The West Country experiment that proves Rayner's ‘mega councils' plan is doomed to fail

Telegraph

15-03-2025

When a new unitary authority in Somerset was formed in 2023, it was hailed as the answer to the town hall's ever-increasing financial black hole.
Yet only two years later, Somerset council is on course to hit a £190m budget shortfall by 2029 – forcing officials to impose an inflation-busting 7.49pc tax rise on citizens. At the same time, funding for public services from toilets to CCTV is being axed – meaning residents will never have paid so much for so little.
The troubled financial state of Somerset is a stark warning to Angela Rayner whose 'mega councils' master plan – announced in the Devolution White Paper in December – is facing mounting scrutiny.
Two-tier county and district councils across the country face being merged into one unitary authority, a local government body which is responsible for all services, in a bid to make much-needed savings. But, councillors have warned Ms Rayner that the alleged benefits from the scheme 'lack a serious and robust evidential base'.
It is something Somerset residents can attest to. Since its 'unitarisation', services for public toilets, local theatres, CCTV and tourism visitor centres have been cut.
The Liberal Democrats-run council has also been forced to introduce a new parking policy, which will impose Sunday charges at all car parks and scrap free parking.
The cost of garden waste collection is rising too, from £68 to £73.50 next month.
Meanwhile, the council tax rise will generate an extra £9m income and add an extra £129 a year on to the average household's bill.
Desperate, the authority has been forced to start selling off its assets to make ends meet. These include a Marks &Spencer building in Yeovil, offices in Bristol and an NCP car park in Bournemouth.
For the second year in a row, the council is using Exceptional Financial Support, which is funding granted by the Government. It has been given permission to sell assets or borrow money to a value of £43m.
The authority has also cut 555 jobs to save £34m a year. Despite this, spending is still set to outstrip income by £101m for 2026-27, rocketing to £190m by 2029-2030.
Martin Dimery, a Green councillor, said: ' Somerset county council was already in a financial crisis when it effectively absorbed the districts. This was due to the burgeoning costs of adults and children's social care against a backdrop of failing to keep council tax in line with costs.
'Far from saving money, Somerset county council has brought all the former districts down with the sinking ship.'
The town hall plans to find savings of £47m this year and Bill Revans, the leader of the council, has admitted there will be further impacts on services.
Somerset is far from the only cash-strapped unitary authority. Nottingham city and Birmingham city councils have both declared effective bankruptcy.
Meanwhile Thurrock, which issued a Section 114 notice to declare effective bankruptcy in 2022, has debt of about £1.5bn.
'Crippling financial problems'
Cllr Jeremy Newmark, of the District Councils' Network (DCN), said: 'Many new large unitary councils have experienced crippling financial problems.
'Claimed savings promised by the proponents of mega councils lack a serious and robust evidential base. Given that reorganisation will incur substantial upfront costs, we must be clear that any savings may not emerge for many years.'
A Conservative Party spokesman said: 'Last year, we set out five key tests that any restructuring should meet – and Labour have failed at every hurdle. In addition to the extra costs, the mass postponement of elections is unprecedented and entirely wrong.'
Somerset council has previously pointed to the fact that it has one of the highest rates of pensioners in the UK, with roughly 25pc over the age of 65. This means the town hall has particularly suffered with the rise in adult social care costs. Somerset's rural location makes matters worse, as it can be a round-trip of 90 minutes for a carer to see one customer in their home.
Elliot Keck, of the TaxPayers' Alliance, said that reorganisation risked 'simply papering over the cracks,' rather than dealing with the root of issues such as social care costs.
Jonathan Carr-West, of the Local Government Information Unit, said: 'The scale of financial challenges faced by councils is so great that even the maximum potential savings from reorganisation will not by themselves be enough to put local government on a sound financial footing.'
Almost half of councils in England risk falling into bankruptcy without action, according to the National Audit Office. But a report says local government reorganisation risks simply reinforcing the status quo.
The report, conducted by Inner Circle Consulting for the DCN, found it would be 'a hugely costly and disruptive process that will simply create larger versions of semi-functional or dysfunctional arrangements that aren't delivering for those that need it the most or for the nation as a whole.'
'It's like running up a down escalator'
Mr Revans this week told a Government committee that unitarisation had produced significant savings, but rising costs negated these: 'The cost pressures of social care are rising at a rate faster than our ability to make savings. It's like running up a down escalator. We are making these savings, but cannot do it fast enough to meet the demands.'
A spokesman for the County Councils Network highlighted that there are 'very specific reasons' for why certain unitary authorities are struggling, but that in cases such as Buckinghamshire, Cornwall and Wiltshire, unitarisation has been a success.
A Ministry of Housing, Communities and Local Government spokesman said: 'This Government inherited a crumbling local government sector and existing, long-standing financial pressures are seriously impacting councils like Somerset.
'That's why we're giving them additional support to help manage these pressures.'