Local Government Reform - What's Happening?

Posted Tuesday 18 April 2017

Latest Update

In March 2017 Council commenced fresh proceedings in the NSW Land and Environment Court in relation to the NSW Government Delegate’s revised report on the Mosman, North Sydney and Willoughby merger proposal. These proceedings, which focus on the inadequacies of the report prepared following the September 2016 judgment in the Land and Environment Court, have been adjourned until later this year.

In early April 2017 Mosman Council, together with other metropolitan councils impacted by NSW government merger proposals, also brought action in the NSW Court of Appeal seeking to overturn elements of the September 2016 Land and Environment judgment. These court proceedings have now concluded and judgment has been reserved. Further information in relation to judgments (or other progress in) both 2017 court actions will be posted as it becomes available.

February 2017 Update

On 14 February the new Premier of NSW, Gladys Berejiklian, announced that the NSW Government still intends to proceed with current merger proposals in Sydney, including the proposal for Mosman to merge with North Sydney and Willoughby, subject to the results of current court proceedings.

Council has voiced its extreme disappointment with this decision and remains committed to its two-pronged legal battle for independence in the NSW Land and Environment Court and NSW Court of Appeal in March and April this year.

The related media release from Council can be read here.

December 2016 Update

Council is formally appealing various aspects of the September 2016 Land and Environment Court judgment and these proceedings will be heard in the NSW Court of Appeal on 3 – 4 April 2017. Council is also proceeding with further legal action in relation to the revised report issued following the September 2016 judgment and these proceedings will be heard in the NSW Land and Environment Court on 23 March 2017. Council’s submission to the Minister in relation to the revised report can be viewed here:


Mosman Mayor Peter Abelson has also authored a paper entitled ‘The Optimal Size of Local Government, with Special Reference to New South Wales’. The paper, published in Agenda, A Journal of Policy Analysis and Reform (Vol. 23 No.1), finds in favour of smaller councils using four main criteria: capacity to work with state governments; economic efficiency (financial capacity); effective provision of preferred local services; and effective local democracy and social capital.

A copy of this paper can be downloaded here.

The Optimal Size of Local Government with Special Reference to New South Wales

September 2016 Update

On 20 September 2016 Justice Tim Moore handed down his judgment on Mosman Council’s case in the NSW Land and Environment Court. Justice Moore found that the functions of the Delegate responsible for the merger proposal process involving Mosman, North Sydney and Willoughby miscarried as the Delegate failed to address one of the mandatory requirements of s263(3) of the Local Government Act. This was the requirement to have regard “to the need to ensure the opinions of each of the diverse communities of the resulting area or areas are effectively represented”.

The effect of the above is that the Delegate has not yet completed the task delegated to him by the Acting Chief Executive of the Office of Local Government. The court found that the report furnished by the Delegate to the Boundaries Commission is not a valid report in satisfaction of the requirements of s218F(6)(a) of the Local Government Act.

Council considered Justice Moore’s judgment at an Extraordinary Meeting held on 21 September 2016. At that meeting it was agreed that Council maintain its long standing opposition to forced amalgamation and continue to work with its legal team to maintain Mosman’s independence.

August 2016 Update

On 23 August 2016 elected officials from metropolitan and regional areas, including Mosman, Hunter’s Hill, Ku-ring-gai and Strathfield along with their regional counterparts from Cabonne, Oberon and Shellharbour councils sent an open letter to Premier Mike Baird urging him to suspend his “undemocratic” merger program.

The letter also requested a meeting to discuss alternative ways of meeting the State Government’s strategic objectives and for community polls to be conducted about amalgamations which would then only occur with majority support. View the full letter here.

May 2016 Update

On 12 May 2016 the State Government announced 19 new Councils for NSW, effective immediately. The Minister for Local Government also announced in principle support for a further nine new Councils, pending the determination of current legal proceedings.

