There has been growing pressure for all levels of government to achieve more while utilising less resources and providing services and facilities comparable to the private sector. Terms such as economies of scale, competitive tendering, contracting out, accountability, efficiency and customer satisfaction are now all part of the way local government operates. Despite the extensive change process that local government has undergone, little evaluation of its impact on the functioning of local government and on its customers has been undertaken. The main thrust of the changes to local government has focused on improving efficiency, effectiveness and meeting the customers'' needs. Results of the research suggested that there is a higher level of customer satisfaction among the residents and ratepayers under the smaller Towns than larger City of Perth. This is in contrast to the idea that larger municipalities enjoy economies of scale that allow them to provide better service to their customers at a lower cost. Also customer satisfaction in local government is more closely related to the way in which services are delivered, rather than the types of services delivered.