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Is Council Financially Secure

By Manly Community Forum
Published in Community
1 min read

A controversial article in the Sydney Morning Herald suggested several amalgamated councils, including Northern Beaches, were less productive since amalgamation and may not be financially secure. Read the full article here.

Council strongly denies the allegations, saying the article used “flawed analysis”, such as comparing 12 months of rate income with 13.5 months of expenses in one case, and with 10.5 months of expenses in another. The article also included all expenses, but not all income: it excluded grants and ignored improvements to services and debt reduction.

Manly Ward Councillor Sarah Grattan said:

“I’m very disappointed in the quality of analysis in the SMH story on council mergers today which has provided a misleading picture on the performance Northern Beaches Council. If you look at their analysis the base year used for comparison by LSI includes 12 months of rates income but only 10.5 months of expenses, significantly overstating the 2016 base year result. This time difference was due to the timing of amalgamation. The 2017 year had 12 months of rates income and 13.5 months of expenses. Other merged councils stats would be similarly impacted. LSI should have taken the 2014/15 year as a comparison - but that would not have been as good a story for the SMH. Staff have calculated the index using LSI’s method, going back a further two years (shaded in yellow) for the combined former councils to show the difference between a 12 month period and the 10.5 mth financial year LSI are using for 2015/16. This shows Northern Beaches Council is actually more efficient than the former Councils based on the LSI method, with a higher index in the full financial years of 17/18 and 18/19.

Sarah Grattan graph

I have a lot of other issues with the methodology (ie include all expenses, but not all income sources). It doesn’t take into account the reduction in debt and borrowings repaid, it excludes operating grants (but includes the expenses) and doesn’t take into account increases in the quality of services.”


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