Agenda item

To update Scrutiny Committee on preparations to submit a proposal for Local Government Reorganisation to Government; and

To present to Committee the business case that has been prepared to support the creation of three unitary authorities in Lancashire. A one-page executive summary of this case is attached, and a copy of the full business case will be circulated to members once the final version is approved for publication.

Recommended             -    That the comments and recommendations of the Committee be noted and actioned, as required.

The Leader of the Council, Councillor Munsif Dad, presented a report to update the Committee on preparations to submit a proposal for Local Government Re-organisation to Government.  He gave details of the business case that had been prepared to support the creation of three unitary authorities in Lancashire.  A one-page executive summary of this case was attached to the report and a copy of the full business case had been circulated to Committee Members, prior to the meeting.  Also, in attendance at the meeting was the Chief Executive, David Welsby, and the Policy Manager, Stuart Sambrook, to respond to the questions of the Committee.

The Leader of the Council explained that the aim for Local Government Re-organisation was to improve service and financial efficiency.  He reported that Hyndburn had chosen to propose the three unitary model to Government and pointed out that this model was the most suitable and met all Government tests without compromise.  Other models weakened the case for any reform.  He indicated that the issue was also due to be discussed by Full Council before a decision was taken by Cabinet on the 19^th November 2025.  All proposals had to be submitted to Government no later than 28^th November 2025. 

Questions in Advance

Members had submitted questions in advance which requested further information on timelines, consultation of the matter, the financial impact of the cost of Adult social care, clarity around an Elected Mayor and civic Mayors, Shadow Authority elections and electoral divisions and the number of Council representatives proposed for the new Unitaries.

The Committee was provided with a timeline and key dates for the Local Government Re-organisation and informed that a full consultation with the public would be carried out.  It was pointed out that Adult Social Care was the biggest expenditure in Unitary Councils and one of the factors influencing Council reform.  Of the different reform model options the evidence provided in the business cases favoured the 3-model option.  In respect of the introduction of a Lancashire elected Mayor, the Committee was informed that this was a possibility and that there could be Mayoral elections in 2028.  The continuation of Civic Mayors was currently unknown but this would be decided before the introduction of a new Shadow Authority.  In respect of elections and electoral divisions, the Committee was informed that it was likely that wards would be based on County wards, although nothing had yet been confirmed.

Further Discussion

Members of the Committee submitted further questions and comments on Local Government Re-organisation including:

·         During the September consultation, which business stakeholders participated and requested data and numbers.

·         Was consideration given to coastal authorities and natural borders when considering the formation of new Unitary Authorities.

·         Elected Members for the new Unitary Authorities would, potentially, have a greater number of electorates to represent.  There was concern that representatives could find their workloads unmanageable and asked for consideration to be given to this factor.

·         Will the Local Elections in May 2026 still take place?

·         What will happen to Council reserves and to the debts carried by some Authorities?

·         What will happen to the Hyndburn Leisure Trust?

·         Would Parish and Area Councils need to be resurrected due to the potential size of the new Authority?

·         What will the new Authorities be called?

·         What happens if Hyndburn Borough Council can’t decide which option they want?

·         Will meetings of Hyndburn Borough Council and the Shadow Authority be separate?

·         How would an Elected Mayor work?

·         Social care issues – the greatest cost on Councils, staff recruitment issues and funding for it.  How will  this be dealt with?

·         What will happen to staff of the current local authorities when the new Authorities are formed?

·         Does the Council have the capacity to deal with any additional workload to  establish a Shadow Authority?

·         Would financial reports still be produced by each individual Council and will the Council need to be more careful with the funding of projects?

Responses:

An analysis of the consultation, carried out in September, had not yet been completed but the information would be broken down and circulated to Members for information.

It was explained that the Secretary of State required proposals to be submitted from each authority in Lancashire. However, none of the model options had full support but the 3 and 4 models were predominantly the most popular. 

The issue that elected Members may have to represent a greater number of electorates and the manageability of potential workloads was considered and noted.  

The Local Elections may possibly be deferred as they had been during the re-organisations that had taken place with other Local Authorities.  The Decision was with the Secretary of State which would be known in early 2026.

Hyndburn Leisure Trust was an independent organization and there were currently no plans to change this.

The financial position of all authorities would be merged and any debt would be disaggregated.  Reserves would remain where they are.  The Chief Executive informed the Committee that financial restrictions would be introduced later as new regulations were brought in. 

The names of the new authorities would be determined by the Secretary of State and it was likely that this would be simplistic names.

The Leader of the Council explained that Hyndburn Borough Council intended to propose the 3-model option and that each Lancashire Authority would submit their own proposal. There would be a public consultation in February and from this information the Secretary of State would make the final decision. 

The Chief Executive explained that Hyndburn Borough Council would meet to make decisions associated with the Council whilst the Shadow Authority would meet to make the decisions of the new Authority.  He explained that the two Authorities would work side by side until the transition had taken place.

A Lancashire Elected Mayor would be funded by the Government and oversee the whole of Lancashire.  An elected Lancashire Mayor would replicate those of Liverpool and Manchester.

The Leader of the Council explained that the provision of social care was a major factor in forming the new Authorities and that it was important to ensure that the model options proposed covered a sufficient population of at least 500,000 to ensure that services could be delivered financially and efficiently.  Anything under a population of 500,000 and it would be difficult to deliver, which was why Hyndburn would be proposing the 3-model option. 

The Chief Executive reported that the general position on staffing was that everyone had the right to TUPE and that it applied to everyone.

The Chief Executive explained that a Joint Committee had been set up, with representatives from each authority.  This Committee’s role was to align services through ensuring each Council provided up to date lists of assets, personnel information and other relevant data.  He pointed out that this may involve additional work for staff but that the Council’s budget planning would include capacity for this, should it be required. 

For each unitary formed, there would only be one financial report and each individual project would be given careful financial consideration before commencing to ensure that the funding and project could be delivered during the reforms.

The Chair thanked Members for their contributions to the discussion on Local Government Re-organisation that had centred around issues such as finances, staffing, public consultation, ward representation and boundaries, the continuation of projects currently underway, elections and the possibility of an Elected Mayor.

Resolved                     (1) That the Resources Overview & Scrutiny Committee recommended that Cabinet noted their support for:

a)   The Council’s proposal for a three unitary authority model for Local Government re-organisation in Lancashire;  and

b) The postponement of the 2026 Local Elections for Hyndburn;

 (2)  That it also be noted, that the Leader of the Council thanked the Chief Executive, the Policy Manager and the Executive Director, Resources, for their hard work in preparing the report and representing the Council at regional meetings; and

   (3) That the Policy Manager provides details of a breakdown of the consultation, carried out in September, in respect of the numbers of those who responded, data relating to business and other stakeholders and other relevant data and circulates this  analysis to Committee Members.