Effectiveness of Support for Local Government

Tabled: 26 February 2015

4 Local Government Victoria's support for councils

At a glance


Local Government Victoria (LGV) is responsible for supporting councils to comply with the Local Government Act 1989 (LG Act), and assisting the minister in administering the LG Act and the Municipal Association Act 1907 (MA Act). LGV provides a variety of support and guidance to councils, including funded programs, online guidance, and assistance in code of conduct or financial issues.


LGV uses a range of established methods to identify the support needs of councils. Its support programs are generally aligned with identified needs, but are also determined by government policy objectives and to assist compliance with the LG Act. Monitoring and reporting on outcomes and program evaluation could be further strengthened. It is unclear the extent to which support programs and initiatives achieve intended outcomes.


  • LGV provides a range of support and guidance to councils and has a sound understanding of support needs.
  • LGV monitoring and reporting on projects and initiatives does not provide adequate focus on measuring outcomes and program evaluation.
  • LGV's Business Plan does not clearly identify how planned initiatives contribute to objectives, and how performance will be measured.


That Local Government Victoria:

  • improves its monitoring, evaluation and reporting to demonstrate the achievement of intended objectives
  • seeks more feedback and guidance from councils on its guidance.

4.1 Introduction

Local Government Victoria's (LGV) role includes supporting and advising the Minister for Local Government in administering legislation, including the Local Government Act 1989 (LG Act) and the Municipal Association Act 1907 (MA Act). It is also responsible for overseeing, supporting, and encouraging local government, and assisting councils by providing advice and support in relation to their roles and responsibilities under the LG Act.

Support provided to councils should meet their needs, assist them to comply with the LG Act, and enable more efficient and effective operations. This may include targeted support or intervention when required. Robust monitoring, evaluation and reporting are required for LGV to understand whether its support is effective and to demonstrate the achievement of its intended objectives and outcomes.

4.2 Conclusion

LGV uses a range of established methods to identify the support needs of councils. Its support programs are generally aligned with identified needs, but are also determined by government policy objectives and linked to the requirements of the LG Act. While LGV has a system of formalised internal monitoring and reporting on projects and initiatives, the focus on outcomes reporting and program evaluation could be further strengthened.

4.3 LGV's role and responsibilities in supporting councils

LGV has clear organisational roles, responsibilities and deliverables, outlined in its business plans for 2012–13 and 2013–14, and in its 2014–15 Business Plan.

LGV's 2014–15 business plan states that its primary function is to provide support to councils, and also lists initiatives by business area, providing a brief description of each initiative. The business plan is based on government priorities, guided by the previous government's Local Government Reform Strategy (LGRS). LGV's recent initiatives include the Local Government Performance Reporting Framework, collaborative procurement, cost containment and capacity building initiatives, and guidance around rating strategies and asset management and maintenance. These initiatives are aligned with government objectives in the Budget Papers, including the Strategic Asset Management Program, and Local Government Performance Reporting. Budget Paper Three: Service Delivery contains measures LGV is required to report on.

LGV's business plan also details relevant objectives from the draft former Department of Transport, Planning and Local Infrastructure (DTPLI) 2014–18 Corporate Plan—to deliver effective reform and governance of local government, and develop and maintain systems that support a strong, transparent and accountable system of local government. LGV's 2014–15 Business Plan identifies that its objectives are to:

  • be the trusted source of knowledge
  • be an innovative, proactive and responsive thought leader
  • be the broker of quality partnerships
  • drive accountability and good governance.

LGV's three business areas are responsible for the programs and initiatives to achieve these objectives. Business areas are responsible for a range of programs in both the 2014–15 Business Plan and previous business plans. Examples of 2014–15 programs and initiatives are shown in Figure 4A.

