UK: Pushing The Boundaries - Making A Success Of Local Government Reorganisation

Last Updated: 17 September 2006
Most Read Contributor in UK, August 2017


All organisations need to adapt to changes in citizen expectations, financial pressures and technology – the pressure to reorganise affects the public sector as much as the private sector. However, achieving the benefits of reorganisation is notoriously difficult. For local authorities, reorganisation is even more complex because they must also address changing views on representation and democracy in their local communities.

As the UK government is currently considering changes in the structure and financing of local government we undertook this research to identify lessons for how to maximise the likelihood of success. We reviewed reorganisations in the United Kingdom as well as in several other countries. We also interviewed local authority chief executives and senior officials who have personal experience of the last major reorganisations in the United Kingdom in the 1990s.

The research identified clear lessons for both central and local government. Above all, both government and authorities need to recognise that achieving the benefits of reorganisation depends as much on successful implementation as on the reforms themselves. Central government needs to use a review process that is quick and independent while providing more support to new authorities. Local authorities need to focus on using reorganisation as an opportunity to transform working practices, not simply to ensure a seamless transition.

This report aims to contribute to the debate on reorganisation and identify lessons for government and local authorities on how to meet the challenge of reorganisation. We look forward to discussing it further with you.

Frank Wilson, Head of Local and Regional Government
Mike Turley, Head of Government and Public Sector

Executive summary

  • Government is currently considering a reorganisation of local government in England. The UK government is developing proposals to reform local government as part of a White Paper expected later this year. While details are uncertain, it is possible that it will propose a new tier of governance at a ‘city-region’ level and some more unitary authorities in shire areas. This could have potentially major implications for the future structure of local government. The future of local government finance is also under consideration as part of the Lyons Inquiry, with a final report expected in December 2006.
  • Whether or not reform produces the intended benefits depends as much on how it is implemented as on the exact nature of the changes. The purpose of reorganisation is to produce local authorities that are more efficient, effective and accountable to local communities. But whether these objectives are achieved depends on government and authorities ensuring that reform is used as an opportunity to introduce deeper changes to working practices. Evidence from the reorganisations in the 1990s suggests that reorganisation is a difficult process, which in some cases did not lead to the intended benefits. The process of reorganisation can be split into three main phases: the review process, the transition between organisations, and the creation of new, transformed authorities.
  • Government needs to provide a quick and independent review process and a robust framework for transfers to new authorities. Government faces a strategic choice about the level of central direction and role of an independent commission in the review process. Evidence suggests that the process is most likely to be successful if managed by an independent commission. However if the Boundary Committee for England (BCE) is to play that role it needs to operate quicker and more independently than it has done previously. In addition, evidence suggests that government should provide more support and direction to foster agreements between outgoing and new authorities. Government should consider introducing a duty for authorities to set up joint transition committees, imposing more constraints on the commitments of outgoing authorities and using a property commission to resolve disagreements over assets.
  • Authorities should focus on using reorganisation as an opportunity to transform working practices. Authorities going through a reorganisation face two potentially conflicting objectives: to enable a seamless transition and to transform the organisation for the better. Evidence suggests that in a future reorganisation authorities need to give more emphasis to transformation. This means taking action early to prepare for a tighter financial situation, forge a new corporate culture, rationalise and update systems and infrastructure, and harmonise and improve services. The example of East Riding of Yorkshire illustrates how reorganisation can be an opportunity to transform an authority and deliver better services for local citizens.


The importance of policy execution

Government is currently considering the case for reorganising local government in England as part of a White Paper expected later this year. While precise details of government’s intentions are not yet available, some new unitary authorities may be created in shire areas where proposals are supported by local stakeholders and meet the requirements of effective government. There is also the possibility of a new tier of government being created to realise government’s aspirations for more control at a ‘city-regional’ level.1 In addition local government finance is being reviewed by Sir Michael Lyons, who is expected to report in December.

The creation of city-regions could have major implications for existing metropolitan boroughs as well as a range of other organisations including Passenger Transport Authorities, joint fire, police and waste disposal authorities, Government Offices for the relevant regions, Regional Development Agencies, English Partnerships and Regional Housing Boards. It could also have an impact on existing shared back-office functions such as pensions administration.

