Two tier or not two tier: that is the question?

Local government restructuring. Three words to strike fear into the hearts of chief executives and councillors in English councils up and down the land. But changes to the complex jigsaw of local government are once again on the horizon in England. The main drivers are claims of cost savings and more joined up delivery of services for customers, but will it happen?

Controversy has stalked the last three rounds of change in England: the abolition of the GLC and the metropolitan counties in the mid-1980s; the Banham Review of 1992-1995; and the bid-based review of 2006-08, one book-length account of which was entitled ‘Botched Business’ (Steve Leach and Michael Chisholm, 2009).

This time it’s been driven from the bottom up, from a number of localities around England:

– Dorset County Council have reportedly submitted a bid to DCLG in January 2017 to create two unitary authorities in the county area. One would  cover Bournemouth and Poole (currently individual unitary authorities) and Christchurch (currently a district council). Research and consultation was also published. The bid was negotiated between county and district leaders, but three district councils (Christchurch, Purbeck  and East Dorset) subsequently voted against the proposals. The proposers have previously stated they anticipate a decision being made in April  2017;

– Two unitary proposals have reportedly been submitted from Buckinghamshire. One, from the county council, is for a county unitary. The other, from the four district councils, is for two unitary councils: Aylesbury Vale DC would form one, and Wycombe, Chiltern and South Bucks DCs would form the other; Oxfordshire County Council has proposed a single unitary council for the county: two district councils support the bid (Vale of White Horse and South Oxfordshire) and three oppose it (Oxford City, Cherwell and West Oxfordshire);

– Lincolnshire County Council considered holding a referendum on establishing a county-wide unitary authority in May 2017, but abandoned the idea in February amid concerns over costs and district council opposition;

– Hampshire County Council launched a consultation on establishing a county-wide unitary authority in August 2016. Discussions have also taken place in late 2016 between district councils in the Solent area and district councils in the ‘Heart of Hampshire’ (the north and east of the county). PriceWaterhouseCoopers produced a number of reports for the district councils in late 2016.

Why is unitarisation back on the agenda?

The principal rationale is to save money. Proposals and reports make claims for ongoing annual savings that will result from becoming unitary. PwC estimated £13-14 million savings in the first year from either a one- or two-unitary option in Hampshire, rising to £38-40 million in the third year. Buckinghamshire County Council’s analysis estimated annual savings of £10 million from two unitary authorities and £18 million from one.

Proposals also claim that unitary local government will enable more effective joining up and delivery of services, at less cost, and a more effective ‘customer experience’ for local people who will access public services from a single council. Greater financial resilience and strategic vision are also cited as positives.

Savings figures must be weighed against the costs of transition to unitary status. Most consultants’ reports claim that ongoing savings will offset the costs of transition with a few years. Studies of previous reorganisations have cast doubt on such claims: for instance, see Michael Chisholm’s Structural reform of British local government: rhetoric and reality (2001).

How will the Government decide?

In law, the Secretary of State has the power to ‘invite’ a council or councils to make proposals for unitary local government. S/he then has full discretion to decide whether to implement either the proposals made or an amended version of them. The affected authorities must be consulted, but they have no power to veto a reorganisation.[1]

The Secretary of State has the power to publish guidance on how decisions on unitary proposals will be made. Rumours surfaced in early 2017 that the Government was planning to do so, but this hasn’t appeared at the time of writing. In 2016, minutes from Dorset County Council noted some key reference points for the Government. These included an optimum size for a unitary council of 300,000-700,000 residents; proposals complementing economic geographies; seeking local consensus; and a preferred date of change of 2019.

Some of the areas considering reorganisation (e.g. Dorset, Buckinghamshire, Oxfordshire) have also been considering bidding for a ‘devolution deal’ from the Government, but none have published any form of bid or prospectus.

What would be the advantages?

Advantages claimed for the creation of unitary authorities include the following:

– Greater clarity for the public, who will know which council is responsible for local services;

– More financially robust councils, with larger budgets reducing risk (this would apply particularly in the context of 100% business rate retention, which is to begin in 2019);

– Greater ease of strategic decision-making, with fewer local partners

What would be the disadvantages?

Disadvantages claimed for the creation of unitary authorities include:

– A potential loss of local responsiveness of services. Many proposals for unitary local government include proposals for ‘area committees’ or for enhanced powers for parish and town councils, to mitigate this issue;

– Projected savings failing to materialise;

– Disputes over boundaries. ‘Traditional’ county boundaries in England frequently do not align with functional economic areas (as an example, see the 2013 map of Local Enterprise Partnerships).

Impartial research on any of these views is thin on the ground, and local feelings on restructuring proposals often run high.

Will it happen?

It is difficult to say. Previous reorganisations have generated much conflict, including judicial reviews from councils facing abolition and changed priorities from Governments. The Government is likely to seek as much local consensus as possible; thus a breakdown in consensus could jeopardise reform. It has also taken a purely reactive position so far – accepting proposals but not seeking to generate them. Equally, local government will continue to face intense financial pressure during this Parliament, and any change that could alleviate that will be attractive.

[1]     The legislation is part 1 of the Local Government and Public Involvement in Health Act 2007. Provisions in section 15 of the Cities and Local Government Devolution Act 2016 permit the change procedures to be adjusted in respect of specified authorities.

Photo Credit: Map showing the all top-tier administrative subdivisions of England (shire counties, metropolitan counties, London boroughs and Unitary Authorities) by Nilfanion and Dr Greg  Creative Commonc ShareAlike 3.0 Unported (CC BY-SA 3.0)