When two become one

Local government in the North East is set for its biggest shake-up in decades

Those living or working in Northumberland or County Durham will be subject to new local authorities within two years.

This was announced on 25 July by local government minister John Healey following a 12-week stakeholder consultation period and a rigorous assessment of bids from councils against published criteria.

Healey said that nine proposals for unitary status were to proceed towards implementation, with the intention that all the proposed new authorities would be fully up and running by 2009.

For those of us with a few years (and a few extra pounds) under our belts, local government reorganisation is something we have seen before, and, as David Miliband highlighted in an article in December 2005 kicking off the latest shake-up: “Debates about the shape, size and role of local government are almost as old as the councils themselves.”

So what does this latest plan for change in our communities mean for people in the North East? What, if any, impact will it have on their day-to-day lives, what impact will it have on the provision of legal services and what impact will it have on the firms providing those services?


The main principles behind the move from a two-tier local government to a unitary approach are:

• The empowerment of local people and communities;
• The improvement of local services;
• The realisation of greater efficiencies; and
• The delivery of improved economic prosperity.

It is these guiding elements that new unitary authorities for Northumberland and County Durham will be required to deliver as the district councils in these areas are abolished and control of services across each council area becomes centralised.

The single common thread, of course, is savings. Those councils working towards unitary status believe that savings of £150m per year can be achieved, which can be used to directly improve frontline services or to reduce council tax bills. This is a significant claim, and only time will tell if the calculations, particularly around transitional arrangements, are correct.

Central government states that it is not just a question of achieving value for money, but if that is the case, why the need for change?

It is claimed that the current two-tier system of local government is both inefficient and costly. Certainly, for communities it can be confusing. For example, consider a road through a village. The parish council may have responsibility for the upkeep of the grass verge, the district council for cleaning the pavement and the county council for the road. It may not be seen as an important issue, but each organisation maintains its own office infrastructure, so back-office costs are multiplied and duplicated. What people want are efficient services and accountability.

This was underlined by the recent government White Paper, ‘Strong and prosperous communities’, which stated: “Citizens and communities want a bigger say in the service they receive and in shaping the places where they live.” So the pressure for reform is growing and whether you live in an area subject to a new unitary authority or not, some reorganisation and change is inevitable.

The costs

But what are the likely costs of change, both financial and on our communities? County Durham estimates one-off transition costs of £12.4m to move from a two-tier to unitary system, with these costs being offset by an estimated annual saving of £21m. The community cost, however, is more difficult to assess. Generally speaking, cost savings come about through job cuts, and implementation of a larger, more centralised supply chain. While this may benefit the wider community, its specific impact on people and small businesses in a particular locality should not be underestimated.

While elements of the transition to unitary status will be handled in-house by the local government organisations involved, with such far-reaching changes it is likely that additional legal resource will be required, and this will present law firms with great opportunities to assist in the process.

The transition phase of the process is likely to raise a number of operational issues for the organisations involved. There is a likelihood that each organisation will be running different IT systems and this may well bring licensing problems and difficulties around interoperability, leading to an impact on service provision. It will also be necessary to align principles and policies throughout the merged organisations and then to train the staff involved. It may also be the case that staff levels within the merged organisations will be too high, leading to issues around redundancy. Employment in general is likely to be a major concern and questions have already been raised in some organisations around equal pay.

As the councils adopt unitary status, what are the likely implications for the legal profession? Will, for instance, the choice of service provider be reduced due to a single centralised procurement regime for such services?

Although there are clear opportunities for the legal profession arising from the proposed reorganisation, there are also threats, and it will be important for firms to respond accordingly, both to assist the process but also to obtain benefit from it.

Alan Grisedale is head of the public sector group at Muckle