NSW Councils fearful that a recent State Government white paper on Crown lands is set to divert them onto a highway to financial hell if they are forced to pick up the bill for repairing and maintaining roads previously the responsibility of the NSW Trade and Investment Crown Lands Division.

In an all too familiar warning on unsustainable cost shifting, local governments across the state NSW Councils are digging in to fight moves put forward by NSW Government’s white paper Crown Lands for the Future – Crown Lands Management Review.

The white paper controversially proposes transferring all local roads to councils, claiming that the Crown Lands Division just doesn’t have the resources or technical expertise to repair or maintain them.

The Crown Lands Management Review 2013, which preceded the white paper, said roads would no longer be the responsibility of Natural Resources, Lands and Water Minister Kevin Humphries.

The Review said: “Roads used to provide access to the general public should be the responsibility of either councils or Transport for NSW, who have been responsible for roads for the past century, are resourced for this purpose and have the necessary expertise.”

“This will result in councils being responsible for all local roads, which is appropriate as roads are one of the core functions of local councils.”

The review proposes councils fund the maintenance and upgrade of local roads through rates and by selling off any extra Crown land that they may gain under the new rules. They will also be allowed to choose which roads they will and will not maintain.

The state would also retain unformed Crown roads and these could be closed and sold where there was no public need for them.

But peak body Local Government NSW (LGNSW) is buying the offer of more roads.

Unswayed by the clarifications, the local government sector has collectively branded the NSW Government’s recommendations councils take over all local roads as “folly”.

Already stung by big Budget cuts, they argue the money for upkeep is simply not there.

“Councils are underfunded for their existing road responsibilities and certainly have no financial or resource capacity to absorb additional responsibilities for all Crown roads,’’ the LGNSW submission said.

“This would clearly create a totally unsustainable and financially crippling cost shift for NSW councils.”

The submission also warns many Crown roads are likely to be in “below-standard condition” leaving councils with “significantly increased risk and liability issues”.

The LGNSW said the transfer would increase the length of the local road network by 167,000km – potentially more than doubling the local road network – with many of these roads being in poor condition. Local government is currently responsible for 164,000km or 90 per cent of all public roads in NSW, excluding Crown roads.

It’s a tough ask when NSW councils are already staring down the barrel of a massive infrastructure funding shortfall, hidebound by rate-capping and unprecedented levels of federal and state government cost shifting.

At a bare minimum, councils want a say in what roads are transferred – and a minimum standard set before any roads are transferred and a full transfer of ownership, not just management responsibility.

Another of the white paper’s recommendations that has councils offside the possibility of being lumbered with unviable “land of local interest to local councils”. One example given is that of showgrounds and racecourses, where councils fear an avalanche of costs relating to management plans, title transfers, weed and fire management.

The white paper proposes that Crown land is divided between state, regional and local lands, with the latter going to councils. Of course, much of this land is already managed by councils.

The definition of land that will go to councils is: “Land with primarily local uses and values will be managed by councils under the local government legislation, using the same procedures that apply to land already owned by councils.”

Land which will continue to be held by the state includes: land used for critical infrastructure like harbours; land which is part of a system, like waterways and beaches; iconic land, like major sporting venues, seriously contaminated land and land near major CBDs.

In its white paper submission LGNSW said: “The suggestion of devolving other “land of local interest to local councils” needs to be approached very cautiously to ensure there is no cost shifting and to ensure councils can assess and accept or reject parcels of land individually.”

A spokesman for Trade and Investment Crown Lands told Government News that the government was seeking to transfer land that was already being managed by local councils in many instances. Any transfers would follow consultation and agreement with councils.

“The government is not planning to shift costs and there will be no forced transfer of land to councils,’’ said the spokesman.

“Local land transfers are intended to be a win-win for both councils and the State due to the reduced red tape, greater clarity of roles, more effective use, management and planning of the land and greater autonomy over the land’s future use.”

There would be no additional costs to councils on Crown land they already managed, he added.

But it’s not all doom and gloom for NSW councils, who agree that the current legislative mess needs to be tidied up to make owning and managing Crown lands less bureaucratic. For example, getting approval for holding activities on Crown land often involves onerous paperwork and delays.

There are eight acts governing the administration of Crown lands, some dating back to 1890, a three-tier system for Crown reserves and various types of land ownership and management arrangements.

The current, confusing system can translate into delays from multiple layers of decision making, duplicated or contradictory requirements and a lack of clarity for ratepayers about which government agency controls particular land. The department also aims to ease approval and reporting requirements giving councils more freedom to manage their land.

One new act will cover: ministerial powers; land ownership; leases and licences; sale and disposal of land; managing Crown reserves; compliance and enforcement, such as stop-work orders and penalties for unlawful use or damage to Crown land.

The review is dealing with a significant chunk of NSW. Crown land comprises around 42 per cent of the state. There are about 33,000 Crown reserves with a total area of 2.5 million hectares. Councils currently manage 7,765 of these on behalf of the Crown.

Crown land includes beaches, waterways, parks, ovals, land for grazing, bowling greens, racecourses, tennis courts, sport fields, cemeteries, and land with commercial uses such as restaurants and marinas and aged care facilities. That’s 33 million hectares of the state with a total value of more than $11 billion. Crown land doesn’t include national parks and state forests.

NSW Trade and Investment began the Crown lands review – the first in more than 25 years – in June 2012.

There will be a pilot program on the local land concept which will examine how Crown land can be transferred to local control and address issues such as ongoing costs ¬¬of land management.

Comments from the public on the white paper are invited until September 14.