Local Government Reorganisation and the art of the possible

‘If you were going to design English local government from scratch, you wouldn’t have come up with this.’ Versions of this observation will be familiar to many in and around the sector relating to the split between district and county tiers and asymmetric arrangements that have emerged over the years. The Government intends to overcome this by embarking on Local Government Reorganisation (LGR), alongside devolution.

So, as set out in the English Devolution Bill, across half the country we will now literally be designing English local government from scratch. New unitary councils will replace two-tier arrangements and strategic authorities set to receive devolved powers from Whitehall will “complete the map”. 

This is a huge undertaking, and it should be grasped as a once-in-a-generation opportunity to re-think and re-set the core purpose of local government to be fit for the challenges of the 21st century.

This first in a series of articles hosted by New Local over the coming months will explore how we can seize this opportunity to reimagine the relationship between communities and the state. Rather than simply resurrect legacy organisations, ways of working and cultures in new geographies, we will explore how we build institutions that are future-proofed for at least the next fifty years.

When it comes to LGR we see a big risk that the agenda is being informed by immediate priorities and current mindsets at the expense of a deeper, longer-term reset that builds institutions to endure. We think at least four short-sighted mistakes are being made. For example:

A core driver for change is the need to reduce costs amidst the backdrop of deep fiscal constraints. The fiscal challenges of the mid-2020s are urgent and unrelenting. But will LGR be pursued simply to identify savings from a short-term efficiency drive that rationalises headcount and seeks economies of scale? Or can we be bolder and design in wholescale shift to prevention which would reduce skyrocketing acute costs over time? 

The pace and parameters of the LGR process has forced local areas into a zero-sum game of redrawing boundaries and haggling over population numbers for an optimum size. But whatever the outcome of these negotiations, there remains a huge opportunity for new institutions to reset the relationship between citizen and state, connect with communities and forge system-wide collaboration so that we can meet the complex challenges of today. Can we emerge with a new blueprint for local governance and responsive public services?

A dominant focus for LGR is the need to be “safe and legal” from day one of the new unitaries. Although this is obviously important, we believe that if this is the limit of ambition, places will be encouraged to stick with what they know best and simply fold existing organisations into each other. We know that on many levels, the status quo is not working – with popular discontent creating space for populist narratives to exploit, and skyrocketing costs across different services creaking under the weight of demand. How can we lift our ambitions higher from where we stand today?

Resetting relationships with local communities is seen as the job of town and parish councils and area committees in a new unitary area. We keep hearing of places intending to focus on hyper-local tiers of governance as a way of maintaining connections with local communities and empowering residents. We agree these arrangements are important, but also that they’re not sufficient, missing wider opportunities to orient new organisations fundamentally around people and place. How can LGR as a process help us achieve community power building from the ground up?

So, we identify three big forward-facing priorities to increase the ambition for LGR to go above and beyond. They are deepening democracy, neighbourhood service integration and place-based collaboration – all enabled by identifying new organisational ways of working that the moment of unitarisation should capitalise on. To take them each in turn:

1. Deepening democracy: Levels of trust in our politics and established institutions are at an all-time low – 79% of people believe the present system of governing Britain could be improved ‘quite a lot’ or ‘a great deal’. Local government tends to poll marginally better than national government, but the difference isn’t significant enough to be complacent. The English Devolution Bill will require unitaries to have “effective neighbourhood governance”, recognising that LGR should formalise measures to deepen engagement.
   Traditional methods such as local area committees and parish councils have their role – but as long-standing arrangements in many areas, they cannot be said to have reinvigorated democracy on their own. New forms of community leadership and governance should be explored as part of plans and there should be a greater openness to local innovation over national prescription. Ongoing deliberative engagement and participatory decision-making could play a significant role, complementing the traditional rhythms of representative democracy. England is behind international counterparts for experimenting and pioneering methods like significant participatory budgeting and standing citizens panels. Can we design in open, participatory and ongoing engagement by default?
2. Neighbourhood-level public service reform, collaboration and integration: LGR’s quest for the efficiency of scale takes place alongside a counter policy direction towards neighbourhood working in response to significant diseconomies of scale when it comes to responding to complex social and economic challenges. The Spending Review’s appealingly simple three public service reform principles include devolving power to organise provision around people’s lives and areas that know communities best. The NHS Ten Year Plan sets out a new devolved operating model built around a neighbourhood health service, explicitly recognising that a one-size-fits-all approach is not fit for purpose and greater diversity of provision will deliver more equitable outcomes. MHCLG has its own adjacent Plan for Neighbourhoods. Meanwhile the Cabinet Office is taking a partnership approach with places through the Test, Learn and Grow Programme for service innovation and Community Help Partnerships for adults with complex needs.
   There is a risk that different neighbourhood-level initiatives currently disconnected across Whitehall departments add up to less than the sum of their parts when they actually land in places. LGR is an opportunity to align national priorities and pursue deeper neighbourhood-level public service reform and integration. This would require us to think about how new unitary councils will be built from the ground up, with provision organised around locality models, collaborative and relational working at the core of local teams and distributed leadership.
3. Place-based collaboration and system leadership for prevention: a big driver for LGR is bringing together functions previously disconnected across two tiers. There is obvious potential for prevention by bringing functions together, such as leisure provision in the context of public health, and housing for care and support. No service is an island in the context of overlapping, complex population-level needs.
   So how can the process of LGR itself be a rationale or a catalyst for the cross-sector conversations needed to push forward deeper place-based collaboration? As the NHS goes through its own shifts, there is a risk that two sectors embark on essentially internal restructures in parallel, despite the fact that at place level they serve the same population. While organisational form is shifting around them, system leaders should be identifying collective place priorities led by data and insight rather than legacy structures and recommit to new ways of working together.
   

Nurturing green shoots

These three priorities for a radical LGR are inspired by the direction of travel already being taken in many places. Places already experimenting with democratic renewal like Test Valley’s community councillor approach, Watford’s People Panel and the We Make Camden strategy that deeply embeds community participation and deliberation. Places like Westmorland & Furness Council, which was vested in 2023, and have shown how the moment of unitarisation itself can be a catalyst for embedding community power. Places like Stockport, Gateshead and Brent that are building new neighbourhood approaches to public service reform. And places like Wigan, where the new Progress with Unity strategy builds on the core DNA and success of the Wigan Deal to embed two core missions right across local partners. Many councils are already leading the way.

What does this mean for Government LGR policy? We think the Government should grab the opportunity and ensure the most is gained by the disruption and distraction LGR inevitably causes. This means being clear about the direction of travel it would like places to follow, encouraging and supporting ambition in all of these areas: place-based public service reform, collaboration with partners, local leadership, democratic renewal. 

This would include looking for proposals that enable these shifts. Less micro-stipulation of uniform models for neighbourhood governance; more an embrace of the principle of empowered communities and a curiosity about the different ways this could be achieved. More aligned policy-making with other government departments to ensure it’s not left up to local leaders to join the dots. Looking for ways to embed the PSR principles and Test, Learn and Grow mindset into LGR and future organisations. Using the opportunity of devolution to create the conditions for all this to flourish. Other departments such as DHSC should give a clear signal to their respective sectors to engage in LGR and ensure decisions over population boundaries should be made with the whole system, not a single service in mind. This includes grasping the moment to align strategic authority governance and health boundaries – the coterminosity Greater Manchester has always enjoyed is bearing fruit through exciting innovation such as GM Live Well. And while the centre itself is designing new frameworks, these should push towards place-based collective responsibility rather than upholding existing organisational territorialism – so for example, the Local Government Outcomes Framework should shift to a place outcomes framework. 

We could go on. But the simple point bears repeating. If LGR is throwing everything up in the air, we really need to grasp the opportunity to forge a new normal when it lands back down on the ground. 

Image Credit: Photo by Ithalu Dominguez

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