Rhys Hurley is investigative Lead at the New Zealand Taxpayers Union
Fewer councils, fewer duplicated roles, all under the promise of lower costs and better services. When governments are looking for an easy win, it seems a shake-up of local government is where they head. For locals that might sound tempting, especially when local tax hikes have already outpaced inflation this year.
While Whitehall chugs along at its typical pace in Britain, a far more radical experiment is unfolding in my neck of the woods. New Zealand has started its own pathway for council amalgamation. Local authorities have been given a strict three-month ultimatum: design your own streamlined, unitary mergers, or central government will step in and do it for you.
The arguments in favour of bigger councils are well-rehearsed and often convincing. Some councils are too small to employ specialist staff, and services can be bought more cheaply at scale. Councils should be encouraged to share services, roles and procurement where that will save money. But that is not the same as saying every local function should be swallowed into a larger authority on the chance that savings might appear.
Like the UK, New Zealand already has councils with larger populations than some Western countries. Additionally, the test case of combining communities under super-city sized structures has already been shown to fail. Auckland, whose population is made up of 1.8 million people, was combined under the promise to do more for less. Yet household rates have climbed more than 85 per cent since amalgamation, while staff numbers rose 27 per cent.
England is now faced with this same question. With the current plan demanding these distinct local areas be consolidated into sprawling unitary authorities. Essentially forcing these new entities toward a massive population threshold of over 500,000 people, and affecting the 21 remaining county councils and 164 district councils.
Yet that same case for savings is not as clear as ministers might like. Information provided by the House of Commons Library states it is “not clear” from the available evidence whether unitary councils save money compared with two-tier systems.
Neither country’s evidence fully supports the “bigger is better” argument. The NZ Infrastructure Commission examined whether larger councils delivered key services more cheaply. It found that council size made little difference to cost efficiency, with performance around the same on average. TDB Advisory’s analysis reached a similar conclusion: there may be a case for sharing services such as roading and water, but for everything else, there was little or no evidence of the benefits of economies of scale.
While the UK’s District Councils’ Network whose original estimates this plan was based on has now found “little or no evidence” to support the plans 500K population baseline. Instead, the evidence on unitary councils more often favoured smaller councils. With those above 350,000 people spending more per resident on average.
When searching for examples you only have to look towards the example of Birmingham’s super sized 1.1 million residents council who declared itself bankrupt in 2023. Not to mention the issues that can arise surrounding poor long term decision making locking in higher spending for existing areas’ constituents once elected members know they will have to compete for newly formed roles and the large restructuring costs itself.
None of this is to say mergers are wrong.
Councils should be free to test ways of cooperating. Sharing services, pooling procurement, and removing duplication of staff and services are places to start that locals would benefit from. In some places, local people may even decide that a merger makes more sense. But these decisions need to come from the bottom up, not be imposed by Parliament because bigger is easier to deal with for Whitehall or Wellington.
The larger and more remote councils become, the harder it is for residents to influence decisions and hold elected representatives to account. If councils are to be merged, put it to the people who pay the bills via referendum. If affected residents vote for it, proceed; if they vote against it, stop.
Rhys Hurley is investigative Lead at the New Zealand Taxpayers Union
Fewer councils, fewer duplicated roles, all under the promise of lower costs and better services. When governments are looking for an easy win, it seems a shake-up of local government is where they head. For locals that might sound tempting, especially when local tax hikes have already outpaced inflation this year.
While Whitehall chugs along at its typical pace in Britain, a far more radical experiment is unfolding in my neck of the woods. New Zealand has started its own pathway for council amalgamation. Local authorities have been given a strict three-month ultimatum: design your own streamlined, unitary mergers, or central government will step in and do it for you.
The arguments in favour of bigger councils are well-rehearsed and often convincing. Some councils are too small to employ specialist staff, and services can be bought more cheaply at scale. Councils should be encouraged to share services, roles and procurement where that will save money. But that is not the same as saying every local function should be swallowed into a larger authority on the chance that savings might appear.
Like the UK, New Zealand already has councils with larger populations than some Western countries. Additionally, the test case of combining communities under super-city sized structures has already been shown to fail. Auckland, whose population is made up of 1.8 million people, was combined under the promise to do more for less. Yet household rates have climbed more than 85 per cent since amalgamation, while staff numbers rose 27 per cent.
England is now faced with this same question. With the current plan demanding these distinct local areas be consolidated into sprawling unitary authorities. Essentially forcing these new entities toward a massive population threshold of over 500,000 people, and affecting the 21 remaining county councils and 164 district councils.
Yet that same case for savings is not as clear as ministers might like. Information provided by the House of Commons Library states it is “not clear” from the available evidence whether unitary councils save money compared with two-tier systems.
Neither country’s evidence fully supports the “bigger is better” argument. The NZ Infrastructure Commission examined whether larger councils delivered key services more cheaply. It found that council size made little difference to cost efficiency, with performance around the same on average. TDB Advisory’s analysis reached a similar conclusion: there may be a case for sharing services such as roading and water, but for everything else, there was little or no evidence of the benefits of economies of scale.
While the UK’s District Councils’ Network whose original estimates this plan was based on has now found “little or no evidence” to support the plans 500K population baseline. Instead, the evidence on unitary councils more often favoured smaller councils. With those above 350,000 people spending more per resident on average.
When searching for examples you only have to look towards the example of Birmingham’s super sized 1.1 million residents council who declared itself bankrupt in 2023. Not to mention the issues that can arise surrounding poor long term decision making locking in higher spending for existing areas’ constituents once elected members know they will have to compete for newly formed roles and the large restructuring costs itself.
None of this is to say mergers are wrong.
Councils should be free to test ways of cooperating. Sharing services, pooling procurement, and removing duplication of staff and services are places to start that locals would benefit from. In some places, local people may even decide that a merger makes more sense. But these decisions need to come from the bottom up, not be imposed by Parliament because bigger is easier to deal with for Whitehall or Wellington.
The larger and more remote councils become, the harder it is for residents to influence decisions and hold elected representatives to account. If councils are to be merged, put it to the people who pay the bills via referendum. If affected residents vote for it, proceed; if they vote against it, stop.