Local government expert’s scathing assessment of Warringah Council amalgamation report

Charis Chang, Manly Daily  September 17, 2013

A LOCAL government expert has delivered a scathing assessment of a Warringah Council commissioned report supporting amalgamation.

University of New England’s Professor Brian Dollery has hit back at the report by SGS Economics and Planning, describing it as a “political document” designed to favourably position Warringah in any future merger process.

Earlier this year Prof Dollery did a report for neighbouring Pittwater Council that found merging the three northern beaches councils would not improve the financial sustainability of a new mega-council.

However, a report for Warringah Council, done by commercial consultants SGS, found merging the councils, along with Mosman, was a preferred option and could save ratepayers about $344 million over 10 years.

Pittwater and Manly councils, which both oppose forced mergers, commissioned another report from Prof Dollery to examine the SGS’s conclusions.

It was released this month and found there was no evidence that increased population size would improve financial sustainability of councils.

It said SGS’s economic analysis was “highly simplistic and misleading” and the cost savings put forward were “not plausible”.

The estimated cost of proposed local boards were “radically understated” at $156,000 a year, instead of $507,631.

Substantial one-off costs, which in Queensland was $8.1 million per amalgamation, as well as ongoing costs, were also not included.

Prof Dollery’s report also found that local boards set up in New Zealand to maintain local representation, made fewer decisions.

“Indeed community/local boards are used much less frequently and make fewer decision than when they were first established in 1989,” Professor Dollery’s report states.

He also criticised the finding that Mosman, Manly, Warringah and Pittwater councils represented a “community of interest”.

The report said SGS had based its analysis of the relationship between the councils on local planning matters, such as traffic corridors, rather than socio-economic profiling and housing density.

A new independent report has provided concrete evidence that larger councils are not necessarily better for residents and ratepayers – and that forced amalgamations do not improve financial sustainability or customer experience.

The report, prepared by local government expert Professor Brian Dollery from the University of New England, was commissioned by Manly and Pittwater Councils in response to the Warringah Council’s Local Government Structural Change report which recommends amalgamating the three local councils and an even wider merger with Ku-ring-gai, Hornsby and Mosman Councils.

The Dollery report found that the proposed model of a northern beaches council, advocated by Warringah Council, was not viable for several key reasons.

These were:

  • There is no ‘community of interest’ between Manly, Warringah and Pittwater Councils considered essential for amalgamation to occur successfully
  • Local boards are both expensive and inappropriate for NSW
  • Amalgamation options proposed do not improve financial sustainability and in the short-term increase costs to ratepayers substantially
  • No economies of scale are present in the amalgamation options proposed by Warringah Council.

“The economic analysis reveals Warringah’s report does not address communities of interest, the cost of additional tiers of government and the potential for cost savings through economies of scale in its various merger options presented for the Northern Beaches, Ku-ring-gai, Hornsby and Mosman.

“Manly Council’s services cater to the particular demographic needs and character of the Manly area. This would be lost in the model of an amalgamated council that is being proposed by  Warringah.

“In fact, a merger could lead to a widening of the socio-economic differences between local councils if a forced amalgamation strategy is pursued. Forced amalgamation could cost our ratepayers $2 million a year.”

Mayor of Manly Jean Hay AM

“The northern beaches councils have successfully delivered cost savings and streamlined services through the SHOROC regional organisation of councils.

“The evidence is clear that amalgamations will not result in better services or lower costs for our residents. Smaller councils are more responsive and less bureaucratic, so there is nothing for residents to gain from yet more layers of Council structures such as boards.”

“Council amalgamations also have other adverse consequences, such as loss of local identity and a ‘local voice’. Assumptions of economies of scale through population size and per capita expenditure do not necessarily follow forced mergers.”

Mayor of Pittwater Jacqui Townsend



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