Chapter Six: Funding and resourcing models


What does place-based funding typically look like?

Effective funding is a key enabler to successful place-based approaches, this has been shown through many reviews, including the Independent Review of the Australian Public Service.

Place-based approaches are typically based around a ‘backbone’ or lead organisation (or group of organisations) in the local community which hold the government funding and coordinate local partners to meet their shared outcome. Community leaders can also establish place-based initiative without the involvement of government and put in place a clear backbone and focus before government comes into the funding conversation.

Why is it important?

How government invests in a place-based approach can significantly impact its success. You may be responsible for determining the outcome the funding is seeking to achieve and the lead organisation that will receive the resources.

It is important to be clear on what is already happening in a local area and the role you want to play. Also think about which elements are already funded, for example by existing partners or organisations, and what government can fund to enable local action on the ground.

The Place-based Funding Toolkit

To complement this guide, a comprehensive Place-based Funding Toolkit is available for VPS who are designing or managing funding agreements with place-based initiatives. It provides in-depth tools and tips.

How it works

Activities and functions

There are many different activities and functions that need resourcing during the development and implementation of a place-based approach.

Backbone organisations and functions

Backbone functions can be undertaken in a stand-alone organisation or distributed across partner organisations depending on the size and scope of the collective effort and its specific context. Refer to Chapter Two: Working with local communities and government agencies for further information.

Backbone functions involve coordinating activities and resource such as:

  • strategic direction and governance
  • stakeholder communication and engagement
  • monitoring data collection and analysis
  • managing funding and communications.

Activities of the backbone need sufficient funding to support successful implementation and sustainability. Refer to Chapter Seven: Collaborative governance to learn more about the key elements of governance structures.


It’s important to invest in building partnerships in the early stages to enable collaboration, rather than adopting a funding approach that promotes competition between organisations. Funding partnerships will allow time to develop trust and build relationships, and mechanisms for accountability.


Common roles in a backbone include:

  • project officer/s to coordinate the initiative and the team
  • staff involved in the implementation
  • leaders to drive and promote the work.

Some lead organisations, such as backbones, directly employ staff. Other staff may be involved as part of their existing role in an organisation. This can be through dedicated funding or an in-kind contribution from a partner organisation. For example, a partner might allocate one of their staff to collect data to identify local issues without asking for a contribution to the staff’s salary.

Refer to Chapter Seven: Collaborative governance and Chapter Eight: Skills, capabilities, and mindsets to learn more about building teams and capacity for place-based approaches.

Community engagement and development

The success of a place-based approach relies on meaningful engagement with the community to understand the local issues and shape the solutions – but this can require significant time and resources. These activities are key for a co-designed approach, and you should also fund community members’ participation.

Capacity building

Place-based approaches require a different way of working from traditional programs so your team and partners will need support to work in new ways and actively participate. For example, developing the capacity of community members to participate in decision-making.

You should also develop the capacity of participating organisations and their workforce to deliver a program or service in a new way. This requires investment in training and mentoring. Community development activities can also be a great way to build local capability and readiness to participate.

Refer to Chapter Eight: Skills, capabilities and mindsets to learn more about building capability.

Project activities

Resourcing is needed for the project activities that make up the initiative, such as the day- to-day running of the service or place-based initiative that is being implemented.


Overheads include office space, meeting space, IT systems and other basic operational resources, which will be needed for the backbone functions and project activities undertaken by the initiative. You could fund these through the initiative’s formal funding, or they could be provided in-kind by a participating organisation.


You will need to communicate the initiative’s purpose, activities and progress to several audiences, including the community, partners, funders and other stakeholders.

It is recommended that a strong place-based initiative identity and visual brand is created, and adequate resources are provided to communications and branding. This function would usually sit in the backbone.


Place-based initiatives are long-term – the desired outcomes usually involve systemic change, which takes time. Your funding approach should recognise this and allow the necessary time.

Key considerations

Traditional government funding approaches can be a major barrier to true collaborative working. It’s critical that funding for a place-based initiative can be used flexibly.

Be adaptive

The ‘emergent’ nature of place-based ways of working means that actions will evolve over time in collaboration with the community. Adopt a flexible funding model to provide scope to adapt in line with a developmental approach. This will allow you to accommodate periods where an initiative is active.

Adopt a long-term outlook

Funding should support the long-term nature of place-based work and commit resources to a realistic timeframe. For example, a yearly funding cycle may not provide enough time or stability for your required work. Yearly contracts may also impact staff retention and the continuity of the initiative, when building relationships and trust are fundamental.

