The Local Government Act 2020 – Stage 4 changes to take effect 1 July 2021


The Local Government Act 2020 – Stage 4 changes to take effect 1 July 2021

As part of the extensive overhaul of the Local Government Act 1989 (old Act), stage 4 of the  Local Government Act 2020 (new Act) is set to commence on 1 July 2021. This stage will see several more changes to the rules governing local councils and is the final stage for the time being of Parliament’s ambitious reform of the Act. A few sections of the old Act, principally regarding rates and charges, continue in effect after the new Act has fully commenced. Below is a summary of the main changes that Councils will need to prepare for.

Council staff

Within 6 months of the commencement of Stage 4, i.e. by 1 January 2022, Councils are required to develop and adopt a CEO Employment and Remuneration Policy under which the CEO will be employed. It must provide for CEO recruitment, terms of contract, performance monitoring and requires Council to obtain independent professional advice about these matters. This is designed to create transparency within Council of the CEO’s recruitment and role during their employment.

Similarly, by 1 January 2022, the CEO must create and implement:

  • a workforce plan to assist with maintaining an organisational structure of the Council;
  • a recruitment policy specifying staffing requirements for the next four years and which ensures merit-based recruitment, supports transparency and has regard to gender equity, diversity and inclusiveness measures specified in the workforce plan; and
  • a Code of Conduct for Council staff, made in consultation with Council. The Code of Conduct must include a gift policy, procedures for dealing with conflicts of interest and provisions for the CEO to take disciplinary action against Council staff.

Powers to make local laws

Councils are currently empowered under the old Act to make local laws to govern a variety of local matters including how property in the Council area is dealt with and penalties for littering or misuse of public property. The new Act continues to allow Councils to make local laws however introduces a new mandatory step. Under section 74 of the new Act, Councils will not be able to make a local law unless it first obtains a certificate from a lawyer with at least 5 years’ post-admission experience stating that the proposed local law is consistent with local law requirements. That certificate must then be tabled at the Council meeting where the proposed local law is to be made. After the law is made, Council must publish a notice stating the title, effect and objectives of the local law. The notice must appear at Council’s office, on Council’s website and in the Victoria Government Gazette.

This requirement is intended to support good governance by requiring Councils to take appropriate steps to ensure local laws are compliant. From a practical perspective it is also envisaged that this step will lessen future challenges to local laws, and the time and cost involved in those matters.

Financial Management

Division 3 of the new Act, titled “Beneficial Enterprises”, addresses Council’s ability to work with corporations, partnerships and joint ventures in the private sector. This section will effectively replace the section 193 entrepreneurial powers provision in the old Act. As such, the investment and risk exposure thresholds in the old Act that trigger the need for a risk assessment report and approval from the Minister and Treasurer will no longer apply.

Service performance

By 1 January 2022, Councils must develop and maintain a complaints policy that includes:

  • a process for dealing with complaints made to the Council;
  • a process for reviewing any action, decision or service in respect of which the complaint is made;
  • a discretion for the Council to refuse to deal with a complaint which is otherwise subject to statutory review;
  • the prescribed processes for dealing with complaints about the Council;
  • the prescribed processes for internal review of complaints made to a Council;
  • the prescribed processes for exercising the discretion; and
  • any other matter prescribed by the regulations.

In its preparation of an updated complaints policy, Councils are encouraged to refer to the Victorian Ombudsman “Councils and complaints – A good practice guide” and the “Revisiting councils and complaints report (October 2019)” which are both available on the Victorian Ombudsman website

Procurement process

Councils must prepare and adopt an updated Procurement Policy which specifies the principles, processes and procedures in respect of the Council’s purchases of goods and services. Until it does so, Council will remain bound by the procurement provisions of the old Act which include competitive tendering thresholds no longer imposed by the new Act.

The new Act additionally allows more flexibility with Council’s review of the Procurement Policy. Under section 108(5) of the new Act, Councils must conduct a review once during the 4 year term of the Council – a change from the annual review that was prescribed under the old Act.

Land information

Councils will need to take caution when recovering money from a former owner or occupier of land. Under section 119 of the new Act, Council cannot recover money owing to the Council (other than rates or charges for personal services carried out by the Council) if it is not stated in the relevant Land Information Certificate. As such, Councils should be careful to check that the Land Information Certificate issued to the former owner or occupier accurately reflects the amount the Council intends to pursue for payment.

Finally, there will no longer be a requirement for a vendor to provide Council with a Notice of Disposition for property that they no longer own. The Notice of Acquisition will be deemed to be sufficient to notify Council of the change in ownership of land.

Comments

The changes being introduced by the new Act are generally welcomed by Councils who have been anxious for an update on the outdated laws of local government. Though this may be the case, such an abundance of amendments and new provisions can seem overwhelming to keep up with. We anticipate that more changes are yet to come as Councils navigate through the new rules, and as the anticipated legislation to give effect to the results of the rating system review is introduced during 2021-22, which would allow the last remaining provisions of the old Act to be repealed.

If you would like advice on compliance or any other assistance in this area, please do not hesitate to contact any member of our local government team at Hunt & Hunt.


~ with Michelle Nguyen, Lawyer

Our Government and Public Sector Lawyers