Council Mergers Save the Back Office. They Don’t Save the Service.

England is replacing 134 councils with 38 new unitary authorities by April 2028. The government’s case is simple: merge the organisations and you get, in its own words, “one planning team, one finance department, one set of senior leaders instead of many.” Fewer organisations should mean fewer duplicated overheads, and fewer overheads should mean lower cost. That logic isn’t wrong. It’s just badly incomplete, and England ran the experiment that proves it less than two decades ago.

What 2009 actually showed

Nine new unitary councils replaced dozens of county and district authorities in 2009, the last comparable exercise. Wiltshire Council, formed from a county and four districts, is the case most often held up as a success: transition cost £18 million, reported savings ran to £68 million between 2009 and 2013, and back-office costs fell from 19% of the predecessor councils’ combined budget to 9% of the new one’s. That’s real and checkable. It’s also, on its own, misleading.

Academic research on the full 2008-09 cohort, led by Rhys Andrews at Cardiff University, found the same pattern across the group: administrative savings materialised fairly reliably, but savings in the services themselves, social care, waste, planning, were rarely achieved, and the financial resilience of some of the new authorities weakened rather than improved. A separate academic critique of the 1990s reorganisation, by Michael Chisholm, found the same mechanism working in reverse on cost: the transition estimates given to Parliament at the time were serious underestimates, and the savings ministers had promised never fully appeared. Two reorganisations, two eras, one result: back offices merge easily. Services don’t, unless someone makes them.

Why the split happens

The reason is mechanical, not political. Merging six HR teams is a governance decision: pick a system, migrate the payroll, done. Merging six ways of assessing an adult social care case, or six sets of planning validation rules, or six children’s services thresholds, is a redesign job: someone has to see how the work actually moves, choose which version is right, retrain the staff, retire the other five. Nothing about creating a unitary authority does that automatically. A council that inherits six planning departments and calls it one hasn’t redesigned anything. It has moved the inefficiency into a bigger building.

This wave starts from a weaker position

The current programme isn’t starting where 2009 started. English councils’ spending power fell 24% in real terms between 2010/11 and 2019/20, according to the Institute for Government, and even after the funding increases planned for the rest of this decade, it’s projected to still sit 2.7% below 2010/11 levels in real terms by 2028/29, the year the new authorities go fully live. Section 114 notices, the local government equivalent of a bankruptcy filing, tell the same story from a different angle: after 18 years without one, councils issued a fresh run of them from 2018 onward, among them Northamptonshire, Croydon and Birmingham. That’s eight years of a sector with steadily less room for anything beyond keeping statutory services running, which is exactly the room redesign work needs.

The transition funding reflects that squeeze. Each new authority gets a minimum of £900,000, plus up to £150,000 for leadership continuity in children’s and adult social care. Wiltshire alone spent £18 million getting one merger right in 2009, which puts today’s baseline grant at around 5% of what the last comparable exercise cost, before adjusting for inflation. The Local Government Association has said as much directly, warning the funding “falls well short of the costs seen in previous reforms.”

There’s a second gap underneath the whole business case. When the BBC used a freedom of information request to ask what independent analysis government had done on the cost and savings of this reorganisation, the answer was none. The responsible ministry confirmed it had relied entirely on a report commissioned in 2020 by the County Councils Network, rather than assessing the numbers itself. That report originally put potential savings at £2.9 billion over five years. Its own authors have since revised it, with some smaller unitary configurations now projected to deliver no savings at all, and in some scenarios to cost more than they save. The figure underpinning the whole programme moved. The government’s evidence base didn’t move with it.

Somerset shows what happens when the money runs out before the redesign does. Ahead of its 2023 unitarisation, Somerset County Council projected £18-28 million a year in savings from replacing six councils with one, a figure the leaders of the five districts being abolished called unrealistic at the time. They had a point: within the same year the new Somerset Council went live, it needed a further £40 million in savings to close a budget gap, and was warning of the same bankruptcy risk that the merger had been sold as fixing. The LGA’s own list of concerns about the current programme makes the forward-looking version of the same point, warning of “some areas ready while others will not be,” with no sign government will adjust the 2028 timetable to match. Ministers’ answer is that councils can bid for extra funding locally. That assumes finance and transformation teams already managing rising social care and SEND demand have spare capacity to write bids and run redesign work at the same time. Most won’t.

The verdict

Reorganisation isn’t a bad idea. Merging six back offices into one still saves money reliably, the way it did in Wiltshire and across most of the 2009 cohort. The mistake is treating that as the whole business case. Councils that use the next 18 months to redesign how casework, planning applications and care assessments actually move through the organisation will bank savings close to what ministers have promised. Councils that spend the period on governance charts and structures, leaving the underlying processes as six parallel versions of themselves under one crest, will end up with a bigger organisation carrying the same inefficiency it had before, with less money and less time left to fix it.

Sources

• GOV.UK: 14 more areas to benefit from streamlined local services (16 July 2026)
• House of Commons Library: Local government reorganisation 2026 (CBP-10494)
• House of Commons Library: Unitary local government (CBP-9056)
• Institute for Government: Local government funding in England
• Institute for Government: Local authority section 114 (bankruptcy) notices
• Local Government Association: Councils raise alarm over Local Government Reorganisation delivery challenges
• LocalGov.co.uk: Government skipped own cost review of council mergers
• BBC News: Scrapping Somerset councils ‘may save £28m a year’ (2018)
• BBC News: New Somerset Council to make £40m of savings over budget squeeze (2023)
• Financial Accountability & Management (Wiley): Can Coercive Vertical Consolidation Improve the Financial Condition of Local Authorities? (Andrews)