Earlier this summer, (16th July), the Ministry of Housing, Communities and Local Government confirmed the next stage of its local government reorganisation (LGR) programme, setting out plans to replace 134 existing councils with 38 new unitary authorities.
For the areas affected, the final destination is now considerably clearer, with new councils expected to go live on 1 April 2028, giving delivery teams less than two years to turn structural decisions into functioning organisations.
For years, LGR was discussed as a mapping challenge, one that questioned the geography, governance, and political identity of the newly assigned authorities. That has changed. Mass reorganisation has quickly become an engineering puzzle to solve. Behind every new organisational chart sits a vast operational machine that has to work from day one.
The true test for those responsible for delivery won’t simply be whether or not a new authority legally exists on 1 April 2028. It will be whether money can reliably move through it, whether staff can see what’s happening financially and whether residents can interact with their new council without feeling the rumblings of the reorganisation machinery underneath them.
Stability cannot come at the expense of experience
There’s an uncomfortable tension at the heart of LGR. Councils are being asked to create financially sustainable organisations while maintaining confidence among residents who never asked for their local government to be reorganised.
A survey we recently commissioned, asking 100 finance leaders within local authorities across the UK how prepared they are to plan, implement and measure the success of LGR digital transformation, brings that tension into sharp focus.
We found that an overwhelming 96% of those surveyed said they’re struggling to balance long-term financial stability with delivering a positive citizen experience during the transition, and more concerning still, one in three councils risk leaving critical financial planning until too late in the process.
The research, which also shared thoughts from sector experts, suggests that the problem isn’t a lack of awareness, but a difficulty turning competing priorities into decisions early enough to make a difference.
I’ve seen firsthand that financial infrastructure can easily be mistaken for back-office plumbing, when in fact, a payment system sits right at the point where the council’s finances meet the resident. If a council tax payment fails, a Direct Debit disappears, a refund takes too long or a resident has to navigate a different payment journey depending on which predecessor authority they originally fell under, the transformation becomes tangible.
The financial stakes are equally real. Government figures show that £7.4billion of council tax remained outstanding across England at the end of March 2026, an increase of 11.8% in a single year.
Against that backdrop, leaving income management until the latter stages of LGR is a dangerous false economy. The closer councils get to vesting day, the less room there is to discover that financial systems don’t align, payment routes behave poorly or income data can’t be reconciled cleanly. With this, a technology problem can all too quickly become a cash-flow problem, that then evolved into a resident experience problem.
But there’s a deeper issue here. Financial planning for LGR can’t be separated from the experience of the very people the new authority is being created to serve.
A council that achieves a technically successful merger but makes it harder for residents to understand and pay what they owe, or resolve a problem with their account, hasn’t really simplified local government: it’s just moved the complexity from the organisation work flow into the citizen journey.
Every disruption to collection has a financial consequence, and every poor payment experience adds friction at precisely the point councils are trying to establish trust in a new organisation.
Complexity is always larger than the plan
Neatness of an LGR programme can be deceptive.
On a project plan, consolidating financial systems might appear to be a migration exercise, but in practice, the complexity is buried in the relationships between systems. A new authority may inherit different council tax arrangements, existing payment gateways, merchant accounts, and revenue systems, each with its own data structures and operational history.
The danger isn’t necessarily that one system fails. It's that several systems continue to function, but no longer quite fit together.
This mish-mash of systems can create duplicate platforms operating in parallel: allowing reconciliations to become dependent on manual interventions, data to sit in disconnected silos, residents to encounter inconsistent payment journeys, and finance teams to lose sight of the single view they need to properly understand income across the new authority.
These complications are particularly difficult to manage as they’re often undetectable during planning. A payment can appear successful at the front end while creating a reconciliation problem somewhere further downstream. A migrated account can look to be up and running while carrying a legacy configuration that misbehaves once it enters the new environment.
This is why safe and legal can’t be the definition of success. A council can technically open its doors while carrying forward the foundations of yesterday’s fragmented infrastructure. If the foundations are weak, the operational debt doesn’t simply disappear when vesting day rolls around, it just becomes somebody else’s problem.
LGR is a chance to rethink the machinery of local government
Instead of asking how existing payment infrastructure can be squeezed into a new organisational framework, LGR considerations give councils the strategic opportunity to ask what infrastructure the new organisation actually needs.
Reorganisation creates a rare moment when long-standing assumptions can be challenged without having to justify every change against an established organisational boundary. It gives councils permission to simplify.
For income management, this could mean moving towards a unified architecture capable of supporting different revenue streams without requiring a separate payment journey for every legacy system.
It could mean giving residents a greater choice of payment methods, while making all transactions easier for staff to manage behind the scenes.
It could also mean designing reporting around the new authority’s requirements as opposed to stitching together reports and audits inherited from its predecessors.
Most importantly, it should also give Section 151 officers a much clearer financial picture.
A new authority simply can’t afford to discover months after reorganisation that its understanding of income depends on manually coordinating information from systems that were designed for different councils. Real-time visibility isn’t an unattainable technological luxury in this environment. It’s a fundamental part of financial control.
The overriding temptation in many major transformation programmes is to preserve what already works and defer the harder redesign until stability has been achieved. With LGR, that can create the legacy of tomorrow. A system selected because it looks to be able to survive Day One may later prove to be the wrong system for the decade that follows.
From safe and legal to customer ready
The government’s certainty around defined LGR boundaries gives councils something they’ve been waiting for while removing excuses for postponing difficult decisions.
April 2028 may sound distant in political terms, but technologically speaking, it’s remarkably close. Procurement takes time; data needs to be understood before it can be migrated; integrations need proper testing against real operational scenarios; staff need to work with new processes before they become business as usual and residents need continuity without having to understand the transformation taking place behind the scenes.
As such, payment infrastructure needs to move much higher up the agenda and much closer to the front of the LGR conversation.
The strongest measure of readiness will look beyond coherence on paper, to inspect whether underlying financial machinery is coherent when residents actually begin to use it.
Now that LGR certainty is (finally) here, the work must begin to ensure that when the new councils open for business, they’re not simply new authorities operating old systems, but genuinely new organisations with appropriate infrastructure, capable of supporting what comes next.
