Population scale
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.
Figure 22 below shows the relationship between local authority scale and unit cost, and demonstrates that the larger the population supported, the lower the unit cost. For every additional 200,000 population, the unit cost will reduce by 1%. This is likely due to the increase in purchasing power for the local authority. Whilst this may appear a small relative change, where disaggregation takes places, the population of new unitary councils will reduce by many hundreds of thousands of residents compared to the existing county council, depending on the size of the LGR geography and the number of proposed unitary councils. This will mean in the largest counties, this could result in populations reducing by a million or more residents.
Figure 22: Impact of scale on unit cost of care
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