Figure 4A

LGV business areas and 2014–15 programs and initiatives

Business area

2014–15 program or initiative

Sector performance and development

The Local Government Performance Reporting Framework, Strategic Asset Management Program, and the Community Satisfaction Survey

Governance and legislation

Oversight and advice relating to the LG Act, supporting the Local Government Inspectorate and Councillor Conduct Panels, monitoring council governance, and the management of the new Sunbury municipality (from July 2015)

Funding programs

Public Libraries Funding Program, Victoria Grants Commission methodology review and Emergency Management Programs.

Source: Victorian Auditor-General's Office.

The business plan links the objectives and initiatives, but it is unclear how they contribute to the achievement of objectives and outcomes. While the 2012–13 business plan included performance measures, the 2013–14 and 2014–15 business plans do not contain sufficient detail to measure the effectiveness of their activities. As a result, it will be difficult to measure progress toward the achievement of objectives and outcomes.

In addition to examples in Figure 4A, business areas manage and deliver a range of work both for supporting councils and in delivering the government's policy objectives for local government. Many smaller programs are undertaken, including multiple collaborative procurement projects between groups of councils and one-off workshop assistance with financial reporting requirements.

4.4 Sector engagement

LGV has a good understanding of council needs, both sector wide and taking into consideration size, location, and capacity.

LGV has a range of consultation methods in place to inform the development of its support programs and initiatives for councils. It uses reference groups to discuss its programs and initiatives and to understand the impact of the government's programs and policies on councils, including:

  • The Local Government Inter-Departmental Network—provides a point of coordination with other departments. This group has enabled LGV to liaise with other relevant departments in reducing the reporting burden as part of the introduction of Local Government Performance Reporting
  • The Ministerial-Mayors Advisory Panel—provides advice to the minister from a mayoral perspective, which does not represent the views of individual councils. While a useful mechanism to gain feedback, it presents individual mayoral views, rather than being representative of a council or group of councils
  • The Local Government Reform Strategy Reference Group—made up of relevant sector representatives including members from peak bodies and council chief executive officers (CEO). This group provides consultation on policy objectives, other initiatives and programs and captures feedback on the implementation of initiatives and programs.

In addition to reference groups, LGV regularly sends out CEO circulars. These communicate proposed changes to legislation, requests for council feedback, and advice on interpreting legislation and newly published support materials. CEO circulars are released on an as-needs basis and are the main means of official communications with councils. Through these channels LGV maintains regular contact with council officers at various levels.

LGV also conducts consultation on individual projects using various methods. For example, in developing the Local Government Performance Reporting Framework and the Councillor Conduct and Governance Bill, LGV used the following:

  • project governance and advisory structures including working groups with relevant organisations including Municipal Association of Victoria (MAV) and VAGO
  • releasing directions papers and other documents and requesting submissions
  • workshops in locations across Victoria
  • technical working groups.

Survey results indicated that of the total 65 councils that had contact with LGV, 15 had contact monthly, 35 quarterly and 13 annually. In terms of the way LGV identifies the type of support needed, 20 of the 65 councils rated them as good, 28 moderate and eight poor. A question about LGV's assessment of the level of support needed indicated a similar pattern with 18 of 65 councils rating them as good, 24 moderate and 13 poor.

Responses showed a high level of satisfaction for knowledge of policy and legislative frameworks (more than 80 per cent), the relevance of guidance material (80 per cent), and technical advice (more than 70 per cent). Councils were less satisfied with LGV's engagement with them about the effectiveness of support programs during delivery and after program completion, and the relevance of capacity building programs (all less than 40 per cent).

4.5 Planning processes and the identification of council needs

LGV uses a range of methods to identify the needs of councils. These include sector consultation and engagement, correspondence to the minister and LGV from members of the public, media monitoring, intelligence from the Local Government Inspectorate, panels, peak bodies and reference groups, and findings from VAGO and other reports.

