Councils fear shake-up won't improve finances, survey suggests

BBC News

06-03-2025

A large portion of council leaders fear a major shake-up of local government will not solve the financial pressures their authorities are facing, a survey has suggested.Ministers are streamlining local government by merging councils and setting up single authorities that provide all the services in their areas.But a survey by the Local Government Information Unit (LGIU) think tank suggested there was low support for it among council leaders, with less than a quarter of those who responded believing the changes would ease their financial challenges.A government spokesperson said reorganisation was "a tough choice" but "the right one" to improve the sustainability and resilience of local authorities.
Councils have been under financial pressure for some time.A recent report by the National Audit Office found funding had failed to keep pace with growing demand for services - particularly social care, support for children with special educational needs and disabilities, and temporary accommodation.The government has increased the amount of money available to councils, and has promised to reform the way their funding works.The government says the reorganisation will streamline and simplify services, make savings and create structures that will allow more powers to be handed down to council leaders and mayors.But in some areas the plans have proved controversial.
Short-term pressure
A survey of council leaders and senior officials, carried out by the LGIU, found many thought the plans were unclear, the timescales were not achievable and while the plans might produce long-term savings, they would add to pressure on councils in the short-term.Only 23% of those surveyed agreed with the statement that the reorganisation would alleviate the financial challenges facing councils.The survey received responses from 150 councils out of 317 in England.The think tank's chief executive, Jonathan Carr-West, said: "On the one hand, the government has had some success in resetting the central-local relationship and there is near consensus that the promised multi-year settlements will benefit council finances."Conversely, many councils are anticipating that reorganisation and the increase in National Insurance Contributions will heap added pressure onto already overextended council budgets."The LGIU said the problems were not "insurmountable", calling for councils to be more involved and more "manageable" timescales.
The restructuring of local councils started in some places under the last Conservative government, with Labour planning to extend it across all of England.It would mean areas with two-tiers of councils, both county and district, would be replaced with single "unitary" councils that provide all services, with more regional mayors.Last month the government agreed to delay local elections that were due to take place in May in nine council areas to allow them to reorganise.For some, it's a welcome move that will make help councils deliver services more effectively.Tim Oliver, chairman of County Councils Network, which represents larger local authorities in England, said: "Financial pressures, coupled with the structural weaknesses and the public's confusion of the multi-tier system, means that it has become impossible to justify."The government's timelines for proposals for change are ambitious, but county councils and their partners are working hard to match these and deliver forward-looking proposals for new unitary councils."Others – including the District Councils' Network, which represents smaller authorities – have warned it would create a period of "turmoil".While there's some disagreement about the government's plans to reshape local councils, many across the sector say the bigger challenge is addressing the underlying financial pressures they face.For the financial year from April, 30 councils have been given "exceptional financial support" to help them balance the books, with many councils planning on increasing council tax and cutting services.A government spokesperson said it is making £69bn of funding available to councils across England - which includes council tax rises."This government inherited a crumbling local government sector," the spokesperson said."We are prepared to take tough choices necessary to rebuild local government and give taxpayers the services they deserve."