And with fair reason too - as despite repeated assurances from the state of no forced amalgamations, many - at least off the record - claim a trap has been set.

That is, those councils ruled to be financially doomed may have little choice but to explore getting together with their neighbours.

Associate Professor Roberta Ryan, director of the Centre for Local Government within the University of Technology, Sydney, said the stakes are high, especially so in rural and regional communities.

While the argument for some consolidation of councils in metropolitan centres is fairly strong, Prof Ryan said there would be significant impacts for smaller communities if shire councils found themselves compelled to merge.

A telling factor would be jobs 'on the ground', as councils are the single biggest employer in 60 of Australia's Local Government Areas (LGAs).

"I've always said if you want to strengthen the region, strengthen local government because they are a significant employer. And it's employment from professional people like accountants and engineers through to outdoor staff. It's a very diverse employment pool," Prof Ryan told Fairfax North Coast.

"What's going to happen if you close a council and relocate it to another area? That source of employment in that locality is going to be hard to get back."

Prof Ryan said the Fit for the Future exercise though could prove beneficial.

"There's always an opportunity to take a look at how we can do things better in local government, there's no question about that," she said. "My experience is that people in out of metropolitan areas have a lot of concerns that they are going to lose local representation if council areas get bigger.

"Spatially, the areas are really large, and it is possibly more difficult for people to have direct contact with their elected members if councils are larger.

"The State Government's still saying there's no forced amalgamations, they haven't changed their policy on that. Some councils will be struggling with financial sustainability, and having a close look at that I think can be good. Then I guess it's up to the Government to say what's going to happen from there.

"Putting councils together that are already struggling is not going to help."

Prof Ryan underlined that larger councils do have some inherent advantages:

"Bigger councils can do more complex service provision. The things local governments do are much more complicated every year. Once upon a time we had swimming pools, now we have leisure centres, and libraries used to be the places where people borrowed books but now libraries do much more complicated things than that etc.

"There's arguments on one side I think for bigger organisations to potentially employ more qualified staff and deal with some of the more complex service delivery that local government does. But on the other side there is the concern of how do you keep things local?

"If there's opportunities for a couple of councils that are doing pretty well to come together or a bigger regional council to potentially work with some smaller outlying councils, then I think that's always been the idea behind the original approach."

Prof Ryan noted there would be a myriad of challenges and costs associated with any amalgamation of councils.

Individual councils often had distinct IT systems, financial management approaches, and different ways in which they assess their assets and their service levels.

"There can be significant costs involved with just the process of bringing people together," she said.

And the arguments both for and against local government consolidation are not holistic.

"Fit for the Future goes to the question of what do you think the main purpose here is - and the conversation is dominated by financial drivers, but there's a whole lot of things that local government does that communities value - and communities pay for, anyway," Prof Ryan said.

"Communities pay for the level of service that they receive and they are usually involved in those decisions.

"Communities have been working through their own financial sustainability with councils for years. So communities are often quite well educated about this is regional and rural areas."

THE INDEPENDENT Pricing and Regulatory Tribunal (IPART) will take a holistic approach to assessing whether councils are Fit for the Future within the existing criteria set by the NSW Government.

Under the NSW Government’s Fit for the Future reforms, all councils in NSW are required to submit a proposal demonstrating how they meet the criteria by June 30, which will then be assessed by IPART, as the appointed Expert Advisory Panel.

IPART Chairman Dr Peter Boxall said following four weeks of public consultation, including 174 submissions and over 300 people attending public forums across the State, the final methodology puts the onus on councils to demonstrate how their proposals meet the criteria.

“There is no one-size-fits-all measure or universal minimum population size in assessing a council’s scale, beyond the options provided by the Independent Local Government Review Panel (ILGRP) in 2013,” Dr Boxall said.

“Scale and capacity are about more than population. We are interested in how high capacity councils are able to deliver quality services and infrastructure while keeping rates and charges affordable, and representing the diverse needs of their communities.

“Similarly, there is no overall pass or fail mark for the other criteria of sustainability, effectiveness and efficiency. What we are interested in is an overall assessment of a council’s proposal.

“These criteria, the way they will be measured and the benchmarks councils are required to meet, have not changed.

“Scale and capacity was set as the threshold issue in September last year, with councils required to consider the recommendations of the ILGRP as their first option.

“But we will consider alternatives if councils can demonstrate that they will deliver benefits to the community that are at least as good as the ILGRP recommendations.”

Dr Boxall said many of the issues raised during the consultation were unable to be addressed by IPART as they relate to issues outside the terms of reference.

“There has been considerable interest from councils in clarifying what requirements they need to meet,” he said.

“We have addressed these concerns as far as possible, and recognise that this is about more than short term budget adjustments. We will make holistic assessments by considering whether councils have the capacity to deliver what their communities need in the future.

“This leaves us able to consider alternative proposals that fulfil the intent of the criteria, and we will consider a flexible approach to individual benchmarks within each overall assessment.”

Dr Boxall said the limited modifications to the assessment methodology should make it easier for councils to lodge their proposals by the deadline.

IPART will take public submissions to the councils’ proposals during July, before advising the Minister for Local Government on its assessment of each proposal by the end of October.

* A copy of the assessment methodology and information about IPART’s approach and timetable can be found on the IPART website

THE UPPER House committee inquiry into local government in NSW this week announced an innovative new way for people to have their say about local council reforms.

The committee is trialling an online questionnaire so that residents can inform the committee of their views.

"The committee is aware there is significant community interest in our inquiry. I believe that this online questionnaire will be a useful tool for people to have their say and provide feedback to the committee," committee chair Paul Green MLC said.

"People will be able to respond to questions about proposed State Government reforms, as well as about their own local council and council amalgamations.

"This new approach does not replace the usual submission process, which is still available for those individuals and organisations who wish to make longer and more detailed responses to the inquiry’s terms of reference.

"The committee will also be holding a number of public hearings in Sydney and around the State, as per the usual course of the inquiry.’

* A link to the online questionnaire, and further information about the committee’s inquiry, can be found here