A NSW government tribunal has deemed 70 per cent of councils in the metropolitan Sydney area to be unfit for their future duties following proposals to dramatically reduce the number of local government jurisdictions across the state.

The Independent Pricing and Regulatory Tribunal (IPART) assessed a raft of proposals collected from councils throughout NSW in June as part of efforts to ascertain their financial health and future development prospects.

The tribunal found that 29 of the 38 proposals submitted by metropolitan councils were “not fit,” meaning that the councils have failed to demonstrate that “they have sufficient scale and capacity and are financially sustainable.”

Many councils that lay claim to sound financial health still saw their proposals rejected by IPART on the grounds that they lack adequate scale or capacity to undertake significant projects or new functions in future.

IPART’s findings are based upon recommendations submitted by the Independent Local Government Review Panel for a dramatic overhaul of NSW’s council system.

The panel had proposed widespread mergers of councils throughout the state, along with a reduction in the number of councils in metropolitan Sydney to 18 or fewer.

Possible mergers could include the creation of a Global City Council that would cover much of inner Sydney, encompassing the existing councils of Botany Bay, City of Sydney, Randwick, Waverley and Woollahra.

The NSW government is also pushing for a sweeping revamp of administrative jurisdictions in the state capital and concomitant improvements to urban planning policy with the establishment of the Greater Sydney Commission. The commission envisages the division of the Sydney into a total of six districts overseen by 13 appointees, with the goal of streamlining urban planning decisions.

While some members of the AEC sector have voiced their support for these plans, councils themselves have reacted with outrage to both the merger proposals and related assessments by IPART.

Sydney mayor Clover Moore said that IPART’s finding that the city council is unfit made a “mockery” of the review process and undermined the credibility of any related decision making.

“Over the past 10 years the city has consistently delivered…high quality infrastructure needed by our community and the one million visitors to the city each day,” she said. “To say the City of Sydney is somehow unfit in the face of this strong evidence to the contrary makes a mockery of the entire review process, and throws into question all decisions made as a result.”