All change on local government reorganisation

Until just over a week ago, almost all councils knew where they were going with local government reorganisation (LGR). The government had made the boundary decisions, and within authorities, intense work had been underway for quite a while to prepare for unitarisation. Despite several changes to local elections, new unitaries were set to come into being in 2027 and 2028.

It is entirely natural for those businesses that need to engage with local government to be wondering just what is going on. Officially, LGR decisions are “paused” or “withdrawn”, there will be a review, and the government is still committed to LGR. Any local elections scheduled for 2027 will go ahead on existing boundaries. Beyond that, the future is uncertain. There is no information on when the review will report back, and there is no commitment to one or other model of local government. Making assumptions here would be a fool’s errand, though the safe bet is to maintain engagement with the key players and position yourself before the change comes.

In effect, LGR is cancelled because the government received legal advice that the process challenges from councils including Essex County, Harlow, and Hampshire would be successful. In what we heard from the Secretary of State for Housing, Communities and Local Government, Angela Rayner in her statement and then Q&As in the Commons, the government would have preferred not to reverse at this late stage but does see the opportunity to make the structure of local authorities better match the devolution agenda.

There are a number of ways this could play out. The two key questions are: Will any new LGR decisions use the same criteria as before, or a new set? And what is the effect on devolution?

Despite government claims to the contrary, LGR could be kaput. It will be difficult to get it all done before the next election; manifesto promises on LGR would lock in its delivery but could be risky; and any change of government would do for it.

Redoing the process with the same conclusion is always an option with judicial review challenges. This could be the case for the proposed boundaries even if the government wants to move where certain services sit (Burnham has mooted social care as a regional issue). This, however, would require much political will and not solve the issue of opposition to the decisions.

Another possibility is a mixed picture: where there is widespread agreement, LGR goes forward, and elsewhere it does not. Digging deeper, LGR may not even have to be unitarisation (it was not stated by Rayner), and the two-tier structure could survive some boundary changes or increased responsibility to the regional level.

In theory, devolution requires unitarisation. But this can be changed. The legislation which made the devolution roll-out a reality earlier this year gives a role on the Strategic Authority Boards only to top tier councils (county and unitary, then unitary only post-

LGR). Without unitarisation, the nascent foundation authorities would continue with the current membership, unless the legislation was changed. While the government is committed to the fullest “Established Mayoral Strategic Authority” model of devolution where possible, it could also keep at “Foundation” stage those areas which do not agree to LGR.

For now, our advice is don’t worry about the boundaries of a possible new LGR arrangement. This is all speculation, and on an unknown timeline. LGR is not the Burnham government’s passion. Devolution is, and the December 2024 White Paper explicitly used Burnham’s Manchester as the ideal model. LGR is a lot of work, but in itself doesn’t move the dial on planning and development. For developers (and other businesses) it is the devolved authorities that will set the policy agenda, and provide opportunities of funding, strategic support and joined-up thinking.