Local Government Reorganisation: South-east

Debate between Alison Bennett and Peter Lamb

Tuesday 10th March 2026 Westminster Hall

[Peter Lamb (Crawley) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Vickers.

Local government is an area of great interest to me. I did my master’s dissertation on models for English devolution; I have worked at the UK’s leading think-tank on devolution; for 17 years I worked as an adviser to local authorities, and I have served in local government in a county council and a district council, including almost a decade as a council leader. From 2015 onwards, I have also been involved in various devolution proposals for Sussex in one way or another.

I say all that because, despite that background, I still cannot get my head around what the Ministry of Housing, Communities and Local Government is trying to achieve with all this. That is despite talking to the director at No. 10, special advisers and Ministers on this policy area. In fact, the more I delve into it, the more opaque it becomes.

My understanding is that this reform all kicked off with Angela Rayner and Rachel Reeves—two people without any background in local government—making a deal: more money now, in return for local government reform. The only reason they thought it would deliver any results was that the County Councils Network had, for many years, been putting forward a document that seemed to set out a case that there would be financial savings if county councils were merged at the unitary level.

Those figures relied on population sizes of roughly half a million people—that figure is critical; I re-read all the statements made by local government Ministers on this before this debate, and it is a figure that has been repeatedly stated and was consistently pushed for the better part of a year. The reason was that, when we look at the County Councils Network figures, the £2 billion savings it talked about delivering, which it presented as if it were an annual statement—it is not, it is over five years—are achievable only when dealing with population sizes of 500,000 or greater.

The problem, when we come down to it, is this: for the Labour party, that is completely unelectable. We have pockets of support within the south east, but we do not have larger footprints. With the politics unravelling around this question, we have started to talk about smaller sizes for unitary authorities, but here we run into a problem: unitary authorities do not save money. Merging existing councils saves money. We could merge districts together—that would save money. We could merge counties together—what an idea!—and that would save money. We could merge existing unitaries together—that would save money. However, when we start creating unitaries, we are merging two different tiers together; if that is a smaller footprint than existing upper-tier authorities, it will always end up costing more money than the alternative.

We now have a proposal that will not deliver politically or financially. I will return to the finances in due course, because the situation is much worse than people think it is. This proposal is somehow still on the table long beyond the original document that set this all out. If there are other figures on this then, like the hon. Member for Surrey Heath (Dr Pinkerton), I would be delighted to see them. I have asked for them repeatedly. However, when Governments do not release data, we come to the conclusion that they do not have data that backs up their case. The evidence base here is very hard to find.

The other argument that comes up very frequently is that two-tier areas are too complicated and people do not know who runs what. I have lived in two-tier areas essentially my entire life, apart from when I was at university, and that is not something I have come across, despite being in roles where I might expect to come across it very regularly. If we say tiers are a problem, adding mayors across the country and encouraging people to set up third-tier authorities increases the total number of tiers at the local government level. It adds to the complexity rather than decreasing it.

We hear bizarre arguments about issues such as waste collection and waste disposal authorities, as if the idea that someone collects the bins and someone gets rid of them is complicated. What particularly grates my gears about that argument is that there are many unitary authorities that are not waste disposal authorities. Take the Thames valley waste authority as an example—take Greater London—take Greater Manchester: in all those areas, waste is collected that is then disposed of on a larger footprint. There are many such areas where the powers do not perfectly align, and people manage to get through them without any great deal of controversy.

The argument for much of this change, particularly with the mayoralties, was that we were would get wider public sector reform, which would deliver astounding savings. The problem with that argument is that the footprints that the change was supposed to create would align the mayoralties, the police authorities and the integrated care boards, so that we would get all the services in one area and they could deliver efficiencies. However, we are now talking about creating police authorities on a larger footprint than the existing mayoral footprint, so the two would no longer correspond. There will be a much more complicated structure now, with deputy mayors sitting on different boards in relation to it. Similarly, the ICBs have had to expand, so they no longer go along with the devolution footprint.

The only form of public sector reform that we can now carry out around this process is reform of local government on its own, and that will not deliver the projected savings. Most of the areas that a district council deals with and most of the areas that a county council deals with do not interface in any meaningful way when it comes to savings. If they did, the County Councils Network report, which it paid PwC to produce in order to create the strongest possible case for reform, would have put that forward. Instead, the report solely states that savings can be made by reducing senior officer numbers. As anyone who has been involved in the sector knows, many of those posts no longer exist in the numbers that they did at the time that the PwC report was formed. At this point, such figures simply do not exist.

The only people I can find who have any difficulty with the idea of two-tier areas are civil servants and politicians from unitary authority areas. One might imagine what other people might feel if we went to their areas and tried to impose our culture upon them. There has also been the claim that these reformed authorities will be engines for economic growth and housing delivery, but let us think about it in this way: I was the leader of a local authority that delivered over four times our Government-assessed numbers for housing, whereas—unfortunately—Mid Sussex district council, which was previously under Conservative control, often did not even have a core strategy for that entire period, never mind delivering any actual housing numbers.

We are about to create unitaries where the areas that deliver large volumes of housing, and that need such housing at an affordable rate, will be swamped by rural communities. What do we think will be the dominant factor in these new authorities, where the politics is controlled by rural communities? Will it be a focus on economic development? Will it be a focus on housing delivery? Or will it be stamping down on those two things, as we have seen time and time again? This plan does not deliver on the Government’s missions; it kills them off, as many Members have tried to point out in recent times. The reality is that demography is destiny, and rural communities will have control over those authorities.

