The report found that reducing waste and red tape through local government mergers could free up close to $2 billion over the next 20 years for NSW ratepayers, which could stabilise council rates and fund new infrastructure for communities.
NSW Premier Mike Baird said research, analysis and consultation with councils has shown that the current system of local government is not working as well as it should be.
“With 60 per cent of councils not fit for the future, this IPART report shows the situation is now critical and that action is needed to ensure ratepayers get value for money and the services and infrastructure they deserve,” Mr Baird said.
Councils will now have a 30-day consultation opportunity with the NSW Government on local government reform and to respond to the IPART findings.
IPART found that:
- 71 per cent of councils in metropolitan Sydney are 'not fit', primarily because councils did not propose a merger despite clear benefits.
- 56 per cent of councils in regional NSW are 'not fit', due to not proposing a merger despite clear benefits, ongoing deficits or both.
The government has also announced a new Stronger Communities Fund, which provides each new council up to $15 million to invest in community infrastructure projects such as sporting fields, libraries, and parks.
Funding of up to $10 million will also be available for each new council to ensure ratepayers don’t pay for up-front costs of merging. This funding will be available to those mergers agreed to by councils and the NSW Government.
The proposed $2 billion in savings and Stronger Communities Fund will enable each council to make a decision on whether to invest their extra funds into better services, more infrastructure or lower rates for their community.
Eight Far West NSW councils were not included in the IPART review as their unique challenges are being addressed through the Far West Initiative.
Read the full IPART report.
Download the IPART report card summary.