Institute for Government report warns local government reorganisation risks paralysing councils

The report from the Institute for Government, titled ‘Reorganising district councils and local public services'', also said that it could take five years for the reorganisation to complete following ‘vesting day’.

Vesting day is the the formal day when a new council takes on its responsibilities and must deliver all services.

The report said that there is a "significant 'long tail' in the local government reorganisation (LGR) process” that comes after vesting day, where councils will still be working to complete the two phases of reorganisation: embedding new structures and transforming services.

Budgetary and staffing pressures alongside limited strategic capacity could also limit councils' ability to manage the demands of delivering business-as-usual services alongside reorganisation, it added.

The report went on to make a set of recommendations for both local and central government.

Among these was a call for local government "to set the preconditions for success in the embedding and transformation stages of LGR", which should include decisions on which services to prioritise for transformation efforts amid capacity constraints.

It also recommended that transformation plans be tailored to each area's circumstances, which could involve district councils merging into an existing authority (for example, a county or unitary council), or where a county council is being split.

On this point, the report noted: "Each scenario presents distinct operational and strategic implications. For example, the delivery risks associated with consolidating waste collection services differ significantly from those involved in dividing social care across multiple smaller geographies – each requiring a tailored strategic approach for the area in question."

The think tank also urged councils to be "mindful of service-specific challenges", as each service area presents unique complexities. It highlighted the legal requirements that often necessitate early decisions on Council Tax harmonisation as an example.

Elsewhere, the report recommended establishing robust operational structures early in the process, including effective operational frameworks and project teams.

This should include developing a new business model, appointing senior officers promptly, and ensuring an experienced senior responsible owner for LGR is supported by a capable programme management office, it said.

Other recommendations included strengthening enabling functions like back-office support and well-resourced HR teams, engaging and supporting staff throughout the process and fostering early relationships with neighbouring councils.

It also called on councils to use contracting decisions for future authorities to "embed innovation".

Recommendations for central government meanwhile called for the creation of clear support and guidance for local authorities to follow, as well as capturing lessons from early movers in the priority programme.

It also called for the Government to assess and strengthen its own capacity to manage simultaneous reorganisation processes, and for the Government to engage experienced members of the sector to help shape its approach to reorganisation.

Adam Carey