There is widespread scepticism across local government about the Government’s flagship plans to create new “super councils” across England, according to research into attitudes among senior figures in the sector.
Less than a quarter (23%) of those surveyed said wholesale reorganisation will improve the perilous state of councils’ finances, while just 20% of officials believe the timescales for change are deliverable.
In addition, only one in 10 feel they have been adequately involved in the process of reorganisation, and fewer than one in five said the Government had provided sufficient clarity on its plans.
In its annual survey on council finances, the Local Government Information Unit (LGIU) found just one in 10 senior council figures are confident about the financial sustainability of local government, with surging demand for services identified as the greatest pressure by 90% of respondents.
Increased national insurance contributions and structural reorganisation were also identified as significantly contributing to the stress on limited council budgets.
The English devolution White Paper, announced by Deputy Prime Minister Angela Rayner in December, laid out the Government’s preference for upper-tier unitary councils.
Under the plan, these would cover large interconnected populations of at least 500,000, replacing existing structures in two-tier county areas.
The Government argued that these new large councils, since labelled “super councils”, can deliver “better outcomes for residents” and “save significant money which can be reinvested in public services”, as well as create the basis of structures for devolving powers to combined authorities under mayors.
A breakdown of the survey data shows 40% of respondents were from non-metropolitan districts, which are under threat due to reorganisation plans.
The survey also found that 6% of councils believe they could declare effective bankruptcy this financial year without “urgent and radical” reforms to the local government system.
In the absence of reform, 35% said they could declare financial failure by the end of the decade.
The survey of council leaders, chief executives, chief finance officers and cabinet members for finance also revealed the range of measures being considered by councils to ensure they balance the books next year.
A vast majority (94%) said they were preparing to increase council tax, while 88% were considering a rise in fees and charges paid by residents.
More than one in five respondents said they would look at increasing borrowing and nearly two-thirds expect to scale back spending on services.
While just under half said they would make savings through restructuring services, 56% said they would draw on their financial reserves this year – a slightly bigger share than last year.
The survey also confirmed strong support for council tax reform, with 77% backing this approach, and three-quarters in favour of more flexibility to generate revenue through local levies.
Despite some concerns, satisfaction with the Government has improved on last year’s results.
This year, 25% of respondents said they are happy with the consideration of local government in wider policy decisions, compared with 8% last year.
One in five said they are happy with the transparency of Government decisions made about local government finances, in contrast to just 4% last year.
Of those surveyed, 30% said they are happy with the Government’s understanding of the scale of the problems facing local government finances, a significant increase on 6% who said the same last year.
The LGIU called on the Government to provide greater fiscal freedoms to local authorities, including tourism taxes, local sales taxes, and other measures that are prevalent in other countries.
LGIU chief executive Jonathan Carr-West said that while the Government had reset the relationship with local government, serious financial concerns persist.
He added: “And, to put it bluntly, respondents are not happy with the way that reorganisation is being carried out.
“The vast majority feel that the Government is not providing enough clarity, enough genuine involvement for councils in the process, or realistic time frames.
“And, critically, most do not believe that it will solve the financial problems that councils face.”
Responding to the findings, Tim Oliver, chairman of the County Councils Network, described the Government’s approach as a “once-in-a-generation chance” to improve and sustain services in two-tier areas.
He added most councils have recognised that the current system of local government is no longer viable, highlighting that “the public’s confusion of the multi-tier system means that it has become impossible to justify”.
Councillor Oliver said: “In order to create councils that can rise to the challenges of the 21st century, deliver better local services, and create significant savings for the public purse, they must be at the right size and scale.
“This means creating unitary councils covering areas of at least 500,000 people or more, with the Government sticking to this number as a minimum.”
A Ministry of Housing, Communities and Local Government spokesperson said: “This Government inherited a crumbling local government sector.
“We are prepared to take tough choices necessary to rebuild local government and give taxpayers the services they deserve.
“Reorganisation is a tough choice but it is the right one to end the two-tier premium and create streamlined, more accountable local government.
“We know the challenges councils are facing, which is why despite the inheritance we have been left we are making available £69 billion of funding to councils across England and working with them to drive forward the Government’s Plan for Change.”