Local Government Reform Faces Potential Cost Overruns, Warns CCN

The County Councils’ Network (CCN) has raised significant concerns about the potential financial implications of the planned local government reforms in England. According to the CCN, the initiative, dubbed the “devolution revolution” by Deputy Prime Minister Angela Rayner, may not deliver the anticipated savings and could instead burden taxpayers.

In Kent, the proposed restructuring aims to replace the existing 14 councils with a smaller number of larger unitary authorities, likely three or four. The Labour government anticipates that this streamlined system will lead to cost reductions, increased efficiency, and faster local decision-making. Based on data from a study commissioned from PricewaterhouseCoopers (PwC), the government estimates that the reforms could save approximately £2.9 billion over five years.

However, the CCN highlighted new insights from an updated PwC report released in March, indicating that substantial savings might only be realized if all 21 two-tier counties, such as Kent, transitioned to a single unitary authority. Their separate analysis suggested that creating 29 authorities with populations exceeding 500,000 could yield savings of £1.8 billion.

Despite the potential for savings in certain scenarios, the CCN cautioned that the proposed transformation to a system of 58 new unitary councils, with populations as low as 300,000, could result in additional costs of around £850 million over five years, failing to deliver long-term savings. This revelation poses a significant challenge for the government, particularly as it seeks to implement the reforms across England.

CCN chairman Cllr Tim Oliver emphasized that the analysis from PwC indicates that, if executed correctly, local government reorganization could unlock substantial efficiency savings for frontline services. Nevertheless, he warned of the potential for “unsustainable new costs” for local taxpayers.

He stated, “It is essential for the government to scrutinize and rigorously evaluate all proposals against their own statutory criteria, ensuring new councils are appropriately sized to achieve efficiencies, enhance capacity, and withstand financial shocks.”

The implications of these reforms are particularly pressing given that many county and district authorities could see funding reductions under the ongoing Fair Funding Review. Cllr Oliver added that local areas should carefully consider the financial ramifications and associated risks of any reorganization.

Local council leaders have expressed frustration over the government’s lack of clarity regarding the operation of the new system, with a deadline for proposals set for November. Stuart Jeffery, the Green Party leader of Maidstone Borough Council, acknowledged that the CCN’s announcement was a “clear worry.” Nevertheless, he noted that earlier analyses conducted by Kent’s council leaders indicated that a three-unitary model could become financially viable within five years, while a four-unitary model—preferred by Medway Council—might take up to ten years.

Cllr Vince Maple, the Labour leader of Medway Council, described his model as the best long-term option, presenting a “perfect opportunity” to redesign the county’s governance structure. Conversely, Cllr Harry Rayner, leader of the Conservative group in Kent County Council, believes that the timelines proposed by Cllr Jeffery may be overly optimistic. He pointed out that the financial assessments do not account for off-balance-sheet financing or the existing debt burdens of the tier-two councils in northern and eastern Kent.

In a contrasting view, Linden Kemkaran, leader of Reform UK in Kent, has proposed a single unitary authority that would include three area assemblies. She expressed concerns about the costs associated with alternative models, stating, “All the other options will cost an absolute fortune to implement, and no one has yet been able to explain to me how that will be paid for. I think the bill will be picked up by the council taxpayers, something I find unacceptable.”

The Ministry of Housing, Communities and Local Government responded by asserting that consolidating services under one roof allows for more coordinated support for residents. They emphasized that councils would develop tailored proposals to ensure effective reorganisation suited to their specific needs.

As discussions continue, the implications of these reforms remain a focal point for local leaders and taxpayers alike, with decisions made in the coming months likely to have long-lasting effects on governance in Kent and beyond.