This article provides guidance for identifying and prioritising candidate services for review.
Prior to conducting individual service reviews all council services and subservices should be identified, categorised and defined. This may be done by referencing existing documents such as:
- Strategic plans
- Operational plans
- Policies and procedures
- Service level agreements
Research has identified that the interpretation of the term ‘service’ for the purpose of reviews varies considerably between councils. Some councils define services at a broad level and select about 40 service groups or packages. Others break them down into as many as 200 to audit and analyse their services at a detailed level.
Services are typically separated into those that exist to serve internal customers, such as human resources and finance, and those that provide direct outputs for external customers, such as road maintenance and development application processing.
Some councils find it useful to further categorise their services into those required due to a legislative or statutory obligation (non-discretionary), and those where there is some discretion over their provision. It may be appropriate to group the services under themes used in strategic and corporate plans. Examples include governance, infrastructure, social, cultural, recreational and environmental services. The services can also be linked to the council’s key strategic directions. For example, waste management can link to community wellbeing or park maintenance can link to environment.
As there are typically many services for councils to review with limited resources, they should be prioritised for review. The prioritisation assists with the scheduling and resource allocation for the individual reviews.
The means for prioritising each service varies significantly amongst councils, depending largely on the aims of the review being undertaken. Where financial savings is a primary focus of a review, services tend to be prioritised primarily based on a ‘high-level’ assessment of saving or income generation potential. This approach is attractive if there is a desire to take some ‘quick wins’ during the review process. The size of the budget for each service may be used as a simple means of prioritisation as this usually reflects the opportunity for savings.
For a more comprehensive approach, it is recommended that a priority rating is assigned to each service. Consideration may be given to previous community feedback, to gauge the likely reaction to cutting or reducing services. This includes community surveys, strategic plans, and feedback received through community groups.
The following are examples of criteria used for rating each service. Weightings are usually assigned for calculating overall ratings.
- Overall budget for service or net cost of service (after income is subtracted)
- Service levels – potential to reduce service levels without generating significant community dissatisfaction (e.g. services with low importance & high satisfaction in community surveys)
- Service delivery – potential for improvements &/or savings through alternative delivery models (e.g. service sharing, outsourcing, partnerships)
- Internal operations – potential for improvements, efficiencies &/or savings through reviewing internal operations (e.g. changes to structure, resources, assets, processes, work practices)
- Revenue generation – potential to generate additional revenue (e.g. increase in user charges, grants, new business enterprises)
- Degree of discretion over the service (statutory / non-statutory)
- Potential to generate expenditure savings
- Potential for review to improve environmental outcomes
- Potential for review to improve social outcomes
- Potential to reduce duplication of services or activities
- Potential to grow or commercialise the service
Services with built assets that have been identified as being in poor condition may also be given priority to ensure appropriate risk management strategies and decision-making processes are in place.
The SmartGov Team