LOCAL GOVERNMENT REORGANISATION: Analysing the impact on people services
CCN is the voice of England’s counties. Representing the local authorities in county areas, the network is a cross-party organisation which develops policy, commissions research, and presents evidence-based solutions to issues on behalf of the largest grouping of councils in England. In total, the 20 county councils and 18 unitary councils that make up the CCN represent 28 million residents, account for 39% of England’s GVA, and deliver high-quality services that matter the most to local communities.
To discuss this document or CCN in more detail, please contact:
James Maker Director of Policy and Communications
We are optimistic about the future of our public services. As a strategic delivery partner to the public sector, we help achieve the best life outcomes for individuals, across the range of services they interact with. We do this by creating financially resilient, thriving, and better-connected public services, organisations, systems, and places. We support with the significant and immediate challenges of today, and reimagine public services for the future, centred around proactive prevention and early intervention, enabled by digital and AI. In doing so, this also improves the experience for those who deliver and lead these services, improving practice, productivity, and engagement.
james.maker2@local.gov.uk
Find out more by visiting www.newtonimpact.com
Contents
01: Executive summary
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02: Introduction
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03: Reorganisation and people-based services: views from the frontline
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04: Deep dive into demand variation
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05: Deep dive into ordinary residence and care supply and demand
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06: Deep dive into unit cost
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07: Deep dive into senior staffing impact
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08: Deep dive into service quality and partnerships
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09: Deep dive into distribution of deficits in the High Needs Block
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10: Conclusions
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11: Footnotes and Appendices
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01: Executive summary
Five key messages from this analysis
The government’s forthcoming decisions about the size of new unitary councils will have profound, long-lasting impacts on the most vulnerable members of society. The evidence strongly suggests larger-scale councils are essential to preserve service quality, prevent rising costs, and ensure financial sustainability of people-based services. 01
New unitary councils with populations substantially below 500,000 people will increase the price councils pay for care, putting further financial costs on these under-pressure services. Modelling suggests that if all new unitary councils had a population below this figure, this would result in additional unit costs of between £180m and £270m annually solely as a result of reductions in purchasing power. In contrast, if all new unitary councils had a population above 500,000, it would reduce care fees by £65m a year across England. Splitting county councils into smaller local authorities will require hundreds of new senior roles as councils already grapple with a shortfall in care staff. Modelling shows that if all new unitary councils had a population of below 500,000, this would result in a requirement of between 500 - 1,100 additional management and senior roles in care services. In contrast, if all new unitary councils had a population of above 500,000, fewer senior managers than are currently in place will be required, saving those areas money to reinvest in care services. Breaking up high-performing county councils into substantially smaller councils could lead to worse services. The report reveals that larger authorities are more likely to receive ‘Outstanding’ or ‘Good’ ratings from Ofsted for children’s services. Currently, 16 of the 21 county councils are already good or outstanding for these services. Consequently, directors of care and special needs services warn in the report that smaller services could struggle to attract staff and invest in improving services. Splitting county councils into smaller unitaries covering populations as small as 300,000 or lower could see some of these new authorities overwhelmed with demand. The report finds that the smaller the council, the more they could experience extreme concentrations of care users: effectively meaning care costs are highly variable between new authorities and may exceed planned budgets. This could leave some councils exposed to unaffordable costs and the use of expensive out of area placements. This could challenge their financial sustainability from inception.
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1.1 Background and context
The research employed two complementary analytical approaches:
Through the English Devolution White Paper published in December 2024, the government has initiated the most significant restructuring of council arrangements in a generation, aiming to eliminate the two-tier local government system by 2028. This reorganisation will affect 21 two-tier areas across England, with proposals ranging from creating single unitary authorities to establishing up to five separate councils within individual county areas. This report, commissioned by the County Councils Network (CCN) and delivered by Newton, presents objective, impartial evidence on how local government reorganisation (LGR) will impact people- based services - including adult social care, children's services, and Special Educational Needs and Disabilities (SEND) provision. Specifically, this work has explored the impact of the geographical footprint and population sizes of new unitary councils on the costs and risks associated with the disaggregation of county-wide services.
