At the election on 4 December 2021, a non-binding poll was held regarding the potential demerger of the Inner West Council.
Citizens were asked the following:
In May 2016, Ashfield, Leichhardt and Marrickville councils were amalgamated into one local government area by the State Government. Do you support the Inner West local government area being de-amalgamated, so as to restore the former local government areas of Ashfield, Leichhardt and Marrickville?
The results of the poll were 62.49% in favour of a demerger.
Following the election of the Mayor on 29 December 2021, the Mayor wrote to the Minister of Local Government informing her of the results of the Poll.
The results of the poll were sent to every household in February via Council’s publication Inner West News.
At the 8 February Ordinary Council Meeting, Council considered a mayoral minute (Attachment 1: Mayoral minute - 8 February meeting (PDF 419.9KB)) and resolved as follows:
- Commences the preparation of a business case for demerger and notifies the NSW Government of the commencement of the development of a business case for demerger;
- Notes the concerns expressed by Council officers through the resolution of the Joint Consultative Committee about the impact of demerger on morale and productivity within the organisation and commits to engaging with Council staff and their representatives throughout the development of the business case;
- Notes the overwhelming majority vote of the Inner West Community to demerge; and
- Involve the community in the preparation of the business case.
On 4 March 2022, the Minister for Local Government met with the Mayor and General Manager and the outcome of the meeting was summarised in the attached letter (Attachment 2: Summary of 4 March meeting (PDF 121.3KB))
Council has engaged Morrison and Low to prepare a business case in accordance with NSW Government guidelines. Morrison and Low had undertaken substantial work for Council in 2021 developing a high level cost benefit analysis (Attachment 3 – 2021 business case (PDF 1.5MB), executive summary (PDF 154.8KB) and community engagement report (PDF 673.3KB)).
The 2021 Morrison and Low report:
- Reviewed former Council’s 2014/15 Long Term Financial Plans
- Re-established previous financial models of the former council’s undertaken in 2015 and previous modelling to 19/20.
- Validated the models against the Council’s that didn't merge (Burwood, Canada Bay, Strathfield).
- Compared 19/20 actual results of Inner West with the aggregated modelled position of Ashfield, Leichhardt and Marrickville.
- Added changes in service levels and new industry compliance requirements, new assets, COVID-19 impacts to these models with a start date of July 2022
The 2022 draft business case
The draft business case will build from the financial impact assessment undertaken last year to develop a draft business case. There are no guidelines or requirements for the format or content of a demerger case so the business case will be developed in line with the NSW Government Guidelines for Business Cases. This is what the state government uses for most strategic decisions and significant funding allocations for infrastructure, technology, structural and policy change. This will ensure that the business case will be suitable for the decision that the Boundary Commission and Minister will be asked to make on the demerger.
The 2022 business case will comprise the following parts:
- Part 1 The case for change: An outline of the poll and community consultation results.
- Part 2 Cost/benefit analysis: Revised 2021 Morrison Low report. Intent to investigate benefits and seek to undertake economic analysis to potentially estimate in dollar terms, including NPV.
- Part 3 Financial and Commercial Analysis: Financial viability of the demerger for the NSW Government. Section 218CC(6) of LG Act states that the NSW Government will cover the cost.
- Part 4 Managerial Analysis: An analysis of the organisations’ ability to deliver, the associated risk, and any identified issues pertinent to the decision.
The next steps:
- Draft business case to be reported to Audit and Risk Committee
- 12 June 2022 – Draft Business case with a plan for community engagement reported to Council meeting
- 9 August 2022 – Final Business case reported to Council with outcomes of community engagement
- August 2022 – Submit business case