Four years of consultation, planning and a process to come up with criteria and a methodology for assessment under NSW Government’s ‘Fit For The Future’ reforms, has culminated in a report card.
Councils across the state were asked to submit their proposals, including preferred merger partners, which were assessed against four criterion covering scale and capacity and finances.
IPART received 139 proposals from 144 NSW councils – which included only four merger proposals – but rejected 87 of them as being not fit, mostly because it says they failed the scale and capacity test.
Blacktown City Mayor, Councillor Stephen Bali, blasted IPART’s ‘Unfit’ assessment for Blacktown, saying it should be ashamed of its undermining of ratepayers’ confidence in their councils.
“When a large, well run and financially sound council like Blacktown can be found unfit, then the whole selection criteria must be called into question,” he said.
“This is dysfunctional decision making, which seems more about supporting an ideological stance than making a proper decision based on fact.”
The two-thirds of councils declared unfit have just 30 days to respond in less than 50 words, according to the Independent Pricing and Regulatory Tribunal (IPART) report, and now face a high-stakes game of musical chairs.
When the music next stops, they’ll have to accept the Baird Government’s ultimatum for a local government survival:-surrender autonomy, choose one or more of the other unwilling participants and merge, after receiving the blessing of their community and yours.
But an Upper House inquiry has just reported that the ‘Fit for the Future’ process was flawed from the outset and that IPART was the wrong organisation for the job.
“While IPART has significant capacity to analyse the finances of local government, it does not have the demonstrated skills or capacity to assess the overall 'fitness' of councils as democratically responsible local governments," the report said.
Another finding relates to the criteria that IPART used to judge councils.
"The scale and capacity criterion was a flawed criterion ... and accordingly assessments of councils' fitness based on this threshold capacity are not well-founded," the report said.
The first of 17 recommendations is "that the Premier and NSW Government withdraw the statements that 71 per cent of councils in metropolitan Sydney and 56 per cent of regional councils are unfit".
Another calls on the Government to consider "the removal of rate pegging and allow councils to determine their own rates" provided the community supports any rate rise.
Local Government Minister Paul Toole has seized on that recommendation, warning that it was proof there were plans by councils for rate hikes.
"The report indicates that they want to jack up rates. They're talking about taking the easy way out here," he said.
"Fifty-two councils over the last two years have put their rates up, in some cases by 50 per cent."
Cr Bali said Blacktown Council’s submission to IPART used sound, defendable accounting practices and he was amazed other councils could be found fit yet say they have outstanding roadworks or footpaths to fix.
“Blacktown council is debt free, has the lowest operating cost per ratepayer in the metropolitan area, and has massively increased the amount it spends on maintaining and improving its roads, drains, parks footpaths and community buildings,” Cr Bali said.
“Yet the state government thinks we are unfit. There is definitely something fishy about this process.”
His thoughts reflect the disquiet across the local government sector over an engagement process criticised for lacking genuine attempts at consultation and dissatisfaction with the parameters in which councils were expected to respond to their IPART future fitness assessment.
High profile radio broadcaster Alan Jones, Sydney Lord Mayor Clover Moore and respected academics are among influential figures who have publicly-criticised the ‘Fit for the Future’ process, while many councils, under the Save Or Councils coalition, have vowed to fight any forced amalgamations.
Premier Mike Baird, in a terse recent interview with Alan Jones, continually sidestepped the contentious issue of forced amalgamations for those councils that had not proposed preferred amalgamation options of their own by the November 18 deadline.
Mr Jones told listeners before the interview that 2GB’s open line was in meltdown and he had a pile of correspondence he “couldn’t jump over” regarding amalgamations and it was all centred on council mergers.
“The anger is out there at what appears to be a unilateral declaration from Macquarie Street that local governments, according to IPART, must amalgamate and that the government is hiding behind IPART to achieve some sort of agenda which is not understood,” he said.
He asked Premier Baird whether he was aware of the community’s anger.
“There is no evidence; there is no case study either that I have read to justify what you said,” he said.
Parramatta City Council, covering the area long-considered Greater Sydney’s second CBD, also received an unfit assessment but said it remained committed to meaningful Local Government reform following the release of the IPART report.
Parramatta had proposed an expansion of its current boundaries to give it the required scale and capacity, consistent with the Independent Local Government Review Panel (ILGRP) regarding mergers and boundary changes.
But because it was unable to secure support for a merger from neighbouring councils, Parramatta was assessed by IPART on a stand-alone basis.
Lord Mayor of Parramatta Cr Paul Garrard, said as a stand-alone Council, Parramatta met IPART's financial criteria but fell short of the required population size.
“The Independent Review Panel has identified the expansion of the cities of Sydney and Parramatta as being the centrepiece of local government reform,” Cr Garrard said.
“Parramatta and its future development have significance well beyond the current LGA. Council looks forward to participating in the NSW Government's consultation process and councillors will meet to workshop the IPART findings next Wednesday.”
Facing the prospect it may be swallowed by Parramatta, neighbouring Holroyd City Council, also deemed unfit, is defiantly resisting the prospect of a forced merger.
It has launched a ‘Hands Off Holroyd’ campaign, including campaign materials showing Holroyd spends less ratepayer dollars than Parramatta on administration. Nearly 90% of residents surveyed by the council have rejected amalgamation and more than 10,000 have signed the ‘Hands off Holroyd’ petition.
Mayor Greg Cummings slammed IPART’s report, calling on Premier Mike Baird and Local Government Minister Paul Toole to justify the finding in relation to Holroyd, which recent audits showed to be debt-free over the past financial year; recording an operating result of $12 million, up from $1 million.
“It is ludicrous that Holroyd has been labelled as unfit for the future, when time and time again, we have continued to prove our financial sustainability,” he said.
“Holroyd has more than $1.2 billion in new developments projected for the city alone this year, which is driving economic growth across Western Sydney.
“How can we be called unfit when we’re also working with the Government to meet its own strategic goals, including all-important housing supply targets?”
He said over the next five years, Holroyd would be among only five councils to reach a housing surplus.
November 18 is now shaping up as D-Day for not only the state’s councils. The government has stressed that this is the endgame for councils, calling it “the final consultation process” and promising there will be no extensions to this deadline.
It is dangling a number of financial carrots to entice councils to push ahead with merger activity, including $10M per council to fund mergers, or $5M per council for regional mergers; and $5m to $15m per council under the new Stronger Communities Fund for community infrastructure.
And there’s even a $5M bonus from the same fund for three or more councils merging to form one.
Meanwhile, Penrith City Council, deemed fit by IPART, said the support and faith the community has shown Council over the past decade had been vindicated.
“This Council saw the warning signs 10 years ago and was supported by the community to apply for a Special Rate Variation which enabled us to do more than just the 'bare minimum' to many of our roads and buildings,” Penrith Mayor Karen McKeown said.
The Hills Shire Council was another council rated fit to stand alone and its Mayor, Dr Michelle Byrne said the assessment was a ringing endorsement of the Council’s elected representatives and staff both past and present.
“However, I don’t think it completely rules out the possibility that The Hills Shire Council could merge,” she said.
The Property Council of Australia, representing property developers, said Sydney's growth trajectory demands councils with the scale to participate in good strategic planning, infrastructure investment and service delivery.
"Sydney is on the cusp of getting a system of local government that matches our standing as a global city," the PCA’s NSW Executive Director Glenn Byres said.
