2016 – Find 2% savings in operating costs
Cockburn’s long term plans for the community, for its business, for its finances, and for its workforce were all revised in 2016. They envisaged a 3% yearly growth in the number of people living in the City leading to commensurate increases in the number of people employed at Cockburn and increases in spending. All paid for by charging ratepayers 3% more every year on their rates. Nowhere did Cockburn mention any plans to find efficiencies from within its Administration to pass on to ratepayers. As always, it will be spend, spend, spend, with not a save in sight.
Every other business sector in Australia is having to make savings but local government seems isolated from that reality. Cost rises can be passed on to ratepayers because we must pay – there is no alternative supplier.
In 2016, Cockburn’s Administration directors proposed a 3% rate rise across the board. The Banjup Residents Group submitted that Cockburn should instead find 2% cost savings from within the business processes of its own 500 strong Administration. This would save $2 million in the first year and require a rate rise of just 0.5%. Finding 2% savings each year over 5 years would save ratepayers $34 million in total.
Needless to say, Cockburn’s directors rejected our cost cutting proposal, saying that they were among the most efficient in the state. They said that they “benchmark” themselves regularly against other councils and they “run a lean ship”. We said “no you don’t” – look at the City of Rockingham, they have 14 staff in accounting and rates but Cockburn has 23 staff. At the City of Armadale, they have 7 HR people for their 350 employees (1 to 50 ratio) but Cockburn has 14 HR people for its 480 staff (1 to 34 ratio).
Cockburn directors replied that these comparisons were not valid because each of the local governments is different from Cockburn.
Hang on a minute – you just said that you compared very favourably with other councils – you can’t have it both ways!
We provided a couple of comparisons with other industries. Cockburn has 7 procurement staff for its $100 million purchases but far bigger companies with much bigger budgets have only 2 or 3 procurement staff. One metropolitan hospital with 1,500 staff has just 7 HR people – a ratio of 1 to 214.
Clearly, Cockburn is not as efficient as it would like us to believe and the Cockburn Councillors are beginning to understand this.
At the special council meeting of 23 June, councillors rejected the proposed 3% rate rise and voted instead for a 2.5% rise – but with no service reductions.
We thought that this was the beginnings of an efficiency drive but no – much of the $300,000 saving will come from the stationery budget and the contingencies budget. Still, the Administration know they are being looked at with more careful eyes. Banjup and Jandakot residents hope that ratepayers will get increasingly better deals over the coming years. We will be watching!