Quantitative analysis:
Regression analysis: A regression analysis was conducted to isolate the impact of population scale on demand, cost, and service quality while controlling for demographic factors such as deprivation and median household income. Demand and cost projections were modelled through to 2040, incorporating both current resident data and demographic projections. National analysis: Building on the bespoke analysis, in collaboration with local areas, a single most realistic and sustainable configuration of 2, 3, 4 and 5 unitary options for each area was selected for the national analysis to provide a basis for consistent and comparative analysis. This resulted in 58 scenarios and 146 different unitary footprints being selected for inclusion within the national analysis. These scenarios could then be aggregated and summarised to produce the analysis included within this report.
1.2 Methodology and scope
Qualitative research:
The development of this report encompassed bespoke research across 19 of the 21 LGR areas in England, plus 16 neighbouring existing unitary authorities. The programme examined 77 different unitary formation scenarios, resulting in 205 possible new unitary footprints, and analysed detailed data from over half a million individuals across adult social care, children's services and SEND. It was overseen by a Steering Group comprising of officers from all participating authorities.
A survey of 39 senior officers (Chief Executive Officers, Directors of Adult Social Services, and Directors of Children's Social Care) across county councils. Roundtable discussions with senior leaders who had previously experienced local government reorganisation. Workshops conducted in each of the 19 participating authorities.
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1.2 Key Findings
Engagement with senior officers in county councils suggests that there is a severe lack of confidence that the risks associated with disaggregation are, or will be, adequately considered in central government policy, including potential decisions by ministers on competing proposals from areas. Fewer than one in 10 (6%) of county council Chief Executives and Directors of Adult Social Care and Children’s Services are confident they will be fully considered. There is also concern that not all proposals from local areas are fully considering the risks posed by disaggregation.
Opportunities from reorganisation
Local authority officers engaged through this programme demonstrated cautious optimism about LGR's potential benefits, with three-quarters of survey respondents expressing they were either "very excited" or "cautiously optimistic" about the possibilities that reorganisation offers for people-based services - but only if reorganisation is delivered in the right way .
The primary opportunities identified include:
Enhanced service integration: Unifying housing services with social care could enable more coordinated support for vulnerable populations, including care leavers and those at risk of homelessness. Improved data utilisation: Access to comprehensive resident data across services will enable proactive identification of at-risk cohorts and early intervention. Strategic transformation: LGR is recognised as presenting a once-in-a- generation opportunity to fundamentally redesign service delivery models rather than simply maintaining "safe and legal" operations.
How confident do you feel the risks associated with disaggregation of people-based services are being or will be adequately considered in central government policy?
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39%
33%
30%
22%
20%
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6%
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Critical risks and challenges
Officers engaged through this programme were clear that the challenges associated with disaggregation encompass a host of wider issues which are likely to impact the quality and efficiency of people-based services on an ongoing basis, beyond the one-off impact of reorganising.
Building on the engagement undertaken with frontline professionals, this programme’s data analysis reveals several significant risks associated with disaggregating county-wide services into multiple smaller authorities:
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Demand variation
For each of the reorganisation scenarios and geographies included in the national analysis as part this programme, the likely rate of total demand for people services (measured by the proportion of the population interacting with people services) has been estimated for each potential new unitary authority. The analysis for this programme clearly shows that as the size of the new proposed unitary authority decreases, the potential variation in demand becomes more significant. This demonstrates there is greater risk that newly formed local authorities with a population below 500,000 will be exposed to extremes in demand variation, and therefore overwhelmed by demand that will not be sustainable in the long-term, or will be left with expensive care settings which are not being fully utilised. When examining this effect at an individual service level, the trend is largely still present, albeit less pronounced. However, for every service analysed, the variation in demand is shown to be less significant where newly formed unitaries have a population of 500,000 or more.
Average total demand variation within each scenario
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300k or below 300-500k
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New unitary size
Total demand variation within each scenario
Unit cost increase
The forecast increase in unit cost if all new unitaries are of average population in each segment
The analysis identifies a clear correlation between authority size and commissioning costs. For every 200,000 reduction in population, unit costs for commissioned care across all services (adult social care, children’s services, SEND) increase by approximately 1%, driven by reduced purchasing power. With existing county councils commissioning care worth many hundreds of millions of pounds per year, reductions in population scale will result in a very significant, material and absolute cost increase where disaggregation takes place. This programme’s modelling suggests that if all new unitary councils had a population of below 300,000, this would result in additional unit costs (solely as a result of reductions in purchasing power) of over £270m per annum. An additional £180m of annual costs would be experienced if all authorities had a population of between 300,000 and 500,000. In contrast, if all new unitary councils had a population above 500,000, a net reduction in unit costs of £65m could be expected.
