Updated financial analysis: evaluating the importance of scale in proposals for local government reorganisation

In December 2024, the government published its English Devolution White Paper. Within this, the government set out its intention to undertake a programme of local government reorganisation in all remaining two-tier local authority areas, alongside small unitary neighbouring unitary authorities (where they exist).

Following this, in February 2025, the government issued a statutory invite to these areas asking for formal proposals to be put forward later this year, with the intention to undertake a phased delivery of reorganisation over the coming years.

Within the White Paper and since, the government has cited the 2020 report by PwC, commissioned by the County Councils Network (CCN) ‘Evaluating the importance of scale in proposals for local government reorganisation’, the report set out at a national level the range of potential financial benefits that could be realised through the establishment of unitary local government.

Drawing on quantitative financial modelling, the report set out at a national level the range of potential benefits that may be brought about through the establishment of unitary local government.

Given the prominence attributed to the analysis and the time that has lapsed since the original report, PwC UK has updated the financial modelling that underpinned the 2020 report. The update includes uses publicly available data updating disaggregation costs in line with inflation, and taking account of cost reductions across councils in the previous four years when estimating the benefits of aggregation.

Download the 2025 report here.

The purpose of the update is to inform national policy decisions and discussions with the most up-to-date data and analysis, while also providing local areas with an indicative benefit range.

In arriving at the final modelling presented in this report, it is important to note that the updated inputs have been developed solely by PwC UK based on the same methodology and approach as used in 2020. The analysis by PwC has been completed independently of CCN and its members.

This report  provides an overview of the approach and methodology undertaken by PwC and the aggregated results of  from the analysis. With PwC retaining the intellectual property of the LGR model used for the analysis, within this report, a high-level overview of the approach to the modelling and development of assumptions is provided.

CCN has separately undertaken a population threshold analysis based on the data provided by PwC UK. The analysis has been developed and published solely by CCN.

Responding to the publication of the updated analysis, Cllr Tim Oliver, Chairman of the County Councils Network, said:

“The government has clearly set out its intentions to reorganise all remaining two-tier areas in England, with councils in these areas now expected to come forward with proposals over the coming months. The County Councils Network (CCN) has been clear from the outset that we support the government reforms, with our role to assist our member councils, and their local partners, to put forward evidence-based proposals.   

“Ministers have placed significant prominence on the 2020 PwC report and the savings it identified that could be achieved by different approaches to reform. It is therefore important that, given the time lapsed since the original study, the analysis has been updated.

“CCN would like to thank PwC for updating the analysis, which is a very important contribution to supporting the sector in developing proposals and informing future decisions on reform.”