ESCOSA final Framework and Approach for second cycle
The framework reflects feedback received during consultation and sets out how ESCOSA will undertake its advisory role for all South Australian councils over the next four years.
Consultation results
The final framework is the result of consultation across the sector. Alongside the LGA, councils from across the state contributed submissions during consultation, with 43 submissions received in total.
Feedback demonstrated strong support for the continuation of the scheme, its advisory nature and the retention of the four-year review cycle.
LGA welcomes the collaborative approach taken by ESCOSA and is pleased that nine of the eleven recommendations included in the LGA's submission were incorporated into the final Framework and Approach. Among the key recommendations adopted were:
- Recognition of council diversity and the need for assessments to consider local context and circumstances.
- Greater emphasis on material changes since a council's first review and on significant sustainability risks.
- Inclusion of both the Consumer Price Index (CPI) and Local Government Price Index (LGPI) as benchmarking tools.
- Providing councils with an opportunity to review and comment on draft assessments before publication.
- Greater focus on minimising duplication and administrative burden by relying on existing council documents and reporting wherever possible.
Two recommendations were not adopted in full. ESCOSA has retained revised assessment categories rather than maintaining consistency with the first cycle, and it has not yet committed to a definitive cost for the second cycle.
ESCOSA has advised that it is open to exploring a tiered or scaled fee model and has committed to working with LGA before finalising.
Second cycle assessment
ESCOSA’s second cycle will focus on three key assessment areas:
- Progress made against recommendations from the first cycle and actions undertaken by councils in response to previous advice.
- Material changes in council circumstances, operating context and long-term financial planning since the initial assessment.
- Council performance against a set of observed practices developed through the first cycle of the scheme.
Importantly, councils will be asked to prepare two written statements addressing their response to first-cycle advice and any material changes in context and circumstances.
The final framework includes guidance on these submissions and provides councils with the opportunity to explain factors that may be outside their control, including structural and external pressures. ESCOSA has also included a useful set of contextual factors (page 23 of the Framework) that councils can draw on when preparing their submissions.
The framework recognises the significant diversity across South Australia's local government sector and explicitly notes that a prescriptive or regulatory model would struggle to accommodate that diversity. Instead, ESCOSA will continue to apply an advisory, transparency-based approach while considering council-specific circumstances and material risks.
A welcome outcome is ESCOSA's commitment to include both CPI and LGPI in its assessments. This recognises that while councils' costs are better reflected through LGPI, community affordability considerations are reflected through CPI, providing a more balanced assessment framework.
Each council will receive both a current assessment and a forecast assessment, providing a snapshot of current performance as well as ESCOSA's view of the council's longer-term trajectory.
What happens next?
LGA will continue working closely with ESCOSA as implementation planning progresses, particularly in relation to finalising costs, guidance materials and support for councils participating in the first year of the second cycle.
We encourage all councils to review the final Local Government Advice Scheme Second Cycle and consider the information and evidence that may be needed for future assessments.
LGA will:
- hold a webinar on the new Framework and Approach
- work with ESCOSA on the finalisation of the second-cycle fee model
- hold information sessions and provide practical guidance for councils participating in the first tranche.
Find out more
LGA's submission to the draft Framework and Approach is available on the Submissions page on the Member Portal.