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300k or below 300-500k
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Unitary size
Population size impact on unit cost (regression analysis)
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Workforce and leadership challenges
The forecast increase in senior staffing costs if all new unitaries are of average population in each segment
Creating additional authorities necessitates substantial increases in senior management posts. Each new unitary requires additional Directors of Adult Social Care, Directors of Children's Services, and supporting leadership teams. Critically, the sector could face severe challenges in recruiting sufficient qualified professionals to fill these roles, particularly given existing vacancy rates of 8.3% in adult social care. The analysis suggests that reorganisation could result in £1-3 million additional total senior staffing costs per authority created. This analysis only includes senior leadership and service management roles required for the people services in the scope of this analysis; there would be further additional staffing required in support functions, including business intelligence, IT and digital, HR and finance to support these newly formed services. This programme’s modelling shows that if all new unitary councils had a population of below 300,000, this would result in a requirement for over 1,000 additional management and senior roles, with an estimated annual cost of £95m. If all authorities had a population of between 300,000 and 500,000, nearly 500 additional staff would be required at an annual cost of £41m. In contrast, if all new unitary councils had a population of above 500,000, a net reduction in senior management could be experienced.
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Unitary size
The forecast increase in senior staffing numbers if all new unitaries are of average population in each segment
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Unitary size
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Financial risk from High Needs Deficits
Service quality risks
In the engagement carried out for this programme, service directors hypothesised that people-based services delivered by larger local authorities were typically more highly rated by regulators. Therefore disaggregation posed a risk that service quality would be negatively impacted by disaggregation. Regression analysis for this programme controlling for demographic and socioeconomic factors revealed that larger authorities are more likely to receive "Good" or "Outstanding" ratings from Ofsted for children's services. Service directors engaged in this work argued that the relationship appears linked to larger authorities' capacity for practice development, quality assurance, and attracting experienced leadership.
High Needs Block (HNB) deficits held by local authorities, as a result of overspends and the statutory override, are arguably the single biggest financial risk facing county councils. How these deficits may be distributed as a result of LGR is a fundamental question for the financial sustainability of the newly formed authorities, particularly where disaggregation takes place. Analysis for this programme shows a greater level of variation in the level of risk as the number of unitary authorities increases (and the scale of these reduces). This suggests significant inequality in financial risk could be created, which may demand disproportionate and unevenly distributed savings to be delivered in the future.
Regression analysis of Ofsted ratings
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The government should consider appointing an independent body to evaluate proposals to ensure the long- term sustainability of local government in non-metropolitan England. Particular attention should be given to the variation in demographics and associated demand in people-based services, ensuring the assessment of proposals results in the best alignment of resources, needs, and assets. Structural Change Orders (SCOs) and implementation arrangements for reorganisation should ensure that upper- tier councils have a majority on implementation governance, particularly Where disaggregation takes place, proactive mitigation of issues related to workforce and leadership development will be vital, and upper tier authorities should be enabled to take the lead on this. Where disaggregation takes place, develop and implement a specific plan (supported by relevant legislation if necessary) to address the issues of ordinary residence. Coherence with ICS restructures should be prioritised to maximise opportunities for public service reform and to ensure alignment at place level and co- terminosity where possible. A solution to be developed and implemented to address the issue of the statutory override on the High Needs Block budget. on Joint Committees and when countywide services are being disaggregated.
Distorted care demand and supply
Many sector stakeholders engaged through this programme expressed a concern about the impact of ordinary residence, whereby demand originates from parts of a county which may not be where the supply of support is most readily available. This research shows that disaggregation and the formation of smaller unitary authorities will present a challenge to balance the uneven distribution of supply of care and the demand for care within these authorities, which is currently smoothed across larger geographic footprints. The greatest potential impact of this distortion can be seen in the working age adult (WAA) residential cohorts. For these cohorts, demand, cost, and growth can be highly varied across a large county area.
1.3 Policy implications
Government priorities
From this programme of work a set of conclusions can be drawn which highlight key priorities for government to consider in moving to the next phase of LGR and assessing, selecting, and implementing proposals put forward by local areas. Local government reorganisation should seek to avoid or minimise disaggregation. The government should scrutinise and rigorously evaluate all proposals against their own statutory criteria, with a particular focus on, and due weighting for, the impact on people-based services.