Of the new Councils announced, one is the Northern Beaches Council, being an amalgamation of Manly, Warringah and Pittwater Councils. Mosman Council falls into the ‘pending’ category, with the Minister announcing in principle support for its amalgamation with North Sydney and Willoughby. Legal proceedings by Mosman Council in relation to merger proposals impacting this municipality commenced in the Land and Environment Court on 30 May, with hearings concluding on 4 July 2016.

In May the NSW Government established a new website www.strongercouncils.nsw.gov.au. This site details the new Councils, those Councils where merger decisions are pending and merger proposals not proceeding. The site also contains the reports of the Delegates and the Boundaries Commission that have been prepared to date, as well as Public Inquiry transcripts and public submissions on the various merger proposals that have been considered since January.

Merger Proposals – Summary

The consultation periods for the two merger proposals affecting Mosman have now closed. Mosman Council continues to strongly oppose forced amalgamations, including both proposals for Mosman. Submissions outlining Mosman Council’s opposition have been lodged in respect of both proposals and can be viewed here:

Council will be continuing to argue the case for independence and seeking full accountability and transparency from the NSW Government.

Further information regarding the NSW Government’s local government reform process can be found at councilboundaryreview.nsw.gov.au and at fitforthefuture.nsw.gov.au

Merger Proposal – Mosman, North Sydney and Willoughby

On 25 February 2016 the NSW Government announced a further merger proposal for Mosman. This merger proposal is for Mosman to join with North Sydney and Willoughby Councils, and comes following announcement of a new merger proposal for the Northern Beaches, involving the amalgamation of Manly, Warringah and Pittwater Councils.

The Government’s Delegate for the Mosman, North Sydney and Willoughby merger proposal is Mr Ian Reynolds. Mr Reynolds is also the Government’s Delegate for the two-council merger proposal for North Sydney and Willoughby.

When announcing the merger proposal for Mosman, North Sydney and Willoughby, the Government did not release supporting documentation for review by the community, as it has done with previous merger proposals.

Some supporting information was released by the NSW Government on 8 March 2016 and this information is available here.

Community feedback was sought on the merger proposal for Mosman, North Sydney and Willoughby up until Friday 8 April 2016.

Two Public Inquiry meetings were held on Wednesday 23 March at Mosman RS Club and on Tuesday 22 March at The Chatswood Club.

Mosman Council also hosted a Public Meeting at Mosman RS Club on Wednesday 30 March to provide residents with information about the merger proposal and submission process.

Council considered this merger proposal at its meetings of 8 March 2016 and 5 April 2016. The reports and Mayoral Minutes (including Council resolutions) from these meetings are available here.

Verbal submissions were also made to the Public Inquiry held on 22 and 23 March 2016. The presentation made by Mayor Peter Abelson to the Publilc Inquiry meeting at Mosman on 23 March 2016 is available here.

A written submission outlining Mosman Council’s opposition to this merger proposal was lodged with the NSW Government on 8 April 2016 and can be viewed here.

The consultation period for the merger proposal has now closed.

Merger Proposal – Mosman, Manly and (part) Warringah

On 18 December 2015 the Premier and Minister for Local Government announced that in early January 2016 the Minister for Local Government would refer 35 detailed merger proposals to the Chief Executive of the Office of Local Government for examination and report under the Local Government Act 1993.

In summary, the Government has proposed a reduction in the total number of Councils across NSW from 152 to 122 and in metropolitan Sydney a reduction from 43 to 25. No Sydney Council is forecast to have a population of less than 150,000.

In relation to Mosman Municipal Council the merger proposal involves Mosman, Manly and part of Warringah Council. The proposed merged Council has a population of 153,000 which is estimated to grow to more than 179,000 by 2031. In addition, through the Stronger Communities Fund each new council that is established will be provided with up to $15 million to invest in community infrastructure and $10 million to ensure that the ratepayers do not bear the upfront costs of merging.

