Briefing Note 06-07-20
Summary of Legal/Procedural Considerations Arising from Local Government
Reorganisation
The Legal Framework and Criteria for Approval of Proposals for Reorganisation.
The legislation that facilitates changes in local government structure and boundaries is now
the Local Government and Public Involvement in Health Act 2007 (the 2007 Act).
There are two procedures under the 2007 Act relating to local government restructuring:
i)
Invitation by the Secretary of State for proposals for single tier of government; and
ii)
Following a review by the Local Government Boundary Commission for England
("LGBCE").
The second of these isn’t relevant to this situation and as such the note focuses on the first
of these procedures, and Invitation by the SoS.
Most Recent Criteria for SoS to Exercise Power to Issue Invitation
In 2019 the former SoS for Housing Communities and Local Government set out in a written
statement to the Commons the specific circumstances in which he would be prepared to
issue a formal invitation to councils under the Local Government and Public Involvement in
Health Act 2007, to submit proposals for the establishment of new unitary councils.
The following is an extract from that statement which details the circumstances in which
they would consider issuing an invitation to a Local Authority under route i) mentioned
above.
“There are two circumstances in which I will consider issuing such an invitation.
The first circumstance is where the following two conditions are met:
1. There is a local request for an invitation.
2. That I consider that the request demonstrates local opinion is coalescing
around a single option which is reasonably likely to meet the existing publicly
announced criteria for unitarisation.
In forming my view I would carefully consider the request, including the groups making
and supporting it and their reasons for so doing. Where I issue an invitation, I would
do so to all those councils that I consider to have regard to the area concerned, whether
or not they were among those who had made the original request.
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The second circumstance is where I consider that doing so would be appropriate given
the specific circumstances of the area, including in relation to the long-term
sustainability of local services. This is the situation in which my predecessor, the Rt Hon
Member for Bromsgrove (Sajid Javid), issued an invitation to the councils in
Northamptonshire.
The statement then goes on to set out what happens if an invitation from the SoS is issued to
the Local Authorities.
Following such an invitation, it would be for the councils concerned to decide whether
to develop and submit proposals for unitarisation, either individually or jointly by two
or more councils.
I confirm that I will assess any locally-led unitary proposal that I receive against the
criteria for unitarisation which we announced to Parliament in 2017 and which I and
my predecessor have consistently used since then. These criteria state that subject to
Parliamentary approval a proposal can be implemented, with or without modification,
if I conclude that across the area as a whole the proposal is likely to:
•
improve the area's local government;
•
command a good deal of local support across the area; and
•
cover an area that provides a credible geography for the proposed new
structures, including that any new unitary council’s population would be
expected to be in excess of 300,000.”
Reference is made to the above because it is the most current statement of the approach
and criteria (highlighted) which has been set out by the SoS and it seems likely that a similar
approach would apply in future.
Process – From Request to Implementation
There are 5 stages in the process,
• Councils request to SoS to invite them to submit a proposal.
• SoS considers request and decides whether to invite councils to submit a proposal.
• Councils submit proposal including business case and evidence of consultation.
• SoS decides whether the proposal should be approved.
• If SoS approval is obtained councils commence implementation phase.
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N.b. The Buckinghamshire proposal can be found at
https://www.buckscc.gov.uk/services/council-and-democracy/our-plans/unitary/
Each Council would need to take a report to its Executive to consider the following decisions:
• exploring agreement in principle to work together;
• the allocation of resources to support the project;
• agreement to jointly approach the Secretary of State with a request to issue an
invitation to the County and districts to develop and submit proposals alongside a
financial case and proposed timetable;
• appointment of a member working group or Joint Committee to oversee the
development of the proposal;
• appointment of a project team to undertake the process of pulling together proposals,
appointing consultants and developing the proposals under the management and
oversight of the Chief Executives (delegating authority to them to spend the allocated
budget); and
• delegation of authority to the Chief Executive/Monitoring Officer to enter into an MoU
or similar.
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Criteria by which the SoS will Consider Proposals Submitted by Councils
DCLG produced statutory guidance for the 2006 invitations headed “
Invitations to Councils
in England to make proposals for future unitary structures”, and as yet there has been no
subsequent guidance. The criteria for the proposal specified in section 3 were as follows:
“3.1 The criteria with which any proposal must conform are:
i) the change to the future unitary local government structures must be:
•
affordable, i.e. that the change itself both represents value for money
and can be met from councils’ existing resource envelope; and
•
supported by a broad cross section of partners and stakeholders;
and
ii) those future unitary local government structures must:
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•
provide strong, effective and accountable strategic leadership;
•
deliver genuine opportunities for neighbourhood flexibility and
empowerment; and
•
deliver value for money and equity on public services.”
The Statutory Guidance expands on the above and the following lists some of the
key issues that will need to be addressed that may influence whether there is support for such a
reorganisation:
• Likely costs of reorganisation and future annual savings from a merger;
• Political impact (especially with a reduction in the number of members – will
turkeys vote for Christmas?);
• Service improvement and opportunities for innovation;
• Geographical impact on divisions & wards and electoral boundaries and
arrangements, along with the impact on communities in particular;
• Will there be further devolution of functions to a more local level with an increase
in town and parish councils that would be enabled to deliver services (would the
whole area be parished?) A community Governance review would need to be
undertaken, probably after unitarisation;
• Environmental impact;
• The impact on council tax between districts, whether it will be harmonised and
over what period (e.g. 3, 5 or 7 years);
• Asset impact and ability to deliver wider regeneration and development (e.g. to
meet housing need of all tenures);
• Stakeholder views.
It would be advisable for any reports to Councils to be jointly prepared and based on an
identical core, as it means all authorities are proceeding on the same basis and there is less
chance of any misunderstanding. A covering report may highlight any
differences/issues/specific results of consultation that may be appropriate. Cabinet would
authorise the submission of the business case, financial case and proposed timetable to the
Secretary of State (and full council if thought appropriate).
Once the proposal is submitted the Secretary of State will consider it and then decide
whether to formally consult before making a decision and for how long. A significant period
(at least three months, possibly longer) for consideration by MHCLG would need to be built
into the timetable. If approved by the Secretary of State then MHCLG would work with the
Councils to progress the necessary Structural Change Order(s).
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Implementation Phase – Creating the New Unitary Authority
The process may vary depending upon the nature of the reorganisation. There is usually a
Structural Changes Order that provides for the abolition of the relevant councils and creation
of the new Councils for the relevant area and then numerous other existing Regulations apply
that deal with finance, assets, staffing by way of transfer equivalent to TUPE etc.
Bucks CC is the most recent county unitarisation and it is worth noting that Bucks sought a
“continuing County unitary” model as per the 2009 Counties such as Durham and Wiltshire.
However, the SoS instead chose to abolish all of the districts and the County and create a new
district Council for Buckinghamshire that then became a county as well. This approach
creates extra administration and bureaucracy as part of the process and representations
could be made to Government to better reflect the 2008 Orders rather than follow the
Buckinghamshire approach. Buckinghamshire Council may be able to articulate some of the
extra costs involved and difficulties encountered, such as the need to transfer and re-register
all stocks and shares of the pension fund in the name of the new authority; transfer the
property titles to the new authority (rather than just change its name) and extra due diligence
on prospective liabilities etc. The DCLG “lessons learned” from the 2009 reorganisations
suggests that where a County Unitary is being created then it should be a continuing
authority.
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Quentin Baker
Chief Legal Officer
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