A $5 billion economic stimulus program targeting Western Sydney LGAs that were hard hit by COVID lockdowns didn’t result in equitable funding, an audit has found. 

The WestInvest scheme was announced in September 2021 to provide ‘transformational infrastructure projects’ across 15 local government areas.

But a new report released by Auditor General Margaret Crawford found the design of the program lacked integrity and wasn’t informed by adequate research to justify such a largescale commitment of public money.

There was also no consultation with councils or other stakeholders before announcing the program, which meant the priorities of local government were sidelined.

The report found a lack of documentation about the program’s objectives and focus areas, as well as in the decision to use a competitive process to allocate grants in one of the program’s three funding streams.

It says decisions about which LGAs got funding weren’t explained publicly or documented internally, and risks relating to the capability of applicants to deliver their projects weren’t considered until after the program design had been decided.

Imbalance of funding

The program was divided into three funding streams:

• $3 billion for NSW government agency projects
• $1.6 billion in competitive grants to councils and community groups
• $400 million in non-competitive grants to councils

The report says the competitive grants round didn’t require, or result in, an equitable distribution of funding.

“The use of a competitive grant funding process for the $1.6 billion community projects round resulted in a significant imbalance in the distribution of funding between the 15 eligible LGAs,” the auditor said

The top three highest funded LGAs were Blacktown, Parramatta and Penrith, with projects in each of these LGAs receiving over $200 million. The lowest-funded LGA was Wollondilly, where a total of $11 million of projects were funded, with The Hills ($16.4 million) and Fairfield ($26.6 million) the next lowest.

Blacktown got the lion’s share of the funding with eight projects approved worth $265.1 million.

There were more than 600 applications for the competitive grants with 87 council projects getting funding.

However the report says some of the analysis to support assessments was outsourced to consultants and the Premier’s Department conducted limited checks on assessments.

“Our analysis indicates that the external advice on project delivery and the financial viability of the applicants was inconsistent,” the report says.

‘Ongoing improvement’

Meanwhile, the report found there wasn’t a consistent assessment process for NSW government projects, which made up $3 billion of fund.

Many government projects that had no clear link to the purpose of the program got funding, against the advice of the WestInvest steering committee, the report says.

Numerous funded projects also failed to meet the objectives of the program, and $1.1 billion was allocated to moderate or low merit-rated state government projects.

Changes were made to the guidelines after applications had been assessed and there was also a lack of clarity about the assessment and approval process.

NSW Premiers Department Secretary Simon Draper said Westinvest was a complex and challenging program and he fully supported ongoing review and evaluation of grants administration to ‘drive improvement and uphold public sector integrity’.

“The premier’s department is committed to working with the cabinet office to ensure ongoing improvement in grants administration in the public sector,” he said.