GROWTH, REFORM AND TRUST - Creating Places That Deliver the Promise and Potential of Local Government Reform

In February 2025 the District Councils Network invited Inner Circle to produce a paper setting out how places might best respond to the challenges and opportunities of LGR based on their own experience, research and through engagement with key thinkers and practitioners in the sector. This work was undertaken on a pro-bono basis. The following is the Executive Summary of this report, to read the full report, you can download it here.

Our communities face unrelenting challenges – stagnant growth, fiscal restraint, rising inequality, intergeneration poverty, and a catastrophic loss of trust in institutions.

Local Government Reorganisation (LGR) offers a vital opportunity to address these issues, yet some see it as a short term cost-saving exercise through the creation of a small number of large councils. It’s an approach that relies on basic number crunching, zooming out on maps and adopting outdated models of local government service delivery. At best this approach is insufficient. At worst it will be a hugely costly and disruptive process that will simply create larger versions of semi-functional or dysfunctional arrangements that aren’t delivering for those that need it the most or for the nation as a whole.  

In terms of achieving financial resilience, recent LGR efforts have delivered mixed results, underscoring the urgent need for reform. To this end, the English Devolution White Paper highlights priorities: economic growth, housing, prevention, and restoring public trust. These are not standalone goals but interconnected drivers of sustainable, effective public services.

The returns to the public purse from growing economies, building housing, preventing future needs and restoring trust are far more significant than the short-term savings that accrue from consolidating existing functions. This is why we believe any proposition for LGR must demonstrate how these objectives will be delivered and what their delivery requires, in terms of geography, operating model, design, leadership, capability and fit with new or existing institutions or partnerships. Their realisation demands a place and people-based approach to the design of future organisations. It is in places that true change happens, be it in a region or a neighbourhood or a village. All of these are key dimensions in the renewal of public services and, consequently, the renewal of the nation.

District councils, deeply engaged in housing and frontline services, hold crucial insights. Their daily interactions with communities give them an unmatched understanding of local needs. As new institutions are designed and then delivered their insight and perspectives are invaluable and their voice must be heard.

The design of future arrangements must adopt a long perspective. Designing the right future state isn’t any more complicated than designing an interim one. While it can make strategic sense to implement change incrementally it rarely if ever makes sense to elaborate goals or a vision of the future incrementally. Such an approach will tend to the status quo. Phasing should be purposeful, ensuring each stage aligns with long-term objectives, rather than a risk adverse restructuring that postpones real transformation. Being ‘safe and legal’ is not a vision, it needs to be one of many key objectives.

LGR success depends on co-production and commitment. Reform should build local capacity, confidence, and resilience rather than merely rearrange structures. Establishing independent design and transition teams, drawing expertise from across existing councils, can ensure reforms are strategic, innovative and effective.

The greatest risk is losing momentum and settling for change that isn’t change. Instead, LGR must focus on a meaningful renewal and reform – driving economic growth, improving public well-being, and restoring faith in the local state.

Now is the time for optimism and action. By prioritising sustainable reform over short-term fixes, LGR can reshape local government into a dynamic, effective force that truly serves the people and places it is here to serve.