The Culture Club of a LGR merger

Lots of learned articles have been, are being and will be written on Local Government Reorganisation (LGR). As I argued last year (30 Oct 2025) on Local Government Lawyer, these are the happy times. However, the herd of elephants in the ‘committee room’ is the issue of ‘culture’. Culture eats strategy for breakfast goes the saying (Drucker, P). During my doctorate research with Essex, Herts and Suffolk Monitoring Officers some 12 years ago, a key finding was that localism established a fertile bed for local practices. What we do about things whether out of choice or compulsion is culture.

So, what happens with culture and LGR?

This paper will consider public sector mergers and culture.

The definition in the revised July 2026 draft Best Value toolkit identifies ‘culture’ at para 42:

42. Culture describes how the established governance procedures and leadership are exercised in practice, whether they are respected by the letter or in spirit. The culture of an authority is determined by an agreed set of shared values, ethics and beliefs, how decisions are made, as well as how elected members and officers behave, interact and carry out their roles. The organisation should act as one, rather than in siloes, with a cohesive sense of one authority running through all operations.

Draft Guidance July 2026

It then goes on to identify what a good culture looks like:

• Members and officers promote and demonstrate the highest ethical standards and appropriate working behaviours through established shared values and ways of working.
• cooperation, respect and trust between members and officers, and between departments exists, along with a commitment to transparent decision-making and information sharing.

• compliance with legislation, strategies, policies and procedures throughout the organization

• Civil working relationships and communications between members including where there are political disagreements.
• A commitment to promoting transparency and sharing information with the public.
• The existence of a proactive and welcoming attitude to inviting and acting on external challenge and scrutiny, including from residents.
• Decision-making is taken at the right level, with officers empowered to do their jobs consistent with the scheme of delegation.
• Respect for a councillor’s need to know and enquire.
• Appropriate processes are in place to address issues such as harassment and bullying.
• An accessible whistleblowing policy, of which there is wide awareness and confidence that it will work.
• Demonstrable steps to engage openly and honestly with staff, including through staff surveys.

These look more like evidence of behaviours rather than culture. For LGR the problem is that these outcomes need to be uniform from an entity created by merger of perhaps district plus district plus county and even in the case of Essex the unitaries of Thurrock and the City of Southend-on-Sea. All with their own localism cultures which may be functioning very well or at least a resemblance of it. It is a truth in sport that nobody hates anyone more than their local rivals whether it may be Man United v City or the Old Firm Celtic v Rangers in Glasgow. It might be said that the proposed devolution and shadow officers and shadow mayor will swiftly establish a performance culture. I doubt it. Last year several authorities cried out ‘we want to embrace LGR don’t distract by elections in May 2026’. Well, the elections were called and the voters sent their own verdict returning in some cases less enthusiastic Members who consider LGR is being imposed on them, like it or not.

In a nutshell some of the participants to LGR don’t want to be LGR’ed.

Learning from Higher Education

Back in the noughties for my MBA dissertation, I was keen to delve into mergers and change management and by good fortune chose the fascinating subject of higher education mergers. The case study being that of London Guildhall (LGU) and the University of North London (NLU) to form London Metropolitan University (Lon Met). The methodology was longitudinal and data acquired through semi-structured face to face interviews. Apart from money, the big issue was leadership personality and unresolved culture differences, particularly about teaching quality. I pass on some of the learning about culture and change from the case study which I think is equally applicable to LGR.

London Met University was to be built on the uniform fusion of the LGU and NLU and neither should dominate post-merger. The merger did not jump that hurdle but instead it created difficulties with the academic stakeholders and lack of clarity over culture.

Neither university could absorb each other. The literature shows that the culture of institutions can have a significant effect on quality where two bodies of equal size merge. At least one culture, if not both, is going to be subject to a radical shock (punctuated equilibrium). This change process can be very disruptive to the stakeholders and then predicably poor industrial relations may follow and claims to the Employment Tribunal. 

So, what is meant by a merger? Harman (2002) provides a definition:

“...an amalgamation of two or more separate institutions that surrender their legality and cultural independent identities in favour of a new joint identity under the control of a single governing body...”

Mergers may happen for many reasons, for example a shrinking market or a strategic alliance of airline and holiday businesses or perhaps to enjoy greater purchasing power. It can be to share resources or to establish economy of scale or widen the range of teaching subjects. In most cases the mission aim will be the same; that is the merger is for the purpose of creating a body which is more effective and efficient than its individual components. This is the purpose of LGR, it is about creating larger 500,000 plus population unitary authorities.

The underlying theory behind mergers is that the amalgamation of two or more organisations should create a body which is more effective than the sum of all efforts on their own.

A merger with good strategic fit ideally should provide greater resources; a better spread of core competencies and broader capabilities. Some mergers are directed to resource sharing, for example if a large capital investment is needed for an item or a rationalisation of accommodation.

The merger can be about savings achieved by combining say research and development or a marketing arm. In addition, the general management capability ought to increase. Over time the donor entities become one and then there is the possibility of establishing economies of scale and combination benefits due to size.

However, the increase in size does not always deliver the increase in value where the entities are not in the business of manufacturing physical products but rather providing personal or professional services. Indeed, it has been observed that where capacities reside in the know-how of key people, they can simply elect to leave the newly formed organisation. It is quite possible for the supposed synergies to never emerge from the fusion, and the combination performs less well than before the merger. This underlines the importance of the need for change strategies.

