The NSW Government has ordered a public inquiry into Liverpool City Council and threatened it with suspension after a report detailed ‘serious concerns’ about widespread dysfunction, maladministration and possible corruption.

“It has become clear that … there is major dysfunction across the entire organisation,” local government minister Ron Hoenig said on Thursday.

“A public inquiry is therefore necessary to get all the issues out in the open and start the journey of restoring confidence in the Council.”

The inquiry will be headed by Commissioner Ross Glover, who was previously appointed to inquire into Wingecarribee Shire Council in 2021.

Mr Hoenig says he has written to Liverpool Mayor Ned Mannoun advising of his intention to suspend the Council and postpone September’s elections while the inquiry is underway.

Council has seven days to show why it shouldn’t be suspended.

“I want to ensure the Commissioner can oversee this inquiry without the politically charged environment of an election, which is why I believe it is in the public interest to postpone the September elections for Liverpool,” Mr Hoenig said.

“This action announced by the Government today is necessary to get to the bottom of some very serious and concerning matters.” 

Mayor slams ‘shopping list of unfounded allegations’

Cr Mannoun described the report as a “shopping list of unfounded allegations by unknown people who may hold a grudge against the me and the Council”.

He said suspending Council would be a bad idea because it would limit its capacity to respond to the report and participate in the inquiry.

“Both the Council and I will be making a full response to the interim report once we have fully reviewed its comments,” Cr Mannoun said.

“The minister has given seven days to make a response.  I assure you a full response will be made and I will be circulating it widely.”

Report highlights serious concerns

Recommendations for a public inquiry are included in an interim report released by the Office of Local Government as part of a separate investigation into recruitment issues at Liverpool Council.

“The investigators are of the belief that the matters of concern outlined in this interim report are sufficient in both number and seriousness to warrant an immediate public inquiry into the functions and operations of the elected council,” the report says.

The report details a number of issues relating to recruitment, procurement, financial management and development applications, as well as widespread evidence of a toxic work environment.

These include interference in the procurement process to pay a consultant $1.4 million.

The report makes reference to the sacking of CEO and former NSW MP John Ajaka last month, saying he had been denied procedural fairness.

It also outlines evidence of direct interference from the mayor and councillors in the assessment of DAs and other compliance and regulatory activities.

The report says it’s likely a public inquiry will reveal more information “consolidating matters of concern”.

Mr Hoenig told reporters the investigation had brought to light an number of matters outside its terms of reference relating to “maladministration and/or corruption”, which would be explored in the upcoming public inquiry.

The serious nature of the report left the NSW government with little choice but to intervene, Mr Hoenig told a media conference on Thursday.

“Communities expect their council to be operating with the highest level of integrity and in their best interests,” Mr Hoenig said.

“This is not the case at Liverpool City Council.”

The report will be referred to the ICAC .

Acting Liverpool CEO Jason Breton said: “Council will of course continue to co-operate with the Office of Local Government and will participate in the public inquiry when it is called.”