Good news, Wollongong: Plan to cut $16m funding scrapped

Threats of job cuts, rate rises and a loss of vital services appear to have been averted at Wollongong City Council with news that a proposed $16 million cut in annual grant funding has been withdrawn.

When news first broke of the plan by the NSW Local Grants Commission to allocate funding via a new methodology for distributing funds, Wollongong was amongst the biggest losers.

Lord Mayor Cr Tania Brown described the proposed $16.1m annual funding cut for Wollongong as “a kick in the teeth”.

Following an extraordinary meeting of council, a submission objecting to the proposed funding cut was lodged with the Grants Commission, outlining how it would impact on the council’s financial sustainability, service delivery and infrastructure renewal capacity.

The submission strongly opposed the new funding methodology, which it said didn’t give due consideration to Wollongong’s position as the regional centre for the Illawarra-Shoalhaven and the associated service demand and expenditure requirements.

“A funding cut of more than 67% to an annual allocation doesn’t stack up for Council or the community we serve,” the Lord Mayor said.

On Friday, Wollongong City Council received the good news. The proposed changes to funding arrangements would be scrapped. This followed opposition to the planned changes from the majority of NSW councils.

In a letter to councils, advising them of the decision, the chair of the Local Government Grants Commission, Linda Scott, said “the draft model did not receive broad sector support”.

“Of the 102 councils that made submissions, 10 clearly supported the draft model, 54 raised significant concerns or proposed modifications, and 38 opposed the changes.”

In the letter to councils, Ms Scott said “no peak body, Joint Organisation or Union clearly supported the new draft model and, significantly, the NSW Country Mayors’ submission noted the draft methodology 'cannot be supported'”, and that, “Feedback from our members is that the new methodology should aim to not leave any CMA Member Council worse off.”

The Grants Commission hasn’t, however, closed the door on changes to funding in the future.

“If additional Financial Assistance Grants funding becomes available, the Commission may revisit a revised model for the 2029-30 council term, following further consultation with the sector and appropriate transition planning,” the Grants Commission Chair added.

Lord Mayor welcomes decision

“I’m so very pleased that the Commission has heard feedback from councils like Wollongong who spoke loudly and clearly about our concerns about these proposed changes,’’ Wollongong Lord Mayor Tania Brown said on Friday.

“Local Government do so much for their community every single day and the Financial Assistance Grants are an invaluable way for us to deliver more for our residents and are an additional funding stream away from rates.

“We’re going to continue to advocate, as we resolved at our Extraordinary Meeting of Council last Thursday, for the Financial Assistance Grants to be returned to 1 per cent of Commonwealth taxation revenue.’’

Community groups backed council

Thirroul Village Committee and the Northern Illawarra Residents Action Group (NIRAG) supported council with a submission opposing the changes. NIRAG secretary Ross Dearden said news the proposed draft methodology would not proceed was “a most pleasing outcome”.

Neighbourhood Forum 5 offered its support to the council submission.