Haspeslagh and Jemison (1990) identify two key strategies for the change:

• An Integration Strategy - that is the donor organisations should work as one

• An Absorption Strategy - an absorption strategy is required as there is little point in maintaining separate identities (though this is not the same as brands where value is in the brand itself). 

Integration is going to be difficult when so much is about geographic location and in some cases being many miles apart. Of course, now you don’t have to be physically there to be working there, but it is vital to integrate the IT quickly or there will never be a single culture.

An absorption strategy would set out to achieve the establishment of interdependence and low post integration autonomy, that is to say carrying on as if the merger never happened

Haspeslagh and Jemison warn that to eliminate all differences can take a very long time because of the need to dissolve the boundaries. This would be particularly so where the organisations were situated in different physical locations and if they are two sizeable bodies in the same business. The principal difficulty is in relation to the outset perspective, the agreed vision as to what the organisation will look like and what it would be its mission. Change has its own pace.

Organisational Culture

Organisational culture is often described as the way we do things around here (Deal and Kennedy (1982). When two or more separate organisations merge there cannot be room for several co-existent cultures, such as safeguarding where for example a unitary is merged with a county or there will be no complete merger. That’s without the issue of what policies will be retained / amended.

There needs to be courage of convictions to ensure a post-acquisition vision formulation is carried out, but in a merger of equal organisations the very snag of cultural differences is highlighted as there are three possible outcomes:

• firstly, an existing dominant culture of one party taking over; or
• secondly, a new jointly owned culture for both (the desired outcome) or
• thirdly disastrously the two or more cultures continue and clash creating a culture of dysfunction. It therefore is vital to have a strategy for change which accounts for how to deal with the existing cultures and how to create the new culture.

Mergers cannot be evolutionary. It is a “frame-breaking change” and as a result there will be winners and losers. Kruger (1966) argues that with planning even fundamental change can be an open and participative process. But it is delivered by surprise, it will be more likely meet with resistance and high rejection risk.

In local government reorganisation the scale of activities means the cognitive maps are likely to be somewhat more sophisticated, and this requires a greater emphasis on the mission to explain why the change should be supported. Kotter and Heskett in Corporate Change and Performance (1992) observed organisations which were successful are more likely to persist in their cultural values even though they may inhibit change. Culture change is usually in combination with other types of change.

A key element to change is the need to communicate with staff and that culture change should be rooted in the business strategy. A merger of organisations of reasonably similar size based in different locations with their own cultures is not going to be easy. To make the merger work would require specific merger success factors. After assessment of the literature, it was clear that several factors would be required as a minimum which are set out in the table below:

Re-reading my research, perhaps the most illuminating observation from the interviews I carried out was the repetition of management’s temptation for the change masters to adopt the maxim ‘one size fits all’. This tended to happen when there was not enough consultation and of course rubbed up people the wrong way. This could be perceived as resistance to change, but it was really about the urgency of wanting to get it over with, overlooking the requirement to sell the need for change. The one size fits all by definition must be based on an average and yet if no feedback is taken on board, then it is quite possible it does not fit anything at all.

Branding is very important, indeed it is vital to think what the post-merger identity looks like, so if one donor authority has a dominant colour, say red, the other authorities will see the bedecking of branding in red as a take-over. This stuff matters particularly on IT. At the old Guildhall University precinct, the telephones were branded in the old university name. So, what do you do? Ditch perfectly good phones or carry on with everyday reminders of what used to be?

Members are not going to be enamoured with the idea but to establish identity will mean spending a lot of money at the printers!

Summing up, establishing a resilient new culture is a critical success factor to LGR. Management must tailor LGR change to be inclusive and avoid at all cost one size fits all.

Conclusion

The revised 2026 best value definition is more about behaviours and as a qualitative factor difficult to evidence particularly as the new LGR entity even if competently led is going to be patchy as the skills sets for formation, integration and maintenance are all different. It does look like a box-ticking exercise, and because the Guidance only mentions LGR in passing (under partnership) it is clearly out of date.

The current version fails to adequately consider LGR and culture. It’s a confident prediction that that Guidance will be re-written for the final iteration.

In the world of LGR the elephants of culture are mighty beasts and the last thing anyone wants to see is a stampede of talent by an inept merger which failed to get culture right.

Dr Paul Feild is a Principal Standards & Governance Solicitor. In 2015 he was awarded Doctor of Business Administration on the thesis which asked ‘How does Localism for Standards Work in Practice? The Practitioner’s View of Local Standards Post Localism Act 2011’. He has been a deputy Monitoring Officer in various public authorities since 2000 and researches and writes on finance and governance issues. He can be contacted by email. His opinions as ever are his own.

Reading

Best Value Duty Consultative Draft Guidance Ministry of Housing Communities and Local Government July 2026

Feild, P (2011) MBA Dissertation – Did the Merger of London Guildhall University with the University of North London deliver better quality Post Graduate Education? A Retrospective Viewpoint by Case Study of the London Metropolitan University Business Campus

Harman. K. (2000) Institutional Mergers in Australian Higher Education

since 1960, Higher Education Quarterly, Volume 54, No. 4, October 2000, pp 343–366

Harman, k. (2002) Merging Divergent Campus Cultures into Coherent: Education Communities Challenges for Higher Education Leaders, Higher Education Volume  44 91-114

Haspeslagh, P., Jemison, D., 1991. Managing Acquisition: Creating Value through Corporate Renewal. Free Press, New York.

Kotter, J.  Leading Change Harvard Business School Press (1996)

Kotter, J.  and Schlesinger, L.J. Choosing Strategies for Change - Harvard Business School Press (July/ August 2008)