On 13 March 2024 the Minister for Local Government received the NSW Local Government Boundaries Commission’s report regarding the Inner West Council’s business case for de-amalgamation. The report recommended that the proposed de-amalgamation of Inner West Council should not proceed, stating this would be the best outcome for residents and ratepayers of the current local government area.
The Minister after considering the findings has exercised his decision-making powers under section 218CC(5) of the Local Government Act 1993 to not support the proposal put forward by Inner West Council for de-amalgamation.
The Minister advised that he accepted the Commission’s view that, “the financial disadvantage associated with a de-amalgamation significantly outweigh any potential financial benefits from a de-amalgamation” and that there is compelling evidence that the business case presented by Council will cost the community more money than it saves.
The NSW Government formed Inner West Council in 2016 by bringing together Ashfield, Leichhardt and Marrickville councils. In December 2021, a non-binding poll was conducted in which the Inner West community voted to de-amalgamate the existing Council and return to the three former councils. The result was carried with 62.5 per cent in favour, in a poll with 80.7 per cent turnout.
Inner West Council prepared a de-amalgamation business case and submitted it to the NSW Minister for Local Government – who is responsible for the final decision – in December 2022.
To inform the proposal, Inner West Council consulted with the community to be able to incorporate your views on which options for service provision under a de-amalgamated model are preferred by the community.
- The Inner West Council de-amalgamation business case has been submitted to the NSW Government.
- In December 2022, the Mayor again wrote to the Minister for Local Government reiterating the concerns around costs and administration.
- The business case is predicated on the State Government, which forced the amalgamation in 2016, funding the full 10-year costs of de-amalgamation, projected to be between $178 million - $190 million, with no costs to be incurred by Inner West residents.
- Council's submission also insisted that no unelected administrator be appointed but rather, ensure the de-amalgamation process is overseen by the democratically elected members of Council, if the process proceeds.
Public hearings and written submissions
The business case has been referred to the NSW Boundaries Commission for assessment. As part of their assessment a public inquiry was held under section 263 of the Local Government Act 1993. Three sessions were held on 6 December 2023 at St Peters Town Hall, with the community able to register to speak.
The inquiry proceedings were webcast live for those unable to attend the venue and recordings of the webcast are available through the Boundaries Commission webpage.
The commission engaged Deloitte to provide advice on the financial implications of the proposal. The analysis included both a review of the business case submitted by Council and an independent analysis of financial and other information of Council.
On 9 January 2024 the commission released a summary of the key findings from Deloitte's analysis of the financial implications.
For more information contact the Executive Officer or visit www.olg.nsw.gov.au
Submissions can be made by email to eo@lgbc.nsw.gov.au or by mail to LGBC Executive Officer Locked Bag 3015, Nowra NSW 2541 and must be received by close of business 31 January 2024.
The final decision and the legal power to undertake the de-amalgamation rests solely with the NSW Minister for Local Government.
Notice of Public Inquiry (PDF, 167.78KB)
Attached below is the business case and the letter of submission from the Council to the NSW Local Government Minister.
Inner West Council West Council De-amalgamation Business Case Submission Letter (PDF, 1.38MB)
Inner West Council West Council De-amalgamation Business Case (PDF, 50.63MB)
Background
At the election on 4 December 2021, a non-binding poll was held regarding the potential de-amalgamation of Inner West Council where 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 de-amalgamation.
Following the Mayoral election on 29 December 2021, the Mayor wrote to the Minister for Local Government informing her of the results of the Poll. The community was informed of the poll results via Council’s publication Inner West News, sent to every household in February 2022.
At the 8 February Ordinary Council Meeting, Council considered a mayoral minute (Attachment 1: Mayoral minute - 8 February meeting (PDF, 419.86KB)) 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, 121.28KB))
Council has engaged Morrison Low to prepare a business case in accordance with NSW Government guidelines. Morrison Low had undertaken substantial work for Council in 2015 with the development of the high level merger business cases of the former three Councils and in 2021 developing a high level cost benefit analysis (Attachment 3: 2021 business case (PDF, 1.54MB), executive summary (PDF, 154.77KB) and community engagement report (PDF, 673.26KB)).
The 2021 Morrison Low report:
- Reviewed the former councils' 2014/15 Long Term Financial Plans
- Re-established previous financial models of the former councils undertaken in 2015 and previous modelling to 19/20
- Validated the models against the Councils 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.