Press Release

Press Release
6 February 2018

LOCAL COUNCILS HOLD BILLIONS IN COMMUNITY INFRASTRUCTURE FUNDS

The Urban Development Institute of Australia (UDIA WA) has found that many local councils in WA are holding funds adding up to over a billion dollars that have yet to be spent on community infrastructure.

These funds, collected via development contributions schemes and voluntary agreements, are supposed to be spent on infrastructure such as roads, upgrades to existing parks and public open spaces, community halls, recreation facilities, libraries, aquatic centres and sporting fields.

“The issue is that there is a lack of transparency and accountability in respect to how local governments manage these funds,” UDIA WA CEO Allison Hailes said.

“There is no set timeframe or trigger point that regulates when the money should be spent after it has been collected,” MS Hailes said.

“There should be mechanisms prescribed in the State’s overarching policy that enables Councils to collect the contributions.  For example, Councils should be required to start spending the money once the population in an area has reached a certain threshold or when a specified percentage of the funds required for a piece of infrastructure have been collected” Ms Hailes said.

“Some local governments have been holding funds for more than a decade while the residents in these areas are still waiting for the promised facilities to be delivered,” Ms Hailes said.

“In many cases, the local government is also meant to be contributing funds towards the new infrastructure due to existing residents, who will also benefit from the new or upgraded facilities” Ms Hailes said.

“Unfortunately we know that there are cases where the local government has deferred making such contributions, which further delays the delivery of facilities. Again, it is the local residents that are missing out on facilities and infrastructure that they are owed,” Ms Hailes said.

In order to establish how much funding for local infrastructure was sitting in local government reserves UDIA undertook research to try to quantify what funds local governments are holding.  The research was based on information provided in publicly available information such as Annual Reports, local government websites and feedback directly from developers who have made contributions.

“Unfortunately, even though local governments are required to report how much funding they are holding in developer contributions, there are many who either do not report these funds at all, or they do not separate the item out in their reporting so it is hard to quantify accurately,” Ms Hailes said.

Based on the information available, UDIA calculates there is at least $1b in development contributions held by local governments across the Perth Metro Area.

“The state government needs to ensure that there are clear policy requirements regarding accountability for the funds and that there are clear timeframes in which development contribution scheme dollars are collected and spent,” Ms Hailes said.

“Currently, we are looking at a significant amount of money that could be injected into the state’s economy that would contribute to the creation of more jobs and a much needed boost to the economy,” Ms Hailes said.

“In the current economic climate, construction and other costs associated with building infrastructure are extremely low and local governments could be getting huge ‘bang for their buck’ if they were building infrastructure now,” Ms Hailes said.

“It is important to note that development contributions, at the end of the day, are paid for by new home buyers.  The costs of the development contributions get built into the price of new land and units.  They deserve, and in fact have paid for, facilities and infrastructure that simply aren’t being provided in a timely manner.  There are cases where someone has bought land, built a home, lived in it for many years and then moved on, without ever having benefitted from the infrastructure they paid for,” Ms Hailes said.

Ends.

For more information: 
Gemma Osiejak
UDIA WA Executive Manager Communications & Marketing
E: gosiejak@udiawa.com.au 
M: 0421 506 819