Council amalgamations ‘will not save money’ says research by Jeff Tate Consulting


Council amalgamations ‘will not save money’ says research by Jeff Tate Consulting

Vikki Campion
The Daily Telegraph
January 30, 20135:35PM

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A NEW report on council amalgamations warns awards and laws that mandate no forced redundancies for three years create overstuffed bureaucracies and would not save money.

It reveals NSW’s past councils mergers were “poorly planned”, stifling proper reform and leaving councils cash strapped and communities unhappy with infrastructure.

Research by Jeff Tate Consulting reviewed council amalgamations focusing on mergers in NSW which saw 42 councils combined eight years ago.

“The processes adopted for planning and implementing the (2004) reforms were generally seen as being poor and the costs were significant,” it found.

“Overall, however, the amalgamations and boundary changes have provided important benefits to the communities and staff of those councils.”

The report, which was commissioned for a sweeping reform of NSW council’s, found mandating a three year no forced redundancies period made “it almost impossible to achieve savings from amalgamations in the short term and has the potential to normalise inefficient organisation structures and overstaffing”.

It found that legislative or award limitations on transferring staff to new work locations, and providing ongoing compensation if they were transferred, “leads to unreasonable costs many years into the future”.

“It also creates different remuneration levels for people doing the same or similar work based on whether they became employees before or after the amalgamation and works against establishing and maintaining a new, single organisation culture that is part of the notion of a new start after an amalgamation,” the report found.

It calls on councils to make the difficult decisions “including reducing staff numbers” early on in the amalgamation, with savings in staff costs more likely to be in white collar roles.

“Grievance procedures need to be in place for staff who feel aggrieved by decisions during the amalgamation process,” it said.

The report also calls on State Government to help councils fund the mergers because the costs associated with amalgamation had been underestimated in the past.

Across NSW councils, there are more than 1500 councillors and about 50,000 employed staff.

“Poor planning and implementation processes combined with legal, industrial and proclamation restrictions have increased costs, extended the negative impacts associated with amalgamations and hampered the achievement of positive outcomes,” the report said.

Independent Review Panel Chair Professor Graham Sansom said the research would inform the panel’s recommendations.

“The panel has made it clear that we believe consolidation of councils will be a significant element of strengthening local government,” he said.

“The panel is well aware that amalgamations and boundary changes need to be carefully planned and handled sensitively, particularly in relation to maintaining local employment,” he said.

“The report’s finding that amalgamations have improved services and efficiency whilst increasing job opportunities is particularly significant.”

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