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Local planning considerations
Disaggregation should be avoided or minimised where possible, but where it cannot, the analysis suggests unitary authorities with populations in excess of 500,000 are those most likely to be able to reduce the risks of extreme demand variation, increased unit costs, and deterioration in service quality. Where disaggregation takes place, careful attention is required to maintaining appropriate scale, ensuring equitable resource distribution, and coordinating with wider public service reforms. Without proper mitigation of identified risks, reorganisation could significantly harm service quality, increase delivery costs, introduce additional operational complexity, and potential threats to the viability of newly created authorities. These risks must be considered within the context of the severe demand-led pressures facing people services, and the pressing need to preserve investment in preventative services to reduce existing challenges within the system. However, with appropriate planning and scale considerations, LGR offers the potential for transformational improvements in how local government serves its communities.
The report emphasises that successful reorganisation requires moving beyond establishing "safe and legal" services to achieve genuine transformation. Key areas include: Housing integration: Developing coordinated approaches to homelessness prevention and supported housing. Preventative services: Utilising enhanced data access to identify and support vulnerable residents proactively. Strategic asset utilisation: Optimising the use of combined property portfolios and community assets.
Partnership alignment: Ensuring coordination with health, police, and voluntary sector partners.
1.4 Conclusions
The report's findings indicate that decisions about unitary authority size and configuration will have profound, long-lasting impacts on the most vulnerable members of society who depend on people-based services. While LGR presents significant opportunities for improved service delivery and democratic accountability, this analysis reveals substantial risks if reorganisation results in excessive fragmentation of people-based services through disaggregation. The evidence analysed strongly suggests that maintaining larger-scale unitary authorities is essential to preserve service quality, control costs, and ensure financial sustainability.
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02: Introduction
2.1 Background
Despite these significant opportunities, experience to date – supported by this programme’s analysis - indicates that if LGR is not designed and delivered in the right way, there is a risk that it has a detrimental effect on outcomes for residents and on costs for taxpayers. Following a decade of funding reductions and increased demand for services, the risk to service continuity, quality, and cost is further heightened as government embarks on a much wider reform agenda across both local government finance and service delivery.
Through the English Devolution White Paper, published in December 2024, the government has embarked on the most radical overhaul to council structures in a generation, with ambitions to end the current two-tier system of local government by 2028. While the scale and pace of change envisaged is unprecedented, local government reorganisation (LGR) is not a novel concept, with unitary authorities having been created at numerous points over recent years. Through this experience, the sector has developed an in-depth understanding of the significant opportunities that can result from reorganisation, as well as the challenges that are often presented. Previous reorganisations have demonstrated that the creation of a new unitary authority can deliver the opportunity for a local area to not just put in place a ‘safe and legal’ model, but rather to fundamentally transform the way in which residents are supported in their area. Merging county and district authorities at the right scale can create a system that is preventative and resident-centric by design; leverages community assets and housing services that better support the most vulnerable residents; delivers reduced operating costs; and brings greater coherence to place-based public service reform. This should result in a system which is more efficient, effective and integrated.
Nowhere is this more relevant than in people-based services.
These services, comprising some of the most important delivered by the state, often to its most vulnerable citizens, include adult social care, children’s services, home to school transport, public health, and special educational needs and disabilities (SEND). Core revenue spending on these services, which are largely statutory in nature, is growing year-on-year and is forecast to account for almost three quarters of spending need in two-tier areas by 2029/30. 1 Any reform to local authority structures will therefore have the greatest impact on these life-critical services, particularly in scenarios where the disaggregation of county-wide services is under consideration.
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Interim local government reorganisation plans submitted by all areas by the deadline of March 2025 revealed at least 53 separate potential unitary configurations across the 21 areas that were invited to submit proposals. The disaggregation of county services was put forward as a formal option in all but one county area. 2 Based on analysis of these plans and formal proposals published since, it is expected that almost every county area will have a submission for at least one unitary council with a population of below 500,000, with several including unitaries with populations of below 300,000. Individual areas are evaluating, or formally proposing, options for the creation of between one and five new unitary councils, depending on the size of the LGR geography. The breadth of emerging proposals and competing options raises significant considerations over the optimum scale for delivering these people-based services. In turn, it also brings to the forefront of the debate the significant and serious risks and challenges associated with the disaggregation of county-wide services where more than one unitary council is created in an area. Previous work by PwC and the County Councils Network (CCN) has estimated the one-off and recurring costs of splitting up and duplicating county-wide services in different reorganisation scenarios. 4 However, the challenges associated with disaggregation in people services stretch beyond the direct financial impact of the potential savings profile from LGR, with many of these not explored in detail within previous reports. 3
These include the potential upward pressure on unit costs due to reductions in purchasing power; workforce deployment and the recruitment and retention of staff; reductions in provider capacity and placement sufficiency; and risks to the continuing quality of services. All these factors will have a major impact on the stability of care services and may even risk the sustainability of some or all of the new councils themselves, given the proportion of local authority budgets that will continue to be devoted to people services.