Reorganisation is also happening, or being considered in other parts of the United Kingdom. Reorganisation is likely to form part of the reform process in Scottish local government, where the Minister is looking to authorities to help develop radical proposals.2 In Northern Ireland the number of local authorities is currently being reduced from 26 to seven. In Wales formal reorganisation has just been rejected by the Beecham Review, but is recommended to be reconsidered in five years’ time.3

Reorganisation defined

Local government in England has a complex structure, which is the product of a number of distinct reforms over the past 40 years. Broadly speaking there are areas which are administered by twotiers of government (county councils and district councils), and those that are administered by a single tier (unitary authorities, and metropolitan boroughs). This picture is further complicated by joint fire and police authorities that cross unitary boundaries. In the context of this report, ‘reorganisation’ refers to three main types of change:

  • Changes in service responsibilities, for example:
    • creating unitary authorities; and

    • reallocating responsibilities between different tiers.

  • Changes in geographical responsibilities:
    • mergers;

    • de-mergers or partitions; and

    • boundary changes.

  • The abolition of organisations, or creation of new ones.

Often elements of all these changes happen together. For instance, in the last reorganisation in England in the 1990s, Humberside county council was abolished, and North Lincolnshire was created. The new unitary authority (with its service responsibilities devolved from the abolished council), was based on new boundaries created from the (abolished) districts of Glanford, Scunthorpe and part of Boothferry.

The importance of policy execution

So far debates about reorganisation have been dominated by a number of important questions including: Are current district councils too small to provide economies of scale? Are counties able to be sufficiently responsive to local communities and if so how? Are unitary authorities more effective or efficient than the governance in ‘two-tier’ areas? Is there a need for a new tier of government at the ‘city-regional’ level and if so, what would it look like? Is there a need for more governance or control at a ‘neighbourhood’ level and what might that involve?

While these debates are vital, how reorganisation is implemented is at least as important as the exact structures that are selected. This is borne out by evidence from the last major reorganisations that occurred in the United Kingdom in the 1990s.

Local government was extensively reorganised in England, Scotland and Wales during the period 1994 to 1996. In England, the two-tier structure of government outside London and metropolitan areas was altered through the abolition of five counties, and creation of 46 new unitary authorities. In Scotland and Wales, two-tier areas were completely replaced with unitary authorities – 32 in the case of Scotland, and 22 in the case of Wales.i

But there are some indications that the potential benefits of reorganisation were not fully realised because of how it was implemented. The review in England in the 1990s was criticised for being too slow and lacking proper independence, while those in England, Scotland and Wales were accused of being influenced by inappropriate political considerations.ii Furthermore, authorities that went through reorganisation in England last time (‘Unitaries’ in the chart) do not clearly perform better than other types of authority.

Clearly there are a number of explanations for these performance levels. However, they may indicate that whether the potential benefits of reorganisation are realised depends as much on how the changes are handled by government and authorities as it does on the exact form of the changes proposed. In other words, the difference between a successful and an unsuccessful reorganisation, at least partly, lies in the quality of the execution. This conclusion is reinforced by studies on mergers and restructurings in the private sector which suggest that achieving the benefits of reorganisation is difficult and depends on how it is implemented.5

There is a clear explanation for this. A reorganisation primarily involves changes in the boundaries or service responsibilities of authorities. This is achieved through corresponding changes in the allocation of staff, assets, and budgets. But these changes in themselves are largely internal to the organisation and have only an indirect relationship to the intended outcomes. As such whether a reorganisation produces the envisaged improvements depends on whether it leads to deeper changes to service provision, patterns of spending, or the relationship with the public.

Learning the lessons

Accordingly, this report aims to provide insights and guidance for central and local government about how to ensure that the process of reorganisation helps promote improvements in effectiveness, efficiency and accountability. It is based on a review of the reorganisations that occurred in England, Scotland and Wales in the 1990s, as well as in a number of other countries. These include: Canada (Toronto), New Zealand, Australia (Victoria), and Denmark.iii

The process of reorganisation has three main phases (See Figure 2). Firstly, the review process – how government determines the exact proposals for reform, with input from local authorities. The second phase is the preparation for the transfer of responsibilities from existing or outgoing authorities to new ones, subject to regulation and support from government. The third, which overlaps with the second, is the creation of the new, transformed organisation.

The report’s structure reflects these three main phases of the process. The first section describes lessons for government on how to run an effective review process. The second describes some conclusions for government on how to improve the framework governing transition. The third section describes how local authorities need to approach reorganisation in order to make it a success.

Creating an effective review process

The need for independence and speed

In any reorganisation, government needs a review process that converts high level policy aims (for example to create more unitary authorities or increase the scale of local government), into specific proposals for change in an area. It will have a number of objectives in managing this review process. It will want the process to be fair and quick, avoiding disruption to services, while also seeking to ensure that the proposals create effective change.

