Posted by Lancing Farrell 1200 words
I recently rediscovered a book that I bought 17 years ago when it was first published. It is one of those useful management books that is an absorbing read when you buy it, and then it quietly sits on your shelf waiting for the day you really need it. It is now a book for the times with rate capping coming into Victorian local government.
Neville Lake’s central idea is that management practice has three fundamental organising principles – effectiveness, efficiency and optimisation. He believes that an organisation can be both effective and efficient but be sub-optimised. This leads to only 80% of its potential being realised.
The other 20% is trapped in processes that don’t work, management models that don’t deliver, and interactions with customers that fail to deliver expected value.
Having worked in local government for 30 years, I have to agree that we are sub-optimised organisations. Continue reading
Posted by Whistler 900 words
It has been some time since discussions commenced regarding the imposition of a rate cap on local government in Victoria. There have been a few earlier posts on the topic (see here, here, here, here and here). The rate cap has now been set and the process for any council seeking an exemption from the rate cap has been communicated. The Essential Services Commission has been effectively positioned as a regulator for local government. So what have councils been doing?
I would say not much. The requirement that the community support must be demonstrated if seeking an exemption, coupled with 2016 being an election year, has stifled activity across the sector. According to The Age newspaper 21 councils have indicated they may apply for an exemption. Some councils, including Melbourne City Council, have attempted to demonstrate community support for their rating strategy, which could support an application for an exemption from the cap.
The results from the few people’s panels held have been interesting but not unexpected. The community expects the council to use current resources well before asking for more. They want to see value for money before they will support asking people to pay more tax. Fair enough. Continue reading
Posted by Lancing Farrell 3300 words
People in local government regularly discuss effectiveness and efficiency. Often this happens in relation to pressure on revenues, such as rate capping. Most of the discussion centres on efficiency rather than effectiveness, and opportunities to stop delivering those services that are seen as ‘cost shifting’ from other government. The efficiency discussion is often not well informed. Frequently it focuses on inputs while ignoring outcomes and public value. Any savings are usually equated with cost cutting, not creating the same value at lower cost.
Australian researcher and writer Christopher Stone has published several papers on ‘false economies’. Each addresses a different aspect of productivity and efficiency in the public sector.
“Everyone has the right to know that money is not being wasted; that it is being spent as efficiently as is possible.” Christopher Stone, Decoding Efficiency, April 2013.
So, what is efficiency and how does it differ from effectiveness? Continue reading