The State Government has pulled the plug on IPART delving into the sustainability of NSW’s 128 Councils.
It comes four days after the closing date for public comments on the draft terms of reference for the review.
Premier Minns told the Independent Pricing and Regulatory Tribunal (IPART) the reason was to avoid unnecessary duplication –
“…..as the matter was now being considered by the NSW Parliament’s Standing Committee on State Development”.
“The Committee will inquire into and report on the ability of local governments to fund infrastructure and services,” Premier Minns said.
“The inquiry is scheduled to begin shortly, and it is anticipated that the Committee will report ahead of the Local Government elections, which are scheduled for 14 September 2024.”
IPART had been planning a more expanded timeline of providing a draft report 12 months after settling on its final terms of reference.
It had first recommended the review be held.
“Last year, as part of our review of the local council rate peg methodology, stakeholders raised concerns about the affordability of council rates in the current cost of living climate, as well as community consultation, financial management and financial sustainability of councils in NSW”, IPART Chair Carmel Donnelly said in a January press release announcing the now dead review.
“IPART noted many of the issues raised cannot be fixed by the rate peg or the special variation process and we therefore recommended the NSW Government commission an independent review of the financial model for councils to identify improvements.”
Now the Chair of the committee conducting the new inquiry Emily Suvaal MLC, said: “Councils are experiencing significant financial challenges which are threatening the long-term sustainability of the sector.
“As the level of government closest to the people of this state, we owe it to councils to ensure they can continue to deliver the important services communities expect and deserve.
“This inquiry will examine the level of income councils require to adequately meet the needs of their communities, and give consideration to the current levels of service delivery and financial sustainability in local government,” Suvaal said.
The terms of reference for the Standing Committee’s review are not the same as the IPART’s draft terms of reference.
The new inquiry will look at the level of income councils require to adequately meet the needs of their communities and examine if past rate pegs have matched increases in costs borne by local governments, including the impacts over 20 years and comparisons with other jurisdictions.
It will also look at current levels of service delivery and financial sustainability in local government, including the impact of cost shifting on service delivery and financial sustainability, and whether this has changed over time.
It will review the operation of the special rate variation process and its effectiveness in providing the level of income Councils require to adequately meet the needs of their communities.
So, in other words, the work of IPART in setting rates will be part of the review.
IPART’s review was more focused on such things as “the visibility of councillors and the community over the financial and operational performance of their councils”; and whether current budget and financial processes used by councils was delivering value-for-money for ratepayers and residents; whether the current funding model would sustainably support the needs of communities and whether both councillors and staff had the financial capacity and capability to meet current and future needs of communities.
The new inquiry says it welcomes submissions from interested individuals and stakeholders, including local governments and members of the community.
The closing date for submissions is Friday, April 26.
