Gladys Berejiklian's government has walked away from its policy of merging councils that have challenged their amalgamation in court.
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The abandonment of mergers for 14 Sydney council marks a major about-face from the Premier on one of the government's signature policies.
Ms Berejiklian said in a statement that due to the protracted nature of current legal challenges and the uncertainty this is causing ratepayers, those council amalgamations currently before the courts will not proceed.
"The government's merger policy has always been about putting ratepayers first and it has become increasingly clear that certain councils were happy to continue lengthy and costly legal proceedings," Ms Berejiklian said.
"We want to see councils focusing on delivering the best possible services and local infrastructure to their residents.
"That is why we are drawing a line under this issue today and ending the uncertainty.
"We are proud of what we have already achieved for local communities in the 20 merged councils, where significant savings and improvements to services and infrastructure have been delivered."
It will affect councils in Sydney's eastern suburbs, northern suburbs, lower north shore and parts of the inner west.
But it will also raise large questions of fairness. Councils that did not challenge their mergers in court were forcibly amalgamated last year.
The following proposed mergers will no longer proceed:
- Burwood, City of Canada Bay and Strathfield Municipal councils.
- Hornsby Shore and Ku-ring-gai councils.
- Hunter's Hill, Lane Cove and City of Ryde councils.
- Mosman Municipal, North Sydney and Willoughby City councils.
- Randwick City, Waverly and Woollahra Municipal councils.
Minister for Local Government Gabrielle Upton said it was important for local councils to have certainty in the lead-up to the September local government elections.
Local government elections for all merged councils and the 14 affected by the announcement will be held on September 9.