These are the Happy Times - Local Government Reorganisation

Is it going wrong? I’m going to argue that Local Government Reorganisation is an error which will not deliver any material savings, will most likely create years of turmoil and with the self-evident breakdown of the dominant party system may lead to the undermining of faith in local democracy.

In December 2024 a white paper set out the government’s vision for simpler local government structures. The government argued that more unitary structures would deliver better services for residents, and savings which could be reinvested in public services. Local Partnerships observe that creating unitary models will reduce duplication and enable stronger regional leadership.

The legal basis is the Local Government and Public Involvement in Health Act 2007, which is likely to be amended and widened by the current English Devolution and Community Empowerment Bill which will inter alia give the Secretary of State the power to compel authorities to engage in a reorganisation [1].

But there is little agreement that new unitary authorities would be more effective by serving half a million plus populations and the suggestion that there would be savings appears to be a wild guess.

The BBC reported (29 August 2025):

Rayner's department, the ministry of local government, based its cost estimates on a 2020 report commissioned by the County Council Network (CCN) that said £2.9bn could be saved over five years. But the CCN has since revised its analysis and now says the reorganisation could make no savings and actually cost money in some scenarios.

The same day CCN commented:

The BBC asked the Ministry of Housing, Communities & Local Government whether it undertook its own analysis of the costs of its reorganisation policy. In response, the department confirmed it undertook no departmental analysis, outlining it used a previous 2020 report by PwC, commissioned by the County Councils Network (CCN).

In March this year, PwC revised its 2020 analysis for the CCN, estimating that £2.9bn of savings would be made over five years if all 21 two-tier county areas were replaced with a single unitary council in each area.

But it turns out CCN’s analysis of the revised PwC figures, visualise £1.8bn of savings over five years if the government created 29 new unitary councils in these areas, all with populations in excess of 500,000 people. Their analysis also showed that replacing the two-tier system with 58 new unitary councils with populations as low as 300,000 could end up costing £850m over five years and deliver no long-term savings.

The Secretary of State announced:

We will be taking forward six devolution areas on the Devolution Priority Programme: Cumbria (Cumberland Council, Westmorland and Furness Council); Cheshire and Warrington (Cheshire East Council, Cheshire West and Chester Council, Warrington Borough Council); Greater Essex (Essex County Council, Thurrock Council, Southend-on-Sea City Council); Hampshire and Solent (Hampshire County Council, Portsmouth City Council, Isle of Wight Council, Southampton City Council); Norfolk and Suffolk (Norfolk County Council, Suffolk County Council); and Sussex and Brighton (East Sussex County Council, West Sussex County Council, Brighton and Hove City Council).

Furthermore, some authorities received the agreement of the Secretary of State to not hold elections last May 2025 and they may well will do the same in May 2026. It is difficult to see how not having elections can result in greater accountability and cynics might say it is not unconnected with the unpopularity of the big parties and avoiding elections to stop Reform getting a foothold or the status quo losing control.

So, this restructuring may lead to no savings at all, which is hardly surprising because of the major changes in staffing [2], procurement, contractual relations, finance and IT arrangements as examples of what will have to be addressed for a new unitary.

From the legal perspective and the Monitoring Officer point of view this turn of events is grave. Any rationalisation of Local Government is likely to be targeted at reducing the professional workforce establishment. The picture is that local politics has never been more fragmented. This combined with the government’s mooted plans to toughen the standards regime with the power to suspend and even disqualify elected members is a cocktail of uncertainty. The optics are not good with the risk of perfectly functioning District and County Councils being drawn into a partisan gerrymandering war whereas up to this point relations were cordial.

What about the deeply indebted councils? Why would any neighbour councils wish team up with councils with hundreds of millions of pounds of debt and burden their residents with the imprudent legacies of historic poor governance, unless there is some form of fiscal prophylactic? There will have to be help. The Secretary of State has indicated there will be assistance. [3] [4]

Summing up, in my view the local government reorganisation will not deliver any material savings because the transactional costs will be colossal with thousands of hours across the land being spent on the obviously devilish details of legal formalities regarding re-procurement, contractual and systems compatibility and staffing conundrums and now apparently hundreds of millions of public debt being written off.

Inevitably a great deal of public money will be spent on professional advisory services not least because there will be a premium on such advice due to scarcity of people capable of giving it all being asked at the same time. That there will be recourse to such expense is inevitable because of the risk of chaos and liability if it goes wrong.

These are the happy times so best treasure them.

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.

[1] Whether they like it or not.

[2] Eg terms of employment, pension funds administration, TUPE, redundancy, redeployment JD evaluation etc

[3] See letter dated 28 October second page surrey-lgr-secretary-of-state-letter-to-surrey-leaders.pdf

[4] The Local Government Lawyer (28 October 2025) reports that the Secretary of State will consent to writing off £500 million of Woking Borough Council’s £1,500 million debt to ease the creation of one of the proposed two Surrey-based unitaries. There will be conditions which will probably require disposal of assets.