LGV uses the information it derives from these methods to assist it in developing support programs, guidance and materials. Its program of sector guidance is detailed in its business plan, and linked to the relevant objective. LGV used these consultation methods to assist with development of the LGRS, which forms the basis of LGV's programs and initiatives, and was the former government's policy since 2011, previously the Local Government Reform Agenda.

LGV has identified key areas where councils require support, which it uses to underpin its work program. These are:

  • financial sustainability
  • local government service levels
  • community responsiveness and accountability
  • community engagement
  • decision-making and planning
  • councillor conduct and governance
  • capacity and capability.

LGV's programs and guidance materials generally align with these areas. In addition, LGV provides support in the form of intervention for councils where issues may arise, for example, providing administrative support when requested by councillors, or facilitating ministerial intervention, such as financial administrators, or dismissal of councils.

As part of our survey, councils were asked to rate, from their experience, the way that LGV identifies the type of support their council needs. Most council's assess LGV's identification of the type of support needed as moderate (28), with slightly less rating it good (20) and only eight rating it poor. A similar question about LGV's assessment of the level of support needed indicated a similar pattern with 18 councils providing a good rating, 13 a poor rating, and 24 moderate.

4.6 Support programs

4.6.1 Overview of key programs

LGV provides a large number of programs aimed at improving capacity of local councils. Programs may be aimed at all Victorian councils, or councils may be invited to participate in pilots—for example, Local Government Performance Reporting and smaller projects such as regional collaborative procurement. In addition to these programs, LGV has a range of guidance material available on its website.

4.6.2 Local Government Reform Strategy

LGV has delivered programs and initiatives under the LGRS, which is focused on assisting the local government sector to be more efficient and productive, including:

  • Local Government Performance Reporting—this is a mandatory framework introduced in July 2014. LGV conducted a pilot inviting all councils to participate prior to its introduction to assist with a smooth transition and to reflect council capabilities in the development of mandatory indicators.
  • Councillor Conduct and Governance—a program of consultation that included the development of a draft Local Government Amendment Bill (Councillor Conduct and Review)which was not progressed.
  • Reducing the reporting burden—a collaborative project between relevant government departments aimed at abolishing or reducing reporting requirements for councils.
  • Cost containment and capacity building—using the Local Government Reform Strategy Reference Group, this project examined ways for councils to reduce their costs. A dedicated working group was established and involved collaboration with Local Government Professionals, MAV and a cross section of council CEOs.
  • Collaborative procurement—31 councils were involved in six projects that aimed to reduce costs through collaborative procurement and asset management and maintenance.
  • Simplified funding—a project aimed at simplifying funding flows from state to local government including the introduction of productivity incentives for new funding.

LGV has also conducted reviews to assist with council capacity:

  • Local Government Electoral Review—a commissioned review of electoral arrangements for local government which aimed to ensure electoral systems are fair, transparent and effective.
  • Review of Victorian Public Libraries—which resulted in the development of a business case for a statewide library management system.

4.6.3 Further support and guidance

In addition to programs delivered under the LGRS, LGV provides additional programs and initiatives aimed at building capacity within the sector. These include initiatives funded under the Local Government Reform Fund, and better practice guidance and templates—including the recent Local Government Planning and Reporting Better Practice Guide—rates and charges, financial reports, audit committees and asset management. These are available on LGV's website and circulated to councils.

Several recent VAGO audits have also examined LGV's support to councils in the context of specific areas of activity or issues, including collaborative procurement, asset management, organisational sustainability and rating practices. A brief outline of these reports is included in Part 1.

4.7 Monitoring, evaluation and reporting

Effective monitoring, evaluation and reporting are critical to demonstrate the achievement of intended objectives and outcomes, and for continuous improvement. While LGV has developed output measures, it does not systematically measure outcomes.

Monitoring and reporting

LGV has objectives detailed in its business plan, which are linked to its programs and initiatives, although how programs and initiatives will assist in achieving objectives is unclear. Business area initiatives are allocated to specific teams with designated team leaders, and these are outlined in individual work plans, with accountability for each project clearly defined and used as performance measures at individual work plan level.

