A suburban Sydney council has been slapped with a "wake-up call", told to repay millions of dollars it controversially received from a grants fund awarded to almost entirely coalition electorates.
Hornsby Shire Council, in the city's north, was awarded $40 million by the former NSW government to build a park under the Stronger Communities fund set up in 2017 to support councils that were forced to merge.
But the council never amalgamated and an inquiry would later reveal 96 per cent of grants went to coalition or marginal electorates in the lead up to the 2019 NSW election.
On Monday, the NSW Labor government ordered the council to repay $36 million in unspent funds, describing the scheme as "egregious" pork barrelling.
The council says it will review its options with its lawyers.
Premier Chris Minns said it was the first time he had demanded a council repay grant cash under so-called 'use it or lose it' provisions.
He said his government received no firm dates on when the Hornsby developments would end.
"Think about a world where local councils promise they'll build ... new infrastructure, or parks or skate facilities or pools, and then just pocket the cash," Mr Minns said.
"We have to be in a situation where you do what you say you'll do and if you don't, the money will return to taxpayers in the state … it's a wake-up call for everybody."
The council's request for an extension of time to utilise the unspent funds was refused.
A separate request for an extension to use a $50 million grant to turn a quarry into parkland was approved after construction was found to have significantly progressed.
"Work is already well underway on this project, which is now even more desperately needed following the announcement of the NSW government's housing targets," a council statement read.
"We are now reviewing our options with our legal team and will advise residents as we make further decisions."
Local Government Minister Ron Hoenig said the government would be recouping money in instances where councils had not demonstrated sufficient progress on projects that received grant funding.
"The former Liberal-National government's Stronger Communities fund has been exposed as one of the most egregious examples of pork barrelling," he said in a statement on Monday.
"Hornsby Shire Council received $90 million despite not being one of the amalgamated councils ... at a time when we are facing a cost-of-living crisis, every dollar counts."
A 2021 parliamentary inquiry found councils were improperly allocated public money on a politically partisan basis that was a clear abuse of the grants process.
Greens senator David Shoebridge, who chaired the inquiry when he was a NSW MP, said the fund was "a brazen pork-barrel scheme" and called it an electoral bribe.
