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50 jobs at risk as council seeks to cut costs

26/7/2018

9 Comments

 
By Catherine Watson

UP TO 50 Bass Coast Council staff may lose their jobs as the council seeks to cut costs by sharing administrative services with three other Gippsland councils.

Affected staff were informed yesterday that the four councils – Bass Coast, South Gippsland, Wellington and East Gippsland – are investigating whether a stand-alone unit could deliver their combined corporate services and IT functions more cheaply and efficiently.
The council’s Acting CEO, Mark Brady, said the four councils could collectively save up to $10.8 million a year, depending on which services they agree to transfer into the joint shared services unit.
 
He said the payback period had been estimated at four years but this could be shortened if the councils secure funding through the Victorian Government’s $20 million Rural and Regional Council Transformation Program.
 
The loss of jobs would be a heavy blow in an area where permanent administrative jobs are hard to come by.
 
Currently Bass Coast Council employs 54.8 FTE (full-time equivalent) staff in back-office/corporate services and IT services.
 
Mr Brady stressed that not all roles are necessarily affected. “Each council needs to determine which services it would deliver through the proposed model and this will be investigated over the next 12 months.”
 
He said there would be opportunities for deployment both within the council and the new entity. The four councils have yet to determine where the new unit will be based but if you drew a line connecting the four council headquarters – Wonthaggi, Leongatha, Sale and Bairnsdale – the central point would be somewhere near Rosedale.
 
By weight of population the unit also appears more likely to be situated towards the east of the combined territories. Wellington and East Gippsland shires have a combined population of more than 93,000 while the combined population of Bass Coast and South Gippsland is about 51,000.
 
However, Mr Brady said consideration would also be given to a distributed model, with various functions operating out of different shires, which would help to retain local jobs.
 
He said the inquiry would investigate the impact on the local economy. Savings from the project could be earmarked for new projects that create local jobs.
 
With the implementation expected to take three to four years, those decisions will be made by a future council, which may use them for capital works to expedite new projects and infrastructure or simply to reduce rates or rate rises.
 
Mr Brady said the council had an obligation to the community to deliver efficiencies but also an obligation to support staff. “We will do everything we can to support our staff in terms of future employment.” 
 
Q&A
Answers supplied by Mark Brady, acting CEO of Bass Coast Shire Council. 
Will this be a separate entity (like West Gippsland Regional Library Corporation)?
Over the next 12 months, the four councils will explore what the model may look like, but it is based on a similar entity, such as WGRLC.  It is a collaborative approach by a group of councils to deliver a service or services to the participating councils.  
  Shared services seek to ensure efficient and effective delivery of council services through the potential establishment of a new entity that would be co-owned by the participating councils and reduce duplication of services.
 
Where will it be based?
Location of the entity is yet to be determined and will form part of the investigation in the next 12 months.
The final decision on the location will be driven largely by business requirements, cost and digital connectivity needs. However the four councils are committed that this be at a location in Gippsland.
 
How many BCSC staff are currently employed in back-office/corporate services and IT?
At Bass Coast it is 54.8 FTE. I wish to make an important point that this does not mean all 54.8 FTE roles are affected. Each council needs to determine which services it would deliver through the proposed model and this will be investigated over the next 12 months.
 
What are “back office” jobs? 
Back-office type jobs are typically the corporate service roles you find in many medium to large organisations. For example these may include human resource services, finance and accounting services, and IT roles.
 
Under the new model, how many local jobs will disappear?
At this stage, no decision on the specific number of job roles affected has been made. A number of corporate administrative roles in each Council will be reviewed over the next 12 months.
 
Opportunities for redeployment?
As roles are confirmed to be included in a potential shared services delivery model, affected staff will be advised and provided guidance and assistance where possible for redeployment within the organisation, possibly transferring to a new shared services entity, or redundancy.
 