In the last reorganisation in the United Kingdom in the 1990s, different processes were used.

The decision-making processes in England, Scotland and Wales England

In England, government initiated the review process through a consultation paper, but then the review was carried out by the Local Government Commission for England (LGCE) under Banham and Cooksey. The commission engaged extensively with local authorities about proposals in their area and used public polling as a major determinant of final decisions. Structural changes were enacted through statutory instruments in three phases in 1994, 1995 and 1996.


Government published an initial consultation paper, outlining the case for unitary government, followed by a subsequent paper proposing different unitary options. The white paper outlined the government’s final proposals, which, with minor changes, were enacted in 1994. The proposals were largely opposed by authorities.


Government outlined the case for unitary government and suggested three possible maps in the original consultation paper. A map was published in 1992, followed by a different map in 1993 in response to representations from stakeholders. Government’s final proposal was published in the White Paper, and with minor changes, enacted in 1994. Sources: Leach and Stoker (1997), Boyne et al (1995).

In comparing the review processes used in the United Kingdom and other countries, we have identified two key choices that government should make, that determine how the review process should be conducted. These are:

  • how ‘top-down’ or ‘bottom up’ is the process? This means: to what extent does government direct the reforms or rely on local authorities or the public to initiate and determine change?
  • to what extent is the review process conducted by an independent commission rather than government itself?

We reviewed a number of reorganisations against these dimensions and present the results in Figure 3. Summaries of the changes that took place in each of these countries can be found in Appendices 1 and 2.

Having analysed the outcomes of these reorganisations, it seems that we can identify three main types of reorganisations – those which are top-down, with a government-run review process, the ones which are bottom-up, led by a commission, and those which are top-down but led by a commission.

Overall the evidence suggests that top-down reviews are more likely to lead to significant change than bottom-up processes, but the latter are more likely to create stakeholder support. This is a difficult choice and depends on government’s broader objectives. Overall, regardless of the choice between top-down and bottom-up, there are strong arguments in favour of using an independent commission. These points are discussed further below.

Top-down/government-run: significant change, at a price

Reorganisations which have been heavily ‘top down’ with a review process run by central government include those that took place in Wales, Scotland and Toronto. Evidence suggests that while each of these reforms achieved significant results in some cases the changes were unpopular and seen as motivated by inappropriate political objectives. As a result, some of the reorganisations may have been poorly implemented.

In each of these reforms, government achieved its primary stated objectives. In the case of Wales and Scotland, this was to introduce unitary government throughout each country. In the case of Toronto, the Ontario Provincial Government wanted to create a single City of Toronto authority from six municipalities.

However in Wales and Scotland the reforms were unpopular and also accused of being inappropriately politically motivated. In Scotland, the consultation paper in 1991 was criticised for relying on assertion and not providing a research base for the conclusions,6 while claims made by the government were forcefully disputed by the Convention of Scottish Local Authorities (CoSLA).7 Officials interviewed as part of this research expressed the view that some of the proposals made were motivated by inappropriate political objectives rather than the goal of creating efficient and effective government. In Wales, there were similar criticisms that the consultation process was opaque, and that the justification for the final proposal of 22 councils was lacking. According to some academics, some of the proposals seemed to be motivated by partypolitical considerations, rather than what was best for the area.8

In Toronto, the reforms were very unpopular with both councils and the public. The changes were enacted with little or no consultation. (The six mayors affected by the reforms were given 30 days to come up with an alternative to amalgamation. Their alternative was then ignored.)9 Referenda demonstrated widespread opposition to the reforms – the number of voters opposed ranged from 69.5 per cent to 81.5 per cent.10 But in any case these views were ignored. The inadequate consultation period led to a legal challenge which was only ended at the Supreme Court of Canada.11

Systematic evidence of the impact of these processes on the success of implementation is not available. However there are some indications that these difficult review processes led to less effective implementation of the reforms. Several interviewees suggested that the nature of the review process in Wales and Scotland tended to hamper adequate preparations for implementation. For example, several Scottish interviewees said that authorities spent time and energy opposing the reforms, which meant that preparations for reorganisation started at a later stage than might otherwise have been the case. This may suggest that the unpopularity and perceived unfairness of the process reduced the likelihood of successful implementation. In the Toronto reforms, there are some indications that implementation did not produce the envisaged benefits. The realised savings and benefits from the amalgamation were considerably less than those projected.12

So using top-down reorganisations that are the outcome of a government-run review process can be a way of creating widespread and effective change, but they tend to be seen as unfair and unpopular, leading to potentially poor implementation. Bottom-up reorganisations: stakeholder support but little change

Governments that give a high priority to securing support for proposals from authorities and the public may wish to explore the use of a ‘bottom up’ process. This could involve putting the onus on councils or the public to initiate change, rather than government.

