BBC story on local government reorganisation savings and costs: CCN responds
Today the BBC has published a story based on the government’s response to a Freedom of Information request on local government reorganisation savings and costs.
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 updated its 2020 analysis for the CCN, with this showing that £2.9bn of savings over five years could still be achieved if all 21 two-tier county areas were replaced with a single unitary council in each area.
The CCN’s separate analysis of the new PwC figures, also published in March, showed that £1.8bn of savings over five years could still be unlocked if the government created 29 new unitary councils in these areas, all with populations in excess of 500,000.
However, the 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.
Responding to the BBC story, Cllr Tim Oliver, Chair of the County Councils Network, said:
“Analysis by PwC has shown that, if delivered at the right scale, local government reorganisation could unlock billions in efficiency savings to be reinvested in frontline services.
“However, we remain concerned over the potential costs of reorganisation where proposals seek to replace the two-tier system with multiple small unitary councils. CCN’s recent report showed that splitting county areas into unitary councils with populations as small as 300,000 will create unsustainable new costs for local taxpayers.
“While it may be necessary for some areas to create more than one new council, it is absolutely essential that the government scrutinise and rigorously evaluate all proposals against their own statutory criteria, including ensuring new councils are the right size to achieve efficiencies, improve capacity and withstand financial shocks. Failure to do so could pile further strain on care services that are already under pressure and at time when many county and district authorities could see their funding reduced as part of the Fair Funding Review.
“It is ultimately up to local areas to choose which option to pursue considering both the financial implications and other important factors. However, they must do so mindful of the costs and risks involved in the reorganisation process.”
