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Reuters<\/p>\nJoshua NevettPolitical reporter<\/p>\n
Reuters<\/p>\n
The UK government did not do its own analysis of the cost of the biggest reorganisation of councils in England for decades, the BBC has learned.<\/p>\n
Deputy Prime Minister Angela Rayner said “a significant amount of money” could be saved by merging councils in 21 areas into single authorities.<\/p>\n
Rayner’s department, the ministry of local government, based its cost estimates on a 2020 report commissioned by the County Council Network (CCN) that said \u00a32.9bn could be saved over five years.<\/p>\n
But the CCN has since revised its analysis and now says the reorganisation could make no savings and actually cost money in some scenarios.<\/p>\n
Tim Oliver, chairman of the CCN, said local government reorganisation “could unlock billions in efficiency savings to be reinvested in frontline services”, if it was delivered at the right scale.<\/p>\n
Oliver said the CCN supported the government’s reforms but added: “We are concerned over the potential costs of reorganisation where proposals seek to replace the two-tier system with multiple small unitary councils.”<\/p>\n
Councils involved in the reorganisation have been submitting plans to create new local authorities in their areas.<\/p>\n
Some councils have proposed setting up multiple smaller unitary authorities in their areas.<\/p>\n
In Essex, for example, the county council has proposed three new unitary authorities in the region.<\/p>\n
The government will decide which proposals to take forward and intends to inform most councils next year.<\/p>\n
A government spokesperson insisted the reorganisation “will improve services and save taxpayers’ money”.<\/p>\n
In initial guidance, Local Government Minister Jim McMahon said councils should “seek to achieve for the whole of the area concerned the establishment of a single tier of local government”.<\/p>\n
McMahon said these new single councils should aim to cover a population of 500,000 or more.<\/p>\n
But the minister has since clarified that guidance, telling councils the population size of 500,000 or more was a “guiding principle, not a target”.<\/p>\n
“We understand that there should be flexibility,” the minister said.<\/p>\n
Financial shocks<\/p>\n
Ministers talked up the potential to save money as one of the main benefits of local government reorganisation.<\/p>\n
Speaking to MPs in June, Rayner said: “Local government reorganisation will lead to better outcomes for residents and save a significant amount of money that can be reinvested in public services and improve accountability.”<\/p>\n
But her department insisted it was not necessary to commission separate in-house analysis of the cost of reorganisation at the public’s expense, in response to the BBC’s freedom of information request.<\/p>\n
The government’s savings estimates were based on data produced by PwC, an accounting firm, and analysis by the CCN<\/a>, a cross-party lobbyist group.<\/p>\n A PwC report in 2020 estimated potential savings of \u00a32.9bn over five years if all councils in two-tier areas were replaced by single authorities.<\/p>\n