One example of this is the process that has existed in New Zealand since 1992 (see Sidebar). The English reforms of the 1990s also gave significant weight to the views of councils and the public in deciding whether reorganisation would go ahead in the area.

Evidence suggests that while bottom-up processes can be a good way of ensuring popular support they are unlikely to lead to significant change.

New Zealand: A bottom-up process of reorganisation

New Zealand undertook a major reorganisation of its sub-national government in 1989. Following that, it implemented a system that enabled reorganisation to occur on an ad hoc basis, through initiation by local authorities or voters.

Reorganisation proposals can be initiated by an affected local authority, the Minister of Local Government or a petition signed by at least ten per cent of the voters of the concerned area. Local authorities must consult with each other to decide whether the proposal should be dealt with by a joint committee, one of the affected local authorities, or by the Local Government Commission (LGC).

If they are undecided after 60 days, the LGC will automatically deal with the matter. A draft reorganisation scheme will then be prepared with invitations for submissions. Submissions must be heard extensively in a consultation process, with a right for all submitters to ‘be heard’ in public hearings. At this point the reorganisation scheme can be adopted, amended or dropped. If adopted the proposal will go to a poll of the public, where at least 50 per cent of valid votes must be in favour of the proposed scheme for reorganisation to go ahead.
Source: Local Government Commission, New Zealand, 2006.

The New Zealand process has not led to significant reform. Of the five proposals that have been generated since 1996, two were rejected by the LGC as unsuitable and two were rejected at the polls. The one proposal to get through the process was the merger of a relatively small authority with a larger one. This suggests that the process is not apt to produce effective change because neither councils nor the public tend to agree on effective proposals for change in their area.

This tends to be confirmed by evidence from the English reforms of the 1990s. In England in the 1990s, the Local Government Commission for England (LGCE) invited councils to submit joint plans for reorganisation. However few joint plans were submitted between counties and districts because they could not agree on a solution with which they were both happy.13 In 2003 to 2004, when government invited councils to submit plans for unitary government based on the assumption of new regional assemblies, no joint plans between counties and districts were submitted.14

Furthermore where the public have been polled about proposed structural changes, they tend to have been indifferent or hostile to proposals. In England in the 1990s, when members of the public were surveyed about their attitudes towards reorganisation in their area, the status quo was always the most popular option (with average support of 68 per cent).15 In New Zealand, public polls stopped reorganisation from going ahead in 41 out of 67 proposed reforms between 1947 and 1972.16

There are many possible explanations for this, including lack of understanding of local government structures and what the changes involved. In other cases, the public may have been influenced by their councils who have often opposed the changes. However, overall this suggests that a bottom-up process is suitable to produce minor, organic change that is supported by councils and the public, but not to produce significant or effective change.

The potential benefits of an independent commission: fairness and stakeholder support

Overall, evidence from reorganisations in New Zealand, Victoria (Australia) and Denmark suggest that a top-down, commission-run process is seen as fairer and can be more effective in generating a broad base of support for change. Commission-run reviews tend to avoid the issues of unpopularity and political influence that often beset government-run review processes. (The case of the English reforms of the 1990s is different and discussed below.)

In a major reorganisation carried out in New Zealand in the late 1980s an independent LGC was able to implement widespread reform because it had a legislative mandate to make changes. This meant that the decisions were formally insulated from political interference. The result was that the Commission was able to engage municipalities in a constructive discussion about reorganisation in their area without being seen as being politically motivated.17 The major reforms that occurred in the State of Victoria in Australia were also the outcome of a widespread review by the Local Government Board. The consultative approach of the board, and its independence from party politics encouraged councils to engage proactively in the review process.18 Lastly, in a recent review of government structures in Denmark, an independent commission played a central role in generating a consensus for widespread reform.19

Accordingly, if government wants to achieve significant change, which can command widespread support, there is a strong case for using an independent commission to manage major parts of the review process. Independent commissions can facilitate constructive debate about proposals and insulate decisions from inappropriate political interference.

Improving the role of the Boundary Committee For England (BCE) in the process

The review that led to reorganisation in England in the 1990s was carried out by an independent LGCE which considered areas on a phased basis between 1992 and 1996 under the leadership of Sir John Banham and then Sir David Cooksey. The BCE is the successor to the LGCE – a statutory committee of the Electoral Commission (see Sidebar).