Potential savings of the shared services model?
The four councils could collectively save up to $10.8m per year (after implementation), but this will depend on those functions which are agreed to be transferred into the joint shared services entity. The payback period has been estimated at four years; however, this could be significantly shortened if the entity receives a funding contribution from State Government
 
What are the costs?
$500,000 has been allocated in the 2018/19 Budget. This money is for Council’s contribution towards the detailed business case and service modelling and to commence implementing the entity should Council decide to proceed.
 
What about Baw Baw and La Trobe councils?
At this stage four Gippsland councils have committed to progress to the next stage of further investigation into the establishment of a shared services entity. Other councils may still choose to join the entity either at its inception or a later date. 
 
Is this the first step to amalgamation?
No, amalgamations are not on the agenda.
 
Are any other Victorian (or Australian) councils operating this sort of model?
Libraries are already a shared service and councils across Australia have shared service arrangements for a variety of specific services – Towong and Indigo share rates and property services, South Gippsland and Baw Baw share risk management, etc.
  The model and potential scale that we will be investigating seems to be quite innovative for rural councils in Victoria.
  The State Government through Local Government Victoria has been engaged and are supportive of the process to date. 
  Funding opportunities for rural/regional councils to better collaborate in service delivery has been announced and the participating councils will be seeking significant contribution from the state government through this program of funding.
9 Comments
Angus Hume
26/7/2018 05:55:03 pm

It might be sensible to examine forming a regional government through the dissolution of these mentioned councils.
Angus Hume
Chair, Victorian Catchment Management Council
Board Member, Southern Rural Water
0438 965 767

Reply
Dilene Hinton
26/7/2018 05:56:13 pm

I think most of the council jobs should be axed at the top, that would save a lot money to put into efficient admin services.

Reply
Graeme Noonan
26/7/2018 05:57:23 pm

Might have more credibility if they tried paring back over-blown executive functionary structures before anything else. Too many over-paid executives at the top of the pyramid.

Reply
Henshaw Michaels
26/7/2018 10:33:05 pm

Nothing new really. It’s like creating a call centre for corporate services. There will probably be efficiencies but Most of the jobs will probably exist, but they will be shipped off, probably to the Valley, cause that it where the labor governments is sending rural jobs. Imagine the impact to local businesses, 50 wages not Being spent locally.

Reply
Phyllis Papps
27/7/2018 11:16:04 am

Have I missed something?
When did the Councillors vote on the proposed investigation, analysis of cost efficiencies by sharing administrative services with three Gippsland Councils?

I realize that the very, very comprehensive reports of the Audit Committee are confidential. BUT they were moved, seconded and passed by Councillors present.

Yet, I haven't seen anything to date in the BCSC Agendas and Minutes that gives me a clue to what is now being proposed. UNTIL a few days ago.

Thank you Catherine for the excellent report.

Reply
Graham Jolly
28/7/2018 03:30:25 pm

It is totally wrong of council to speak of rates reduction or rates increases. The Victorian State Government sets the rate rise each year for all councils. Any such savings must be shifted into Capitsl Works. If this is to go ahead them all Financial Reserves not supported by Cash or Investments must go. Paper reserves of this nature are nothing more than a financial cover up by council. Employee benifit in each years budget are far to high in relationship to the total income contributed by ratepayers.

Reply
Frank W Schooneveldt
29/7/2018 07:16:20 am

God grant me the wisdom to listen to other peoples ideas wrong that they may be!
Thank you Catherine for your report. Considering that there was a $500,000 allocation in the 2018/19 Council Budget can you please ask Mark Brady where this item was revealed in the Budget papers and why this matter did not form part of community discussions in approving the Budget?
The Council talks about open too way communication but
this looks like the exact opposite.
Cheers.

Reply
Robert Dyson
29/8/2018 11:05:26 am

If the four councils are willing to work together on this aspect perhaps other management functions can be consolidated. ie do we need four CEO's ?

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Levinus Van Der Neut
8/5/2019 06:36:45 pm

Saving the wages of 4 CEO’s would be avoid think expecially if these CEO’s allegedly earn more than the premier

Reply



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