Council revamp £11m more a year to run, study says

All of Lancashire's 15 councils have been asked to submit initial plans for how they will reorganise themselves

A radical revamp of Lancashire's councils could end up creating a system that is £11m a year more expensive to run than the one it replaces, analysis has shown.

Forthcoming changes will see all 15 local authorities scrapped and replaced with a handful of new ones.

There is projected to be a huge variation in set-up costs depending on how many new authorities are brought into being, with a total of four estimated to come with a bill of more than £41m.

The results of what the County Councils Network (CCN) research described as a "high level" financial assessment of the various possible scenarios were featured in a report presented to Lancashire County Council's cabinet.

'Transition costs'

The research found the government-ordered overhaul would be cheaper to operate only if three or fewer replacement councils were established across the county.

However, several of the existing authorities are known to favour the creation of four or even five new councils.

The analysis predicted the establishment of four new councils would have a recurring additional annual cost of £11.5m after five years.

In contrast, three new authorities were forecast to save £6.4m in running costs after five years, while two would generate savings of £21.2m and just one – for all 1.5 million Lancashire residents – would be £45.3m less costly than the current arrangements.

The reason four or five new councils could end up costing more than the 15 existing ones is because they would each be standalone - or unitary - authorities, responsible for delivering all of the services in their patch.

Under the current "two-tier" system, Lancashire County Council looks after issues like social care, schools and highways across the vast majority of the county, while the 12 district authorities – Preston, South Ribble, Chorley, West Lancashire, Fylde, Wyre, Lancaster, Ribble Valley, Burnley, Hyndburn, Rossendale and Pendle – take care of the likes of planning applications, parks and waste collection in their own patches.

Blackpool and Blackburn with Darwen councils are already unitaries and so provide the full range of local services in those areas.

The CCN assessment also estimated the "transition costs" for establishing different numbers of new councils, with the total for four of them being almost double that for one – £41.3m, compared to £22.2m.

Two would come in at £28.6m while three would cost £35m.

The county council report stressed that the establishment and running cost figures were derived from "detailed assumptions [that] have not been made available" – and so did "not represent a full and final financial analysis".

The Ministry of Housing, Communities and Local Government was contacted for comment.