Level 12 60 Collins Street Melbourne 3000
GPO Box 4326 Melbourne 3001
T 03) 9667 5555 F 03) 9667 5550
MUNICIPAL ASSOCIATION OF VICTORIA
_____________________________________________________________________________________________
28 February, 2007
Mr. Colin Morrison
Manager, Funding Programs
Local Government Victoria
Department for Victorian Communities
GPO Box 2392
MELBOURNE 3001
Dear Mr. Morrison
The MAV welcomes the opportunity to respond to the review of Public Library Funding
and Service Agreements (FASAs) 2007 – 2011 in its submission as attached.
As indicated in the MAV submission to the FASA review in 2003, and in line with the
Intergovernmental Agreement on local government (April 2006), the MAV seeks to
develop a Program Partnership Agreement for Public Libraries with the State, which would
provide the overarching context for the FASA arrangements.
In terms of the overall quantum of library funding, the Association continues to seek
greater financial contributions from the State Government for public libraries, as outlined
in the MAV’s submission to the 2007-08 State budget, a copy of which is also attached for
your information.
Should you have any queries regarding the submission, please contact Clare Hargreaves,
Manager – Social Policy ph. 9667 5543 or email chargreaves@mav.asn.au
Yours sincerely
ROB SPENCE
Chief Executive Officer
Enc.
Municipal Association of Victoria
Submission to the State’s Public Library
Funding and Service Agreements Review
2007 - 2011
February 2007
INTRODUCTION
The Municipal Association of Victoria (MAV) is the peak body for local government with a
legislative responsibility to represent the 79 councils in Victoria. Public library services
are operated by municipal councils, and as acknowledged in the current Funding and
Service Agreement (FASA), councils contribute the major proportion of funding for public
library services in the state. The MAV submission provides a broad overview position, as
detailed submissions have also been made by a number of councils and Regional
Library Corporations.
Key Modifications made since 2003
The MAV notes the positive modifications which have been made to public library
funding since the last Review including increases in the CPI paid to all library services,
and also funding for increases in population paid to library services with population
growth.
MINISTERIAL ADVISORY COUNCIL (MAC) VISION
The MAV is an ongoing contributor to the development by the MAC of the overall ‘vision’
for public libraries, and supports the ‘vision’ as a key framework guiding future decisionmaking regarding public library program and capital funding.
PRINCIPLES
In considering the current arrangements operating for funding and service agreements, it
is suggested that the following principles are generally accepted by the State and local
government:
1. That an equitable mechanism for distribution among councils (and between
individual councils and Regional Library Corporations) is required to achieve
equitable outcomes for communities.
2. That a balance between the needs of the metropolitan, interface, provincial and
rural councils be maintained.
3. That no library be disadvantaged in any restructure of funding arrangements, in
terms of its current funding levels, and any redistribution be achieved
incrementally.
4. That a population needs based funding distribution formula is appropriate.
5. That a sustainable recurrent funding model is linked to wage cost indexes and
CPI, and is indexed annually.
PARTNERSHIP AGREEMENT
In line with the Intergovernmental Agreement on local government (April 2006), it is
recommended that the State and the MAV proceed to develop a Program Partnership
Agreement for Public Libraries. A higher order partnership agreement negotiated
between DVC and the MAV would be overarching, and not preclude the current FASA
arrangements. This agreement would more clearly identify the role and commitments of
State and local government as the broad context for negotiating the FASAs, and
recognise the size of the local government contribution.
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BUDGET ALLOCATION – QUANTUM OF LIBRARY FUNDING
MAV request to State Budget 2007-08 seeks:
Support focusing on the key challenges facing councils; maintaining their operation and
staffing in the rapidly changing environment; their collections, both electronic and paper;
and improving their ICT capacity.
-
-
$660 000 over two years for satellite technology for mobile libraries
An immediate increase in the total quantum of funding provided to Victoria’s
public libraries, and index this funding so that it grows with the wage cost index
and population
The provision of grants to public libraries to cover the costs of ICT.
Focus of this Review
It is acknowledged that this Review is focused on the formula used to allocate the
recurrent funding provided by the Victorian Government to councils and regional library
corporations and the terms and conditions attached to the receipt of these grants. The
Review does not extend to the special projects and contingencies grants component of
the funding or the overall quantum of the funding.
OPTIONS FOR THE NEXT CYCLE
(a) Implementation of a further round of Funding and Service Agreements
Should a fourth round on Funding and Service Agreements be implemented to
allocated recurrent public library grants?
 To date, the development of three-year service agreements has been
supported as a general government direction as outlined in the October
2002 Government Response to the Public Accounts and Estimates
Committee 47th Report to Parliament - in relation to Department of Human
Services agreements.
 The proposal to extend future agreements to operate for a period of four
years to mirror the periods of office for both council and the State
Government is supported. This also matches Library Corporation
requirement to develop four-year plans.
 A fourth round of FASAs is supported for the period 2007-2011, and
provides an effective model which has proven successful to date.
 The four-year time frame provides increased certainty and greater
capacity to forward plan, and it is therefore recommended that a fourth
round is implemented.
.
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As stated in the Discussion Paper, library services have also welcomed the opportunities
afforded by the Local Priorities funding grants to plan for service developments over a
period of more than one year with the certainty of government funding being available.
(b) Specific Purpose Funding
Should part of the annual funding allocation to public libraries be set aside to fund
specific, designated library infrastructure operations?
