Local government reorganisation in England – what it means and why it matters for businesses

Subscribe to Campaigning blog feeds

Published

The County Councils Network is a cross party network of 37 County Councils and Unitary authorities across England. In this article they outline why bigger local authorities are a better bet for manufacturers compared against proposals for greater local government fragmentation through geographically smaller councils.


Government plans to give new powers and funding to local authorities through its devolution agenda wouldn’t have gone unnoticed by the manufacturing community.

However, what may have slipped under the radar of EEF members were significant last minute changes to Devolution legalisation (EEF reviewed this legislation earlier this year), with Government granting itself new powers to fast-track changes to the way local government is structured.

Current local government structures

English local government is divided in some areas into county councils and district councils. A major reform in 1972 established two-tier government throughout England. The two-tiers have distinct functions, though they overlap in some matters.

In other areas, “unitary authorities” carry out all local government functions. There are 353 local authorities in England, of which 27 are county councils, 201 are district councils, and 125 are unitary authorities. Of the latter, 33 are London boroughs and 36 are metropolitan boroughs.

This has acted as a lightning rod for local activity in places such as Oxfordshire, Buckinghamshire, and Hampshire.

With no Government criteria or direction on the type of council format it favours, local government is currently gripped by rampant speculation over competing proposals from counties and districts.

Many, including CCN Chairman Paul Carter, rightly believe that this debate is a distraction from delivering savings targets and ambitious devolution deals.

CCN is neither for nor against Local Government Reorganisation (LGR) – it is up to our members to make the best choice for their local areas.

However, the manufacturing community cannot underestimate the implications of splitting up county councils into smaller authorities.

In the remainder of this article we look at why bigger authorities may be better for businesses.

1. Economic Growth

Firstly, reorganisation proposals must foster growth.

County economies deliver 41% of England’s GVA, providing 2m manufacturing jobs in England, some 52% of all the jobs in your sector.

To continue to drive growth, businesses need authorities that have the strategic size, capacity, and expertise to enable the best conditions for continued growth.
Our members are responsible for 93% of all growth related expenditure and capital investment in two-tier areas, including planning for infrastructure schemes to stimulate economic growth, improve roads, and increase skill levels.

With EEF’s recent survey showing that road networks were the biggest issue for manufacturers, it is county councils in partnership with businesses that have the expertise and service knowledge to respond to the challenges facing EEF members, with a track record of designing and delivering successful growth related services at both size and scale.

2. Reduces complexity for businesses

Secondly, if LGR is to be worth the pain, it must reduce the complexity faced by business, streamline decision making, and strengthen the voice and influence of business.

Proposals in Oxfordshire and those emerging elsewhere suggest the creation of four or even five ‘district unitaries’, with the need for a small combined authority to provide additional capacity to deliver strategic services across an area.

Efficiency is a key word in the business world, and so manufacturers may be left wondering why a company would want to deal with 10 authorities when it had the potential opportunity just deal with one?
If reform is to be pursued, we need to ensure that it does not lead to a more confusing system and parochial decision-making that could weaken, not strengthen, the business voice.

Breaking up counties into smaller district based unitary authorities could unnecessarily fragment growth and regulatory services already at a county level. Moreover, if we are to reform who delivers services such as housing and planning, we should be seeking to upscale into larger, not smaller, units.

3. Delivers efficiency savings

Thirdly, proposals must demonstrate that they can maximise efficiency savings which could then be re-invested in growth-related and essential services.

In an era of austerity, counties have delivered unprecedented efficiency programmes, reducing costs to protect the frontline and embracing private sector financial discipline. 

Counties have the lowest back office and management overheads at just 6% of their budgets compared to 46% in the average district council.
During the last Parliament our member councils reduced employee expenditure by 31%, greater than all other local authority types.

Therefore, it is little wonder that independent LGR studies suggest that the option of a single county unitary secures on average almost double the efficiency savings for local taxpayers compared to competing proposals.

A more rigorous evidence base is needed for reorganisation proposals

CCN is committed to working with all parts of the sector and businesses to deliver devolution without structural reform of councils.

But we have a duty on behalf of our authorities, residents, and businesses to put forward a rigorous evidence base for service delivery at size, scale and value for money.

Importantly, if we are to have an open, honest and evidence-based discussion on LGR, it needs to move away from being largely behind closed doors between central and local government, with all stakeholders, such as EEF, having a voice.

Simon Edwards, Director of the County Councils Network

Online payments are not supported by your browser. Please choose an alternative browser or make payments through the 'Other payment options' on step 3.