City governments are spending different amounts | KPMG | QA

KPMG report finds city governments are spending strikingly different amounts to deliver basic city services

City governments are spending different amounts

City governments are spending strikingly different amounts to deliver basic city services, even within the same regions, according to Finding the courage to improve: Benchmarking city services a new report from KPMG International.

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City governments are spending strikingly different amounts to deliver basic city services, even within the same regions, according to Finding the courage to improve: Benchmarking city services a new report from KPMG International.

The KPMG report summarizes the findings of an in-depth benchmarking survey involving 35 cities around the world. Twelve basic city services were reviewed, including road access, transit, park access, garbage collection, and drinking water supply, among others.

The report reveals that some cities might be inefficient and spending too much for the services they deliver. For example, one city reported that 65% of its drinking water is lost from the time it enters the treatment facility, to the time it is supplied. Some cities report spending two to three times the average for the same services, while others are not collecting reliable data to make relevant service-related comparisons.

Commenting on how the report findings relate to the Middle East region, Mihir Shah, Head of Infrastructure at KPMG in Qatar said: “Technology and innovation have created massive new opportunities for cities globally and in the Middle East region, which could radically transform their efficiency and effectiveness. New funding mechanisms and private partnership opportunities are being explored across multiple city services ranging from transit to waste management, to unlock unprecedented opportunities for cost-effective service improvements. And everyone — from citizens through to government agencies — is eager for change.”

The benchmarking report also found that cities are challenged in having a clear understanding of the actual efficiency and effectiveness of the services they deliver. The study could have included many other cities but the authors note that numerous cities dropped out when they discovered they were unable to generate basic data critical to measuring service outputs. One city reported that 100% of their roads were in “good condition” – virtually impossible to achieve. However, such a finding further points to the need for a common framework for measuring services.

The report found that round the world, cities are pouring millions — sometimes billions — of dollars into developing and improving public transit. But our benchmarking exercise suggests that when it comes to comparing services against other transit authorities more work can be done to collect and compare ridership and route effectiveness indicators. And, as a result, investments may be flowing into ineffective routes, modes and assets.

The report also highlighted that to be effective, decisions with respect to service quality — headway, mode, geographic coverage — need to be taken within an overall city/urban structure strategy.

On the development of transit systems in the Middle East, Shah shared “Transit is one area of city infrastructure which is seeing tremendous investment, innovation and change regionally. We are seeing environmental stewardship from cities who are exploring possibilities for e-buses and hybrid buses. We are also witnessing increasing number of cities choosing to partner with the private sector to finance and deliver efficient transit infrastructure and services.”

Unlike other city benchmarking exercises, the KPMG report focused on comparing tangible efficiency and effectiveness measures such as cost, quality and service value for specific city services. Within the report, the authors compare the participating cities’ results to help city leaders identify ‘average’ costs for basic city services around the world.

The study also explores new approaches, innovations and models now being tested and applied in cities around the world – practical lessons that can be shared with other cities. Leveraging specific examples from Europe, Asia and the Americas, the report aims to help city leaders think differently about the way they manage city service delivery.
 

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