Ministers didn't do cost review of council mergers

According to the BBC, the UK government did not perform an independent review of the cost of the biggest reorganisation of councils in England for decades. A substantial amount of money could be saved by merging councils in 21 counties into single authorities, according to Deputy Prime Minister Angela Rayner. The ministry of local government of Rayner based its cost estimates on a 2020 study by the County Council Network (CCN) that said £2. 9bn could be saved over five years. However, the CCN has since updated its report, and now claims that reorganisation could result in no savings and actually cost money in some scenarios.

According to Tim Oliver, chairman of the CCN, local government reorganisation

may result in billions in efficiency savings to be reinvested in frontline services. Oliver said the CCN accepted the government's reforms, but went further, saying:

We are worried about the potential costs of reorganization, where plans seek to replace the two-tier system with multiple small unitary councils.

A two-tier system divides responsibilities between a county council and district councils, which is split between responsibilities. Councils that have been affected by the reorganisation have been considering the creation of new local authorities in their territories. Several have suggested the establishment of multiple smaller unitary authorities in their regions. For example, the county council in Essex has suggested three new unitary authorities in the area. Next year, the government will determine which plans to go forward and which ones to notify the majority councils. According to a government spokesperson, the reorganisation

will improve services and save taxpayers' money.

Financial shocks

Ministers discussed the possibility of saving money as one of the main benefits of local government reorganisation. Rayner, a former governor of the United Kingdom, promised improved results for residents and saved a considerable amount of money that can be reinvested in public services and improve accountability, according to MPs in June. In reaction to the BBC's freedom of information request, her department maintained that it was not necessary to commission separate in-house analysis of the cost of reorganisation at the public's expense. PwC, an accounting company, and CCN, a cross-party lobbyist group, informed the government's savings estimates. In 2020, a PwC study estimated that there will be £22 in savings. If all councils in two-tier areas were replaced by single authorities, the 9bn would have over five years. However, the CCN's updated review this year found that if 58 new councils, based on a minimum population of 300,000 people, were established in all 21 two-tier cities, they could cost £850 million over five years and produce no savings.

No long-term savings will be made under this scenario,

the CCN's report found,

it will be more cost effective to maintain the existing two-tier system in England. According to Oliver,

dividing county boundaries into unitary councils with populations as small as 300,000 will result in hundreds of millions of new unsustainable costs for local taxpayers. According to the councillor, the government must ensure that the new councils, which have been established, are of the correct size to achieve cost savings, increase productivity, and withstand financial shocks.

If you fail to do so, it could place more pressure on already under pressure health services and come at a time when many county and district authorities could see their funding reduced,

Oliver said.

'Mega councils'

According to the District Councils' Network (DCN), the reorganisation may have poor results considering the funding challenges facing local government. It's surprising that the government has conducted no independent study before embarking on the biggest reorganisation of councils in 50 years,

Sam Chapman-Allen, chair of the District Councils' Network.

Mega councils with populations of half a million residents or more may be imposed on areas where there is no reliable, up-to-date evidence to back up councils of this size, and many large councils that were not established before are struggling financially.

The DCN said that it was not too late for the government to commission an investigation into the optimal number of councils to maximize potential savings in order to maximize future savings.

Councils around the country have also told us that joining services under one roof provides them with joint-up assistance when they need it most, while clearer boundaries mean people know who's responsible for providing their services.