The Boundary Committee for England (BCE)

The BCE is a statutory committee that has the power to conduct reviews of local government in England, having taken over the powers of the previous LGCE. It can be instructed by the Secretary of State to carry out local government reviews (boundary and structural changes) as required, under the terms of the 1992 and 2003 acts.

The Local Government Act of 1992 and the Regional Assemblies (Preparation) Act of 2003 give the Secretary of State the power to direct the BCE to consider, in two-tier areas whether new unitaries should be created and/or whether boundary changes are necessary. It can also be instructed to consider only unitary options, assuming the existence of a regional assembly.

The BCE must have regard to a) the need to reflect the identities and interest of local communities, b) the need to secure effective and convenient local government and c) Ministerial policy guidance. The Secretary of State retains the power to accept, modify or reject the BCE’s recommendations.

In the past, its reviews have been conducted in four stages: consultation and research, formulation of draft recommendations, consultation on the draft recommendations, and then the submission of final recommendations to the Secretary of State. Its research involves gathering submissions from local authorities and other public bodies, analysing how services are provided, and polling the public about their travel patterns and perceptions of community identity.
Source: The Boundary Committee for England, 2006.

However, despite the general merits of using an independent commission, the LGCE was widely criticised at the time. It was accused of inconsistency, taking too long, and being subject to inappropriate political pressure.20 Accordingly, if the BCE is to play an important role in a future reorganisation it should operate differently. In particular, it will need to be quicker and more independent in the way it works.

If the BCE is to carry out reviews for a potential reorganisation then it is important that these are carried out quickly. Once a review is initiated, local authorities will devote time and energy to trying to shape the outcome. Interviewees reported that the process in the 1990s produced considerable animosity between counties and districts, which in some cases persisted for years afterwards. In addition the uncertainty a review brings can have a significant impact on staff. Several interviewees reported that when a review is being carried out it creates a high level of uncertainty, which can lead to qualified and experienced staff leaving the organisation before the review has been completed.

The main reason the review in the 1990s was seen as taking too long was that it was carried out in phases and was arguably poorly resourced.21 So, if another reorganisation occurs there is a case for conducting it in a single sweep, rather than in distinct phases and providing it with sufficient resources to do this.

The operation of the BCE also needs to be, and be seen to be, thoroughly independent. This may mean reviewing or amending the current power of ministers to shape final proposals. One of the weaknesses of the commission’s work in the 1990s was seen to be the power of ministers to modify, amend or reject the conclusions of the LGCE. In some cases this meant that the independence of the review process was undermined by informal political pressure. For instance, the LGCE’s review of Somerset resulted in an all-unitary proposal. However, this was overturned by the Minister following a Cabinet colleague’s threat to resign over the proposals.22 Interviewees also reported that despite the operations of the commission, the outcome was often influenced by informal lobbying of the relevant politicians. So for a future reorganisation it may be worth considering whether the power of ministers to amend, modify or reject proposals should be reduced.

Allowing authorities and the public to shape proposals

Once government has made a strategic choice about the degree of central direction and role of an independent commission in the process, it also needs to decide what role authorities and the public should play.

Evidence suggests that even in a relatively top-down process, authorities and the public should play a central role in shaping the reforms in the area, even if they are not responsible for triggering or sanctioning whether reorganisation proceeds.

Authorities have knowledge of the area and the practicalities of service delivery that need to inform any review process. Furthermore, authorities are invariably responsible for implementing the reforms, and so it is important that they feel a sense of ownership over them.

Experience suggests that local authorities should be involved in drawing up the options for reform in their area but within constraints. Evidence from the English reforms shows that if councils’ proposals are unconstrained a) they may not agree on a single proposal and b) the proposals may favour the existing organisations. However, where constraints have been imposed on the choices, this has led to a much more constructive engagement with the review process. In the recent review process in Denmark final proposals were constrained to ones which met a minimum population threshold. This was an important tool in generating an effective consensus from municipalities on reform.23

Furthermore the public should be consulted on any changes in boundaries or the identity of authorities. The purpose of reorganisation is to produce authorities that are more efficient, effective and accountable to local communities. Whereas the issues of efficiency and effectiveness are largely technical questions (and should be assessed through the evidence) the issue of accountability is intrinsically related to public attitudes. So in a reorganisation it is important to consult the public about such changes. This may mean surveying the public about their attitudes towards possible boundary changes, as well as changes in the name of the authority.

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If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.