Re­newal gap for coun­cils es­ti­mated at $225 mil­lion

Au­di­tor-Gen­eral high­lights as­set man­age­ment by Vic­to­ria’s 79 lo­cal coun­cils

Mansfield Courier - - NEWS -

VIC­TO­RIA’S 79 lo­cal coun­cils man­age more than $73 bil­lion in phys­i­cal as­sets an­nu­ally.

These build­ings, parks and gar­dens, roads, bridges and drainage net­works need to be main­tained so that coun­cils can con­tinue to pro­vide ser­vices and sup­port com­mu­nity ac­tiv­i­ties.

The Vic­to­rian Au­di­tor-Gen­eral’s re­port tabled last week, ‘As­set Man­age­ment and Main­te­nance by Coun­cils’, high­lights is­sues with coun­cils’ as­set re­newal plan­ning and prac­tices, and with their as­set man­age­ment poli­cies, plans, strate- gies and in­for­ma­tion sys­tems.

The big­gest is­sue is the grow­ing as­set ‘re­newal gap’, which is the dif­fer­ence be­tween the fund­ing that coun­cils need to re­new their as­sets, and the money they ac­tu­ally al­lo­cate to this pur­pose.

The re­newal gap for Vic­to­rian coun­cils was es­ti­mated to be $225.3 mil­lion in 2012–13 with the cu­mu­la­tive as­set re­newal gap pre­dicted to grow to al­most $2.3 bil­lion by 2026–27.

If the re­newal gap is not ef­fec­tively man­aged it could lead to re­duced ser­vices, poorer qual­ity of com­mu­nity life, lower eco­nomic ac­tiv­ity, the ac­cel­er­ated de­te­ri­o­ra­tion of as­sets and the pos­si­bil­ity of hav­ing to spend more on main­te­nance and re­newal in the long run.

There are also po­ten­tial safety risks to the pub­lic if as­sets de­te­ri­o­rate to the point of fail­ure.

The Vic­to­rian Au­di­tor-Gen­eral, John Doyle, noted that “a num­ber of pre­vi­ous re­ports from my of­fice have iden­ti­fied per­sis­tent is­sues with coun­cil as­set man­age­ment prac­tices and rec­om­mended that coun­cils im­prove their as­set man­age­ment frame­works and their re- lated poli­cies, strate­gies and plans”.

Coun­cils have i mproved i n some of these ar­eas in re­cent years, how­ever, ‘sig­nif­i­cant de­fi­cien­cies re­main’.

The re­port made six rec­om­men­da­tions to Lo­cal Govern­ment Vic­to­ria which have all been ac­cepted, and seven rec­om­men­da­tions to coun­cils which have all gen­er­ally been ac­cepted.

Fo r the full re­port, visit: http://www.au­dit.vic.gov.au/ re­port­s_and_pub­li­ca­tions/lat­est_ re­ports/2013-14/20140219-As­setMan­age­ment.aspx.

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