Local government financial sustainability and asset management: a crucial link for grant funding success

By Zoe Dark, Principal Advisor and Manager, Peak Consulting, Grant Office 

Financial sustainability has become a top priority for local governments in Queensland, especially when seeking grant funding. Increasingly, funders require proof that councils can not only deliver projects but also maintain the associated infrastructure over its lifespan. This shift in expectations aims to ensure the long-term benefits of government-funded assets are sustained without creating financial stress for councils. 

According to a recent report by SGS Economics, 39% of Queensland councils were assessed as having low financial sustainability between 2016-2022 (p.4). This includes struggles to maintain an operating surplus ratio, meet debt obligations, and fund necessary asset maintenance. A consistent issue is that councils are heavily reliant on grants, with limited capacity to generate their own revenue. This reliance is further strained by rate-capping policies in other states like New South Wales and Victoria, which can have ripple effects across the sector. 

Adding to the complexity, the competitive nature of many grant programs means that councils must submit increasingly detailed business cases, even for lower-cost projects. Business cases now commonly require whole-of-life costing analysis to demonstrate that councils can afford ongoing asset maintenance and operational expenses. This is a growing trend that reflects the desire of funding bodies to prevent ‘stranded assets’—projects that are built but cannot be maintained long-term due to financial constraints. 

Whole-of-life costing (WOLC) is emerging as a critical tool in grant applications. This approach accounts for the total cost of owning and operating an asset over its lifespan, including initial construction, maintenance, upgrades, and eventual decommissioning. Tools such as the Queensland Treasury’s WOLC guide provide practical frameworks that councils can adopt to develop more reliable financial forecasts. Moreover, ensurine your funding application is supported with a full Cost Benefit Analysis and has expert financial analysis in the business case. 

Using qualified economists and advanced modelling tools to support WOLC assessments ensures that business cases align with funding expectations. This also demonstrates a council’s ability to manage financial risks and avoid the need for trade-offs between core services a risk noted by the Australian Local Government Association (ALGA) in the above mentioned SGS Economics report (p.4).  

To secure future grant funding, Queensland councils need to emphasise the sustainability of their projects through robust financial planning. Building in steps to your project planning and development can help demonstrate this to funders, such as: 

• Incorporating WOLC in Project Planning: 
  Early integration of WOLC ensures accurate budgeting for asset management, reducing financial uncertainty. 

• Strengthening Regional Collaboration: 
  By working with neighbouring councils and sharing resources, smaller local governments can enhance their financial sustainability and increase the likelihood of successful grant applications. 

Local governments are uniquely positioned to drive community development, but only if they can secure sustainable funding streams and prove their ability to manage long-term costs. With better financial planning and whole-of-life costing strategies, Queensland councils will be well-equipped to meet these evolving funding requirements and ensure that public assets remain a benefit to their communities for years to come. 

Peak’s team of expert Grant Writers, Project Planners, Economists and Project Management experts are always collaborating to ensure grant submission packages and project maturity plans incorporate sound long term financial sustainability planning, ultimately increasing the competitiveness of grant submissions and providing critical information to support comprehensive decision making. 

To help prepare your project for success reach out to Zoe Dark, Principal Advisor & Grant Office Manager at zdark@wearepeak.com.au or M 0442 102 122