Ongoing uncertainty around Government reforms to councils disrupting spending choices - LGIU

Following last week's publication of the government's Devolution and Community Empowerment Bill, the Local Government Information Unit (LGIU) and Norse Group have today released new research which reveals that ongoing uncertainty around local government reform is disrupting decision-making and spending choices in many councils. 

Service Delivery in Uncertain Times, which surveyed senior representatives from councils currently undergoing local government reorganisation (LGR), found that more than 3 in 5 councils say that LGR influences their decisions to outsource, insource, establish joint ventures or maintain current arrangements in service delivery. 

For some councils, this influence stems from a desire to align service delivery models with neighbouring councils that are likely to be part of the new unitary authority. For others, this is due to LGR prompting an acceleration of planned changes to ensure their delivery in advance of ‘reorganisation proper'. 

For many councils, however, LGR has resulted in the abandonment of planned changes to service delivery due to the impossibility of delivering them under the necessary timeframes. This is exacerbated by uncertainty over the future geographies of new unitary authorities and concerns of potential delays in the reorganisation timetable.

As the government consults on local government reforms across finance, governance and accountability as well as public procurement (backed by the Deputy Prime Minister in a recent speech here) - today's research has found that UK Government guidance is seen as relevant to council decisions across just 24% of the councils surveyed.

Where past decisions were based near-exclusively on savings, capacity, and service quality, current decisions are increasingly disrupted by the realities of local government reorganisation. However, 61% of respondents agreed that LGR presents an opportunity to reset relationships with service providers.

An executive summary of the report is included below and an embargoed copy of the full report is available upon request.

Jonathan Carr-West, Chief Executive, LGiU, said:  “This publication, aptly titled Service Delivery in Uncertain Times, sheds light on the impacts of reorganisation (so far) on service delivery decisions. Though we are still at the beginning of this journey, these reforms are already having far-reaching effects on councils poised for reorganisation. 

Ensuring best value and high-quality services during and after this period of change is an immense logistical challenge. However, local authorities remain fully committed to achieving this goal. And LGIU stands ready to support our members throughout the process with our ongoing resources and research.

This report is a useful reminder, if one were needed, that nothing happens in local government without the hard work of council staff. So we must thank them for their steadfast efforts as we continue on this journey together.” 

Justin Galliford, Chief Executive, Norse Group said: “Service Delivery in Uncertain Times offers an invaluable perspective on the demands, frustrations, and appetite for change among local authorities as we navigate this once-in-a-generation challenge of reorganisation together. While new unitaries are forming, it's vital that frontline services remain focused on the needs of communities.

At Norse Group, this has been a key focus since the publication of the Devolution White Paper. With a strong track record of successful joint ventures with local authorities, we recognise that despite ongoing change and financial pressure, keeping communities at the heart of service delivery is essential, and reorganisation presents a valuable opportunity to renew and strengthen partnerships.”

ENDS

Notes to editors

Service Delivery in Uncertain Times In May and June 2025, LGIU's Local Democracy Research Centre surveyed/interviewed 71 senior representatives from 63 councils in England currently undergoing local government reorganisation (LGR) to understand their views on insourcing, outsourcing and joint ventures in this era of local government reorganisation. 

Executive summary

More than 3 in 5 survey respondents indicated that LGR is influential in decisions to outsource, insource, establish joint ventures or maintain current arrangements in service delivery.

For some councils, this influence stems from a desire to align service delivery models with neighbouring councils that are likely to be part of the new unitary authority.

For others, this is due to LGR prompting an acceleration of planned changes to ensure their delivery in advance of ‘reorganisation proper'.

For many councils, however, LGR has resulted in an abandonment of planned changes to service delivery due to their lack of deliverability under the necessary timeframes.

This is exacerbated by uncertainty over the future geographies of new unitary authorities and concerns of potential delays in the reorganisation timetable.

As a result, fewer than 1 in 8 respondents report current plans to outsource, fewer than 1 in 10 report plans to insource, and fewer than 1 in 7 report plans to establish joint ventures.

Still, 29% of respondents stated that LGR is not relevant in these decisions, indicating that they will proceed under a ‘business as usual' approach.

Nevertheless, where past decisions were based near-exclusively on savings, capacity, and service quality, current decisions are increasingly disrupted by the realities of local government reorganisation.

Of past decisions to change to service delivery, insourcing produces the highest net satisfaction score (+74%), followed by joint ventures (+52%), and outsourcing (+49%). 

Despite these differences, there is little evidence that LGR will lead to the broader adoption of any specific model.

However, notably, 61% of respondents agree that LGR presents an opportunity to reset relationships with service providers.

2025 State of the Locals Between 28 March and 31 March 2025, Ipsos was commissioned by LGIU to survey a representative sample of 1,805 adults online in England. Survey questions explored public attitudes towards local government in general, proposed reforms in the sector and the role of directly elected Mayors. Some questions are trended over time and some questions are new this year.

State of Local Government Reorganisation (LGR) in England This publication offers a critical snapshot of the early narratives being generated by councils on LGR. We focus on the trends of new unitaries, the cost implications, the nature of financial analysis and best practices in LGR approaches.

State of Local Government Finance in England LGIU's 12th annual State of Local Government Finance (England) report surveyed council leaders, chief executives, section 151 officers and cabinet members for finance to gauge how confident the sector is feeling about the sustainability of council funding. The research found that fewer than 1 in 10 senior council figures are confident in the sustainability of local government finance with surging service demand being the greatest pressure on local government finance (a major problem for over 90% of councils). Local government reorganisation and National Insurance Contribution rises also represented significant new pressures on councils' already overextended finances.

Navigating risk in local government: challenge, change and capacity The LGIU's Local Democracy Research Centre interviewed risk managers in UK local authorities in depth to better understand how councils manage risk, the challenges faced by risk managers, and how the perception of risk in local government is changing.

Local government facts & figures All of the details on how a council really works, a breakdown of local government structures, stats and workings across England.