LGV has task and delivery targets in its Business Plan 2014–15, although public reporting through the Budget Papers is not sufficient to understand whether its objectives and outcomes are being achieved. LGV has indicators that are reported against as part of the Budget process in Budget Paper 3: Service Delivery. These indicators are not sufficiently constructed to determine whether LGV is achieving its intended outcomes. Output measures include quantity, quality, and timeliness, but do not always allow an assessment of performance. In the case of quality, the following measures are outlined:

  • LGV's legislative and regulatory change considers stakeholder feedback and consultation with local government
  • LGV's policy and program development considers stakeholder feedback and consultation with local government.

These measures consider whether a specific activity has been undertaken, rather than how well the output has been undertaken, in this case, whether feedback and consultation with local government has occurred. They do not provide any information about the quality of LGV's work and whether it is achieving intended outcomes.

LGV does not formally report against or measure achievement of its objectives, and does not have established and consistent reporting on all of its support programs and guidance. Without this, LGV cannot be assured that it is on track to achieve its objectives and outcomes, or whether it is contributing to the achievement of these under the draft DTPLI 2014–18 Corporate Plan.

Councils rated LGV as relatively good for expert advice and interpretation of the LG Act, and in monitoring compliance with applicable legislation. However, they rated LGV less positively on a number of other measures, including:

  • partnering in the delivery of council services
  • acting as a spokesperson for councils at the state table/Cabinet
  • facilitating collaborative opportunities and ways for councils to work together
  • providing support and programs that help develop council capabilities.
LGV's business reporting practices

LGV does not systematically monitor, evaluate and report on all of its support activities, although evaluations have been undertaken for some of its larger programs. While external objectives and reporting requirements exist at a departmental level, LGV's business plan does not contain qualitative performance measures linked to outcomes to meet LGV's four objectives as outlined in Part 4.3.

LGV captures information on the progress and performance of a number of discrete projects, including the Procurement Excellence Program and the Asset Management Performance Information Project. It also conducts reviews of larger initiatives such as the Local Government Reform Fund. Monitoring of projects and initiatives occurs as a component of weekly management processes with all LGV team members, and relevant senior departmental management, however, this is not documented. LGV should improve its monitoring and reporting including more rigorous documentation of project monitoring and reporting to assist in understanding the quality and effectiveness of its suite of support programs and initiatives.

Use of LGV's guidance material

Our survey found, that most councils are satisfied with the quality and timeliness of LGV's guidance material and advice. LGV relies on feedback from the sector about improvements that can be made to its guidance material and the input of the technical experts involved in developing guidance. It has sought feedback on draft guidelines through its system of CEO Circulars—including for asset management—and through its consultative mechanisms. Further analysis of data relating to how councils use support and guidance material would assist LGV to ensure its support remains relevant and useful.

LGV undertook a content audit of its website to determine where improvements were needed for its webpages on the mandatory Local Government Performance Reporting Framework. However, it does not monitor which and how many councils use its other website guidance materials. LGV could improve its methods for seeking feedback and monitoring use of support materials on its website, as well as consulting councils to ensure it provides a broad range of support in the specific areas and issues where councils may require support.


LGV does not have an established practice for reviewing or evaluating all of its work, although it has produced evaluations of some of its larger programs. While these evaluations report outcomes in some cases, others consist of mainly output-based reporting. LGV provided reviews of council internal audit practices and Victoria's public libraries, which, while useful, do not constitute outcomes-based evaluation, but provide recommendations for service and process improvements. LGV could improve its evaluations to ensure rigorous analysis of outcomes and the effectiveness of its support programs.

