Creating single unitary councils within existing boundaries is the best way to save money, promote economic growth and make the most of devolved powers, a new report has found.
In the report to be published on Monday, thinktank Respublica calculates devolving powers akin to a city region deal to county level could result in savings of between £6.2bn and £11.7bn a year across England.
The report, Devo 2.0 - The Case for Counties, was commissioned by the County Councils Network and proposes two models for future devolution.
These are single county unitary councils responsible for all services, or reformed two-tier arrangements.
The latter would create a single “strategic authority” allowing counties and districts to jointly exercise strategic functions for economic development, planning, housing, council tax and business rates. The report said the process would be led by counties, with a gradual transition towards greater integration of district and county functions.
The report envisages half of any savings made through either option for reform would return to the Treasury. Devolution to reformed two-tier arrangements would make available approximately £5.8bn over five years to invest in local growth, which could increase GVA by £26.3bn.
However, it found that if powers were devolved to a single unitary county an additional £1bn would be made available, which could raise GVA by an additional £4.8bn.
The report said fragmentation of services is currently pronounced in two-tier areas where “multiple service delivery bodies overlap across multiple council borders”.
It argues that dividing up county councils, for example into new unitaries, would exacerbate the problem, particularly with social care as the “diversity” of a large commissioning authority is required to maintain specialist units.
It also found that the two-tier system leads to housing development “in the wrong place to access services” and councils attempting to prove they need to build less than demand requires. Only 30% of two tier areas currently delivering housing to meet at least 95% of population growth, compared to 60% of unitary counties successfully doing so.
In response to the report, a Department of Communities & Local Government spokesperson said: “Moving to a single tier large unitary authority can often give residents a better deal for their local taxes, improved local services, less bureaucracy and stronger and more accountable local leadership.
“However we are clear that any such move must be both locally led and have support from the community.”
Chairman of the County Councils Network Paul Carter said both proposed models would enable counties to rise to national and local challenges.
He added: “For those who wish to pursue more radical reform, this report clearly illustrates the huge economic and public service benefits of streamlining complex local government structures into singular county unitary authorities.”
However, a spokesperson for the District Councils Network said the report promotes a “sterile and tiresome debate” on structures which ignores the needs of residents at a geography they can “recognise and relate to”.
They highlighted comments made by local growth minister Jake Berry in Parliament this week that “devolution and the improvement of local government cannot be achieved through a simple top-down, one-size-fits-all equation that we come up with in Westminster”.
Mr Berry said: “I want to make it absolutely clear that the Government do not want to get in to a top-down reorganisation of local government. We want proposals from district councils—in fact, from any councils—for mergers to be locally led and to have local support”.