Part 3: Overall observations from our review

Local government: Examples of better practice in setting local authorities' performance measures.

Community outcomes

The Act defines community outcomes as the outcomes for that district or region that are identified as priorities, for the time being, through a process under section 91 (process for identifying community outcomes). Community outcomes include any additional outcomes subsequently identified through community consultation as important to the current or future social, economic, environmental, or cultural well-being of the community.6

Each of the local authorities in our sample had many community outcomes. Although each community outcome appeared to be distinct, there were similarities in their descriptions or aspirations. The local authority's goals and objectives determine which outcome(s) an activity contributes to. Figure 2 sets out, at a high level, the community outcomes that the five selected activities contribute to.

Figure 2
Community outcomes for the selected activities

Community outcomes
Safety Environment Economic impact Health Skills and education Sustainable infrastructure and services
Roading Image of a tick. Image of a tick. Image of a tick.
Water supply Image of a tick. Image of a tick. Image of a tick. Image of a tick.
Waste-water Image of a tick. Image of a tick.
Libraries Image of a tick. Image of a tick.
Building control Image of a tick. Image of a tick.

The descriptions of the community outcomes provide some context for what they mean to the local authorities:

  • Safety: "Safe places in a caring society that is free from crime" (Gore District Council).
  • Environment: "Quality landscapes, and natural environment and enhanced public access" (Queenstown Lakes District Council).
  • Economic impact: "A vibrant and prosperous economy" (Carterton District Council).
  • Health: "A district that provides a safe, healthy, and friendly place to live, work, or visit" (New Plymouth District Council).
  • Skills and education: "A city of lifelong learning" (Christchurch City Council).
  • Sustainable infrastructure and services: "A community that is served by a strong infrastructure or essential services, where daily life and business is able to be conducted safely and easily" (Marlborough District Council).

Community outcomes, strategic direction, and the goals and objectives significantly influence the performance measures a local authority sets. For example, the use and number of available parking spaces could be interpreted as good or bad depending on the local authority's objective. A high number of vacant parking spaces could mean that people are using alternative transport such as buses, walking, or cycling rather than using private motor vehicles. Alternatively, it may suggest something about the cost to users of that parking area.

In another example, some people prefer a fast flow of water from the tap. However, from a water conservation point of view, fast flowing water may lead to higher water consumption and consequently a higher amount of wastewater disposed of.

Overall, although it is desirable for comparability and transparency reasons to prescribe a standard set of measures for all local authorities to report against, the performance measures that each local authority adopts should reflect its operating intentions and the relevant community outcomes. Providing relevant and understandable performance information will contribute towards building a relationship of trust and confidence between a local authority and its community. Likewise, providing members of the community with meaningful information gives them a greater opportunity to understand and take an interest in their local authority and the city or district in which they live.

Group of activities

The Act does not prescribe the number of individual activities that local authorities should include within a group of activities. The Act defines a group of activities as "one or more related activities provided by, or on behalf of, a local authority or council-controlled organisation".7 It is expected that activities within a group of activities will have a common theme, such as a service output. As a result, local authorities have flexibility over the composition of the group of activities. For example, the parking activity could be included within the roading group of activities to reflect the relationship to road use, or within the regulatory group of activities to reflect the relationship to monitoring enforcement services.

We found that most local authorities had a vast range of individual activities. We also found that the activity structure of many LTCCPs reflected the local authority's current management structure and how those activities are managed internally. To be usable, the LTCCP should give balanced information without overwhelming the reader.

We suggest that related activities should be aggregated, particularly where they have similar objectives and service provision. Aggregating the activities will also reduce the amount of repetitive information and performance compliance reporting for related activities included in the LTCCP, annual plan, and annual report.

Use of satisfaction surveys

Satisfaction surveys and related performance measures were a common feature in LTCCPs.

The value of user and community feedback should not be underestimated. Surveys can be a useful and effective way to collect feedback on a range of aspects, such as service quality, responsiveness, and value. Where surveys are used, they should form part of the information that management and governors of an entity use to understand what is sought from services and to make improvements.

Satisfaction surveys are relevant and appropriate for measuring performance where the questions focus on what respondents can reasonably be expected to have a view on.

