A suburban Sydney council will need to repay millions of dollars it controversially received from a grants fund awarded to almost entirely coalition electorates under the former NSW government.

Hornsby Shire Council, in the city’s north, was awarded $40 million 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.

“There have been significant delays in the delivery of the project and limited progress has been demonstrated, with most of the grant money yet to be spent,” a statement read.

A request from the council for an extension of time to utilise the unspent funds has been refused.

A separate request for an extension to use a $50 million grant to turn a quarry into parkland has been approved after construction was found to have significantly progressed.

Local Government Minister Ron Hoenig said the government would be recouping money in instances where councils have 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.

“The fund was originally established to support councils which had been forcibly merged by the former government, yet 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”.

Inquiry chair and NSW Greens MP David Shoebridge said the fund was “a brazen pork-barrel scheme” and called it an electoral bribe.

“The coalition designed a scheme with so few checks and balances that $252 million of public money was handed out on a purely political basis to sort out the coalition’s political problems,” he said.

– AAP