Creating single county-wide unitary councils in current two-tier areas could save up to £2.9bn nationally over five years, according to independent research for the County Councils Network.
The study by consultants EY considered six models for restructuring in two-tier areas. It concluded single county unitaries could generate savings earlier than other structures, provide the best opportunity for financial sustainability and lead to lower council tax bills.
CCN said the report, which has been shared with government, shows models that build on the “scale and geography” of counties provide the most effective foundations for structural reform.
CCN said it does not endorse or oppose structural reform and commissioned the report to inform decision making.
CCN chairman Paul Carter (Con) said the report should be “an important reference point” should the government decide to push ahead with reorganisation.
He added: “Sub-county unitary options would fragment the services that matter to residents, potentially worsening them at a time when we can ill-afford to with demand rising, and could be an ineffective use of public money.”
The report analysed data from all 27 counties and 201 districts in England. It found potential savings from a single unitary model ranged from £2.4bn to £2.9bn over five years. By comparison a two unitary option could save between £1.2bn and £1.7bn while a three unitary model was said to generate savings of up to £526m over five years but could result in a net cost to the taxpayer of £33m due to potential increases in management costs, duplications and reduced economies of scale.
The report also considered splitting a county into three unitaries supported by a combined authority, as has been proposed by districts in Oxfordshire.
It found the model could cost the taxpayer up to £366m due to significant implementation costs and highlighted the risks of untested service models.
Finally, the report considered maintaining two tier structures but sharing support services between county councils or merging existing district councils. It found these options would save up to £568m and £839m respectively.
District Councils’ Network chairman Neil Clarke (Con) said there should be a greater focus on place-based service reform and examining the benefit of “clustering” within or beyond council boundaries to reflect “economic geography and natural communities”.
He added: “Successfully seizing on the devolution revolution in district and county areas requires a sophisticated and strategic approach, one built around providing the right tools for economic renewal and collaborative working – where districts have a proud record of driving efficiency and innovation”.