Infrastructure challenges present the leading risk to local government in 2018, according to a survey of the sector.  

In their 2018 Risk Report: Australian Local Government, global professional services firm Aon found that the combination of funding squeezes and rate capping alongside rising ratepayer expectations ensured infrastructure topped the list of 10 leading risks as perceived by local government, followed by financial sustainability and stability.

“Not surprisingly, the unrelenting challenge to do more with less ensured that the financial challenges of infrastructure, financial sustainability and stability lead the list of risks for local government. It’s been that way since Aon started this benchmarking series in 2015,” the report states.

The report collated responses to a survey from 116 risk management executives from at least 90 councils across NSW, Queensland, Tasmania, Victoria and WA.

Aon’s Head of Local Government Paul Crapper says the rate of municipal growth is another key factor causing infrastructure to take the lead as the greatest risk for councils.

“Councils going through such high levels of municipal growth struggling to keep up with delivery of all the infrastructure required for that level of growth,” he told Government News.

The report also listed a “widening asset renewal gap” as placing financial pressure on councils, as they seek to implement new infrastructure while maintaining existing infrastructure.

Health and safety came in third, followed by risks to cyber security, reputation, human resources, asset protection, funding, planning decisions and weather. Cyber risks only entered Aon’s top ten list in 2017.

“Council databases are a trove of tempting private information. In the year to June the Australian Signals Directorate responded to 671 serious cyber security incidents involving some level of Government. Any serious breach of private information whether through hacking or by accident will soon need to be reported and remediated by councils to comply with data breach notification laws soon to be introduced for the local government sector,” the report states.

As the final surveys were collected Australia endured a round of cyclones, bushfires and floods.

“Mother Nature won’t be ignored,” the report quipped.

The report found 86% of councils surveyed had made insurance claims in the past 12 months. Trips and falls made up almost 24% of claims, followed by storm damage to council assets (21.13%), tree root damage (14.08%), council-owned road damage to private vehicles (13.38%), and flood damage to council assets (12.65%).