Latest Public Sector News

26.11.14

Welsh local government mergers could cost £268m

The upfront costs of local government mergers in Wales could cost as much as £268m, a new report by the Chartered Institute of Public Finance and Accountancy (CIPFA) has revealed. 

Commissioned by the Welsh Local Government Association, SOLACE Wales and the Society of Welsh Treasurers, the study stated that the cost would be offset against potential savings of £65m a year across all councils after a three year period. 

However, the study found significant differences in the costs of mergers for different local authorities with a variety of local factors needing to be taken into account to properly understand potential costs. 

CIPFA Wales evaluated a number of areas where the costs of transition and recurrent savings are likely to be significant. These included people change costs, including redundancy, of up to £158m; property, systems and other change management costs of around £54m; and income forgone due to council tax harmonisation of at least £57m. Meaning the upfront costs of reorganisation across the whole of Wales could range between £160m and £268m. 

Rob Whiteman, CIPFA’s chief executive, said: “The evidence suggests that the finance profession in particular will need to be keenly aware of the risk management issues of undertaking large structural change whilst simultaneously continuing to deliver on prolonged reductions to council budgets. 

“If council mergers are to deliver for the public, politicians must undertake thorough due diligence and provide a rigorous evidence-base for decision-makers to determine the robustness of the Welsh Government’s ambitions.” 

The report provides the strongest evidence-base so far on the transitional costs, the recurrent costs and the expected benefits that will accrue from the most ambitious programme of local government reform since 1996. 

Cllr Aaron Shotton, WLGA deputy leader and finance spokesperson, said: “Over the next three years alone, local government will be absorbing budget shortfalls of around £900m and I hope policy-makers and politicians alike will reflect on this piece of work and begin to address the many questions that arise from it.” 

A Welsh government spokesman added: “We simply cannot afford to miss this opportunity to change the shape of our councils and to drive funding into improving frontline services. 

“There is a significant cost to doing nothing.” 

Tell us what you think – have your say below or email us directly at opinion@publicsectorexecutive.com

Comments

There are no comments. Why not be the first?

Add your comment

 

related

public sector executive tv

more videos >

last word

Prevention: Investing for the future

Prevention: Investing for the future

Rob Whiteman, CEO at the Chartered Institute of Public Finance (CIPFA), discusses the benefits of long-term preventative investment. Rising demand, reducing resource – this has been the r more > more last word articles >

public sector focus

View all News

comment

Peter Kyle MP: It’s time to say thank you this Public Service Day

21/06/2019Peter Kyle MP: It’s time to say thank you this Public Service Day

Taking time to say thank you is one of the hidden pillars of a society. Bei... more >
How community-led initiatives can help save the housing shortage

19/06/2019How community-led initiatives can help save the housing shortage

Tom Chance, director at the National Community Land Trust Network, argues t... more >

interviews

Artificial intelligence: the devil is in the data

17/12/2018Artificial intelligence: the devil is in the data

It’s no secret that the public sector and its service providers need ... more >

the raven's daily blog

Utilising data to best deliver meaningful public services

14/11/2019Utilising data to best deliver meaningful public services

Public Sector Executive’s Matt Roberts explains how living in a modern, interconnected world, as we do, means public sector organisations cannot afford to ignore the rol... more >
read more blog posts from 'the raven' >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this feeling of imminent change than the article James Palmer, mayor of Cambridgeshire and Peterborough, has penned for us on p28. In it, he highlights... read more >