On 14 October the Local Government Amendment (Red Tape Reduction) Bill 2014 (Amending Act) was introduced to Parliament, as the first step in the NSW State Government's 'Fit for the Future' local government reform agenda. According to the second reading speech the Amending Act sets out a number of measures to cut red tape and allow Council's to engage more effectively with their communities. 

"It represents the first step in the delivery of the most comprehensive reforms to local government seen in this State for a generation." – Mr Paul Toole, Minister for Local Government, 14 October 2014.

If the Amending Act is passed, some key changes to the Local Government Act 1993 (LG Act) include:

  • Ability to delegate acceptance of tenders: Councils will be permitted to, by resolution, delegate the acceptance of tenders. This change would overcome what are currently some significant hurdles for effective joint procurement between councils. For example, if it is necessary to go back to each council for a resolution to accept a tender:
    • the delay between the first council and each subsequent council making the necessary resolution creates a risk that confidentiality will not be maintained and tenderers will become aware of whether or not they are preferred tenderers, with unsuccessful tenderers being motivated at that point to undermine the process by directly lobbying councils
    • in a tender where price is likely to be contingent on the participation of each council, no council will know the price that it is accepting until the last council makes its resolution (i.e. if fewer councils participate, the tendered price will likely increase)
    • the tender documentation may need to invite separate prices depending on which councils resolve to accept the tender and participate in the contract.
  • Increase in tendering threshold: The prescribed tendering threshold for councils will increase to $250,000 for specified councils that are 'fit for the future'. This change recognises that the scale of procurement risk will differ between councils, depending on their scale and strategic capacity. For some councils, the current threshold of $150,000 may represent a significant or high-risk procurement – justifying the imposition of the prescriptive tendering requirements under the LG Act. However, for other councils a higher threshold is justified where internal procedural requirements are in place to ensure that the procurement delivers value-for-money outcomes based on principles of transparency, competition and probity. The $250,000 threshold aligns  with the threshold that applies to State government agencies.
  • Tendering exemption to support Australian Disability Enterprises: Councils will no longer need to invite tenders under the LG Act for contracts with a person or body approved as a disability employment organisation under the regulations made under the Public Works and Procurement Act 1912. This supports a State government policy objective of  increasing government-purchasing opportunities to support businesses that employ people with a disability.
  • Standing offers and prequalification schemes do not need to specify a rate: Councils will be able to procure through prescribed entities (such as Local Government Procurement or Procurement Australia) without the need to go to tender, without a rate having been specified. This will enable councils to use an increasing number of State Government prequalification schemes that no longer specify a rate.
  • Publication of notices via the web: Councils will have greater flexibility in determining how to issue notices under the LG Act. Rather than requiring that a notice be published by newspaper, councils will be required to publish the notice on its website and in such other manner as is determined by the council: 'with the objective of bringing the subject matter of the notice, advertisement or other matter to the attention of as many people to whom the council considers it may be of interest as possible.' This recognises the reduced circulation of newspapers and an outcomes based approach that is intended to be adopted in a new local government Act.