A s local government reform (LGR) gets under way, authorities are beginning to consider the challenges posed by the merging of some services (largely those currently delivered at district level), and the splitting up of others (primarily county services). The integration of multiple councils into larger unitaries will place substantial pressure on resources; managing elections, unifying personnel, rationalising administrative functions and devising a property strategy will push these authorities to their operational limits.
The merging of frontline services, such as waste collection, street cleansing, and facilities management, has the potential to generate significant economies of scale, increase productivity and achieve cost savings, provided it is executed effectively.
But other services will have the opposite problem. As counties undergo restructuring, disaggregation may be needed – potentially eroding economies of scale and resulting in increased costs. Diverging political leadership and policy approaches among new unitary authorities may complicate the development of a cohesive service delivery strategy. Moving the existing service into a LATCo, with the new authorities becoming joint shareholders, means that there would be no need to disaggregate, and no loss of efficiency.
The need for control and flexibility underscores the appeal of the LATCo model. It offers councils direct control and adaptability beyond the scope of a traditional direct labour organisation, offers financial advantages through commercial operations and supports external revenue generation.
However, setting up a LATCo is not straightforward: it requires careful planning, robust governance, clear objectives and substantial initial investment. With all the other pressures of reorganisation, starting up a LATCo may be a step too far. Forming a partnership with an existing LATCo such as Norse would provide the flexibility to ensure that services are maintained and costs are controlled; and would keep the option open to choose in future years the most appropriate long-term arrangement, whether outsourcing, insourcing or continuation of the partnership.
In a rapidly changing world, I believe that this approach offers the best way forward for the new unitary authorities post-LGR.
