The analysis below demonstrates that there is a greater level of variation in the level of risk as the number of unitary authorities increases (and the scale of these reduces). This analysis is sensitive to the current level of deficit; how this deficit is apportioned based on historic demand; and the future demand trajectory. Whilst there is significant variation in the starting point of each authority, for some newly formed unitary authorities, their inherited High Needs Block deficit will be much larger in comparison to their potential budget than for their neighbours.
This is particularly the case where a larger number of unitaries are being created in an area and suggests significant financial inequality being created, which may demand disproportionate and unevenly distributed savings to be delivered in the future.
This analysis is summarised in Figure 32 below.
Figure 32: Average variation in ratio of 2040 spend to inherited deficit by number of unitary authorities
4%
3%
2%
1%
0%
2
3
4
5
Number of unitary councils
75
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