The RSPCA will stop acting as a pound for Wollongong and Shellharbour councils in 18 months but its Unanderra shelter will continue looking after animals in need.
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In February 2024, the RSPCA's impounding service contracts with the two councils will end.
A spokesperson said this was because the organisation was redirecting its focus to its core mission, enforcing the Prevention of Cruelty to Animals Act.
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Currently 60 per cent of the shelter capacity is made up of lost and stray animals.
"This transition is imperative in alleviating pressure on the significant volume that strays place on our staff, and will ensure we have capacity to accommodate the animals who have come into our care through our inspectorate or community programs," the spokesperson said.
The RSPCA has provided an impounding service for Shellharbour since 2006, and Wollongong since 2009.
Both Wollongong and Shellharbour councils have resolved not to proceed with a formal tender process to find a new supplier for an impound service after receiving just one submission when they called for expressions of interest.
Instead, the councils will together enter into direct negotiations with an interested party.
RSPCA NSW operates six shelters, a rehabilitation centre and a care centre, which support more than 29,000 animals each year.
"Our shelters are a haven for animals that have been abandoned or have been victims of cruelty or neglect," the spokesperson said.
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