LGA accused of keeping millions from South Australian councils

MILLIONS of dollars set aside for council “research and development” is almost entirely being directed back to the industry lobby group the Local Government Association, which also controls the fund.

• Adelaide council becomes first to turn back on LGA

MILLIONS of dollars set aside for council “research and development” is almost entirely being directed back to the industry lobby group the Local Government Association, which also controls the fund.

The redirection of funds has angered those lobbying for council rate capping because they say the money should be going to councils to provide better services.

The Local Government Research and Development Scheme was set up to provide funding lots of $25,000 each to help councils work in smarter ways.

Despite councils being told to apply for grants of up to $25,000, the LGA has secured much larger payments of $965,000, $540,000, $300,000, $250,000, $150,000, and $100,000 from the fund.

Payments from the research and development scheme include a payment to the LGA of $60,000 to study why councils should be able to charge higher rates.

The LGA spokesman said when councils were told to apply for $25,000 lots, this was due to high demand, meaning smaller projects were “more likely to be funded’’.

Of the 81 “current projects” funded by the scheme, the LGA take is $4.6m of a total of $5.3m.

Marion councillor Bruce Hull, who will move at a meeting on Tuesday night that the council leave the LGA in protest at its $100,000 annual membership fee to the organisation, has criticised the scheme.

He said the research and development funding allocation showed again that there needed to be more scrutiny on LGA funding.

“That is public money that is not scrutinised well enough,’’ he said.

“Marion found out it has been ripped off for seven years and this is another example where better scrutiny is needed.’’

Marion Mayor Kris Hanna described the LGA as a “bloated bureaucracy” after it was first revealed last year that his council was paying more than any other council despite not being the largest.

But the LGA, which has reviewed Marion’s fees, said there was nothing wrong with the administration of the scheme and “current projects” listed on its website included many for which it had ongoing funding.

A spokesman said of the latest funding allocation in May, only six in every ten dollars, $720,000, went to the LGA for new projects.

An LGA spokesman said the use of the funds was no different than a lobby group such as the Property Council or Business SA using members’ funds to run its affairs, and many of the projects were hosted by the LGA on behalf of councils.

“All funding provided through the scheme ultimately goes to projects which benefit the local government sector,’’ the spokesman said.

Property Council executive director Daniel Gannon said the LGA had not “done its homework” because taxpayer and ratepayer money was not the basis of the group’s funding.

“What the LGA is wanting people to believe is that what they do is a standard way of doing business for a peak body,’’ he said.

In contrast to groups such as the Property Council, funding for the Local Government Research and Development Scheme begins as public money, profit from a bank run by councils, the Local Government Financing Authority, and royalties collected by the State Government from councils.

“Let me make this very clear — we do not run our organisation the way the LGA is run and unlike the LGA, we are not reliant upon ratepayers’ or taxpayers’ money to keep our organisation going,’’ Mr Gannon said.

“In a bizarre attempt to drag other industry groups into this issue, the LGA has embarrassingly been hoisted by its own petard.’’

The Property Council is one of a number of organisations supporting calls for rate capping, to stop councils increasing rates each year well above inflation.

Xenophon team MLC John Darley, who also advocates rate capping, said the division of money under the scheme heavily favoured the LGA, but should be going to councils to help fund services.

“The LGA is feathering its own nest,’’ he said.