NSW amalgamations: councils have 'largely achieved' milestones

By David Donaldson

May 8, 2019

Council amalgamations in New South Wales are largely going to plan, according to a recent report by NSW Auditor General Margaret Crawford.

The audit, which looked at three councils — Inner West, Snowy Monaro and Queanbeyan-Palerang — found all three have “made progress towards efficient organisational structures following the amalgamation of their former council areas in 2016”.

The councils are now operating with amalgamated workforces and have “largely achieved the milestones they planned for the first stage of their amalgamations”, says the report, which was published last week.

In May 2016 the state government announced 42 local government areas would be merged to create 19 new councils, with another council announced later that year. There are now 128 local government areas in NSW.

The changes entail a lot of work — amalgamations not only require re-drawing boundaries, but re-establishing local representation, decisions about alignment of services across the former council areas, and establishment of an amalgamated workforce.

All three of the councils examined are making progress on their amalgamated workforces. They have “developed detailed plans to bring their former workforces together, review positions and salaries, amalgamate salary structures and align human resources policies”, notes the auditor.

“At the time of the audit, major milestones in these plans have largely been met and each of the three councils is operating with a single workforce.”

The councils did not expect to have gained significant efficiencies yet, due to a three to five year staff protection period. Staff protections meant there was little industrial action, but also limited councils’ abilities to move or remove staff. Additionally, issues such as duplicated software and databases present barriers to efficiency.

And while the councils have been helping staff to cope with change and have implemented extensive communication programs to keep staff informed, “it is evident from staff surveys and field visits that staff in all three councils are still finding it difficult to cope with change and need ongoing support.”

There is still work to be done. None of the councils have finished reviewing and aligning services across their former council areas nor integrated their ICT systems. This needs to happen for the councils “to be in a position to implement an optimal structure”, the auditor argues.

At present, the councils are working out what customer service levels they should provide as an amalgamated council, including whether service levels should be common across the council area. At the time of the audit, different service levels inherited from the former councils mean some ratepayers are receiving a higher level of service than others.

“The next challenge will be to work out future service levels across the new council areas and make any accordant workforce adjustments,” Crawford said.

The transition processes “are time and resource intense”, wrote Inner West Council CEO Michael Deegan in Inner West’s official response to the audit, who added that while protections had provided some certainty for staff, they had also had “a detrimental effect on timely benefits realisation”.

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