The Local Government Act 2020 (Vic)

This is the first of a series of articles on the staged introduction of the Local Government Act 2020 (Vic) (the new Act), which applies to local Councils in Victoria.

In broad terms, the new Act will replace the Local Government Act 1989 (Vic) (the old Act), which sets out the roles and responsibilities of Councils and Councillors, the framework for how Councils should operate.

The new Act will gradually replace the old Act in four main stages between April 2020 and June 2022. This staged implementation is designed to provide local Councils with sufficient time to understand and comply with the new statutory requirements.

Key changes

The new Act represents an overall shift from the prescriptive approach of the old Act to a new, “principles-based”, approach.  The 5 principles which have driven the development of the new Act are: community engagement, public transparency strategic planning, financial management, and service performance. These principles aim to enhance transparency and responsiveness to the community, as well as supporting stronger accountability.

Key features of the new Act include:

• Entitlements and allowances

The new Act strengthens provisions in the old Act relating to the allowances and entitlements payable to Mayors, Deputy Mayors and Councillors. These allowances will now be determined by the Victorian Independent Remuneration Tribunal, rather than the Minister and Councils (section 39).

• Donations and gifts

The new Act introduces a control on electoral campaign donations and gifts to support appropriate standards of integrity (section 306). Council staff must also keep and maintain a gifts register.

• Procurement obligations

The new Act requires Councils to prepare and adopt a Procurement Policy addressing certain matters (section 108). These include a description of the criteria used by the Council to evaluate whether a proposed contract provides value for money (i.e. the Council’s methodology).  Procurement Policies must also be reviewed at least once during each 4-year Council term.

• Ministerial oversight

Part 7 of the new Act establishes a framework for Ministerial oversight. This framework improves the accountability and governance of local Councils by setting standards of conduct and enabling investigation of public interest complaints relating to significant governance failures or breaches of the law by councilors (e.g. section 184).  It also allows for the standing down Councilors in breach of such standards (sections 228).

We note that the new Act retains some of the Minister’s powers under the old Act, including the power to suspend a Council where there is evidence of significant governance failures or breaches of the law (section 230).

• Confidential Information

The new Act introduces a definition of confidential information intended to include information which, if disclosed to the public at any time, is likely to be inappropriately detrimental to the Council or any person.[1]

A person who is or has been a Councillor, member of a delegated committee, or a member of Council staff who intentionally or recklessly discloses confidential information will commit an offence and liable to pay a significant penalty (currently a fine of approximately $19,800).

Need help?

FAL Lawyers has extensive experience advising on administrative procedures, compliance and governance and can assist Local Councils with understanding how the Local Government Act 2020 (Vic) may impact them. If you have any queries or would like to discuss, please do not hesitate to contact us.

[1] Local Government Bill 2019, Explanatory Memorandum, page 24.