Safe to fail; free to learn

Ensure funding is flexible enough to allow for innovation and promote a ‘safe to fail and learn’ environment.

For more on this see Chapter One: Understanding place-based approaches and how they evolve over time.

Focus on outcomes, not outputs

Funding that is based on measuring and reporting on outputs doesn’t work with place-based approaches. Focus on outcomes instead of outputs to allow a deeper understanding of your place-based initiative’s contribution or impact (Smart, 2017).

Be prepared to pivot

Flexibility in your organisational structure is key, so staff can pivot between their existing roles and roles in the initiative.

Case study: Latrobe Valley Authority (Victoria)


The Latrobe Valley Authority (LVA) was established in November 2016 following the announcement that the Hazelwood Power Station would close in March 2017. Acknowledging that a different approach was needed to make real improvements to social and economic outcomes for the region, the Victorian Government made a commitment to the Latrobe Valley community that the establishment of the LVA was a ‘line in the sand’ to ensure long-term delivery, not more short-term plans or promises.


The LVA’s purpose is to be a catalyst for place- based transition, transformation and long-term sustainable prosperity. This involves taking a whole-of-community approach to fostering the conditions necessary for successful transition, and is a genuine place-based response to how government works with a region.

The LVA was empowered with a high level of autonomy and discretion in decision making and funding allocation. There was also a clear mandate to do things differently; to bring community, business and government together to develop and progress a common agenda of shared priorities. This involves building on identified strengths and empowering local stakeholders to take greater control of their future.

Crucially, this does not start from a deficit perspective or a view that regions are a problem for government to fix. It is a genuinely collaborative process that builds multi-level governance and leadership, local knowledge and capability, and empowers communities to develop and implement change. With a team of local staff established in Morwell to work with and for the region, this has helped rebuild community trust in government and reshape perceptions about the potential to secure a strong and prosperous future for the region.

This approach is based on global best practice in place-based regional development and is aligned with the Victorian Government’s A framework for place-based approaches. The LVA has been cited internationally to illustrate that while it was established as a top-down initiative, its success is largely due to its inclusive and collaborative, bottom-up approach (European Commission, 2019).


The LVA’s initial focus following the Hazelwood closure was supporting impacted businesses, workers and their families. In addition, a suite of major and community infrastructure, events and programs was delivered to provide a local economic stimulus and boost to liveability.

Over time the focus has evolved to recovery and capability building, and driving system change by enabling the essential conditions for regional growth and transformation across the community and economy.

This evolution is characteristic of true place-based approaches – long-term, collaborative efforts that empower communities to guide change and contribute to a cycle of learning and transformation.

The LVA has drawn on the European model of Smart Specialisation as a strengths-focused, place-based framework to boost growth and employment by supporting the region to identify and develop its own unique assets and resources.

More than 2000 people in Gippsland have been involved across four key sectors which were identified as having key strategic importance and future growth potential - Health and Wellbeing, Tourism, Food and Fibre, and Energy.

Central to the approach is government (state and local), education, industry and the community working together. Joining up government departments and agencies in this collaborative approach has influenced how they, often based and led out of Melbourne, think about their role and contribution as equal partners and decision makers working in a region. There is greater emphasis on collaboration and innovation and providing longer term solutions within and across sectors.

An example

The LVA is maximising outcomes from major projects across economic and industry development, liveability, social connection, employment, training, healthcare and wellbeing, by staking a systems approach to ensure cross-sector collaboration.

The Gippsland Regional Aquatic Centre (GRAC) is contributing to liveability by providing a world-class health, fitness and sports facility for families across the region. The project also provided a boost to the local economy through 450 jobs during construction and 100 ongoing operational and support roles.

However, GRAC is more than just a short-term stimulus.

The Centre is piloting the use of geothermal energy for heating – providing significant operational cost savings as well as establishing future opportunities in the new energy sector.

The LVA commissioned modelling of the future workforce needs and opportunities in Gippsland’s health and community services sector. This identified a current skills gap, but community need for, and job opportunities in, allied health services. Federation University has created new courses and GRAC is the site of a Wellness Centre used to deliver training in physiotherapy, exercise physiology, occupational therapy and speech pathology. The Wellness Centre will allow local residents to train and upskill within their own community rather than needing to travel to Melbourne or beyond, before finding a rewarding job in the local healthcare sector.