Councils in Turmoil: The High Stakes Gamble of Merging Local Authorities Without Cost Analysis

In a shocking revelation, the UK government has admitted to not conducting an independent cost analysis for the largest reorganization of councils in England in nearly fifty years. This follows claims by Deputy Prime Minister Angela Rayner that merging councils in 21 areas could yield significant financial savings. Originally estimated at £2.9 billion over five years based on a 2020 report from the County Council Network (CCN), recent revisions from the CCN suggest that these reforms may actually cost money in certain scenarios.

Tim Oliver, CCN chairman, highlighted the potential for efficiency savings from local government reorganization but voiced concerns about the ramifications of implementing multiple smaller councils instead of larger, single authorities. Current plans involve councils proposing new structures; for example, Essex plans to create three unitary authorities. Yet, the government’s outlandish optimism about cost savings does not align with the revised CCN analysis, which indicates that the proposed council restructuring could lead to an extra cost of £850 million** over five years if executed poorly.

Critics from various political factions, including the District Councils’ Network (DCN) and Liberal Democrats, have expressed disbelief at the lack of a thorough review before proceeding with such drastic changes. The DCN warned that the government is basing monumental reforms on outdated data, risking the imposition of overlarge councils without adequate justification, especially when many existing large councils are struggling financially. Daisy Cooper, deputy leader of the Liberal Democrats, condemned the government’s actions, arguing the reorganization could push already fragile council finances to a breaking point.

With the Ministry of Housing, Communities and Local Government asserting that merging services could improve efficiency and accountability, the effectiveness of these changes remains to be seen—especially without a proper, independent cost assessment. There is an impending sense of urgency, as many fear the rush to transform could jeopardize vital services, particularly for vulnerable populations.