Additional matters associated with the reform process include:

  • For four years after the new merged council is created, the Government’s policy is that the rates charged by the new council will be no more than the rates the existing councils would have charged
  • IPART has been commissioned to review the rating system, and has been requested to advise on the best way to achieve the policy commitment on freezing rates as part of the rating review. IPART will provide its report to the Government by end 2016
  • That the Government will commence consultation on proposed amendments to the Local Government Act, including previously announced changes such as two-year terms for mayors and new financial intervention powers

The detailed merger proposals have been finalised and referred to the Chief Executive of the Office of Local Government for examination and report. The process is detailed below.

  1. On 6 January 2016 the Minister for Local Government referred merger proposals to the Chief Executive of the Office of Local Government for examination and report under the Local Government Act 1993. Each proposal document contains information about the impacts and benefits of the proposed merger.
  2. The Chief Executive of the Office of Local Government has formally delegated the examination of merger proposals under the Local Government Act 1993 (NSW) to Delegates. The Delegate dealing with the merger proposal for Mosman, Manly and (part) Warringah Councils is Mr Michael Bullen.
  3. Communities will have a chance to have their say during a public consultation process for merger proposals, including through submissions and at public hearings.
  4. Local Government Boundaries Commission membership is confirmed.
  5. Delegates examine proposals, including reviewing public submissions, and after having regard to the factors listed in the Local Government Act 1993 provide a report to the Minister.
  6. Delegates will also provide their reports to the Boundaries Commission who will review and comment on the reports.
  7. Boundaries Commission provides its comments on the Delegates’ reports to the Minister for Local Government.
  8. Minister for Local Government considers the reports from the Delegates and comments on those reports from the Boundaries Commission, and makes a decision for each proposal.
  9. The Minister may or may not recommend to the Governor of NSW that the proposed merger be implemented.
  10. New councils commence.

An Extraordinary Meeting of Council was held to discuss this matter on 22 December 2015. At that meeting Mayor Abelson delivered a Mayoral Minute addressing the NSW Government’s merger proposal that Mosman Council be amalgamated with Manly and the southern half of Warringah with a total initial population of approximately 153,000.

The Mayoral Minute outlined the process that the Government will follow in relation to pursuing the merger proposal, including the public consultation requirements. In response to the Government’s announcement Council resolved the following:

  • Noted that the Mosman Community has been consistently and strongly opposed to amalgamation with any other council. In a full referendum in the 2012 local council election, 80% of residents voted against amalgamation. In surveys in April/May this year, only 23% supported a merger with North Sydney, 17% with Manly and 7% with five other Northern Councils including East Ryde, Hunters Hill, Lane Cove, Willoughby and North Sydney.
  • Noted that there has been no formal or even informal business case or any other assessment, and no polling, of the proposed merger with Manly and half Warringah.
  • Noted and accepted that the NSW Government has determined broadly to follow the requirements set out in the Local Government Act 1993.
  • That the requirements of the Act should be followed thoroughly and completely in all its components.
  • That the assessments by the Chief Executive and the delegates should be demonstrably objective, draw on local views as required by the Local Government Act, and be based on evidence rather than on convenient but unsupported assumptions.
  • As part of this process will fully engage with Warringah and Manly councils to determine key priorities.
  • As representatives of our community will be strongly guided by the informed views of our community.
  • An allocation of up to $50,000 for an information campaign in response to the Government’s merger proposal.

Mosman Council further considered the merger proposal for Mosman, Manly and (part) Warringah at its meetings on 16 January, 1 February and 16 February 2016. The reports and Mayoral Minutes (including Council resolutions) from these meetings are available here.

Verbal submissions were also made to the Public Inquiry held on 2 February 2016. The presentation made by Mayor Peter Abelson to that Inquiry is available here.

