CCN sets out evidence on potential local government reorganisation

CCN News 2016 | 03 November 2016

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The County Councils Network (CCN) has today published two independent studies looking into potential local government reorganisation in county areas.

CCN is neither for nor against reorganisation, and commissioned both studies as a comprehensive national evidence base to be used both locally and by central Government, as well as to support member councils. Read a summary of the findings and CCN’s response here.

The first report, Learning the Lessons from Local Government Reorganisation, produced by Shared Intelligence explores the last two rounds of local government reorganisation in the 1990s and late 2000s. You can download it here.

CCN also commissioned market-leaders EY to produce a report that analyses six different single and two-tier governance ‘scenarios’ for county and district authorities. The EY report Independent Analysis of Governance Scenarios & Public Service Reform in County Areas* outlined the challenges and merits of each model against a broad set of criteria including financial efficiency, sustainability and public service reform.

You can read the full report here, and CCN’s Response to both studies, here.

* In downloading this document we are required to draw the attention of recipients to the disclaimer on page 2 and to the final paragraph of section 1.2 of the EY Independent Analysis of Governance Scenarios & Public Service Reform in County Areas.

EY report

Based on an assessment of national data across 27 shire counties, EY’s financial analysis showed:

  • Creating 27 countywide unitary authorities could save £2.9billion nationwide, on average up to £106million per county. The single unitary option has the shortest payback period, generating savings earlier, and also provides the most effective platform for financial sustainability and reducing council tax for residents.
  • This approach could save 68% more to the second option of abolishing county and district councils to create two unitary authorities per county, which would create 54 new councils across the country.
  • A third scenario of abolishing county and district authorities and creating three unitaries per county, creating 81 new councils countrywide, could result in a net cost to the taxpayer.
  • Another option to retain and reform the current two-tier system, through ‘merged districts’ was found to be more cost effective than creating three unitaries per county.
  • The scenario to create three unitary authorities, supported by a combined authority delivering the major services – which has been proposed in areas such as Oxfordshire and Buckinghamshire – would generate no savings, costing the average county between £1-14m over a five year period. The report highlights the risks of this ‘untried and untested’ model of reorganisation.

CCN is neither for nor against structural reform, and commissioned the study to inform evidence-based decision making.

In analysing the evidence, CCN said “the evidence strongly suggests the most effective foundations for structural reform – whether unitary or two-tier – are those that build on the scale and geography of county councils.”

Paul Carter headshot

Responding to the report, CCN Chairman, Cllr Paul Carter, said:

“CCN is neither for nor against reorganisation, and commissioned this research in an era of anything goes, as seen in competing proposals across several parts of the country. As revealed in the study, each option has its own merits and its own challenges. This body of work will feed into the debate as to the most efficient and effective manner to deliver complex local government services in this country. This research and evidence base should form an important reference point should central Government have an appetite for the reorganisation of local government.

“But a clear conclusion from the report is that there are real risks in splitting up the historic counties of England, in terms of both savings and maintaining good public services. Instead, the evidence strongly suggests the most effective means of structural reform – whether through unitary or two tier models – are those that build on the scale and geography of county councils.

“If structural reforms were to take place a single unitary model not only creates the most efficiencies for frontline services, the greatest scope to lower council tax bills, but also the best platform to transform local services so they are sustainable and fit for the considerable demands for the future.”

A key conclusion from the study found that there is a correlation between the single unitary model that generates the most savings and that which relates to the public service reform agenda.

Delivering services at scale, under clear governance, and within coterminous boundaries with key partners would benefit health and social care integration, economic growth, transport, crime, and enhance the sustainability of services, the study said.

Alongside substantially lower savings, the options to create several unitary authorities could put at risk the quality of services delivered to residents, the report demonstrates. It highlights the risks involved in fragmenting frontline services at a time of increasing demand – with this fragmentation resulting in more complex services, higher costs, and could result in an inconsistency in services delivered within areas of a county boundary.

Cllr Carter added:

“Regardless of any reorganisation proposals, the need to transform public services is absolutely critical to sustain and improve public services enjoyed by our residents. A clear conclusion from this study is the need to maintain and enhance scale in delivering these services.

“Sub-county unitary options would fragment the services that matter to residents, potentially worsening them at a time when we can ill-afford to with demand rising, and could be an ineffective use of public money. Instead, residents who rightfully expect quality services could be left with the likes of social care and children’s services delivered in unproven and untested ways, while setting back progress on integration and growth.

Darra Singh, Partner, Head of Government and Public Sector at EY, said:

“Our findings from this strategic review aims to provide an evidence base as well as a wider narrative to inform the debates around county areas. This discussion will be increasingly important given the growing demand for services, funding reductions, devolution and structural reform debates, as well as uncertainty of future funding arrangements for local authorities.

“Most importantly, this report looks beyond a narrow focus of savings from structural reorganisation. It places emphasis on the transformational and service re-design opportunities which can come from considering different governance scenarios and the imperative for wider public service reform.”

Shared Intelligence report

The report produced by Shared Intelligence analysed the last rounds of local government reorganisation in creating unitary councils in the 1990s and late 2000s.

The report concludes the larger councils with a higher population or geographical footprint are better placed to deliver economies of scale and divert more money towards protecting key frontline services, helping them respond to the current financial and services pressures more effectively.

The report also warns over fragmenting social care and education services, which correlates with concerns in EY’s report over disaggregation of services in the sub county options, particularly in a climate of increased demand and a rapidly ageing population.

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