During the audit, VAGO observed part of a post-implementation review of the Local Government Performance Reporting Framework Project which discussed positive aspects of project management and ways that the management of the project could have been improved. The DTPLI Project Management Framework section on Outcomes Management and Evaluation includes the clear recommendation that a post-implementation review be conducted in conjunction with an outcomes evaluation review. This is a useful exercise that should assist LGV to continuously improve its project management skills and methodology. However, it is not clear whether post‑implementation reviews are applied on all or just a subset of LGV's projects.

LGV has provided a number of evaluations and reviews of some of its major programs as outlined in Figure 4B.

Figure 4B

Summary of LGV evaluations



Councils Reforming Business (CRB) – final evaluation of the Procurement Excellence Program and Better Practice Local Laws (October 2012)

Considered whether its objectives had been achieved, and measured reductions in regulatory costs as a result of the program. Overall, it enabled councils to achieve cost savings. However, the evaluation only considered two of the initiatives under CRB rather than all of its programs, and in some cases relied on feedback from councils, without rigorous measurement of whether all outcomes had been achieved.

Local Government Sustainability (June 2012, delivered by MAV)

The Local Government Sustainability and Regional Asset Management Services program evaluations found positive outcomes against project objectives, including improved efficiency and effectiveness in strategic planning processes, improvements in collaboration in local government, improvements in data collection and analysis, and councils had progressed toward better asset management practices, although these were not fully developed.

Review of Victoria's Public Libraries (November 2013)

This was a review of existing library operations with the purpose of developing a strategic plan for Victorian Public Libraries, rather than an evaluation. However, the recommendations should assist LGV to understand what support councils need to effectively provide library services in the future. The review recommended an increase in collaboration and the adoption of a joint strategic approach to adapting to a changing environment, including an integrated statewide library service and integrated and streamlined back office operations.

Value Adding through Internal Audit (June 2012)

This was a project report that reviewed the audit capacities of south west Victorian councils. While not specifically an evaluation, it provided some recommendations to assist councils with building internal audit capacity. The report recommended collaboration between councils in internal audit, and collaborative procurement of a single internal audit provider, as well as reporting findings in relation to council practices in internal audit and the importance of support from senior management in collaborative procurement practices.

Procurement in Practice Program (July 2012)

LGV provided a project report for its projects under the Local Government Reform Fund, which included a review of the Procurement in Practice Program, which aimed to assist councils to undertake collaborative procurement. The Procurement in Practice Program reported cost savings for councils involved in collaborative procurement for road resealing. Building Best Value Capacity reported improvements to capacity in undertaking Best Value Service Reviews, but a lack of proficiency in conducting rigorous service reviews overall.

Source: Victorian Auditor-General's Office.

LGV delivers a range of programs of varying sizes, some of which may be too small to merit a full evaluation. However, LGV should consider applying evaluation concepts to its full suite of support programs and initiatives in order to understand if they are assisting it to meet its objectives as detailed in its business plan, and effectively supporting councils to comply with the LG Act.

4.8 Supporting the Minister for Local Government

LGV has provided briefings to its minister on a wide range of issues relating to the LG Act. This advice has related to council activities and performance—such as the appointment of monitors, capital works funding, code of conduct matters and legislative proposals. In addition, LGV briefs the minister on requests for exemption from section 186 in the LG Act, which allow councils to enter into a contract for goods, services or works in specific circumstances without first undertaking a public tender. Exemptions have been granted on five occasions since October 2012, including the granting of a blanket section 186 exemption on any contracts with MAV Procurement for every council from May 2014. This is discussed further in Part 5.

LGV's support for the minister in relation to oversight and MAV, and both the MA Act and LG Act, is discussed in Part 5.


That Local Government Victoria:

  1. improves its monitoring, evaluation and reporting on support activities to demonstrate the achievement of intended objectives and outcomes, including in relation to its business plan, and ensures it has relevant and appropriate performance measures, and publicly reports its progress and performance
  2. develops processes to seek feedback from councils on the use of its guidance material and website information to identify opportunities for continuous improvement.

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