Council continues to strongly oppose forced amalgamations and has formally rejected the merger proposal for Mosman, Manly and (part) Warringah. A submission outlining Council’s opposition to the proposal has been lodged to the NSW Government. It can be viewed here.

The consultation period for the merger proposal has now closed.

Background October – November 2015

On 20 October 2015 the NSW Government released the IPART’s ‘Assessment of Councils Fit for the Future Proposals’. This report contained determinations in relation to the future ‘fitness’ of NSW Councils, as assessed by the IPART in accordance with Terms of Reference set by the NSW Government . Mosman Council, together with councils across that State, lodged its submission for assessment by the IPART in June this year.

According to the IPART report, 71% of Sydney metropolitan councils (including Mosman) and 56% of regional council were assessed as being ‘unfit’. All metropolitan Councils east of Parramatta that were declared unfit were assessed as not meeting the NSW Government’s threshold criteria of ‘scale and capacity’. None of the six councils recommended for a ‘mega merger’ in the 2013 report of the Independent Local Government Review Panel (i.e. Mosman, North Sydney, Willoughby, Lane Cove, Hunters Hill and Ryde) were assessed as meeting this criteria.

Despite being declared as ‘unfit’ on the grounds of ‘scale and capacity’ Mosman Council (together with many other councils failing the scale and capacity criteria) was found to meet ALL other fitness criteria including sustainability, infrastructure and service management and efficiency.

In releasing the IPART report, the NSW Government requested that all councils that did not meet the required scale and capacity criteria again consider options for merger. Councils were given until 18 November 2015 to submit up to three merger preferences and also to provide feedback in relation to their assessment by IPART. The NSW Government provided a range of financial incentives to councils submitting agreed merger preferences by the 18 November deadline.

A copy of the IPART report, together with a ‘Report Card’ released by the NSW Government and the financial incentives currently being offered for mergers, can be accessed on the Fit for the Future website.

Mosman Council again engaged its community in the lead-up to the deadline prior to formally determining its response to the NSW Government. A public meeting was held on 26 October, attracting 300 residents overwhelmingly in support of Mosman retaining its independence. A survey regarding potential amalgamations was also conducted between 26 October and 3 November the results of which are detailed in a Mayoral Minute presented to Council on 10 November.

The Council Meeting on 10 November resolved not to provide any preferred merger options to the State Government by 18 November 2015, as requested by the government as part of its ongoing reform agenda. In presenting the Mayoral Minute on this issue, Mayor Peter Abelson referred to the strong and ongoing opposition of the Mosman community to amalgamation, and the community’s unwillingness in the most recent round of community surveys to support any merger options being submitted to the State Government.

Council formally responded to the Government’s request for merger options on 13 November, providing (within the strict 50-word limitation set by the State Government) its reasons for opposing any merger and expressing extreme aversion to a multi-council amalgamation.

Council also provided comment on IPART’s assessment of Mosman’s Fit for the Future submission.

On 13 November Mosman Mayor Peter Abelson also sent a letter to the Minister for Local Government and a Mayoral Minute providing further comment on the deficiencies of IPART’s recent assessment of its future ‘fitness’, with a focus on the shortcomings of the scale and capacity criteria and the flawed assumption that financial capacity is a function of scale.

The State Government advised that it would consider submissions made by NSW Councils prior to the Government’s deadline of 18 November and that all Councils would know their fate by year’s end.

For further information on the Fit for the Future process prior to October 2015, visit the ‘Fit for the Future’ – September 2014-September 2015 tab on this page.

Fit for the Future – September 2014 – September 2015

In mid-September 2014 the NSW Government announced its response to the Final Report of the Independent Local Government Review Panel (ILGRP). The Government’s response includes a reform package called ‘Fit for the Future’. All Councils in NSW will be required to demonstrate how they intend to operate in the future, bearing in mind the structures recommended in the ILGRP’s Final Report, and according to other criteria determined by the State Government. Details of the ‘Fit for the Future’ program can be found at www.fitforthefuture.nsw.gov.au .