Sector Development / Incentive Fund
This proposal is not supported as it would decrease the total pool available to Victorian
public libraries. Given that local government contributes the major proportion of funding
currently, councils would view this as a cost shifting exercise. In preference, it is
proposed that the Government establish a Sector Development Fund over and above
the current pool.
The MAV supports the view of the MAC that budget bids for statewide library initiatives
should not be taken out of the core allocation. Any money granted for such initiatives
should be over and above the core library funding.
The potential benefits of developing collaborative statewide infrastructure have been
demonstrated though projects such as Swift and LibraryLink, and it is likely that this will
be an area of expanding activity requiring ongoing sector development funding. These
projects are actively supported by the MAV as local government nationally is pursuing
efficiency gains through shared ‘back of house’ services across a wide variety of
activities and programs. (See reference to ALGA PWC report Section (e)).
(c) The formula used for allocating grants funding
Local Priorities Component
The percentage split between recurrent expenditure and local priorities funding is
generally considered to be satisfactory by councils, although a number of metropolitan
councils such as Knox would prefer it is rolled into a 100% untied funding grant.
It is apparent that the Local Priorities component of the grant is favoured particularly by
rural councils and also single council services as it enables their councils to make a
commitment to implement specific projects, in response to community needs. In the
large metropolitan regions it is generally a minor component absorbed into an overall
budget. It is noted that the amount has not increased beyond CPI for a significant
number of years.
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Council Component
The allocation of recurrent funds between per capita (90%) and the council component
(10%) is generally supported as enables the smaller councils to maintain a viable level of
service.
It is acknowledged that the formula used to determine the funding of the council
weighting favours rural services. While this is supported, it is recommended by the MAV
that the application of the weightings approach is monitored to ensure that significant
inequities do not result in the funding level of non-rural councils over time, particularly
those councils experiencing rapid population growth.
(d) The conditions in place for the receipt of library grants
The conditions of grant receipt are generally considered to be satisfactory.

West Gippsland Regional Library Corporation (WGRL) note that cashflow
transfers from DVC to libraries need to be ensured in first week of each quarter.

WGRLC suggest that an additional condition could be included concerning the
reciprocal borrowing of library collections across the state, which is supported by
the MAV.
The Definition of Basic and Value Added Library Services (Schedule 3) are generally still
appropriate subject to updating terminology, and should be maintained in line with the
Australian Library Association (ALIA) and the International Federation of Library
Associations (IFLA).
The concept of free and universally accessible basic service continues to be strongly
supported, as it is under A Fairer Victoria.
It is noted that the capacity to re-assess these definitions may be required during the
four-year period given the rapid advances in many areas of information provision
including information technology. Some councils / corporations suggest that the
definitions need to be tightened up so as to avoid difficulties and contradictions currently
faced in their interpretation.
Some councils / corporations propose that a ‘basic core’ of software programs be
available on public use internet PCs.
Geelong Regional Library Corporation (GRLC) also notes that National Competition
Policy requirements need to be kept in mind with potential in some areas for basic library
services to come into competition with commercial hire outlets (eg, DVD hire).
In summary, the MAV is mindful that the State and local government are seeking to work
towards as much commonality in program guidelines across municipalities as possible,
so that residents / library users and suppliers have uniform and equitable access to
services across Victoria, while at the same time not stifling local flexibility to respond to
community needs and preferences.
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(e) Other
Annual Indexation
The MAV and councils have proposed for some time that government grants in service
areas such as libraries should be indexed according to wage based indicators, as the
CPI rate does not reflect the most significant proportion of the library budget which is
salaries.
The Australian Local Government Association (ALGA) National Financial Sustainability
Study of Local Government by PriceWaterhouseCoopers (PWC, 2006) findings propose
that:
- councils realise gains from greater economies of scale and reduce unit costs via
regional or shared service provision, statewide purchasing etc
- reforms to intergovernment transfers – ‘revise the escalation methodology for
Federal Assistance Grants (FAGs) from mix of population growth and CPI to a
formula tied to local government cost movements (eg. Wage Cost Index,
Construction Cost Index, population growth).
Capital Funding
Rural library services in particular have also raised the need for greater capital
contributions to public libraries. The current amount of funding through Living Libraries
only allows for capital upgrades to existing branches and not new or larger scale
developments. GRLC also raise the issue that rural library services currently have
access to only 50% of the amount available to metropolitan Melbourne libraries.
CONCLUSION
Submissions regarding the FASA Review to the MAV from councils restate that the key
issue from the local government perspective is the need for an increase to the quantum
of recurrent funding for public libraries.
Within that context, the responses indicate that there is a general consensus to continue
with the FASA arrangements on a four-yearly cycle, and to continue with a per capita
distribution funding model. The general conditions of funding are also supported, with
some additional suggestions for inclusion.
In the longer term, in the spirit of the Intergovernmental Agreement (April, 2006), the
MAV seeks to develop a Program Partnership Agreement for Public Libraries with the
State, which would provide the overarching context for the FASA arrangements. The
MAV’s recent submission to the 2007-08 State Budget identifies public library funding as
a priority issue for local government.
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RECOMMENDATIONS
1. That the State and MAV - local government proceed to develop a Program
Partnership Agreement for Public Libraries.
2. That the overall quantum of library funding is grown by the State in subsequent
budgets as libraries represent a key community building and information
resource.
3. That the State commits to provide an immediate increase in the the 2007/08
budget of the total quantum in recurrent library funding, and index that funding so
that it grows with the wage cost indexation.
4. That a fourth round of Funding and Service Agreements be implemented with
local government.
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