Transforming our cities where ratepayers are customers in a market driven economy

Cities are changing. They are not simply postcodes where citizens happen to live, but emerging as centres for driving change and adding value to the economy. Cities today are hubs for growth and innovation, and connectivity is as important as liveability.

People are drawn to cities because of the opportunities they provide, with jobs as the first priority, closely followed by lifestyle. Councils are keen to attract new businesses, and these attract new residents and drive economic development.

In return, local councils must deliver the services and amenities today’s citizens expect in a market-driven economy.

Housing affordability? Tick.
Low traffic congestion? Tick.
Schools and leisure complexes? Tick.

Citizens are more than ratepayers: they are customers with high expectations. Fuelled by social media, constituents are not afraid to express themselves vocally, if they believe that issues are not being addressed or council services fall short. As ‘customers’, rather than mere ratepayers, they expect the same levels of service from government as from commercial transactions. Local government is therefore under intense pressure to perform.

We tend to look at councils as providing services weighted towards major projects such as infrastructure or roads and the macro indicators for livability.  However a key driver in achieving these macro indicators is how effective and efficient a council is in service provision.  Until now there has been no global benchmarking study taking a look at council services “behind the scenes “– the essential maintenance or roads, for example, or waste disposal.

Finding the courage to improve: Benchmarking city services, a new report from KPMG International, summarises the findings of an in-depth benchmarking survey involving 35 cities around the world. Twelve basic city services were reviewed, including road access and maintenance, transit, park access, garbage collection, among others.

The report reveals that some cities might be inefficient and spending too much for the services they deliver. For example, within the EU alone, some cities spend 5 times as much as others for basic services such as drinking water.  Cities were also challenged in having a clear understanding of the actual efficiency and effectiveness of the services they deliver, often unable to provide basic data critical to measuring service outputs.

It’s clear that to progress, all cities must innovate and upgrade to a Smart Cities agenda. In 2016 the Federal Government launched its Smart Cities Plan that sets out a vision for Australian cities—metropolitan and regional—across three pillars of Smart Investment, Smart Policy and Smart Technology. This introduces a National Cities Performance Framework (NCPF) that paves the way for multiple outcomes, social, fiscal and economic. The NCPF articulates the need for cities to obtain valid data that will shape not only their individual development but the overall performance of Australian cities as a whole in order to become globally competitive.

In this regard, KPMG report deconstructs the common problems of our global cities, and asks questions about measuring service delivery, community engagement and change in order to achieve better practice and ultimately contribute to progress towards smart cities and communities.

It pinpoints the problems cities have faced in obtaining accurate, timely, optimal quality data in the past, and challenges the traditional mindset of local government as reporting for compliance as opposed to reporting for performance.

Such measurement paves the way for creating international standards for local government to build progressive, sustainable communities. Ultimately, citizens will be the prime beneficiaries of Smart Cities innovation – and that can only be a good thing.

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