I like your thinking but it is not new!
There are two issues that arise here from your statements above.
1 Should Councils have access to Open Source Software
2 Should Councils have access to a standard set of software that specifically applies to Councils requirements
1 Access to Open Source
Governments have been trying this for years but with very limited (no) success. Why, because although Open Source is a great idea (concept)
in practice the reality is that apart from very simple, generic applications, open source is not sustainable or user friendly. It is also often difficult to get changes made or services around Open Source software because of its generic ownership. Companies have been set up on the back of Open Source software but generally they will modify it, tailor it (to specific requirements), market it, sell it and support it (as their own). This is generally what a client customer requires. So Open Source for Local Governement with the list of applications areas you require is not practical or achievable (or I feel it would have been done). There are areas where LG requires detailed functionality that is guaranteed by the supplier (e.g. Finance and Accounting). LG would not accept an "Open Source" brand witout the guarantees and the ongoing developement and support.
My thoughts on Open Source.
2 Standard Applications for LG
There are two bits to this;
a There are a few large suppliers of systems for LG where their products have been well and truly tested in LG environment.
There are a few suppliers (?) including Technology One who have (are developing a comprehensive set of applications for LG.
I only menton Tech One because we use a number of their products (Finance One, Proclaim, Dataworks, Outcome Manager etc) that Tech One are looking to integrate.
We do not use their Asset Management Software (even though they supply this application).
This is an option for LG (but can be a more expensive options for greater functionality, greater integration, lower risk etc)
b There was a major project a number of years ago where 5-6 Councils got together, threw in significant dollars and had a major (international) consulting firm specify and deliver a solution by presumably combining "appropriate vendors" products and integrating them. I think Parramatta and several other NSW Councils were involved in this "extensive" exercise. The marketing of this integrated solution (and its support) seems to be left to the individual vendors. So we are back with the individual vendor model (and not as effective probably as the "sole" vendor concept described in 2a.)
In summary, I think this would be a nice problem to solve but most Councils are already locked into specific solutions and a major exercise to get everyone on the same page would not be a possibility. Happy to hear others thoughts on this.