NSW government pushing for council mergers

Local councils across Sydney are currently going through a process of making submissions to the state government’s ‘Fit For The Future’ program, which is aimed at judging councils on a bunch of criteria, seemingly with the goal of consolidating the number of local councils, producing a smaller number of more populous councils.

In practice, the criteria are largely arbitrary, based on some vague concept of “big is better”, and attitudes of local councils towards amalgamation seem based on base politics, with various councils effectively promoting hostile takeovers of their neighbours in ways that will help their political party solidify its hold.

Through the course of this month, each council in the Sydney region is making a submission to the Independent Pricing and Regulatory Tribunal (IPART) about how their council meets the criteria set by the NSW government as to whether they are ‘fit for the future’. This process has involved many councils undertaking consultation, and coming to decisions about their recommendations, which have focused on whether councils support amalgamating with their neighbours.

The criteria cover the capability of the council, along with its efficiency, financial sustainability and management of infrastructure. The other criteria, ‘scale’, seems to be particularly arbitrary – the government has set a presumption that councils should have a substantially larger population than they have now, which necessitates significant amalgamations regardless of how a council performs on the other criteria. No number has been set for this criteria, with various figures suggesting different figures throughout the process.

While the process is requiring councils to produce public submissions, there is no such requirement for the state government to be transparent in their decisions – the IPART decisions will remain secret, and we won’t know whether any decisions by the state government to recommend amalgamations was made based on an IPART recommendation, or despite IPART’s recommendations.

There are undoubtedly some parts of Sydney which could do with local council amalgamations (hello, Burwood and Hunters Hill), but it is very unclear how much Sydney councils would be improved through amalgamations. While there may be some efficiencies, these in part could come from reductions in duplicated services, which may not be appreciated by their residents, and there will be a substantial cost to amalgamate different councils. Different councils provide different levels of service, and it remains unclear whether amalgamated councils would raise all parts of the council area to the highest standard, or lower services to the minimum.

Many councils are already benefiting from efficiencies created by cooperation between councils, sharing procurement and other parts of a council’s work, through the existence of regional organisations.

Looking at the list of councils who have expressed an openness to amalgamation, it has little to do with which councils are in most need of amalgamation, but more to do with politics – larger councils attempting to take over their smaller neighbours, and councils finding ways to design new boundaries that benefit the politically-dominant faction. In some cases, councils which are not considered to be in any need of merger have launched attempts to take over their neighbours.

In most of these cases, these councils are run by Liberals or Liberal-aligned independents.

Warringah Council, which is already well above the average population, has launched a bid to merge with its neighbours in Manly and Pittwater, neither of which support amalgamation.

In the north-west, The Hills, another large conservative council, is seeking to take over Hawkesbury Shire, which has about one third of the population but covers a large swathe of north-western Sydney. Hawkesbury, despite its small population, was not targeted for amalgamation because it covers such a large area. Hornsby Shire has also proposed a merger with Ku-ring-gai, who have refused the overtures.

In the inner west, most councils have opposed amalgamation, but in some cases councils have adopted ‘back-up options’. Leichhardt Council has proposed an amalgamation with Canada Bay and Ashfield councils, which would produce a strange Y-shaped area, but would conveniently weaken the Greens, who topped the poll in Leichhardt in 2012.

Further out in the inner west, Auburn and Burwood councils both agreed to a merger with Canada Bay council, but Canada Bay rejected the proposal. The three-council merger proposal was already strange, as it would leave Strathfield council alone (one of the smallest with a population of 37,000) surrounded by a new council on three sides which would include a population of over 190,000. It’s even more ridiculous without Canada Bay, because Burwood and Auburn do not share a boundary. Auburn intends to still push for the merger despite Canada Bay’s objections.

While Auburn is eager to merge with councils to its east, it has been resistant to joining an enlarged City of Parramatta with Holroyd (which is also anti-amalgamation) and Parramatta, which is generally supportive. One wonders whether this is linked to the political make-up of the councils, and where the centre of gravity would lie in an Auburn-Burwood-Canada Bay council compared to a City of Greater Parramatta.

The most ridiculous case comes in the eastern suburbs of Sydney. The original proposal from the independent panel was to merge the councils of Botany Bay, Randwick, Waverley and Woollahra into the City of Sydney, so that Sydney would cover the entire eastern peninsula. The other four councils all oppose this option, but their tactics to prevent it have varied.

Waverley and Randwick councils, which both have substantial numbers of Labor and Greens councillors but are currently dominated by conservatives, have both supported mergers with Woollahra and Botany Bay councils respectively, and possibly as a merger of all four councils. In Randwick, the Greens have come on board with the Liberal plans to launch a hostile takeover of Botany Bay council, which is dominated by Labor and strongly opposed to a merger.

Woollahra council, which is also dominated by the Liberal Party, also rejects amalgamation – unlike its neighbours to the south, the Liberal Party has a solid hold on Woollahra which is unlikely to change. It seems like those ‘marginal Liberal’ councils may see amalgamation as a way to solidify their hold on the east.

Of course, we have no idea how seriously these local council positions will be taken. Apart from Randwick and Waverley, no two other neighbouring councils support merging with each other. So any mergers will require the overriding of councils, at which point it seems far more rational to draw new boundaries where the government sees the most need, rather than drawing them according to the short-term political interests of sitting councillors.

We also don’t know what other reforms could come along – the independent review panel also recommended direct election of mayors, and possibly other structural reforms. I would personally like to see larger councils (including those large councils that already exist) given a larger number of councils than the current limit of 15 – but the trend seems to be in the other direction, treating councils as ‘boards of directors’ which are easier to manage with less representation.

While local government in New South Wales isn’t perfect, triggering a frenzy of amalgamation pushes across Sydney won’t do much to improve it – so much of the problems local councils have relate to the costs that have been imposed on them by other levels of government, and the ways in which they are restricted in finding funds to cover their work. Consolidating local councils into larger units won’t do much at all to fix that fundamental problem, but that’s a story for another day.

The deadline for local council submissions is next Tuesday, 30 June, so we may well see solid proposals for council amalgamations, likely forced, later this year, in time for council elections in 2016.

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