2.2 Purpose
To explore these implications in more detail, CCN has worked with Newton on an extensive programme of work to assess the potential impact of LGR on local authorities’ people services. Specifically, this work has explored the impact of the geographical footprint and population sizes of new unitary councils on the costs, opportunities and risks associated with the disaggregation of county-wide services. The purpose of this report is to provide new and original quantitative insights on how demand, cost, and quality of councils’ people services will be affected by the geography and population scale of new unitary councils. Alongside this, through engagement with senior practitioners in adults’ and children’s services and with county Chief Executives, it has qualitatively analysed benefits and risks of reorganisation for these critical services, and explored how these may be maximised and mitigated.
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Box 01: Overview of local government reorganisation
Currently, local government across England is made up of a combination of unitary authorities and two-tier local government. In the two-tier system, responsibility for service delivery is split, with county councils responsible for functions such as education and social care, and district councils providing services such as waste collection. In December 2024, the government published the English Devolution White Paper, in which it set out its plans for LGR. It has invited all two-tier areas and some unitary councils to submit proposals as part of this. The government plans to complete reorganisation through a phased delivery programme during this parliament. LGR is being carried out alongside wider reforms to children’s services, SEND, the Casey Review of adult social care, and an overhaul of the local government finance system through the fair funding review. Alongside LGR, new devolution arrangements through Strategic Authorities are also being developed, aiming to drive economic growth. In February 2025, the government issued a statutory invitation to the 21 two-tier areas asking them to provide a proposal for LGR in their area: The authorities must be able to achieve efficiencies, improve service capacity, and withstand financial shocks. As a guiding principle, councils have been informed the population size should be 500,000 or more within each unitary authority. However, the government has since stated this is not a hard target, and councils should set out clearly their rationale if the proposed unitary councils are above or below this figure. 5
Unitary authorities must prioritise the delivery of high quality and sustainable public services to its residents, considering the impact on crucial services such as adults’ and children’s social care and SEND. Proposals should show how new structures will improve local government and service delivery Unitary authorities must demonstrate how they have worked together to come to a proposal, ensuring it meets the needs of their residents and is informed by their views. Unitary authorities must be prepared to facilitate devolution in their areas. and should avoid unnecessary fragmentation of these services. Unitary authorities should enable stronger engagement with their communities. This includes detailed plans for neighbourhood empowerment through formal neighbourhood partnerships or area committees. As of June 2025, the government has provided feedback on these interim plans, asking councils to build on their initial work to create final proposals which both meet the criteria and are backed by evidence and data. Councils in Surrey submitted final proposals in May, while councils in six Devolution Priority Programme areas submitted proposals in late September. All remaining areas are expected to finalise proposals by the end of November. 6
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This national report has been developed to provide objective, impartial evidence, and to summarise themes and learning at a national level, based upon bespoke local analysis conducted on behalf of CCN member councils and additional sector engagement. The analysis in this report is intended to provide an input to a much wider debate, to inform and guide developing proposals, ministerial decisions, and planning at both a local and national level.
Further details on the approach to local and national modelling is outlined in Box 2 below and in the Appendices. Alongside these data driven insights, qualitative engagement on the impact of LGR on people-based services was undertaken to further explore the themes of this research. This included a series of roundtable discussions with Chief Executives Officers (CEOs), Directors of Children’s Social Care (DCSs) and Directors of Adults Social Services (DASSs) who have previously experienced local government reorganisation, with workshops also conducted in each of the 19 participating authorities. Moreover, during Summer 2025, a survey was conducted by CCN and Newton with CEOs, DCSs and DASSs across the 21 county councils in England on the opportunities and risks of LGR on people- based services. The survey received 39 responses in total, with three quarters of respondents a current DCS or DASS. Overall, 39% of all county council CEOs responded to the survey, 62% of DASSs and 66% of DCSs.
