Spending too much on consultants? Don’t ask us!

WE’RE told the Bass Coast Shire Council will spend $2 million on consultants this year, and a further $2 million the following year, getting outside advice.

Cr Les Larke wants to know if we’re getting value for money.

It seems a fair question to ask, and allegedly, after trying to get the information directly from the shire’s administration, he brought the query to council last week via a Notice of Motion.

Some of his colleagues liked it, most didn’t.

Cr Larke explained:

“Engagement of consultants is projected to cost council in excess of $2 million in 2021-22 and again in 2022-23. The objective of this motion is for transparency purposes and from a due diligence perspective, to understand the nature and quantum of the outlays and to improve how the integrity and value-for-money of consultancy engagements are demonstrated and how the application of policy, if any, in relation to these types of arrangements is overseen.”

In other words, are we getting value for money for what we spend on consultants, and is it measured and reported?

Speaking to the Sentinel-Times this week, Cr Larke explained his concern, claiming the shire would record underlying losses of a total of $8 million in the next three years, and was projecting its debt to balloon out to $44.6 million, over the next three years.

While reserving his opinion on the MAV’s call for a review of the 1.75% rate cap, he said he believed there was a lot councils could do to trim operational expenses, before looking to increase rates beyond the cap.

It’s a topical issue with annual rates’ notices arriving on kitchen tables across the shire in the past few weeks.

While it’s difficult to tie down exactly what the operating position will be, in the preamble to the 2022-23 Budget, Council said the following: “The Budget projects an operating surplus of $2.2 million for 2022-23 and a balanced funding statement position. An adjusted underlying deficit of $3.4 million is largely attributable to significant one-off landfill rehabilitation works totalling $4.1 million…”

The Notice of Motion prompted spirited debate.

Cr Ron Bauer was supportive:

“I will be honest, I wouldn’t have worded this motion in quite these terms. However, what I believe Cr Larke is trying to achieve with this motion is to make the council officers more accountable for the money that is being spent on outside consultants and external advice,” said Cr Bauer.

“The implementation of this motion would demonstrate that the money spent is value for money,” he said, noting that council could incorporate such an initiative when revising its budget, something he believes the shire needs to do in view of the changing economic conditions around inflation and interest rate rises.

Cr David Rooks wasn’t at all supportive, neither was Cr Leticia Laing.

Cr Rooks said he was “frustrated” that Cr Larke hadn’t discussed the issue of consultants with his fellow councillors first and put three questions to him, asking if the community had raised the issue with him, what he wanted the report for, and how long he thought it would take to compile.

Despite complaining he hadn’t had time to research the issue, Cr Rooks said he believed it would take two to four weeks to compile the report and that there were 1000 invoices to check through.

“Maybe we’ll need to get a consultant in to do the work,” he said.

Cr Rochelle Halstead asked for some additional information and was told by the shire’s General Manager Business Transformation, Wayne Mack, that the administration didn’t report on specifically what services consultants provided.

Cr Leticia Laing was scathing of Cr Larke’s request.

“It's worrying for me as a councillor to be asked to allocate an unbudgeted amount of resources and ratepayer funds to develop a list of indistinct line items on emotion about consultants,” he said.

“There has been little collaboration on developing this motion and it's unfortunate that I have to listen to the summing up before I can make up my mind.

“The framework asked for in this motion is, from what I've been able to understand, inconsistent with the local government better practice guide and model budget released by Local Government Victoria.

“It is also inconsistent with the Australian Accounting Standards as authorized by the Australian Accounting Standards Board.”

Cr Laing went on to say that she didn’t believe the investigation proposed by Cr Larke would deliver any value for the time and resources needed. She also noted that Cr Larke didn’t even vote in favour of the budget.

In closing the debate, Cr Larke said those councillors who had spoken against his motion had missed the point. He said it was about establishing whether the appointment of outside consultants was well planned, effectively procured, well managed and comprehensively evaluated.

He said, from his own research, the proper policies for appointing and evaluating the use and value of consultants was not in place at Bass Coast Shire.

When the vote was taken, Crs Kent and Bauer agreed to investigate the use of consultants but Crs Laing, Le Serve, Rooks, Tessari, and Whelan didn’t think it was worth the time and effort.