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Establishing county unitary authorities ‘could save £3bn a year’

Creating 27 county unitary authorities could generate nationwide savings of nearly £3bn, a new report, conducted by consultancy firm EY for the County Councils Network (CCN), has revealed.

Based on an assessment of data across the 27 two-tier authorities in England, EY’s financial analysis showed that replacing them with one unitary authority each could save £2.4bn - £2.9bn nationally, and up to £106m in every county.

The single unitary option would also begin to deliver financial benefits after just two years, whereas the other options considered, including abolishing county and district councils to create two unitary authorities per county, would not begin to pay until between three and seven years. This would allow councils to achieve financial sustainability and reduce council tax.

Cllr Paul Carter, chair of the CCN, said: “CCN is neither for nor against reorganisation, and commissioned this research in an era of anything goes, as seen in competing proposals across several parts of the country.”

He added that the study highlights each option has its own merits and own challenges, but the work should feed into the debate as to the most efficient and effective manner to deliver complex local government services in the country.

“But a clear conclusion from the report is that there are real risks in splitting up the historic counties of England, in terms of both savings and maintaining good public services,” said Cllr Carter. “Instead, the evidence strongly suggests the most effective means of structural reform – whether through unitary or two-tier models – are those that build on the scale and geography of county councils.”

The report noted that establishing unitary authorities would allow greater action and accountability in the devolution process, and provide a single point of focus, making it easier for councils to make decisions in areas such as economic growth, health and social care integration, and planning decisions.

Local government is currently facing acute financial shortfalls. Councils including Manchester, Sheffield and Wolverhampton have announced that they are being forced to cut jobs and services.

EY also considered a number of alternate scenarios – for example, creating two unitary authorities per county. This would create 54 new councils across the country and only save £1.2bn - £1.7bn.

Establishing three unitaries per county would create 81 new councils and potentially not deliver a profit, with a net cost to the taxpayer of £33m. Other scenarios included sharing services with other councils without structural reorganisation, which would save £160m - £568m nationally, and merging district authorities, which would save £53m - £839m.

Areas such as Oxfordshire and Buckinghamshire are also considering creating three unitary authorities to accompany a new combined authority. However, EY warned this was an “untried and untested” model and estimated it would generate no savings and cost £1-14m.

Cllr Carter added that, regardless of reorganisation proposals, there was still an “absolutely critical” need to “maintain and enhance scale” in delivering services.

But the District Councils’ Network (DCN) stated that while the report raises some valid questions about public services and local economies in district and county areas, “there should be a greater focus on placed-based public service reform, examining the benefit of clustering within, or even across county boundaries, to further reflect economic geography and natural communities”.

 “Successfully seizing on the devolution revolution in district and county areas requires a sophisticated and strategic approach, one built around providing the right tools for economic renewal and collaborative working – where districts have a proud record of driving efficiency and innovation,” said Cllr Neil Clarke, chair of the DCN.

“As a network, the DCN is clear that when it comes to devolution it should be for local areas to determine what works best for their locality and many of our members have demonstrated an appetite for the transformation of local services where there is local need and consensus. One size does not fit all.”

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