Single unitary councils could deliver £3bn over five years

New analysis has revealed that single unitary councils could deliver £3 billion worth of savings over five years and ‘maximise’ the benefits of economic growth and housing policy.

However, ahead of the publication of the government’s ‘devolution and local recovery’ white paper, a new report from the County Councils Network has shown that splitting historic counties could reduce the financial benefits by two-thirds and create ‘significant risks’ for the most vulnerable.

With councils in shire counties facing billions in rising costs for care services, alongside financial deficits caused by the coronavirus pandemic, a study from PricewaterhouseCoopers (PwC) shows that merging district and county councils in each area into a single unitary council could save £2.94 billion over five years nationally.

The report concludes that a single unitary in each area would reduce complexity and give communities a single unified voice to government, providing a clear point of contact for residents, businesses and a platform to ‘maximise’ the benefits of strategic economic growth and housing policy; integral to the ‘levelling-up’ agenda and securing devolution.

However, the report also shows that replacing county and districts with two unitary authorities in each area would reduce the financial benefit by two-thirds to £1 billion over five years, with three unitary authorities delivering a net loss of £340 million over the same period. A fourth scenario of a two-unitary and children’s trust model in each county would deliver a net five year saving of £269 million.

Alongside a minimum £1.9 billion in additional costs from splitting county council services, the report outlines the establishment of multiple unitary authorities in each area creates the risk of disruption to the safeguarding of vulnerable children, while ‘instability’ in care markets could impact on the quality and availability of support packages and care home placements.

On the implications of a two-unitary and trust model, PwC conclude this would lead to additional cost, complexity and potential instability in how commissioning arrangements were managed. It also suggests there is limited evidence the implementation of these types of models can lead to immediate improvements.

CCN says that the report outlines a ‘compelling’ financial case for the creation of a single county unitary in areas where councils seek reorganisation. This will help ‘safeguard’ council services in the wake of the pandemic, while ensuring councils are of the necessary size to drive forward the economic recovery and devolution agendas.

But the CCN warned that an arbitrary population limit in the White Paper would lead to a ‘missed opportunity’ and ‘worse deal for local taxpayers’, creating ‘significant risks’ and instability in vital care services, and holding back the levelling up agenda.

David Williams, chairman of the County Councils Network, said: “The consequences of coronavirus for local government finances, and the need to work quickly to support the economic recovery, means more councils want to look again at how local government is structured in their area. This government has already signalled that it wants to see many more unitary councils created and it is important we get it right for our residents – we do not want to look back on this period as a missed opportunity.

“The findings from PwC show there is a compelling financial case for the creation of more unitary counties where councils seek reorganisation. They will provide significant savings to support frontline services and the stability needed to safeguard care services as we continue to mitigate the impact of coronavirus. Crucially, it will create councils of the necessary size to support local economies to recover from the pandemic and drive forward the devolution and levelling up agendas.

“In contrast, an arbitrary population threshold that limits the size of any new council will cap our areas’ ambitions and create significant risks in delivering care services. This evidence shows it would mean a worse deal for local taxpayers, create confusion, costs, and complexity, and potentially deliver a postcode lottery for local services and the economic recovery. Unitary counties won’t lead to a democratic deficit. Rather, as evidenced by authorities that have already made this journey, they have the potential to bring services closer to residents, developing new ways for residents to engage and shape service provision more effectively and enhance local democratic participation with empowered town and parish councils.”