Surveys may not provide a complete view of performance on their own, and consideration should be given to whether there are other dimensions of performance that should also be included to provide a complete description of service performance. For example, a resident could be expected to have a view on how water tastes, but not on whether the water is fit to drink – the Council should already be ensuring, and know, that the water supplied is potable.

The purpose of survey questions should be clearly described – for example, to understand what needs to change and what to keep doing. The use of survey results are more powerful when interpreted alongside results from previous years or other comparative information so that trends can be identified.

Cost-effectiveness/value-for-money assessment

A report by expert reviewers on changes between the 2004-14 and 2006-16 LTCCPs stated:

Engaging with communities over the levels of service is a key process underlying the development of an effective LTCCP, with cost being one aspect underpinning decision-making on levels of service. While an area of challenge, the performance information in the LTCCPs should include measures indicating cost-effectiveness, in relation to both strategic choices and at the lower level of specific service performance.8

Within the 15 selected local authorities, some measures were included that might have been intended to give insight about cost-effectiveness or value for money – for example, "Maintenance and capital budgets are managed within budget as approved by Council" and "Operating expenditure is managed to within a range of [+x% or -x%] of budget". However, cost-effectiveness relates costs to service delivery and impacts or outcomes. Including simple measures of spending does not add any useful additional information.

Including performance measures, such as unit cost or operating cost per length of the roading network or operating cost of water services per household, allows the community to assess the value for money of services they receive. This type of performance measure is useful only if there are comparisons available – for example, with a neighbouring local authority. We would like to see more performance measures that assess value for money and cost-effectiveness.

General observations on the performance measures

Local authorities that included definitions and/or contextual information to support technical words made the intended levels of service more understandable to the lay reader. Translating technical information into simple terms will be more effective in engaging the community.

A large number of performance measures were often included in each activity. It is the quality of the performance measures that matter and not the quantity:

In selecting performance measures to report, entities should consider the characteristics of performance that:

  • are of greatest importance to stakeholders;
  • reflect the financial significance of the activity; and
  • reflect both the objectives for carrying out the activity and any (external or internal) risks needed to be managed in achieving those objectives.9

The performance measures that a local authority chooses should provide a balanced picture of the important aspects of the levels of service that it provides and the purpose of that activity.

Many measures capture only one dimension of performance. To describe levels of service more effectively and reduce volume, local authorities could consider combining some of the performance measures to measure more than one dimension of performance. For example, "[x]% road signs found missing during [x] monthly safety inspections are repaired within [x] working days."

Some performance measures reflect internal activities and processes rather than goods and services provided to third parties. For example, reviewing an asset management plan is an internal quality assurance process and not a service to the community. However, the community may reasonably take comfort from a robust review of assets that confirms that the local authorities' asset management plans are appropriate and implemented, and as a result be reassured that assets are maintained and developed as needed. In general, internal activities and processes should be excluded from performance measures.

Some performance measures are part of a process and not results oriented. The performance measure "water supply network is inspected for leaks" is inadequate because it describes activity rather than results. However, it could be made more meaningful by including other information – such as the basis for carrying out an inspection, the response and response time if a leak is found, or the number of leaks identified.

Source data and information systems

Local authorities need appropriate and reliable systems to gather information to report on their achievements against performance measures and targets. The Act does not require local authorities to disclose their source data and information systems in the LTCCP, so relatively few local authorities had included such information. However, describing the system for gathering information can help the community to better understand the service delivery and how that delivery is assessed.

Other performance information may come from external agencies. For example, local authorities enter data about the condition of their roads into their roading assessment and maintenance management (RAMM) system. The New Zealand Transport Agency (NZTA) then collates and presents the road smoothness/roughness data to local authorities. In these instances, local authorities still need to assure themselves that the information NZTA provides is consistent with the data in their RAMM.

6: Local Government Act 2002, section 5.

7: Local Government Act 2002, section 5.

8: Report of expert reviewers on changes between the 2004-14 and 2006-16 Long-Term Council Community Plans, (June 2007), commissioned by the Controller and Auditor-General.

9: The Auditor-General's observations on the quality of performance reporting, paragraph 6.43.

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