It was the member who had recently spent some time in hospital and read many magazines and even the odd short story, who ventured to ask whether there were particular views regarding the question of competition in local government.
There were a few views about the reason for such a question and it seemed that there were competitions at virtually every level of sport and also between companies that are listed on the stock exchange. The general feeling was that where sponsors and profits are concerned it was obvious that competition should be expected. Prizes and all kinds of accolades are awarded, while, especially as far as profits and dividends are concerned, there are many individuals that benefit from the competitive spirit that is underlying the efforts of those involved.
The pipe-smoker felt that competition could be seen in the actions of local government. He was quick to add that it would be a futile exercise to compare local governments with each other because the vast range of different assets and locations between them makes comparisons an exercise that leads to results that are not fair to the different local governments. His reason for supporting competition should be sought at the degree by which the one succeeds in scoring better averages in one year compared to the previous year. He likened it to the way in which a golfer improves his score at the same golf course over a period of time.
It was thus not a question of one versus the next, but actually one versus its own score year after year. The rest of the group immediately took him to task by asking whether the scores could not be manipulated by adjusting them from one year to the next without anyone becoming aware of these subtle changes. They all felt that there were many ratios that could feature on a regular basis without resorting to doubting the degree of manipulation. Figures such as the ratio of debt to current expenditure, expenditure on salaries and wages (including fringe benefits) as a percentage of total current expenditure, the role that tax exemptions and bad debts play in the overall picture. Obviously, these ratios for each local government on a year by year basis plus the direction that these ratios go should be the real basis for determining whether there could be a mention of a winner in this competition.
It was once again the most recent new member who pointed out that these ratios are usually only published some time after the end of the financial year while these numbers should be reported during the financial year in order to see any progress and whether it should be improvement, or to note a decline and what management action is required right away.
As a local government does not deliver services which allow it to declare a profit at the end of the year, the use of meaningful ratios that indicate whether services are being delivered at better rates over the year should be the yardstick of improvement or lack of improvement. “Therefore, the question of a bonus payment to top management becomes vital, especially if all other staff get a ‘thirteenth cheque’ as a matter of course.” This question was raised but not discussed.
BY STAN DAVIS
