How to improve Council’s financial sustainability and service delivery
Beyond the Inquiry: Preparing Councils for the Future of Untied Funding
The recent Victorian Inquiry into Local Government Funding and Services has underscored systemic issues in how councils access, manage, and report on funding. The report calls for significant reforms to improve financial sustainability and service delivery, including a shift toward more flexible, untied funding.
While such a transition could unlock transformative opportunities for councils, success depends on their ability to strategically plan, justify, and account for spending in a way that delivers measurable community outcomes.
This article explores how councils can refine their grant management processes today while preparing for the potential of untied funding. It emphasises the critical need for strategic planning, data-driven decision-making, and robust reporting to maximise the value of funding—whether tied or untied.
Councils that strengthen these capabilities now will position themselves as responsible custodians of public resources, ready to justify and prioritise investments that achieve sustainable and broad-reaching benefits.
Improving Grant Management Today
- Aligning Projects with Strategic Plans: Councils must ensure their projects are tied to long-term strategic plans, making them funding-ready well before opportunities arise. This requires early definition of needs, clear articulation of objectives, and evidence-based business cases. Applying a scaled version of the Department of Treasury and Finance’s Investment Management Standards for all major investments makes sense from a justification perspective and sets it up for external funding if required.
- Proactive Partnerships: Engage potential partners early to build coalitions around shared objectives. Demonstrating broad support can strengthen applications and attract co-funding.
- Project awareness: Communicating and advocating projects publicly promotes greater awareness amongst the community and agencies likely to support funding.
- Use benchmarking to compare funding per capita, grant dependency, and project outcomes against similar councils. Data-backed insights can highlight gaps and opportunities, helping councils target areas with the greatest need or potential impact.
Demonstrate benefits beyond the immediate project. Include social, environmental, and cultural impacts alongside economic outcomes. This maximises the types of funding that might be applied.
Present evidence showing that proposed projects will enhance existing operations, not undermine them by creating unsustainable long-term costs. This supports funding for renewals and operational expenses, not just new projects.
Preparing for Untied Funding
- Untied funding offers flexibility, but councils will need robust frameworks to prioritise projects. Criteria might include alignment with strategic goals, risk assessments, expected community benefits, and long-term cost-effectiveness.
- Tools like the Investment Logic Map can help councils assess options, evaluate trade-offs, and develop compelling business cases.
- Current shortcomings in evaluating project impacts must be addressed. Councils should implement processes to track and report outcomes over time (often well after the project was acquitted), including both tangible and intangible benefits.
- Transparent metrics and clear reporting frameworks will build trust with funders and the community, showcasing responsible and effective use of resources.
- All new infrastructure projects should include components to improve existing operations or replace outdated assets. This ensures investments contribute to overall efficiency and sustainability, rather than adding to future liabilities.
- Consider the full lifecycle of projects, from initial implementation to ongoing maintenance and renewal. Funding strategies must account for long-term costs to avoid burdening future budgets.
From Scattergun to Strategic: A Paradigm Shift
Historically, many councils have adopted scattergun approaches to funding, chasing opportunities as they arise without a coherent strategy. This reactive mindset often results in fragmented efforts and missed opportunities to align with broader goals.
Councils that embrace a strategic approach—integrating funding into their planning processes and prioritising projects based on community impact—will not only secure more funding but also deliver better outcomes. This involves a cultural shift toward long-term thinking, proactive preparation, and evidence-based decision-making.
The potential introduction of untied funding represents a pivotal moment for local government sustainability. However, the benefits will only be realised if councils have the processes, data, and strategic foresight to use these funds wisely. By improving grant management now, councils can build the skills, systems, and credibility needed to thrive in a funding landscape that demands accountability and impact.
Through better planning, benchmarking, and partnerships, councils can move beyond compliance to leadership—demonstrating that they can deliver transformative outcomes for their communities, today and in the future.
Simon Coutts
Simon is the CEO and Founder of Grantus, a trusted advisor in strategic funding, complex problem solving, and stakeholder management, driving growth and public benefit for organisations dedicated to making a lasting impact. Book a ‘Borrow My Brain‘ session with Simon.
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