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UNITARY SHIRES COSTED AT£1.1BN

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The transition to unitary English shire councils will cost£1.1 billion, according to the latest calculations prepa...
The transition to unitary English shire councils will cost £1.1 billion, according to the latest calculations prepared for the government. West Sussex CC Treasurer Paul Rigg has also calculated the transition to 28 new unitary councils in Scotland will cost £158 million and the changeover in Wales will cost £110m.

Mr Rigg - who prepared the English figures for a meeting with DoE officials due today - told LGC this week the government would find it difficult to cap these transition costs. Last week a memo leaked to LGC suggested ministers were prepared to allow local tax payers to absorb the cost of change. If the government dismantles county budgets it will push some councils above their capping limits.

For example, a unitary authority covering the area now covered by Adur DC 'cannot spend as heavily as we do in Adur without being capped', Mr Rigg said. The grant regime was not sensitive enough to protect councils which would lose government money or claw back money gained in the change to the new structure.

Councils which lost grant through reorganisation could therefore claim unreasonable treatment if they were then capped. Councils which gained under the new financial regime through higher standard spending assessments would be immune from cuts - bringing spending below what the government estimated they needed to maintain a standard level of service. 'The basic problem is that you can't cap a loser down to SSA and you can't cap a gainer below their SSA', Mr Rigg said. The government would have to top slice grant to equalise changes. But he said the simplest solution was to copy previous reorganisations and 'let the lid off for a little while'.

Districts say these costs - which represent less than 3% of total council spending - will usually be paid for from the savings generated by unitary councils. Early recommendations from the Local Government Commission suggest transition costs will average £27.2m for each of England's 39 counties.

Mr Rigg divides the costs into eight areas: £390m on planning for the new councils and winding up the old; £312m on new computer systems; £117m on redundancy and retirement payments; £117m on staff relocation; £78m on accommodation; £23m on elections and members' expenses; £12m on recruitment and training new staff; £12m on other costs such as new signs for buildings.

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