We've been talking about it for a while; we've experienced it before so it's not a new thing, but this time it's different – it's bigger, more wide reaching, happening at pace and creating unprecedented challenges and opportunities. Yes, local government reorganisation (LGR) 2.0 is here.
Naturally LGR has been the talk of the last few months and on our annual Penna roadshows with chief executives and senior leaders, where we share our annual talent market data and insights, it's not surprisingly been the new context that we have all been contemplating.
As recruiters and career transition specialists with experience of supporting LGR in Buckinghamshire, Cumbria, Dorset, and Northamptonshire we want to learn the lessons and create better ways forward to ensure that change is embedded, sustainable and affordable, so in the spirit of sharing our experience here's what we've learned, heard and discussed. If you'd like to see the talent data or join the conversation we'd love to hear from you.
Firstly, the talent market without LGR already presents challenges and opportunities. The chief executive market is already at the most active since Covid – with 81% of appointments being made since 2020, only five district council chiefs making it into the unitary league in that period and only 10% of upper tier chief executive roles being held by those with a district background – there needs to be major consideration given to how the sector retains and develops this talent at a time of greatest need. Wouldn't it be a shame and a waste if many of those who want to stay in the system do not get suitable support and consideration in the competition for the new councils?
We are yet to hear from the Ministry of Housing, Communities and Local Government about the approach to ring fencing vs open competition for chief executive, statutory officers or second/third tier roles. If the past shapes the future, then it is likely that open competition will be encouraged at tier 1 and tier 2, but is this the right thing to do with the challenging talent backdrop outlined? Could internal first approaches with support and development be a better way forward and more cost effective?
When it comes to statutory officer roles, the market is the most challenging we've ever seen – both section 151's and monitoring officers (interim and permanent) are simply ‘hen's teeth' to recruit at the moment and you add the notion that these roles are at times undesirable because of the exposure and risk into the mix with LGR and a growing combined authority demand, along with the range of interim and fixed term contract specialists needed, we can definitely see a perfect storm ahead.
So, in our view it would make complete sense to ringfence these statutory officer roles and potentially the director of public health, director of children's services and director of adult social services too.
It's not surprising that we have seen increased demand for transformation and programme management leaders (425% increase in 2025 compared with 2024) as councils and collaborations of system partners have introduced LGR programme leadership roles to build in-house teams to support the delivery of safe and legal, or safe and legal plus models.
The HR leadership and work required for this level of national disaggregation and aggregation is intense, and we feel this technical skill set will be in high demand to undertake these significant changes on a safe and legal basis. The sector may need to bolster HR resources and look to the private sector and specialist interims to help with this level of change.
One skill set that is highly likely to be in great demand is organisational development (OD) as the operating model for the new authorities will need resetting. In our view it's a huge opportunity for major transformation with integrated and modern structures, and OD talent is limited, so likely an opportunity for the consultancy practices who can offer the structural and reward support and also for interims who specialise in this area.
But with such time pressures will the operating model have to be the same as most others for now? We have heard encouraging aspirations for safe, legal and transformed councils – let's hope the timescale allows for this and that local government can be reformed, recalibrated and reimagined to bring forward stronger outcomes for residents in the most cost-effective and efficient of ways.
Reorganisation is asking a great deal of local government leadership: to project confidence without certainty, to offer reassurance without all the answers and to hold organisations steady while the ground is still moving beneath them. Support for these leaders to navigate the change curve is essential, as self-preservation and personal change is often hard to reconcile with leading change that they don't support but have a duty to deliver.
Our sister company, LHH, are market leaders in career transition and talent mobility, with extensive experience supporting organisations through mergers and acquisitions. In response to this critical need, their experts have designed a modular change support programme. The programme equips leaders to drive effective change amid uncertainty, helping to retain key talent, boost morale, and maintain productivity. This kind of approach could be key for members and officers who need to think beyond personal impact and opinion.
The talent retention challenge is also very real. Across local government, people are making decisions before decisions are made for them. For example, some are leaving districts and counties for established unitary councils, not because they are disloyal, but because certainty – even imperfect certainty – feels safer than waiting for the future to emerge. Several candidates have also shared with us their concerns that there might be a lack of innovation and investment at a time in their services at a time when establishing the authority foundations will be a priority.
We spoke with one chief executive of a district council who, like many, is excited by the opportunity of LGR and noted that, in part, this is retaining people as they look forward to being part of creating new councils. We discussed how critical it is that all leaders who have followers (not just those at the senior layers) ‘show up' to create a psychologically safe space but also to ignite possibilities and true transformation within the workforce who are themselves uncertain.
By the summer we should know what the landscape looks like. Most councils are rightly not waiting for the outcome and are busy modelling options and acting as system leaders regardless of their personal opinion. It's one of those pivotal moments when public service leaders have to remind themselves what motivated them to be a public servant and the communities they are serving.
If LGR delivers better outcomes for residents at less cost it will have succeeded – and the objective, ambitious and humble leaders who make it happen will find there are way more opportunities than challenges.
Julie Towers is a Director and Rachael Morris is an Associate Partner at Penna
To join the discussion and share your experience contact julie.towers@penna.com or rachael.morris@penna.com
