PwC: Evaluating the impact of scale in proposals for local government reorganisation

This updated PwC analysis, commissioned by the County Councils Network (CCN), examines the financial implications of different local government reorganisation scenarios across England’s remaining two‑tier county areas.  

This 2025 update revises PwC’s 2020 modelling using the latest financial data and inflation‑adjusted assumptions. Its purpose is to inform national policy—particularly in the context of the English Devolution White Paper which set out the government’s ambition to reorganise all remaining two-tier county areas.  

It also aims to support local areas in understanding the likely cost–benefit profiles of moving to unitary structures. CCN uses this data to support its own population‑threshold analysis, which complements PwC’s aggregated scenario modelling.  

The report’s findings include:

• Replacing the two‑tier system with a single unitary authority in each area could achieve savings of £2.87bn over five years.  
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• Total annual savings over five years under an average single‑unitary scenario is £694m, with no disaggregation costs.  
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• Moving to two unitaries per area reduces gains due to duplicated leadership, democratic structures and service delivery, resulting in a £708m net benefit over five years.  
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• A shift to three unitaries creates a net cost of £738m over five years, driven by rising disaggregation costs of £475m annually.
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• Four‑ and five‑unitary scenarios (for the largest counties only) deliver net losses of £754m and £753m respectively over five years.  
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• Disaggregation costs have risen by 33–38% since 2020, reflecting pressures in adults’ and children’s social care.
  
• Efficiency benefits from aggregation have risen 10–12% since 2020, but remain outweighed by duplication in multi‑unitary models.  

Recommendations put forward by PwC include:

• CCN should continue to advocate that single‑unitary models provide the most sustainable and financially efficient option.
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• Government and local areas should avoid multi‑unitary proposals due to escalating disaggregation and transition costs.

• Local areas should use PwC’s analysis as a strategic benchmarking tool, supplementing it with local‑level modelling.
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• Policymakers should treat reorganisation as a route to long‑term financial resilience, not a short‑term savings strategy.