Local government reorganisation (LGR) and devolution

What is local government reorganisation and why is it happening?

The Government wants to make councils more efficient and ensure that they can use additional devolved powers to improve their areas, accelerate economic growth and make life better for residents. To do this, it wants to replace existing county, district, borough and smaller unitary councils with larger unitary councils, covering populations of around 500,000 inhabitants.

On 7 September, the Government announced an immediate pause to the LGR process in Staffordshire and Stoke-on-Trent. It said this was in order to listen to concerns which have been raised in some parts of the country which are also delivering reorganisation, and to ensure that the LGR decisions announced in July align with the new government’s policy aims. We do not yet know how long the review will take, what it will entail, or whether it will lead to any changes to the proposals for LGR in Staffordshire and Stoke-on-Trent. However, we are working closely with the Ministry for Housing, Communities and Local Government (MHCLG) to obtain more clarity about this process and possible implications for our area. In the meantime, we remain committed to working with our partners and communities to secure the best outcomes for people and businesses in Stoke-on-Trent. Regardless of what may be happening elsewhere, we believe that the proposal for a single North Staffordshire Unitary Council remains the best option for our area and will continue to work with the Government to make this happen.

Will LGR definitely happen?

While the Government has decided to pause the LGR process in 14 areas, including Staffordshire and Stoke-on-Trent, it has not given any indication that it will discontinue the work that has already been undertaken. On the contrary, MHCLG has said that ministers still intend to deliver its LGR plans within the lifetime of the current parliament (i.e. before 2029). The review which was announced on 7th September is about examining specific issues which led to LGR decisions being reversed in four areas of England where opponents were mounting legal challenges to LGR proposals and taking steps to ensure that other decisions are legally safe to implement. It is important to stress that the pause and review are not an indication that there are any issues with the legality or practicability of the proposal that was chosen for Staffordshire and Stoke-on-Trent. This remains the most viable option and the best opportunity for North Staffordshire, and is one that the City Council will be working with the Government and other local authorities to progress.

What will LGR look like in Staffordshire?

The Government has chosen the model of local government proposed by the City Council, in conjunction with councils in Stafford, Cannock Chase and East Staffordshire. This will replace Stoke-on-Trent City Council, Newcastle-under-Lyme Borough Council and Staffordshire Moorlands District Council with a new North Staffordshire Unitary Council, serving a population of almost 500,000 people.

To the south, a new Southern & Mid-Staffordshire Unitary Council will be created in place of the remaining six district and borough councils in Staffordshire to cover an area with well over 600,000 inhabitants. Staffordshire County Council will also cease to exist, with services and functions transferred to the new unitary councils.

These new structures have been chosen because they reflect existing recognised geographical areas and distinct local economies, as well as the unique cultural identities of the two areas. More importantly, they align with the reality of how people in these areas live their lives on a day-to-day basis as they travel between home, work and education, and access public services and leisure and social activities.

What benefits will this model of LGR bring?

Independent analysis has consistently demonstrated that a two-unitary model is the most economical and pragmatic solution for LGR in Staffordshire because it will create councils which will be large enough to generate significant economies of scale, while being small enough to deliver local services well and represent the local economies and individual communities they serve.

North Staffordshire is already a recognised geographical area with its own functional economic area based around the urban core of The Potteries, with Stoke-on-Trent driving much of the economic, employment and productivity growth within this informal city region. Similarly, southern and eastern parts of Staffordshire share different economic strengths and characteristics and much closer economic ties to the West Midlands.

The chosen model of local government will enable both areas to focus on these distinct economic characteristics and opportunities, investing in vital infrastructure and skills to support sustainable development and growth for decades to come.

In addition, detailed forecasting has shown that the North / Southern & Mid Staffordshire model will entail the least cost and disruption to local services and residents, while providing the strongest base for future transformation that will help to put local government on a much firmer and more sustainable financial footing in the future.

What will happen now?

