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IPART's 'Fit for the Future' Report released

The NSW Government has released the much anticipated report of the Independent Pricing and Regulatory Tribunal (IPART) into the local government sector.

Background

In 2011, the Government requested the IPART act as the Expert Advisory Panel to review the performance and sustainability of the state’s local governments. The review, ‘Fit for the Future’, was designed to cut red tape, reduce council expenditure and improve council services.

Councils were invited to submit proposals to IPART by 30 June 2015 demonstrating how they will become sustainable, provide effective and efficient services, and have the scale and capacity needed to meet the standards of communities.

The IPART has now handed down its final report. The report found two-thirds of NSW councils are unfit and local government mergers could save up to $2 billion over the next 20 years for NSW ratepayers. Assessment was based on each council’s scale and capacity, financial sustainability, infrastructure and service management, and efficiency.

There are 152 councils in NSW – 144 were invited to submit responses to IPART, of which 139 did (8 councils in far western NSW were not required to submit proposals because they were not part of the ‘Fit for the Future’ process). Of those received, 52 of the 139 proposals, or 37 per cent, were assessed as being fit.

Councils were assessed as not having sufficient scale and capacity because:

  • A merged entity would have greater scale and capacity;
  • A merged entity could better integrate planning and development decisions;
  • A merger option would deliver substantial economic benefits;
  • Independent economic analysis by Ernst & Young indicated a merger would provide large benefits to communities;
  • The council’s proposal to remain stand-alone was not at least as good, by reference to the assessment criteria, as a merger option; or
  • A merger option would delivery overall benefits to residents.

The Minister for Local Government, Paul Toole, has given NSW councils 30 days to respond to the IPART’s report. Although the report does not make specific merger proposals itself, many councils will now be expected to consider voluntary merger options.

As an incentive to merge, Mr Toole today also announced a Stronger Communities Fund, which would provide up to $25 million in funding for newly merged councils.

The NSW Government will respond to the report before the end of the year.

Metropolitan Councils

IPART received 38 proposals from metropolitan councils. Two of these councils proposed mergers, while the other 36 submitted ‘Improvement Proposals’, which identified options for improving their performance.

Of the 38 proposals, nine were assessed as fit and 29 were assessed as unfit. The majority of proposals assessed as fit were from outer metropolitan Sydney. In contrast, and with the exception of Bankstown, all inner metropolitan councils that submitted Improvement Proposals were assessed as unfit because they failed the scale and capacity criterion. For each of these councils, IPART has recommended mergers.

Hunter’s Hill, Lane Cove and Ryde councils submitted a ‘Joint Regional Authority’ proposal, proposing to share some services and centralise their planning functions. IPART rejected this idea as unfit because it failed to satisfy all of the assessment criteria overall.

Regional Councils

In total, 101 regional proposals were received. Of these, 43 were assessed as fit, two were merger proposals (assessed as fit), and the remainder were assessed as unfit.

Scale and capacity were the major reason most regional council proposals were rejected, affecting 43 councils in all. In a number of cases, declining or static populations meant proposals were assessed in light of future scale and efficiency projections. 24 councils also failed on the basis of IPART’s financial benchmarks.

27 councils were found to be in a position to merge to satisfy IPART’s requirements for being fit for the future.

‘Fit’ Councils

Metropolitan Councils: 29 per cent of Sydney metropolitan councils were assessed to be fit.

  1. Bankstown
  2. Blue Mountains
  3. Camden
  4. Penrith City
  5. Sutherland Shire
  6. The Hills Shire
  7. Wollondilly Shire
  8. Auburn, Burwood and City of Canada Bay*
  9. Randwick and Waverley*

* These councils have volunteered to merge in order to be cumulatively fit.

Regional Councils: 44 per cent of regional NSW councils were assessed to be fit.

