Districts warn that ‘mega councils’ may limit growth and public trust

The Government’s aim to create new “mega councils” has been dismissed by a report as an unnecessary, disruptive move driven by “basic number crunching” that will perpetuate failing models of service delivery.

The analysis found benefits to the public purse from growing local economies, building housing, preventing future needs and reversing a “catastrophic loss of trust in institutions” far outweigh any short-term savings from consolidating existing council functions.

It calls on the Government to explain how its objectives will be delivered and what is required in terms of “geography, operating model, design, leadership, capability to fit with new or existing structures of partnerships”.

The report, commissioned by the District Councils’ Network (DCN), adds that realisation of the Government’s aims “demands a place and people-based approach to the design of future organisations”.

“All of these are key dimensions in the renewal of public services and, consequently, the renewal of the nation.”

The report added: “The greatest risk is losing momentum and settling for change that isn’t change. Instead, (local government reform) must focus on a meaningful renewal and reform – driving economic growth, improving public wellbeing, and restoring faith in the local state.”

The English Devolution White Paper, published in December, required the 164 English district councils to merge with county councils to create large unitary authorities with populations in excess of half a million people.

A timetable was imposed, with a deadline for interim proposals set for March 21.

The Government’s aim is to have the new councils, which would serve about 20 million people, up and running by 2028.

The urgency required contributes to “a lack of bandwidth in local government to develop ambitious proposals”, it adds.

This means often “the outcome could be driven by risk aversion rather than innovation, and a mistaken conclusion that it would be simplest just to consolidate things as they are into the most basic model of something new”.

The report said conversations with many public service leaders revealed that “without exception” they are finding the current stage of local government reform “personally and professionally challenging”.

It adds: “While many are trying to remain hopeful, they remain deeply concerned that there is insufficient time and safe, reflective spaces to work out what could and should happen next.

“As one serving chief executive put it: ‘the idea that we can politely organise ourselves around this and figure it out together fails to recognise the power dynamics that are in play’.”

He added: “It’s going to take more than mere mergers to bring about growth, end the crisis of trust in local institutions and to move the focus of services from reactive to preventative.

“To reorganise without determining how we transform is likely thwart central and local government’s shared aim of promoting growth, jobs, housing and prevention.”

Mr Chapman-Allen said claims that “mega councils” will deliver savings are “largely theoretical”, and called on the Government to rethink requirements.

“The danger is that so many places – but small cities and rural areas – are likely to be held back if subsumed into a far wider area,” he added.

But there is disagreement in local government about the way best forward.

Recent analysis for the County Council’s Network backed proposals for the creation of new unitary councils in England, arguing that new authorities must cover areas of “at least” 500,000 people or more in order to save billions of pounds and free up investment in local services.

The CCN report found that replacing the two-tier system with new councils with minimum populations of 500,000 or more could save at least £1.8 billion over five years.

It also argued that those savings reduce dramatically if county and district authorities are replaced with multiple smaller councils, potentially costing local taxpayers hundreds of millions.

Commenting on the report, CCN chair Tim Oliver said: “It is absolutely essential that the Government now stick to the statutory criteria they have set out, treating the 500,000 as a minimum not an optimum population scale.

“This will ensure we create new councils with the scale and capacity to deliver substantial savings to be reinvested in frontline services to the benefit of local taxpayers.”

A Ministry of Housing, Communities and Local Government spokesperson said: “This Government inherited a crumbling local government sector which we are now focused on rebuilding. This means taking tough choices to make local government more sustainable and give taxpayers the services they deserve.

“Reorganisation will be crucial to creating a more accountable system which will streamline the delivery of local services, and give councils the power and resources they need to deliver for local residents.”