The prospect of council amalgamation is once again in focus for local municipalities, following a push towards consolidation by the NSW government.

Tess Gibney

Prompted by the recommendations of a three-year consultative independent review of local government, the push is backed by a $1 billion ‘Fit for the Future’ state government support package.

Described by Premier Mike Baird as the “most significant investment the State has ever made in the local government sector”, the package incentivises councils to merge – allocating $258 to those that decide to do so.

Long a politically contentious, vexatious issue, the amalgamation of councils is designed to alleviate financial pressure on local governments. According to TCorp, the State’s central financing authority, over two-thirds of NSW councils are in a deteriorating financial state, running a combined deficit in excess of $400 million.

Premier Baird says there is potential for the government to revisit their long-held ‘no forced merger’ policy – also an election promise – before the June 2015 elections. “The simple position is this – councils losing a $1 million a day is unacceptable, it can’t go on, there needs to be change – and we need our councils to be in a position where they are financially secure in the future,” he said.

In January, the Independent Local Government Review Panel released its final report, Revitalising Local Government, and recommended Sydney councils be reduced from 41 to between 15 and 18. The panel encouraged councils along the upper and lower North Shore merge into two “super councils”, amalgamating Ku-ring-gai and Hornsby councils into one and North Sydney, Willoughby, Hunters Hill, Lane Cove and Mosman councils into another.

Though previous panel recommendations on mergers have been rejected by several North Shore mayors, councils are now taking the divisive issue seriously following the government’s recent announcement.

A public meeting was held at Lane Cove Council Chambers on October 8 to gauge both community and council views on merging. The meeting found that considering “the size of the Lane Cove Local Government Area and that Council has no debt, Council believes that it is ‘Fit for the Future’ and therefore does not need to amalgamate with any other Council(s).”

Willoughby Mayor, Gail Giles-Gidney, said Willoughby Council was considering amalgamation “very seriously” and that the impact on local communities needed to be “assessed as part of the review process”.

“Amalgamations may provide the framework for councils to operate in a more efficient manner, though we need to ensure the strong local representation and understanding of local issues offered by the current model is not lost,” she said.

Willoughby councillor Angelo Rozos, however, has spoken out independently in favour of amalgamation as means of reducing costs for ratepayers.

Rozos says some of the biggest issues facing North Shore councils include the “shortfall of revenue and the backlog of infrastructure”, and that merging could cut back on council responses to this shortfall in revenue – such as the selling off of public land and the creation of big buildings.

“There seems to be a bit of a resistance regarding amalgamation, but we need to have that serious debate on the North Shore. I am all for retaining local and independent council representation, but we need to get the balance right with financial responsibility for the long term.”

NSW councils will have to prove they are ‘Fit for the Future’ by providing details of their response to community issues, based on a template set to be released next month. The government is defining a council as ‘Fit for the Future’ if they can: “save money on bureaucracy and administration in order to free up money for frontline services and community facilities; can contribute to projects and tackle issues that impact on its residents and extend beyond the council boundary; and has credibility and influence across councils, across government and within industry.”

Ku-ring-gai Council’s position on amalgamation has remained unchanged since 2013. Mayor Jennifer Anderson said that the disadvantages for Ku-ring-gai residents “far outweighed any perceived advantages”, and that the Council had already shown its ability to work beyond its boundaries through its membership in the Northern Sydney Regional Organisation of Councils.

“Regional cooperation is our preferred model for council reform,” she said.

“In terms of our residents, a forced merger would mean reduced representation, higher rates and a loss of identity. We believe there would be massive disruption to services and unknown outcomes for our town planning and heritage controls.”