Newcastle lord mayor Nuatali Nelmes has long been vocal about the city being classified as metropolitan, meaning it misses out on regional grant funding opportunities.

She said many of these either don't have a corresponding metro program, or if they do, Newcastle can't get a look in.

"For example, there are huge pools of funding for art gallery infrastructure," she said. "We're talking hundreds of millions of dollars.

"We had some small requests around $20 million for our long standing art gallery expansion, but we were always deemed too small or not competitive enough."

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The issue reared its head this month when the state government responded to the Public Accountability Committee's Inquiry into the integrity, efficacy and value for money of the NSW Government grant programs.

Newcastle council made a submission to the inquiry in 2020, supported by a Hunter Research Foundation Centre paper which found Newcastle was denied eligibility for $5.86 billion in funding - with an approximate share of $170.9 million.

The committee found "it was unacceptable for large regional cities such as Newcastle and Wollongong to be excluded when complementary grants programs are designed for both metropolitan and regional areas".

But the government released its final response this month, with no mention of fixing the issue.

Deputy lord mayor Declan Clausen also pointed out the John Hunter Health and Innovation Precinct project was counted in the recent 'regional' NSW budget, which included a footnote saying Newcastle was included in population numbers but was not considered regional.

Cr Nelmes put up a motion to Tuesday's Newcastle council meeting pointing out the "inequity" and pledged to write to NSW Local Government Minister Wendy Tuckerman MP asking for help to resolve the issue urgently.

"It's very frustrating," she said.

"We have just recently been excluded from $20 million worth of grants for the events boost program that was only offered to councils around the city and in regional NSW, but not to us.

"Also the electric vehicle charging grants.

"Two areas where we would have absolutely put in applications, given our push for events in terms of restarting the visitor economy after COVID and we're one of the early leaders in rolling out electric vehicle chargers."

Cr Nelmes said the issue affected the greater region too as lower Hunter councils were included in council's planning and advocacy.

"There is a huge amount of inconsistency that's based around very arbitrary borders," she said.

"When you cut out the urban core, which is the predominant area of employment, where a lot of the economic drivers and businesses are, you're excluding not just people in Newcastle, you're excluding those benefits to everyone in the lower Hunter."

Cr Nelmes said while Wendy Tuckerman was new to the local government role, she had been a "good advocate" for Newcastle on other issues, so was hopeful of the problem being addressed.

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