Darcy Byrne calls for $24 million Inner West compensation as Auditor General report finds that council grant program ‘lacked integrity’

By PATRICK MCKENZIE

Inner West Mayor Darcy Byrne has decried the NSW Government’s “systemic rorting” of grants, following the release of a report by the NSW Auditor General last Tuesday.

The report, which investigated the integrity of the administration of the Stronger Communities Fund (SCF), found that the NSW Office of Local Government’s (OLG) assessment and approval process for allocating $252 million to local councils “lacked integrity”.

It found that the funding was prioritised for councils that had worked constructively with the government during the 2016 council merger process, an overwhelming percentage of which (96 per cent) were in coalition-held state seats.

The Stronger Communities program was established to provide funds to support newly amalgamated councils and others subject to merger proposals from 2017 to 2019.

Cr Byrne, who made the initial request to the auditor general to investigate the program, called on NSW Premier Dominic Perrottet to act on the report’s findings and to compensate $24 million in funding that the Inner West was wrongly prevented from accessing.

“The Auditor General’s report is a scathing indictment of this $252 million slush fund and it is now time for the government to compensate communities like ours that were cheated out of funding,” Cr Byrne said.

“96 per cent of the funds were handed over to Liberal and National Party electorates with no proper assessment process and zero transparency.”

In July 2017, the NSW government established that SCF funds should be used to cover councils’ legal costs associated with amalgamation, reimbursement of costs incurred by councils who were unable to merge but had participated constructively and to fund community initiatives in councils that had amalgamated.

Inner West Council was formed in May 2016 as a merger of the former Ashfield, Leichhardt and Marrickville councils. It was allocated $300,000 at the time, which was distributed across a number of community groups.

In October 2020, Inner West Council and the City of Canterbury-Bankstown began a joint campaign for an investigation into the program. 

In the East

Woollahra Council was an outlier in how the three major eastern suburbs councils were impacted by the program.

The council received no SCF funding after its merger proposal with Waverley and Randwick was abandoned and court action was launched. The area includes the state seats of Vaucluse (held by Liberal Gabrielle Upton) and Sydney (held by Independent Alex Greenwich).

Randwick and Waverley Councils both received funding, $2.58 million and $2 million respectively, however, the OLG did not publish any information about the funding, and there is no documented rationale for the reason particular projects were funded or how much they received. 

Lacking transparency

The report also identified that program guidelines were not published, nor did they contain details of the selection and assessment processes.

Instead, the report says that projects across 24 councils were identified by former premier Gladys Berejiklian, former deputy premier John Barilaro and the Minister for Local Government, and were communicated to the OLG with “no merit assessment of identified projects.”

Hornsby council, whose Mayor Phillip Ruddock is the President of the NSW Liberal Party, received $90 million (36 per cent) of the funding alone.

Ms Berejiklian’s approval of the grant was previously the subject of an ICAC inquiry in October 2020, during which the government admitted that signed approval documents for the grants administered prior to the 2019 state election did not exist.

The report notes that for the 22 councils where funding was determined by Ms Berejiklian and Mr Barilaro, “the only record of their approval is a series of emails from their staff”. 

“This is a test for Premier Perrottet,” Cr Byrne said. “He has said he wants to end his government’s systemic rorting of grants. It’s time now to act and show that he is the Premier for all of NSW, not just blue-ribbon Liberal electorates.”

“We still desperately need financial assistance for infrastructure, and the Premier should stand up today and commit to working with us on a compensation fund.”

When asked on February 8 whether he could assure people that pork barrelling would not occur at the next state election, Mr Perrottet fronted a ‘zero tolerance’ approach.

“I’ve made it abundantly clear to every single one of my ministers – they are the ones responsible for the decision-making in relation to those grants programs and the outcomes,” he told The Sydney Morning Herald.