Why has the state merged so many councils? And will the new councils be better than the old?

The answer to those questions, one might think, should be obvious.

Premier Mike Baird and Local Government Minister Paul Toole have sacked 42 councils. They have replaced them with administrators. Local democracy has been suspended for over a year until elections are held in September 2017.

You might think there would be a clear explanation for Baird and Toole have done this; that there would be a clear statement of what this will achieve.

But there does not seem to be. And while there are good reasons to merge councils in Sydney, they are not necessarily ones the government is using.

This is an issue because if the reasons upon which the government is merging the councils are shaky, there is a chance the results of the mergers will not be as good as they could be.

In Baird and Toole's telling, new councils are better than the old because they are larger. Because they are larger, they will save money.

Baird and Toole have a figure they use to demonstrate this: merged councils will save $2 billion in 20 years.

In his press conference announcing he had merged councils, Baird stressed the value of these savings. The savings would be spent "on childcare, parks, sporting facilities, front-line services". There would be less pressure on council rates to rise.

When you look a bit harder at Baird's figures, however, they evaporate into meaninglessness.

The savings touted by Baird - $100 million a year across the state – make up less than 1 per cent of the $10 billion yearly revenue accrued by councils. That's a pretty tenuous basis upon which to do anything.

And Baird and Toole have consistently failed to release the basis for this savings figure.

If the government could not cook the books to arrive at an impressive figure to demonstrate savings from merged councils, then it is fair to say that is not the reason they're being merged.

So why are they being merged?

"It is actually clout – it is actually clout."

This explanation comes from Frank Sartor, the former mayor of Sydney and Labor MP, speaking at a panel last year, and it makes a bit of sense.

"It's not whether it is financially more viable or not, because you can run a very thin council," said Sartor. "It is really about capacity."

The idea here is that larger councils will be better able to partner with other governments to do things that could be useful.

Gold Coast Council, for instance, partnered with the state and federal governments to build and run the tram line that extends that along the city's shopping strip. And while Sydney councils contribute money to state projects, they have not to this stage partnered in the same way as the Gold Coast.

If giving councils more clout to with which to spend money is one reason to merge them, therefore, another is simply to try and make them raise and spend more of it.

When the state government first said it wanted to reform local government, it commissioned an independent panel of three to produce a report.

The report, finished in late 2013, found many councils had no financial worries. In fact, the panel highlighted the opposite concern.

"The City of Sydney has money coming out of its ears," says Graham Sansom, the chair of the panel.

"It is debt free. It provides free rates for pensioners. It is wealthy," says Sansom.

"The question is how, in the broader interests of the people of Sydney and NSW, should that wealth be used? Should it be locked up in a relatively small local government area in the middle of the metropolitan region? Or should that money be put to better use over a larger area?"

The panel's argument was that wealthier councils, mostly to the east of Parramatta, should be given more responsibilities for amenities within their own area. The City of Sydney could have paid for the entire eastern suburbs tram line, for instance.

This recommendation was based on two corollaries. The first was that councils in wealthier areas be given authority to level higher rates that better reflected local land values. The higher rates would be justified on equity grounds. (If the City of Sydney paid for the eastern tram line, the government could spend more money where it was more needed).

The second was that some councils would need to be significantly larger. In Sansom's report, the City of Sydney would have taken over the eastern suburbs.

Baird and Toole's reforms fail to grapple with this first corollary at all. In fact councils are likely to have less money available, because of government-imposed caps on rate increases.

As to the second, there is still no Sydney council of the size of the Gold Coast.

The government ignored Sansom's recommendation for a much larger City of Sydney. And it scuttled the Sansom panel's plan for a much larger Parramatta to recognise its status as a second CBD.

Instead, Baird and Toole opted to create two councils in the Parramatta region, one in the wealthier northern suburbs, and a second in the south. This has created accusations that the process reflects a political gerrymander.

"It certainly looks that way," said Sansom, when asked if the Parramatta fix looked a political fix.

Baird is right to say that the sky will not fall in following council reform. But the point of the exercise is far from obvious.

Jacob Saulwick is city editor.