Posted on December 18, 2015 by Stuart Simington

Forced Council Amalgamations – the Road Ahead

The Premier has announced 35 proposals for local council amalgamations throughout New South Wales that will lead to the number of councils being reduced from 152 to 112. The proposals follow the release of the final report of the Independent Pricing and Review Tribunal (‘IPART‘) in October this year which found that nearly two-thirds of councils were not ‘Fit for the Future’.  Here we consider the process for the proposed amalgamations.

Process for forced amalgamations

It is understood that the State Government will utilise the existing procedures in Division 2A in Part 1 of Chapter 9 of the Local Government Act 1993 (‘LG Act‘) for the compulsory amalgamation of council areas.

The amalgamation of areas under Division 2A is done by proclamation of the Governor under s218A(1) of the LG Act.

If an amalgamation is proclaimed:

• it may contain a range of provisions necessary or convenient to give effect to the amalgamation, for example as regards transfer of staff, assets, rights and liabilities (s218C(1), s213); and
• councillors of the former areas cease to hold office except as otherwise provided for in the proclamation (s218A(2) and s218C(2)).

Before amalgamation under Division 2A may occur, there must be a proposal to amalgamate under s218E.

The Minister’s 35 detailed proposals will be referred to the Chief Executive of the Office of Local Government (‘OLG‘) for examination and report to the Minister under s263(1). The Chief Executive will delegate the examination of each proposal to a delegate.

Before preparing its report, the Chief Executive’s delegate must:

• hold a public inquiry where members of the public can express their views on the proposals (s263(2A), s263(5));
• have regard to the matters listed at s263(3);
• furnish a copy of the report to the Boundaries Commission for review and comment to the Minister (s218F(6)).

The Minister may make a recommendation to the Governor that the proposal be implemented whether with modifications arising out of the reports received, or with such other changes as the Minister determines so long as these do not constitute a new proposal (s218F(7)).

Details of how the review of merger proposals will be conducted will be made available in January 2016.

Transitional arrangements

The Minister has confirmed that all councillors will remain in place and council matters will continue as usual until such time as any new councils are created. The OLG will shortly issue guidelines under s23A of the LG Act to assist councils during this period, and the Department of Premier and Cabinet will issue merger guidance material.

Stronger Communities Fund

Through the Stronger Communities Fund, the Minister has committed to providing each newly amalgamated council with up to $15 million to invest in community infrastructure. Each new council will receive funding up to $10 million to ensure that ratepayers do not bear the upfront costs of merging.

It remains to be seen whether the process for consideration of the Minister’s proposals will be the subject of litigation by councils or councillors opposed by the proposals.

The Premier’s media release states that the detailed proposals will be made publicly available at www.councilboundaryreview.nsw.gov.au.