Returning to the issue of finance, in my area the actual cost of the merger is estimated as three times greater than the estimate put forward so far. In fact, even on the most optimistic assumptions, on these footprints no savings would be delivered until the end of the next Parliament—but it is more likely that there would not be any saving at all. In fact, the situation gets even worse than that. Who knows when most of the country’s leisure centres were built? I will give Members a clue—it was in the early ’70s. What happened in the early ’70s? We merged all the district councils, and they looked at their accounts and said, “I am not handling this over to the next council”, and they got busy spending.

We can see that in the country currently. The reality is that, until the protections come in with the new authority, people will be getting money out the door. Debt is going up, budgetary decisions are being postponed and savings are being put off in order to invest in local communities while there is one last chance to do that. Over the next 12 months, section 114 notices are far more likely than in any preceding period.

I will move on to the issue of democracy. Resident satisfaction surveys of local authorities have consistently shown a positive correlation between the perception of a local authority and the size of that authority. It is not the other way around, as though suddenly authorities delivered much more effectively when they got to a much greater footprint—why would that be the case? More remote Government is not necessarily going to make people any happier.

Currently, the average size of authorities in the UK is seven times larger than not the European average, but the authorities in the European country with the next largest—and this programme will make our authorities 14 times larger than those. Why are we such an outlier? Why are councils in Europe, which have far greater powers and far greater money than we do, apparently perfectly capable of running their local areas, while in our areas we have to bring things up to a central Government level? Again, I think that the civil service has far more to do with this programme than any actual rational thought does.

The changes will also prevent people from having any meaningful relationship with councillors. In the UK, we are far less likely than in any other part of Europe to have independent councillors. The reason is that with footprints of this size we cannot build a meaningful relationship with a councillor. The distance cuts people off from their democracy and any sense of control, and increases their scepticism. Conversations about area committees are frankly meaningless; anyone who has actually worked with those structures knows they do not replace meaningful representation.

The fundamental problem we will run into is geography. When we strive to get population sizes in rural areas, we come up with enormous geographies; for my patch, we are most likely talking about an area in excess of 50 miles wide. Greater London is just over 30 miles wide. What common interests can exist in that footprint? What common services? What common identity? We will end up with competition between the different communities in those areas, and policy will be driven by those communities whose voices are heard loudest in whatever administration is in control. That will, again, mean that the rural beats out the urban. Urban communities such as mine, which includes some of the most deprived parts of the country—certainly in the south-east, at least—will lose out as a direct result of the restructure.

There are 71 Labour constituencies that trusted us at the last election, but that will see their quality of life decline as a direct result of the policy as well. When we look at the numbers, it might well be that if the Labour party, sacrificed those 71 constituencies, it would never be in office again. I am sure that Opposition Members would be delighted; it is why I thought they would be pushing the policy, not the Members on the Labour Benches. Talk to any Labour party organiser and they will say that the policy undermines our organising model. They are up in arms.

Most Labour Governments in the last century would not have happened had there been a reform such as this. We are arguing for a policy that no longer reflects the principles on which it was first brought together. It no longer reflects the same goals: it will not save us money, it will be more remote and it will undermine the deprived communities that this Government are allegedly in place to serve. It is clear that the advice given to Ministers in MHCLG is poor; we have seen that in just one month, with fair funding miscalculations that took place, and we have seen that with the elections, with the conclusions that we now all have to deal with.

Having been through the detail of the policy over and over again, I cannot see any way that it is not another example of that poor advice.

[Alison Bennett]

I am very much appreciating and enjoying the hon. Member’s contribution to the debate. Can I suggest that, when it comes to getting local government in England on a sound financial footing, the real elephant in the room is putting social care on a financial basis so that councils can deliver decent social care to our communities?

[Peter Lamb]

There are three areas, and social care is one of them. The finances of upper-tier authorities have been totally compromised, initially by the costs of social care, where we have still not taken decisions all these years after the Dilnot review. We all know that social care is slowly bankrupting councils. Go to any single council presentation on local government finance—whether a unitary or upper-tier authority—and that is the thing that will be mentioned.

Then there is SEND, which again has absolutely crippled local authorities’ funding to the extent that we allowed them to keep it off their books because the cost would have bankrupted them. That has now been taken away from them to be covered centrally, so that is one less problem to deal with.

Lastly, there are the costs of temporary housing, which housing authorities, like the districts, are mandated to provide. They have no control over it, and are often dealing with the consequences of central Government decisions that move more people into the area and create that level of housing need. However, those costs ultimately stem from a failure of housing policy in this country.

Those are the three areas bankrupting local government. Despite the fact that local government started out as the most efficient part of the public sector and has become still more efficient since, taking sensible decisions to maintain its survival, it cannot deal with pressures that are not being dealt with centrally. If we deal with those three problems, local government finance problems will go away—but they are central Government’s problems to resolve, and we have not yet quite resolved them.

I accept that all that is in motion, but when I talk to people in local government, very few of them want this policy. The reality is the boundaries are most likely going to end up lasting for another half a century—just look at the pain we are going through now; we are not going to want to go through it all again. We should not be embarking on something that will last 50 years when we cannot publish the evidence base because it is so weak. A pause is now needed to reflect on these proposals. I will continue to argue more and more loudly for that, adding more and more things to the debate about the best outcome here. I say to Ministers, “You’ve inherited a mess from other people; it wasn’t of your making and I really wouldn’t jeopardise your careers seeing this through.”