The operating environment for local government continues to shift rapidly. Global instability, cost volatility and supplier market changes are no longer abstract risks — they have arrived and are threatening council budgets and day-to-day operations.
At LGP, our role is to help councils navigate this complexity with clarity, consistency and confidence, while also ensuring our supplier markets remain strong and sustainable.
As expected, following the conflict in Iran, global fuel markets have become increasingly unstable. Over recent weeks, we’ve seen a sharp increase in enquiries from both councils and contracted suppliers about how these rising costs should be managed under existing contractual arrangements.
Rather than leaving councils and suppliers to navigate this uncertainty alone, LGP took the proactive step of communicating early and clearly with all councils and suppliers operating under our panel contracts. Our message was simple and deliberate:
- LGP will support open and constructive engagement, provide guidance on fair and appropriate responses to cost pressures, and
- LGP will monitor activity around this issue in relation to our Bulk Fuel contract, ensuring everything remains grounded in contract obligations and sound procurement practice.
Our focus is on protecting council value while ensuring suppliers remain viable during a period of global volatility.
We are very conscious that many suppliers — particularly those heavily exposed to fuel costs — are facing genuine financial pressure. To reduce the risk of supplier failure or service disruption, LGP has outlined a clear pathway for considering temporary fuel surcharges. Where an Approved Contractor believes such a surcharge is genuinely required to remain viable, it must be raised with LGP for assessment and approval before being applied under any LGP panel contract.
This isn’t a blanket approach, and it won’t be permanent. The global fuel situation remains uncertain, and LGP is reviewing this position daily to ensure we strike the right balance for both councils and suppliers as conditions evolve.
Another emerging issue facing councils is Microsoft’s recent decision to change its licensing cost model, including the removal of volume-based discounts across its online services portfolio. These changes affect platforms relied on by almost every council, including Microsoft 365, Dynamics 365, the Power Platform and security services.
To try and get ahead of this issue, LGP has been working closely with our contracted Microsoft resellers and with Local Government NSW (LGNSW) to understand the full impact and explore mitigation options. This includes supporting LGNSW’s discussions with the NSW Government around whether councils can be included under broader government arrangements.
At a national level, this issue is not unique to NSW. We have also raised the issue with National Procurement Network Executive, procurement leaders from all Australian states are now exploring how to work together on a coordinated national response.
Moving to more positive news, our 2026 Network Meeting Program is now underway, creating opportunities for councils to connect, share experience and learn from each other. We kicked off in Tamworth on 26 March, with more than 60 participants from over a dozen councils. Next the program now moves to:
- Coffs Harbour – 7 May
- Canberra – 21 May
- Orange – 4 June
Across the full program, we hope to engage more than 500 participants from over 70 councils, continuing to strengthen collaboration across the sector by the time we wrap up in Albury in August.
LGP has also made strong progress on our reconciliation commitments.
I’m also pleased to share that LGP’s Reconciliation Action Plan has been submitted for final approval from Reconciliation Australia. Once approved, we’ll move quickly to publish the RAP and begin delivering on its commitments through a structured program overseen by our Executive and Board.
As part of this work, LGP hosted our inaugural First Nations Procurement Forum in Tamworth on 25 March, bringing together First Nations business leaders and councils to focus on turning procurement intent into practical action.
Our First Nations Procurement Project Lead Justin Pheeney shared how procurement can create lasting economic opportunities through stronger partnerships with First Nations businesses.
Participants also heard from Councillor Marc Sutherland, a proud local Gomeroi man and Councillor at Tamworth Regional Council, who spoke about the Tamworth Aboriginal Community Controlled Organisations (TACCO) initiative and the council’s work supporting Closing the Gap outcomes.
The key message from Cr Sutherland was “Procurement can play a powerful role in creating economic opportunity and stronger partnerships with First Nations businesses.”
We look forward to continuing engaging with indigenous businesses through another five First Nations Procurement Forums across NSW as part of our 2026 Network Meeting Program, with the next Forum being held on Wednesday 6th May in Coffs Harbour.
Finally, release of the LGP Procurement Capability Grant Program opens on Thursday 16th April, and will remain open to submissions for 4 weeks. You can Click Here to find out more.
Thank you.