Mosman Council has advocated strongly for its independence throughout the reform process, which originally commenced with the Destination 2036 Action Plan that was developed following a meeting of NSW Mayors, General Managers and State Government representatives in August 2011. With the State Government’s ‘Fit for the Future’ program now in train, Council is continuing in its efforts to secure the best possible future for Mosman, its residents and its system of governance.

In late 2014 Mosman Mayor Peter Abelson co-authored a paper entitled ‘Smoke and Mirrors: Fallacies in the NSW Government’s Views on Local Government Financial Capacity’ with Dr. Roselyne Joyeux , an Associate Professor at Macquarie University. The paper, which disputes any link between the size of a Council and its financial sustainability (and consequently the NSW Government’s equation of scale with financial capacity), has been distributed by the Sydney Metropolitan Mayors’ Association to all members. A copy of this paper can be downloaded here.

A presentation based on the above paper was delivered by the Mayor to the Local Government Professionals forum in Sydney on 27 February 2015. A copy of this presentation can be downloaded here.

The Mayor has also presented thirteen Mayoral Minutes to Council providing updates on the ‘Fit for the Future’ process including action taken and proposed by Council. These Mayoral Minutes are available here:

Between February and April 2015 Council sought community feedback on a number of independence and amalgamation options for Mosman’s future. The results of this engagement, which indicated strong support for Mosman’s continued independence, were referred to in the Mayoral Minute of 14 April 2015 and also in a report presented to Council at its meeting on 5 May 2015. At that meeting Council resolved to maintain its independence and to lodge a ‘Council Improvement Proposal (Existing structure)’ as its Fit for the Future submission to the NSW Government’s Expert Advisory Panel.

It was also resolved at the meeting of 5 May 2015 that Council make a submission to IPART addressing the assessment methodology proposed to be used by IPART in its role as the Fit for the Future Expert Advisory Panel. This submission has since been lodged and is available here.

Council has also submitted its ‘Council Improvement Proposal’ to IPART. All proposals have been published on the IPART website, together with public submissions on the proposals. To view each council’s proposal and related submissions, visit the IPART website here. IPART is required to assess all proposals received and then provide the NSW Premier and Minister for Local Government with its final report by 16 October 2015, identifying whether or not each council is Fit for the Future and the reasons for this assessment. This final report will be publicly released following Cabinet approval.

On 4 August 2015, following presentation of a Mayoral Minute by Mayor Abelson it was resolved that Mosman Council again reiterate its commitment to independence as strongly supported by residents. Council also recognised that there is widespread popular support for the existing councils across Sydney and pledged its support for the Save Our Councils Coalition including by, Where appropriate, sharing information and materials prepared by the Save Our Councils Coalition aimed at encouraging residents to have their say about amalgamations and the Fit for the Future process. Visit the Save Our Council’s website here

On 8 September 2015 Mayor Abelson presented a further Mayoral Minute indicating his concerns regarding an advertising campaign authorised by the NSW Office of Local Government and advising that he has sought urgent advice from the Minister for Local Government regarding assertions made in the advertising.

At an Extraordinary Meeting of Council held on 28 September 2015, Council resolved to proceed with a campaign to further inform residents about the State Government’s reform agenda and to call for community action in support of Mosman’s continued independence.

Independent Review of Local Government

For further information on the reform process leading up to announcement of the State Government response, visit the ‘ Independent Review of Local Government in NSW’ tab on this page

The Independent Review of Local Government in NSW

In March 2012 the NSW Minister for Local Government announced the establishment of a three member panel to develop options to improve the strength and effectiveness of local government in NSW.

