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2. Analysing and modelling the impacts of council mergers

Throughout 2015 and the first part of 2016 Morrison Low has supported over 50 NSW councils in responding to the government’s Fit for the Future reform program.

Our work over this time has covered virtually every area of the process but in particular focused on providing information and support to councils so that they could answer two key aspects of the process councils were required to respond on.

What does the proposed merger look like?

Estimating the costs and benefits of merging councils carries with it uncertainty and therefore risk. Morrison Low was able to draw on experience in mergers in Queensland and New Zealand to develop a merger business case model which provided a high level of detail to the councils on the assumptions driving the projected costs or benefits. By providing clarity around where costs and savings were expected to arise, councils could contribute to its development and the model itself was tailored to suit the individual circumstances of each and every merger.

The impacts of mergers go much wider and deeper than just the financial performance of a proposed cCouncil. Following analysis of communities of interest and the impacts on representation, local identity and local priorities, Morrison Low, in many cases, presented a broader and richer view of the impacts which could then be articulated to the community.

How could performance improve to become sustainable as a standalone council?

Meeting the government’s financial benchmarks by the 2020 deadline challenged councils to adapt their operations and expenditure to focus on financial and asset sustainability. Morrison Low developed a methodology for identifying opportunities to reduce costs or increase revenue and a dynamic model that allowed councils to see the impacts of any decisions on council’s performance against the benchmarks.

This process which typically engaged staff and councillors, alongside innovative ideas from the councils themselves and real time modelling helped focus councils. In almost all cases our clients achieved the required performance against the benchmarks. 

Project Contact: Dan Bonifant

Image sourced from the Newcastle Herald.