2.3 Approach
The development of this report was overseen by a Steering Group comprising officers from all participating authorities and involved bespoke research across 19 of the 21 LGR areas in England, plus 16 neighbouring existing unitary authorities. In total, the local programme of analysis examined 77 different unitary formation scenarios, resulting in 205 possible new unitary footprints. The programme’s analysis drew on detailed data returns across adult social care, children’s services, SEND, and home to school transport from each participating authority and some neighbouring unitary councils. Overall, this encompassed data regarding over half a million residents, supplemented by national data returns where required. The expected demand and/or caseload for key people services within each county was calculated across the unitary geographies analysed. The change to the baseline has been calculated as well as the variation between the new authorities within each scenario. This includes a view of how demand and cost of service delivery will split on day one and how this may change over time (until 2040).
2.4 Limitations of this analysis
Given the aims and scope outlined above, it is important to be aware that neither this report, nor the underlying analysis, are intended to provide a comprehensive assessment or forecast of the long-term need for support from authorities’ people services. To enable an informed and comparable evaluation of different options, several core assumptions have been made about levels of potential need for support and factors which may influence this, and these assumptions have been applied to all areas consistently. Local areas will be able to adjust these with their own more detailed forecast modelling if desired.
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Box 02: Approach to national modelling
In the following sections of this report, two forms of analysis are presented:
Regression analysis: A regression analysis of nationally available unit cost data from across all current local authorities in England data was conducted, to examine the key factors which drive the unit cost of care in people services. The analysis explored the relationship between each potential factor and unit cost, whilst holding all others constant. This included demographic factors, such as the level of deprivation, as well as factors specific to the local authority, primarily focussed on understanding the impact of scale and purchasing power. These relationships were then used in the local area analysis. The same approach was used to analyse the relationship with Ofsted and CQC outcomes for the service quality analysis. National analysis: The local analysis carried out for each of the county areas included scenarios of different numbers of unitary authorities, and often multiple variants comprising the same number of unitaries but with different boundaries, according to the options being considered locally. For example, multiple scenarios exist where a county area is considering disaggregation into two unitaries, but with boundaries drawn in different places. In order to aggregate this analysis and produce a national picture, a consistent approach was taken to the number and potential size of unitary councils across different areas, taking into account the size of the population and potential number of unitary councils. Therefore, in collaboration with local areas, a single most realistic and sustainable configuration of 2, 3, 4 and 5 unitary options for each area was selected to provide a basis for consistent and comparative analysis. Depending on the size of the individual LGR geography, if the area had not initially requested these option to be modelled within their local analysis, these councils were asked to provide the most realistic configuration based on local factors. Only areas with a combined population above 750,000 included a three unitary option. Four or five unitary scenarios were only included for geographies with a) a population of more than 1 million people and b) where a four or five unitary scenario was potentially feasible within the geography. Twelve areas with a population below 1 million had the option of a county-wide unitary authority included within the national analysis. This resulted in 58 scenarios and 146 different unitary footprints being selected for inclusion within the national analysis. These scenarios could then be aggregated and summarised to produce the analysis included within this report.
Further details on the approach to aggregating scenarios can be found in the Appendices.
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2.6 A note on aggregation
It is also important to be aware that the analysis conducted does not consider all possible factors for LGR and should therefore not be treated in isolation. For example, the impact of public health, social housing, or additional staffing costs from other teams, such as IT or legal teams, has not been modelled.
The main themes explored in this report relate to the implications of the disaggregation of people-based services, where this is being considered or proposed. Nonetheless, for several county areas where disaggregation is being considered, this is likely to be accompanied by a degree of aggregation of services between neighbouring unitaries and county councils. In these instances, there will be significant areas of the population, mainly those living in smaller, existing unitaries, often in more urban and more deprived areas, who may stand to gain. This could lead to a debate around the extent to which the system is redesigned to favour these populations, at the expense of those living within larger upper tier county council areas.
2.5 Structure of this report
This report begins by exploring officers’ views on the key perceived opportunities and risks for people-based services, based on this programme’s engagement with CEOs, DASSs and DCSs, including with officers from authorities that have previously undergone reorganisation. In Sections 4-8, the report provides deep dives into the impact of LGR on demand, cost, ordinary residence and care supply, senior staffing, service quality and partnerships. Section 9 provides a specific deep dive into the impact of the distribution of High Needs Block deficits. The report ends by making a set of recommended priorities for government and local areas involved in LGR planning, based on the findings from this programme’s analysis.
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Box 03: What do we mean by people services?
