Newcastle MP Tim Crakanthorp has investigated the situation after complaints from the Carrington Community Council residents' organisation, after it was knocked back three times for a grant to install lighting on the Carrington side of the Throsby Creek foreshore.

Mr Crakanthorp said yesterday that even if government agencies and other large organisations were legally able to apply for funding, their access to a supposedly "community" grants scheme did not "pass the pub test".

THE STATE SAYS:

The Port of Newcastle has declined to buy into the debate beyond saying it provides the $1 million a year as well as its "other corporate and community sponsorships and donations", and that the state government administers the fund.

A published list of recipients shows community groups received just nine of the 22 funded grants so far, receiving $792,000 of the $4.8 million spent.

Recipients include $500,000 to the NSW Port Authority for improvements to Macquarie Pier at Nobbys and the same amount to Newcastle City Council to renovate Nobbys Surf Life Saving clubhouse.

The grants were initially administered by the Hunter Development Corporation, which merged to become the Hunter and Central Coast Development Corporation soon after unveiling the 2018 recipients.

The Department of Regional NSW under Deputy Premier John Barilaro took over for the 2019 grants.

A departmental spokesperson said eligibility criteria had not changed since the scheme began but a review was done after each round to "consider what improvements could be made".

Mr Crakanthorp said he was not criticising the quality of the projects selected for funding.

"But when a grant program is called a 'Community Contribution Fund', the expectation is that the money goes to the community, not the NSW government doling out more than $1.8 million to its own agencies to complete projects," Mr Crakanthorp said.

Carrington Community Council president Graham Hardes said the group had been funded for $45,000 in the second round in 2016 to provide cricketing nets at Pat Jordan Oval, but its three applications to light the walking path along the Carrington shore had been rejected.

"The residents are the ones who are primarily affected by port developments and we are the ones being pushed aside," Mr Hardes said.

He said the first application was for hard-wired mains lighting.

They were told that solar would be better so they went that way but were rejected for reasons that included "a lack of ability to deliver the project".

"That's despite the contractor we had partnered with having just done the same thing at Maitland and installed 18 kilometres of solar lighting at Goulburn," Mr Hardes said.

A spread sheet of grant recipients compiled from the government's online records shows that NSW government agencies have received grants of more than $1.8 million over the five years the scheme has operated.

Newcastle City Council, the University of Newcastle and the Port of Newcastle have between them received more than $2.1 million, taking the total to just over $4 million, compared with the $792,000 allocated to community groups.

More than $300,000 of the community allocation went in two grants to the William The Fourth restoration group.

Mr Crakanthorp said it was hard enough as it was for Newcastle applicants to win grants, especially when the government seemed to use alternative definitions of Newcastle as either "regional" or "metropolitan" as the circumstances suited it.

"With Newcastle community groups and sporting clubs excluded from almost every other grant program operated by the NSW Government, due to not being defined as regional or metropolitan, in no way, shape or form does the distribution of this fund pass the pub test," Mr Crakanthorp said.

"Community groups should not be competing against large government agencies for this money."

Mr Crakanthorp said to reform the fund, 75 per cent or more of each round should "go to the community".

Any funding to government departments or agencies must be matched with a dollar for dollar contribution.

He said an $180,000 unspent after five years should be added to the 2020 pot.

He called for the geographical area of the fund to be expanded.

At present it ran from Nobbys along the waterfront side of Wharf Road and Hannell Street, taking in all of Carrington, Walsh Point on Kooragang Island and all of Stockton as far north as the Stockton Bridge.

It also covered all of Islington Park, joined to the port by the thin strip of public land running along Throsby Creek.

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