Item 9.3 - Attachment 1

Economic Development Review 2008/09


Projects and Expenditure Review


Economic Development Team Activities -2009

Parramatta City Council






We, the undersigned, have been invited to review the expenditures, activities and outputs of Parramatta City Council’s Economic Development Team for the twelve months 2008-09, and are pleased to report as follows.


Nature of the Review

This review is in the way of a high level overview of the activities and expenditures of Council’s Economic Development Team with a view to forming an independent view from a business perspective. The review does not purport to be in the way of an expert audit of the financial, process or risk features of those activities or expenditures, which audits remain the responsibility of Council’s auditors, PriceWaterhouseCoopers.


To that end, we have set ourselves three questions:


1.   Is the scope of expenditure on Economic Development matters and activities reasonable in the context of Parramatta City Council’s capacity, strategy, and priorities?


2.   Are the outputs from the Economic Development Team’s activities reasonable in terms of quantity and quality within the scope of that expenditure?


3.   Are the Team’s outputs and activities reasonably consistent with Council’s agreed Economic Development strategy and plans?




Review panel members declare the following interests:


Mr Otto Hirsch was, for the period under review, retained by Council in the role of “Convenor of Business Partnerships” for which he receives an honorarium of $10,000 per annum, and has been working directly with the Economic Development Team. He is also a Committee Member of the Western Sydney Business Connection which Council supports financially through its own membership.


 Mr Roman Dechnicz was, for a significant part of the period under review, Chairman of the Parramatta Chamber of Commerce, and continues on the Chamber’s Board.



We have relied on four main elements for this review:


1.   the “Parramatta Economic Development Partnerships Plan 2007-2011, 2008-2009 Update”, appended


2.   the “2008/2009 Parramatta Economic Development Partnerships Plan – Projects and Expenditure Report”, appended,


3.   discussions with Michael Thomas, Manager Economic Development, City Strategy Unit, Parramatta City Council, and an interview on 4th September 2009, and


4.   our own direct experiences of the Economic Development Team’s activities and outputs.



Scope of Expenditure

Economic Development Expenditure in 2008/09 was $405,000 plus staff costs of $409,000; a total expenditure of $814,000.


This compares to $664,000 plus $548,000 staff costs the previous year when there were two additional staff.


More importantly, it represents around one half percent of Council’s total operating budget. As such, and based on business development or growth development expenditures of many other industries in which we have experience, we view the scope of Council’s expenditure on Economic Development to be more than reasonable, and would instinctively be inclined to categorise it as ‘modest’.


However, before finally reaching such a conclusion, or making any recommendation to expand expenditure in the Parramatta Council’s Economic Development functions, we would make two observations:


1.   it has not been possible for us to find comprehensive benchmarks against other councils for Parramatta Council’s Economic Development 0.53% proportion of expenditure and outputs, let alone other councils in similar economic growth quality environments. A small sample of three other councils indicates expenditure rates between 0.55% and 1.17% of total budget[1] but we have not yet been able to compare the volume and quality of their outputs.


2.   there is no demonstrable and direct causal link that we have seen that proves how much or how far Economic Development outputs drive growth outcomes. Instinctively, we are inclined to a positive view in that regard, and strongly opposed to risking any reduction of Council’s economic stimulus efforts, but we would require a better understanding how organisations such as Sydney Water and small businesses that have recently started up in the Parramatta LGA made their decisions before we could suggest moving to a significantly more aggressive economic stimulus expenditure strategy.


Quality of Expenditure

In the absence of such proof of the direct impact of Economic Development expenditure on Parramatta’s economic growth trend, or even some statistically significant correlation between them, this review must consider the ‘quality’ of the Economic Development activities by three factors:


1.   The ‘market’ uptake or volume of the main programs


2.   The apparent sophistication and professionalism of those key programs


3.   The variety and spread of programs


Within the four expenditure categories of Marketing the City, Fostering Innovation, Supporting Employment Growth, and ‘Other’, there are more than 15 individual activities and programs as outlined in Mike Thomas’ attached report. Of those, four programs account for more than 44% of expenditure, which we have used as the benchmarks for our determination of the Economic Development expenditure quality, namely:

·     the Parramatta Dining Guide,

·     development of,

·     launching ,and

·     acceleration of the tourism development plan


Without individually analysing each of those four programs for their uptake and professionalism in this review document, we are satisfied that their ‘quality’ is of a very satisfactory standard, in keeping with the rapidly emerging sophistication of Parramatta. We say ‘rapidly emerging’ because, while Council and the local business community is aware of the coming-of-age and sophistication of economic activity in Parramatta and Western Sydney, we continue to hear expressions of positive surprise from those who are unfamiliar the ‘new Parramatta’.  By any standard, the quality of Economic Development programs is most satisfactory.


Similarly, the number and range of activities is extensive for such a relatively small staff and expenditure.




Strategic Fit

Beyond the modest scope of expenditure and the highly satisfactory quality of programs, we have carefully analysed whether Economic Development activities during the last year have been conducted reasonably within the strategic parameters declared in the Development Partnerships Plan 2007 – 2011 as modified.


We commend the Economic Development Team and Parramatta City Council Management for their determination and consistency in working diligently within those strategic guidelines, and not straying into the many other opportunities that are presented to them for economic development expenditure or activity.




From our perspective as experienced business people, we are entirely satisfied that the expenditures and activities undertaken by the Economic Development Team during 2008/09 were relatively modest in their financial scope, of very satisfactory and professional quality, and within the agreed strategy.


We commend the Economic Development Team for maintaining those activities and outputs, especially during a period of turbulence, tragedy and stress in the Team’s composition.


We also support the Team’s intention to revisit and refine its long term strategy in 2009/10.









Otto Hirsch BE, MAICD                                    Roman Dechnicz BA, Dip Law

Executive Director                                          Managing Director

Advanced Strategy Centre                              RAD Consulting



9 September 2009











[1] Source: Mike Thomas information.