  1. Albury
  2. Ballina
  3. Bathurst
  4. Bega Valley Shire
  5. Bogan Shire
  6. Byron Shire
  7. Carrathool Shire
  8. Cessnock City
  9. Coffs Harbour City
  10. Coolamon Shire
  11. Coonamble Shire
  12. Cowra Shire
  13. Dubbo City
  14. Eurobodalla Shire
  15. Gilgandra Shire
  16. Glen Innes Severn Shire
  17. Great Lakes Shire
  18. Greater Hume Shire
  19. Gunnedah Shire
  20. Inverell Shire
  21. Leeton Shire
  22. Lismore City
  23. Lockhart Shire
  24. Moree Plains Shire
  25. Muswellbrook Shire
  26. Nambucca Shire
  27. Narrabri Shire
  28. Parkes Shire
  29. Port Macquarie-Hastings
  30. Port Stephens
  31. Richmond Valley
  32. Shoalhaven City
  33. Singleton
  34. Tamworth Regional
  35. Tumbarumba Shire
  36. Upper Hunter Shire
  37. Wagga Wagga City
  38. Wakool Shire
  39. Warren Shire
  40. Wingecarribee Shire
  41. Wollongong City
  42. Cootamundra Shire and Harden Shire*
  43. Young Shire and Boorowa*

* These councils have volunteered to merge in order to be cumulatively fit.

‘Unfit’ Councils

87 proposals were assessed as unfit. Of that number: 60 were assessed as not having sufficient scale and capacity but did meet the financial criteria; 18 were assessed as having sufficient scale and capacity but did not meet the financial criteria; and 9 were assessed as not having sufficient scale and capacity or financial criteria.

Metropolitan Councils: 71 per cent of Sydney metropolitan councils were assessed to be unfit.

  1. Ashfield City
  2. Blacktown City
  3. Botany Bay
  4. Campbelltown City
  5. Canterbury City
  6. Fairfield City
  7. Hawkesbury City
  8. Holroyd City
  9. Hornsby Shire
  10. Hunter’s Hill
  11. Hurstville City
  12. Kogarah City
  13. Ku-ring-gai
  14. Lane Cove
  15. Leichhardt Municipal
  16. Liverpool City
  17. Manly
  18. Marrickville
  19. Mosman Municipal
  20. North Sydney
  21. Parramatta City
  22. Pittwater
  23. Rockdale City
  24. Ryde City
  25. Strathfield Municipal
  26. Sydney City**
  27. Warringah
  28. Willoughby City
  29. Woollahra Municipal

**Sydney City Council has been assessed as unfit on the basis of its status as a ‘Global City’ council.

Regional Councils: 56 per cent of regional NSW councils were assessed to be unfit.

  1. Armidale Dumaresq
  2. Bellingen Shire
  3. Berrigan Shire
  4. Bland Shire
  5. Blayney Shire
  6. Bombala Shire
  7. Cabonne
  8. Clarence Valley
  9. Conargo Shire
  10. Cooma-Monaro Shire
  11. Corowa Shire
  12. Deniliquin Shire
  13. Dungog Shire
  14. Forbes Shire
  15. Gloucester Shire
  16. Gosford City
  17. Goulburn Mulwaree
  18. Greater Taree City
  19. Griffith City
  20. Gundagai Shire
  21. Guyra Shire
  22. Gwydir Shire
  23. Hay Shire
  24. Jerilderie Shire
  25. Junee Shire
  26. Kempsey Shire
  27. Kiama Municipal
  28. Kyogle
  29. Lachlan Shire
  30. Lake Macquarie City
  31. Lithgow City
  32. Liverpool Plains Shire
  33. Maitland City
  34. Mid-Western Regional
  35. Murray Shire
  36. Murrumbidgee Shire
  37. Narrandera Shire
  38. Narromine Shire
  39. Newcastle City
  40. Oberon
  41. Orange City
  42. Palerang
  43. Queanbeyan City
  44. Shellharbour City
  45. Snowy River Shire
  46. Temora Shire
  47. Tenterfield Shire
  48. Tumut Shire
  49. Tweed Shire
  50. Upper Lachlan Shire
  51. Uralla Shire
  52. Urana Shire
  53. Walcha Shire
  54. Warrumbungle Shire
  55. Weddin Shire
  56. Wellington
  57. Yass Valley
  58. Wyong City

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