Friday 16 March 2018

Of devolution and cash-starved councils

Merging councils is no magic bullet to fight austerity

Council mergers may look efficient, but local government reform is like Brexit: a wasteful wild-goose chase

Joanne Fry

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On Chesil Beach: but will merging Dorset’s nine councils into just two bring a chill wind to the county? Photograph: Stuart Fretwell/REX/Shutterstock

On 26 February, the government gave the go-ahead for Dorset’s nine councils to create two new authorities. On paper, this looks like a no brainer. But it’s a decision officials, councillors and residents in the county may yet come to regret.

The new structure, aimed at saving £108m over six years, would come into effect in April 2019, assuming it gets parliamentary approval. Separate councils for Bournemouth, Christchurch and Poole will be replaced with one new unitary council, while the second unitary council will comprise what is now Dorset county council and the district councils of East Dorset, North Dorset, Purbeck, West Dorset, and Weymouth and Portland.

Support for the decision is hardly surprising. There are 353 local authorities in England: 27 county councils, 201 district councils, and 125 unitary authorities, including 33 London boroughs and 36 metropolitan boroughs.

In 2016 a report by EY for the County Councils Network (CCN) concluded (pdf) that creating 27 unitary authorities in England could save up to £2.9bn. The single unitary option has the shortest payback period and the most effective platform for financial sustainability and reducing council tax for residents. Counties also have the lowest back office and management overheads – just 6% of their budgets, compared to 46% at the average district council.

However, there is no official government guidance on what constitutes an acceptable model for local government. A range of models are being proposed, many of which make little sense and may actually end up adding extra cost. Proposals in Oxfordshire and elsewhere suggest creating four or even five “district unitaries” and then a small combined authority to provide additional capacity to deliver strategic services.

Breaking up counties into smaller unitary authorities doesn’t make sense geographically, and could unnecessarily fragment services at a county level if they don’t have the same boundaries as other public services like fire, police and the NHS. It’s true that there may be value in rethinking who delivers services such as housing and planning, but strategically that would mean looking to larger, not smaller, units.

But the real point is that local government reform is not and has never been about efficiency; it’s about politics, with a large and small “p”. There can be elements of gerrymandering – when the Labour government sought to consolidate its power base in Devon in 2009 by creating a unitary authority in Exeter, it would have effectively cut the heart out of the county both financially and geographically, and impoverish the parts of the county more likely to support the opposition. The whole notion of localism is too often about what the government wants, rather than what makes most logical sense for residents and communities.

In Dorset’s case, the councils’ chief finance officers have stated that authorities within Dorset are solvent and have sufficient balances to remain this way for the foreseeable future . Four options were proposed for Christchurch council after consultation in 2016, one of which was no change, an option later rejected by the Ministry for Housing, Communities and Local Government.

Many believe t the whole debate about reorganisation could simply distract councils from delivering savings and ambitious devolution deals. Paul Carter, leader of Kent county council and CCN , has claimed (paywall) it could result in three years of misery, as well as creating friction and tension between councils.

I can heartily agree, having myself lived through a tense legal battle over local government reform that wasted an estimated £200,000 of our council’s budget and reduced our capacity to deliver essential services because of the chaos it created.

Of the nine councils that will be scrapped in Dorset, three did not fully support the proposal and Christchurch council still plans to find a legal means to oppose being merged with neighbouring councils.

Local government reform is like Brexit: at best, a disingenuously simple answer to a complex question, at worst a smokescreen. Either way, it’s a wasteful and lengthy wild-goose chase where nobody can clearly define how to deliver a way forward that works for everyone.

Joanne Fry is a senior local government manager.

Merging councils is no magic bullet to fight austerity | Joanne Fry | Public Leaders Network | The Guardian

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