Adult social care
Children’s social care
Children’s social care supports children, young people, and families who need additional help to protect children and young people from harm. Its main aim is to keep families together, but when this isn’t possible, the system provides an alternative home to children and young people. The Director of Children’s Services and Lead Member for Children’s Services in local authorities are the key points of professional and political accountability, but the relevant Acts of Parliament also place safeguarding duties on a range of organisations and individuals (including ICBs, police, and education providers). Children can be supported through a variety of measures. This report focuses on these key services: Children in care: The council has parental responsibility of the child and must place the chid in a safe setting. Child protection plan: Compulsory plan when a specific risk to a child is identified. Child in need plan: A non-statutory plan that recognises a need that a child has. Early help: Non-statutory support to families and children considered to be vulnerable and at risk. There is a significant reform agenda underway that will impact the nature of services in children's social care.
Adult social care is the support provided to help adults of all ages, most commonly with physical disabilities, learning disabilities, frailty, mental illnesses, or who experience substance misuse. Local authorities have a legal duty under the Care Act 2014 to assess and meet eligible needs, provide safeguarding, and shape the local care market. The aim is to promote independence, dignity, and wellbeing, enabling people to live as safely and independently as possible in their own communities, with the people and things that matter to them most. In this report adult social care has been split by age group and refers to working age adults (18-64) and older adults (65+). This report focusses on adults who are receiving long-term care. These individuals can be supported through a variety of provisions. For this analysis the report has focussed on:
Nursing care: Specialised nursing support provided in a care home.
Residential care: Support provided in a care home. Supported living: Supporting individuals either in their own homes or shared housing. Domiciliary care: Supporting individuals in their own home with personal care and household tasks. Other: Care that does not fall into the above categories.
Services for children with SEND
Special Educational Needs and Disabilities (SEND) refers to a child or young person who has a learning difficulty and/or disability that means they need special health and education support. This report focuses on young people who are supported by an Educational Health and Care Plan (EHCP). This is a legal document outlining the educational, health, and social care needs of a child or young person with special educational needs or disabilities, aged 0 to 25. Children and young people with EHCPs can be supported in a variety of settings. For this analysis the report has focussed on:
Mainstream: Children and young people supported in mainstream schools.
Maintained special schools (MSS): Children and young people supported in local authority owned special schools.
Independent non-maintained special schools (INMSS): Children and young people supported in independent non-local authority owned special schools.
Other: EHCPs that do not fall into the above categories.
This report does not include statutory SEN support which should be provided by mainstream schools with less oversight from the local authority.
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03: Reorganisation and people-based services: views from the frontline
Building on this programme’s engagement with CEOs, DASSs and DCSs, including with officers from authorities that have previously undergone reorganisation, this section explores officers’ views on the key perceived opportunities and risks for people-based services. This insight is drawn from 1:1 conversations and roundtable discussions in addition to a survey of CCN members.
There is also the potential to unlock a wider strategic ambition , which is more holistic and all-encompassing for each local place, with a more formally unified group of decision-makers who, between them, have access to a wider range of levers to deliver. This can support aligned strategy, policy, and decisions at a place level, whilst also removing blockers and enabling places to achieve this ambition at greater scale and pace. These benefits have the potential to deliver advantages for the whole council, and stakeholders engaged through this programme identified a distinct set of opportunities for people services: The opportunity to work in a unitary organisation with housing services alongside social care can present opportunities for a more integrated approach to service delivery. This includes potentially providing a more joined-up service, i.e. in support of homelessness. Stakeholders mentioned that this may also help align available housing in an area with in-need cohorts such as young people leaving care. It may also enable counties’ land holdings to be used for housing and specialist housing, depending on local needs. The data held by lower tier authorities holds significant value in supporting the proactive identification of ‘at risk’ cohorts within a place , and early intervention to prevent need from escalating. Many stakeholders agreed that LGR offers an opportunity to better connect this data and leverage it.
3.1 The perceived opportunities
Service delivery currently often requires collaboration between district and county colleagues, and this can present barriers in terms of ensuring organisational, cultural, and financial alignment. As a result, the primary anticipated benefits associated with reorganisation include improved efficiency of delivery; simplicity and clarity of local accountability; and enabling further devolution of power regionally and locally. Officers engaged through this programme emphasised that perhaps most importantly, reorganisation could act as a springboard for transformation, encouraging new and innovative models of service delivery and collaboration as tiers of government are brought together, while leveraging the opportunities for deeper public service reform and integration with health, police, and the voluntary sector. Officers spoke of how this opportunity can bring with it the ability for leaders to focus more on place , with a wider set of services within a single organisation providing more ‘levers’ to influence the local place through effective service delivery for residents.
