One evening in late August 2018, Northamptonshire County Council took the unprecedented decision to abolish itself. The council was drowning in debt and had been forced to take an axe to local services. Earlier that year it had become the first local authority in two decades to declare itself bankrupt. On the recommendation of Max Caller, the government’s chief council fixer who had been called in to conduct a review of the struggling authority, the only way to overcome Northamptonshire’s issues was to rip it all up and start from scratch. In 2021, Northamptonshire’s existing county council and seven districts ceased operating and were replaced by two new unitary authorities.
Before this, Northamptonshire was run via a two-tier system, whereby larger services are run by a county council and smaller services by a district council. After the decision to self-immolate, now a so-called unitary authority runs all services in the area. The country and district councils are defunct.
Northamptonshire was betting on an untested assumption: that unitary authorities are necessarily more efficient than the two-tier alternative. But this assumption is one Labour has clearly adopted too. On 16 December, following a speech by Angela Rayner in Leeds, the Ministry for Housing, Communities and Local Government (MHCLG) released plans for a major reorganisation of local government in England. Under these new plans, all remaining two-tier areas will be invited to set out proposals for unitary reorganisation; Essex, Kent and Hertfordshire are thought to be in the first tranche of areas up for renewal.
With this white paper, Rayner has set out its radical vision for the future of local government. The financial crisis facing England’s 317 councils is already proving a persistent quandary. Since Northamptonshire’s collapse in 2018, seven councils have declared bankruptcy. A survey by the Local Government Association from earlier this year suggested that one in four councils are likely to need emergency government support to avoid going bust.
But the solution to this emergency in reorganisation is misdirected; it is tinkering around the edges of an existential problem which will only get worse if not thought about more directly. Councils’ financial woes are not only caused by a lack of organisational efficiency but are driven by a vicious cycle of rising demand for services (namely housing and social care) coupled with the scars of ten years of deep austerity. It will take more than moving the chairs around to prevent further collapse.
Labour are not unique in the pursuit of reorganisation of local government. In 2021, Robert Jenrick (then in Rayner’s position as communities secretary) signed off on the abolition of the two-tier system in Cumbria, Somerset, and North Yorkshire, citing increased efficiency as the reason. But reorganisation is not a miracle cure for a decade of neglect and cuts to funding. Nor does it change the fact that without substantial investment – or a radical overhaul of services – councils are increasingly buckling under the weight of a steep rise in demand for social care.
Take Somerset, for example. Since its county council and four districts were abolished in early 2023, the new unitary council has declared a financial emergency and has been forced to find cuts of £35m. For many councils, these kinds of cuts can mean the end of discretionary, local services which would previously have been run by the district council. The local library, or the public pool are regularly victims of these measures. Part of the mess, the council said, has been caused by the fact all previous councils managed their budgets in different ways. But fundamentally, the council said the cost of delivering services has risen significantly faster than its income. It must cut other, non-statutory, preventative local services – all of which are intended to lock in cost benefit – to account for the ballooning cost of social care.
For residents in Northamptonshire too, financial struggles have been inherited by the two new unitary councils – West Northamptonshire and North Northamptonshire – which were set up to replace the ailing county. The former recently invited its 2,500 staff to consider voluntary redundancy in order to fill gaps in its budget, while in March 2024 the latter reported facing an £11m overspend.
It is clear, then, that in order to find a truly radical solution to the crisis currently ravaging England’s councils, Labour must ask itself an important question. What is local government for? Is its fate to become a National Care Service by proxy? Or is it intended to add value and improve residents lives? The plans released this week suggest Labour have yet to grapple with this challenge in-depth.
Reorganisation is the easier option than radical reform to tax and funding structures. And, from the outside it appears sweeping and progressive. But dig deeper and it is an improbable silver bullet. Too many of Keir Starmer’s five missions (is it six pledges now?) are dependent on an a priori healthy public realm. Re-organising local government without a root and branch operation on its ailing structures will only cause the government more problems than it already has.
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