Local Government Finance

The English Devolution White Paper set out that Government will facilitate a programme of local government reorganisation. This can help strengthen local leadership, improve local services, save taxpayers’ money, and improve local accountability.

In 2020 a PwC report, “Evaluating the importance of scale in proposals for local government reorganisation”, for the County Councils Network, estimated that reorganisation of the then 25 two-tier areas to a single unitary structure would have a one-off cost of £400 million, with the potential to realise £2.9 billion over five years, with an annual post-implementation net recurring saving of £700 million. The unitary proposals submitted in relation to the most recently established unitary councils identified a range of efficiencies that could be achieved where council services are brought together in one organisation. For North Yorkshire Council, established in April 2023, unitarisation has enabled the council to manage financial pressures through structural changes and service transformation which are expected to achieve more than £40 million in savings by March 2026.

However, it is important to note that the scale of savings are dependent on the size and number of unitary authorities which are created. It is for local areas to develop proposals which are then submitted to government. Scale and efficiency will be an important element in those considerations, alongside a range of other factors.

In our invitation we have set out guidance to support councils as they develop proposals that are in the best interests of their areas. This includes guidance on issues of size, sensible geographies, efficiencies and financial sustainability. The criteria we will assess proposals against include the ability to achieve financial efficiencies.