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Survey findings - opportunities
In some instances, lower tier authorities have access to community assets , which can be leveraged to support the delivery of key people services. For example, these assets could be used in partnership with the NHS to provide neighbourhood facilities to better manage demand for health and care support at a very local level. This is in line with the government’s ambitions to create a neighbourhood health and care service.
Three quarters of respondents to the programme’s survey agreed with the
statements that they were ‘very excited’ or ‘cautiously optimistic’ about the possibilities that reorganisation offers for people-based services, but only if it is delivered in the right way. Ensuring the right number and population scale of unitary authorities was regarded by respondents as key to being able to unlock the benefits of reorganisation for people- based services.
Figure 1: Which of the following statements in relation to LGR and the impact on people-based services do you most agree with? Please rank 1-4, with 1 being the one you agree with most.
Ranked #1 (most agree)
Ranked #2
Ranked #3
Ranked #4 (least agree)
100%
20%
40%
34%
20%
80%
23%
23%
31%
60%
26%
46%
54%
40%
14%
17%
20%
20%
17%
11%
0%
I am very excited about the possibilities and potential benefits of service integration it offers
I am cautiously optimistic about the possibilities it offers, as long as it is delivered in the right way
I am predominantly pessimistic about it, due to the associated risks from disaggregation
LGR could be a distraction which
takes resources way from service delivery and improvement
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The programme’s survey showed a consistent view amongst senior officers that the greater the number of councils, and the smaller the population of those authorities, the lower the perceived benefits. This was particularly stark in relation to benefits such as improved integration of key services; achieving better service outcomes and service delivery; the delivery of financial savings; and crucially, putting in a place a stronger platform for service transformation in the future.
Across nearly all questions in the programme’s survey to senior officers, respondents consistently rated scenarios with a lower number of unitary authorities as more beneficial than those with a greater number. This suggests a strong belief that consolidating governance into a small number of unitary councils could lead to clearer accountability, better integration of services, and more strategic alignment.
Figure 2: How significant do you believe the following potential benefits are from LGR on people-based services in your area? For each of the potential number of unitary authorities, please score the level of potential benefit. Please only answer four or five unitary councils if the total population of the area involved in the reorganisation within your area is above 1 million. (A positive % represents a beneficial score).
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3.2 The perceived risks
Demand variation
Councils evaluating their options and embarking on reorganisation need to be aware of the potential risks and costs posed to people-based services by LGR. Reorganisation proposals, including the aggregation of existing unitary councils, will create new authorities with new demand profiles and cost-bases, and will change the interaction and relationships with care markets and wider public service providers. Previous research by CCN and PwC has shown that the population of new unitary council areas will have the single biggest impact on the potential efficiency savings from unitarisation in England, due to the costs of splitting up and duplicating social care services into multiple smaller councils. CCN analysis of PwC data showed that replacing the 21 existing county councils with 58 new unitary councils based on a population threshold of 300,000 would create £3.7bn of disaggregation costs over five years, including £501m of permanent disaggregation costs. In contrast, creating 29 unitary councils based on a minimum population of 500,000 would reduce disaggregation costs to £1bn over five years, with £134m of permanent disaggregation costs. 8 However, officers engaged through this programme were clear that the challenges associated with disaggregation encompass a host of wider issues which are likely to impact the quality and efficiency of people- based services on an ongoing basis, beyond the one-off impact of reorganising. The risks identified through this engagement included: 7
Demand profiles are highly varied across county areas . Disaggregation may concentrate high levels of demand in certain areas, driven by variation in deprivation, access to other services, and demographics. Unless this is well understood, stakeholders engaged were concerned that this poses a significant sustainability risk if there are insufficient resources to meet current and future levels of demand.
Care supply
Uneven distribution of demand and care supply is perceived to create significant risks relating to placement sufficiency , and ordinary residence when disaggregation occurs, and responsibility for a person’s care is attributed to their current placement address, and this falls into a different unitary authority than their original home address. This is expected to cause a mismatch in care supply, demand, and capacity in new authorities, introducing additional cost, operational and administrative complications, and costly legal disputes.
Cost of providing care
The unit cost of commissioned care is expected by officers to be affected by scale and disaggregation - stakeholders were concerned that disaggregating existing authorities into smaller authorities may reduce purchasing power and increase the cost of commissioned care.
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