Local Government Reorganisation and rethinking corporate structures

Is now the time to rethink your corporate structures? Peter Collins looks at the benefit for local authorities undergoing local government reorganisation in reviewing their arrangements.

Local Government Reorganisation is often viewed as a process of transition.

It can also be an opportunity.

As councils review their wider corporate landscape, there is value in asking whether existing structures continue to support the strategic ambitions of the future authority.

That does not automatically mean change is required.

But it does create an opportunity to ask important questions.

Every structure should have a purpose

Many council-owned companies continue to deliver significant value.

Others may have fulfilled the purpose for which they were originally established.

Reorganisation provides a natural point at which to consider:

• Does the company still achieve its original objectives?
• Could services now be delivered more effectively through a different model?
• Have duplicated structures emerged across predecessor authorities?
• Are governance costs proportionate?
• Would simplification create longer-term benefits?

These are strategic questions rather than purely legal ones.

Rationalisation should be evidence-led

There is no advantage in changing successful arrangements simply because organisational structures elsewhere are changing.

Equally, where duplication exists, reorganisation may provide an appropriate opportunity to simplify governance and improve efficiency.

The objective should always be to ensure that corporate structures continue to support the needs of the new authority.

Looking beyond vesting day

While much attention understandably focuses on transition, councils also have an opportunity to think about the longer term.

Reviewing corporate structures now may help create a governance framework that remains effective well beyond implementation.

Looking ahead

Local Government Reorganisation is not only about bringing organisations together. It is also an opportunity to consider whether existing corporate arrangements remain fit for the future.

Taking a measured, evidence-based approach can help ensure council-owned companies continue to deliver value while supporting the strategic priorities of the new authority.

Peter Collins is a Partner at Sharpe Pritchard LLP.

Please contact Peter if you would like to discuss any of the issues raised in this article or how they may affect your authority.

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This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any issue raised in this article, please contact us by telephone or email This email address is being protected from spambots. You need JavaScript enabled to view it..