A linear multivariable regression model was used to identify the trend in this dataset and a statistically significant correlation was found between smaller authority population sizes and higher unit costs, in combination with these additional factors. As the population size, IMD and median income for each geography are known, it was possible to calculate the expected increase or decrease in cost by varying the population size, predicted IMD and predicted median income in the model compared to the baseline scenario. For each proposed authority, a relative cost factor was then calculated that could be applied to each unitary to calculate the expected unit cost. For where neighbouring unitary data has been provided, the step-up factor has not been applied in the baseline case. This has been applied to Adult and Children's placement costs but not to SEND or Home to School Transport.
Service quality regression analysis
A regression model was developed to isolate the impact of scale on the ratings provided for children’s services by Ofsted, and for adult social care by CQC. Controlling for authority location, deprivation and median income in this way indicates whether the probability of an authority achieving good or outstanding changes as the authority size changes. The sources for population size, median income and deprivation are as shown as part of the unit cost regression analysis. CQC and Ofsted ratings available in September 2025 were also used. A linear multivariable regression model was used to identify the trend in this dataset and a statistically significant correlation was found between smaller authority population sizes and lower probability of achieving good or outstanding ratings, in combination with these additional factors. As the population size, IMD and median income for each geography are known, it was possible to calculate the expected increase or decrease in cost by varying the population size, predicted IMD and predicted median income in the model compared to the baseline scenario. Within the bespoke analysis provided to each local authority, an indication of the likelihood of a new authority achieving a good or outstanding rating based on its likely characteristics has been calculated, based on the new unitary sizes. This gives a score of 1 – 4 which relates to the probability of achieving inadequate (1) to outstanding (4).
This relationship is summarised and presented in the national report.
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