The panel (known as the Independent Local Government Review Panel or ILGRP) has been charged with investigating and identifying options for governance models, structured arrangements and boundary changes for local government in NSW, taking into consideration: -

  1. ability to support the current and future needs of local communities
  2. ability to deliver services and infrastructure efficiently effectively and in a timely manner
  3. the financial sustainability of each local government area
  4. ability for local representation and decision making; and
  5. barriers and incentives to encourage voluntary boundary changes

In conducting the review, the panel is also to take into consideration the following: -

  1. Ensure recommendations meet the different nature and needs of regional, rural and metropolitan communities.
  2. Consult widely with the broader community and key stakeholders.
  3. Take into account the work completed, and future work to be completed, under the Destination 2036 initiative.
  4. Take into account the broader interests of the State including as outlined in the State Plan.
  5. Consider the experiences of other jurisdictions in both the nature and implementation of local government reform.
  6. Take into account the Liberal-National’s 2011 election policy of no forced amalgamations.

As well as the above, the following actions have also been referred to the Panel. These actions are contained within the Destination 2036 Action Plan prepared following a meeting of NSW Mayors, General Managers and State Government representatives in August 2011: -

2a   Develop options and models to enhance collaboration on a regional basis through ROCs
2b   Undertake research into innovation and better practice in Local Government in NSW, Australia and internationally
5b   Examine current local government revenue system to ensure the system is contemporary, including rating provisions and other revenue options
8a   Examine the pros and cons of alternative governance models
8b   Research and develop alternative structural models, identifying their key features and assessing their applicability to NSW
8c   Identify barriers and incentives to encourage the voluntary amalgamation or boundary adjustment of councils
9a   Identify those functions that are clearly State or Local Government responsibility, those that cannot be readily defined and those that have been legislated/regulated as core functions

The work of the ILGRP since its establishment is detailed on the Local Government Review Site .

The ILGRP has released a number of Consultation Papers and Reports, the most significant being: -

July 2012

Consultation Paper No. 1 – Strengthening Your Community

November 2012

Consultation Paper No. 2 – Better, Stronger Local Government – The Case for Sustainable Change

April 2013

NSW Local Government – Twenty Essential Steps.

(For a more comprehensive listing of Panel Papers and Reports visit the Local Government Review Site .

January 2014

Final Report – Revitalising Local Government

The final report of the ILGRP was released by the Minister for Local Government, the Hon. Don Page MP, for public consultation in January 2014. Submissions on the report closed on 4 April 2014.

Putting our Community First

Throughout the Panel’s process of review, Mosman Council has been actively engaged in contributing to, reviewing and responding to the Panel’s work. The documents below reflect Council’s continued engagement in the review process, particularly in critically analyzing the scope, methodology, guiding principles and findings of the review with an overarching objective of protecting local interests. In other words – putting the Mosman community first.

Council Submissions

Mayoral Minutes

Other Commentary and Contributions

Keeping it Local

In delivering its April 2013 Report ‘Future Directions’, the ILGRP recommended a series of Council amalgamations in metropolitan Sydney and regional NSW. Its recommended approach for Mosman was to amalgamate our local area with those of North Sydney, Lane Cove, Hunters Hill, Willoughby and possibly part of the eastern area of Ryde.

Over many years the people of Mosman have continually voiced their opposition to any such amalgamation of our area. At the 2012 local government elections 81.3% of voters voted against such action, with 82% support for independence being recorded during the most recent consultations in February to April 2015. Council has communicated this local sentiment on many occasions, in many different forums, and there are continuing efforts in the fight for Mosman’s independence. In February 2013 the Committee for an Independent Mosman was established, bringing together Council and eminent community members with a shared passion for ‘keeping it local’. The Committee has worked hard to protect the identity of Mosman for future generations and to keep community governance at a local level. Along with Council the Committee prepared a submission on the final report of the Independent Local Government Review Panel in April 2014.

More recently, the Committee has responded to the ‘Fit for the Future’ reforms announced by the State Government, establishing a Facebook page supporting Mosman’s independence and rejecting its amalgamation with other local government areas – see www.facebook.com/independenceformosman