The Government has said that it will be working “at pace” to review all the LGR decisions it made between March and July, including the one to create two new unitary councils in Staffordshire and Stoke-on-Trent. It has said that a report on this review process will be brought before Parliament “at the earliest opportunity”. It also said that it does not want this to lead to an “extended” delay. However, the decision to revert to council elections on existing authority and ward boundaries in May next year indicates that issues are unlikely to be resolved quickly enough to enable adequate planning and preparation for the previously proposed shadow council elections. All the affected councils are seeking urgent clarification regarding the timetable for the review, and we will provide an update when we know more about this.

In July, the Government chose the preferred model of LGR for Staffordshire. Assuming that this remains the proposal following the current review, local councils will work with the Ministry of Housing, Communities and Local Government (MHCLG) to develop and refine a Structural Change Order (SCO) – a piece of legislation which will pave the way for the existing councils to be dissolved and replaced with the new unitary authorities. This will set out the key requirements, steps and conditions involved in setting up the new councils, and how they will operate. The SCO is likely to be laid in Parliament before the end of this year.

Once the SCO has been passed by Parliament, existing councils will work together to establish shadow councils for the two new unitary authorities. These will initially be governed by joint committees which will oversee preparations for the establishment of the unitary councils. Shadow councils are expected to be in place next year, and local elections in 2027 will elect Members to the shadow councils, rather than existing councils.

On 1st April 2028, the new councils will ‘go live’, formally commencing operations and taking responsibility for service delivery, resources and decision-making across the new council areas. Until this point, existing councils will continue to work closely together to plan for the transition, minimising disruption and ensuring that the new councils are able to operate effectively on vesting day.

What does this mean for the finances of the new council?

One of the most important advantages of the North/Southern & Mid Staffordshire LGR model is that it will rebalance the economic, deprivation and demand profiles of local areas, distributing wealth and resources more evenly and fairly. Because of economies of scale, it is forecast to deliver the highest return on investment and save Staffordshire taxpayers up to £29.9 million a year after the first three years.

The City Council has made no secret of the fact that it has applied for, and been granted, Exceptional Financial Support from central government in recent years. It was among 35 English councils to receive EFS this year. This is primarily due to a structural lack of reserves due to the flawed way that the council was created in the mid-1990s, combined with higher levels of demand for frontline services. Compared to other councils in Staffordshire, the city’s debt levels appear much higher; however, comparison with other unitary councils operating in similar areas show that the city’s debt levels are average, as the table below illustrates.

How the city debt levels compare with similar urban authorities

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Is LGR going to create a ‘Greater Stoke-on-Trent’ which swallows up other areas?

No. All of the existing councils in Staffordshire are going to be dissolved and replaced by brand new unitary authorities. This includes Stoke-on-Trent City Council and Staffordshire County Council. In North Staffordshire, the City Council, Newcastle-under-Lyme and Staffordshire Moorlands will all work very closely together to address local needs and concerns and ensure that the new council is able to serve the interests of all of North Staffordshire’s residents and communities.

Will there be any disruption to local services during this process?

Moving from 10 councils to two unitary authorities will be a huge challenge. However, councils were required to develop detailed plans to manage this transition as part of their proposals for local government reorganisation. Councils are already working collaboratively to develop plans which minimise disruption and deliver a seamless transition to the new systems, while keeping residents and businesses informed about any changes.

What is devolution and how will it work in Staffordshire?

Devolution involves transferring some powers and funding from central to local government. The aim is to enable local government to address major challenges more effectively and grow their economies.

The Government has not announced a timetable for devolution in Staffordshire, but as soon as a decision is made work will begin on the establishment of a new Strategic Authority which is likely to cover the whole of Staffordshire but could extend to adjoining areas. The Strategic Authority will receive the devolved powers and funding from central government and will work with the new unitary councils to help deliver sustainable economic growth.

Does this mean Stoke-on-Trent will not be a city? We will lose our Lord Mayor?

Stoke-on-Trent will continue to be a city with a Lord Mayor. These are both important to the people of Stoke-on-Trent, and to us. There are different ways of preserving our city status and Lord Mayor under the changes. The details of LGR in North Staffordshire will be contained in a structural change order issued by the government. There will also be a supplementary structural change order which will deal specifically with this issue.