The reorganisation game has warmed up and is starting to play out on turbulent political terrain. While local authorities shape their proposals for new unitaries, what lessons are on offer from those who have already navigated the process?
North Yorkshire Council was formed in April 2023 through the merger of the former county council and seven former district and borough authorities. But this example shows reorganisation is no panacea for resolving financial challenges. Last week the council's leader Carl Les met with local government minister Jim McMahon to highlight fears over the impact impending funding reforms nationally will have on the council's budgets. North Yorkshire said it had been given one of the worst funding deals for the current financial year, leaving it with an ‘unexpected' shortfall of almost £22m.
Chief executive of North Yorkshire Council Richard Flinton emphasised the ‘sheer scale of the endeavour'. He told The MJ: ‘Councils have got to understand absolutely what you're embarking on and the knock-on effects on current plans that all of the councils involved in the potential merger have and the issues they're trying to deal with. This includes delivering projects and their own transformation agendas.
Ed Hammond is deputy chief executive of the Centre for Governance and Scrutiny. Speaking to The MJ, he advocated for putting governance front and centre as organisations progress through reorganisation. He said: ‘It's all about the relationships…and building and maintaining effective working relationships across an area.' He added: ‘And it's really challenging [in] an environment where you've got contested proposals. You've got tensions arising politically and organisationally, because people are trying to put different ideas to government.'
‘One of the big things for us is that we found we had to forgo quite a bit of savings and transformation opportunity, because there's only so much the organisation can do at any particular time.'
That meant ‘probably not realising something in the region of £25-£30m of savings over that two-and-a-half-year period when we were leading into this and starting to get stuck into it'.
He warned that councils involved in a reorganisation believe change is going to take place in the new council, ‘so it's very difficult to lead change in the tail end of the existing councils'.
What's crucial, he said, is ‘the team you need to pull together, the way you need to organise yourself and have a really thorough, planned approach to what you're doing'.
What would he have done differently, in hindsight? He said ‘more workforce angst' was probably created by trying to give staff an early line of sight of the new organisation's consolidated terms and conditions. ‘I think that could have been taken more slowly and dealt with once everybody had been TUPE transferred, and our new terms and conditions put in place.'
Flinton also warned about councils facing reorganisation trying to ‘put money into certain previous council pet projects before those councils became abolished'.
Change could take longer than organisations were prepared for. ‘I think councils believe this is going to be quite quick. Here I think we're identifying that within a four-year period, we will have sorted virtually everything out.'
Buckinghamshire Council was created on 1 April 2020. Chief executive Rachael Shimmin was lead chief executive during Buckinghamshire's transition. She told The MJ that undertaking due diligence is critical. She added: ‘I think one of the risks of unitisation is that there is the potential for councils to stop pursuing their delivery plans on savings.
‘If you think about it, medium-term plans are generally over three years in most councils. There is always the risk in unitisation that councils think: "Actually we're not going to exist. There's not an awful lot of point continuing to go down this road on savings, because the new council will want to look at that in the round". Now, of course, there's some sense in that.'
But she continued: ‘The risk though is if you're waiting for two or three years until you go live, you're accruing a bigger financial cliff for the new council to try and deal with. So understanding during transition what the savings targets are for all the councils, and understanding the ability to deliver those during transition is important. It's only by doing this that you understand how much the revenue budget is going to be at the start of the new council.'
Focus needs to be on the basics required to get the new organisation up and running on vesting day, she believes. ‘So [that means] the bins are emptied, people are paid. Residents don't perceive there's been a massive shift on day one.'
But she is fully aware of the challenge that presents in the current national political context. She told The MJ: ‘We've got a very ambitious government with a massive policy agenda that councils are struggling to juggle and deliver. This is alongside ongoing and very significant financial constraints, and enormous increases in demand for all of those statutory services that we're familiar with. So that is no easy task for anybody.'
Ed Hammond is deputy chief executive of the Centre for Governance and Scrutiny. Speaking to The MJ, he advocated for putting governance front and centre as organisations progress through reorganisation. He said: ‘It's all about the relationships…and building and maintaining effective working relationships across an area.'
He added: ‘And it's really challenging [in] an environment where you've got contested proposals. You've got tensions arising politically and organisationally, because people are trying to put different ideas to government.'
When considering what needs to happen in reorganisation, including ‘the disaggregation and aggregation of services, setting up a shadow, all these other things, people don't sometimes think about the fact that governance is crucial to the day zero events and establishing the shadow [authority]. It's central to the day one stuff about vesting, because in order to vest, you need to have that assurance over safe and legal services. You need to have an approach which will manage that transition effectively. So governance is kind of fundamental to everything.'
He believes there is much individual council planning and preparation that can be done ‘but I also think there needs to be a degree of liaison and relationship building happening between councils now as well, even if that is really difficult'.
Westmorland & Furness Council was created as a new unitary on 1 April 2023 as part of larger reorganisation in Cumbria. Chief legal officer and monitoring officer Linda Jones said local authorities involved need to multi-task ‘and to be resilient, like Spongebob'. She described the timescale in Cumbria as ‘really tight, going into day zero'.
In terms of getting the job done in the timescale: ‘The key thing I think is you've got to have really strong programme project management, which we did have.
‘We had a programme board, we had theme boards, and legal and governance reported into a chief executive that was leading on that theme. We had member oversight, and then we had something called a "day one readiness board" as well, which basically made sure that we were tracking the actions from each of the themes and making sure we were safe and legal.
‘Without all of that in place, safe and legal would not have been on day one,' she added.
Shimmin has a lesson to offer the Government: ‘I have a very clear view that this period of uncertainty doesn't drive helpful behaviours and doesn't drive delivery.
‘The sooner it can bring certainty to places around the form [of the new unitaries] the better. Because my experience is that it's only once you've got the final decision that you really swing into gear in terms of delivering the new council.' As one of the chief executives who has arguably been on the reorganisation pitch the longest, ministers would do well to listen.
Reorganisation: The timetable
Government decides: December, into January
Structural change order: Probably January or early February, laid and comes into force on the same day. Provokes the establishment of formal joint committees following boundaries of the new authorities.
First election for shadow areas: Thursday 7 May 2026. The shadow authorities come into being the day after the election (‘day zero').
Municipal year 2026-27: The shadow authority and the sovereign councils work to design policies and blueprints for the transition and management of ‘safe and legal' services for vesting day. Timelines will vary but an interim chief executive and interim chief officer structure will likely be appointed in the autumn, followed by the remainder of the management and staff structure in winter and early spring.
Jan/Feb 2026: Shadow authority agrees its budget and medium-terms financial strategy.
Day before vesting day: Last day of operation of the existing sovereign authorities.
Vesting day (‘day one'): shadow authorities become the new sovereign authorities for the area.
*Contributed by Ed Hammond
