Agenda item

Cllr Liz Leffman, the Leader of the Council, has been invited to present a progress update on the Council’s work on Local Government Reorganisation.  Martin Reeves, Chief Executive, Lorna Baxter, Executive Director of Resources and s.151 Officer (Deputy Chief Executive), and Helen Mitchell, Programme Director: Local Government Reorganisation, have also been invited to attend and to answer the Committee’s questions.

The Committee is asked to consider the report and raise any questions, and to AGREE any recommendations it wishes to make to Cabinet arising therefrom.

The report, annexes 1-4, and the background paper are attached.  Annexe 5 is to follow.

Cllr Liz Leffman, the Leader of the Council, was invited to present a progress update on the Council’s work on Local Government Reorganisation.  Martin Reeves, Chief Executive, Lorna Baxter, Executive Director of Resources and s.151 Officer (Deputy Chief Executive), and Helen Mitchell, Programme Director: Local Government Reorganisation, were also invited to attend and to answer the Committee’s questions.

The Leader introduced the Local Government Reform (LGR) item outlining the statutory requirements driving the process, emphasising the Council’s duty to engage with the City Council as the local planning authority and to fulfil its own responsibilities as the highways and transport authority. The Leader highlighted key benefits of LGR, such as the opportunity for more integrated and efficient service delivery, improved strategic planning, and better use of public assets. Partnership working was underscored as essential, with the Leader noting ongoing close collaboration with Oxford City Council and other public sector partners to ensure that the reform would support both local priorities and statutory obligations, and to maximise the positive impact for residents and the wider community.

The Executive Director of Resources and s.151 Officer presented the financial analysis for Oxfordshire's single council proposal, noting PricewaterhouseCoopers (PwC) appraisal of one and two unitary options with a standard methodology for direct comparison. The analysis used revenue reports from local authorities and assessed reorganisation benefits in staff, third-party spend, property, and democracy. Disaggregation costs were only relevant for two and three-unitary models; transition costs like redundancies, IT, and consultation were considered. The Executive Director of Resources and s.151 Officer confirmed the methodology was typical for business cases, not government-mandated, and expenditures were aggregated as a starting point. The appraisal targeted net benefits and payback periods, estimating roughly £27 million annual savings for a single unitary council, with the analysis pending final due diligence.

The Committee raised the following questions and comments:

·       Whether the financial analysis for local government reorganisation accounted for diseconomies of scale, particularly if more services were devolved to town and parish councils, and about the treatment of pension strain in the calculations. The Executive Director of Resources and s.151 Officer responded that diseconomies of scale were not expected to be significant, as county-wide procurement would likely offset any such effects.

Regarding pension strain, the Executive Director of Resources and s.151 Officer explained that it referred to the cost to the pension fund when someone over 55 was made redundant, and that it was difficult to calculate precisely for each individual. However, she confirmed that, for consistency, none of the three business cases included pension strain in their calculations.

·       A question was asked about the powers of mayoral strategic authorities, referencing a recommendation from the Centre for Governance and Scrutiny (CfGS) that suggested the City Council might retain powers over areas such as the economy, business, tourism, planning, and licencing. The question also sought clarity on the concept of clusters, the powers and budgets of area committees, how a larger council could be closer to communities, whether the county council truly provided the majority of services, and concerns about the practical disaggregation of services.

The Leader explained that, whilst mayors would have strategic powers in areas like planning and transport, councils would continue local service delivery, aided by area committees to maintain community input. She stressed the need to strengthen ties with town and parish councils without fully devolving or centralising responsibilities. Statutory roles, such as adult social care and children's services, would remain distinct to avoid duplication, differentiating between strategic oversight and local operations.

The Chief Executive noted that a single unitary authority offered financial resilience and economies of scale, but these do not ensure local responsiveness without active community engagement. He pointed out that service delivery can be both uniform and locally adapted, as seen in adult and children’s social care. The Chief Executive clarified that mayoral authorities would retain only select strategic functions, with most services staying within the unitary authority, and stressed the importance of blending strategic scope with localised delivery.

The Programme Director noted that, whilst Government wanted area committees for neighbourhood empowerment, a single model would not suit all areas. She emphasised the need for flexible, sensitive governance due to the complexity of community arrangements. The Programme Director added that the LGR Neighbourhood Governance working group had piloted new approaches to ensure genuine local involvement.

·       Whether it was appropriate to begin discussions now with parish and town councils regarding the transfer of powers, responsibilities, and funding, rather than waiting until after the new council was established.

The Programme Director responded that there was nothing to prevent parish and town councils from requesting to take on services now, as they already had the legal right to do so under the Localism Act. However, she noted that, as the reorganisation process progressed, there would eventually be restrictions on councils entering into new contracts or spending above certain thresholds. She suggested that, whilst such discussions could take place, the current period was unusual due to the impending changes, and she offered to provide a more detailed response later.

The Chief Executive stated that, although some services can be discussed at this time, there are practical limitations, such as ongoing contracts. He suggested focusing on identifying which services are most appropriately delivered at each level, evaluating the current capacity and willingness of parish and town councils, and considering options for clustering. It was noted that some councils already provide several services, whilst others do not have the capacity or interest to do so. The Chief Executive indicated that a flexible, customised approach is preferable to a universal transfer of responsibilities and observed that issues of duplication and inefficiency in service delivery should be addressed during the reorganisation process.

·       Whether there were protections in place to prevent parish and town councils from being given services and responsibilities they were not equipped to handle, especially as some were already taking on functions like grass cutting, pothole marking, and public toilets.

The Leader responded that the approach should be to work with parish and town councils to understand what they wanted and were able to do, recognising that some were keen to take on more powers whilst others, particularly smaller councils, were not in a position to do so. She emphasised that the process would not be uniform and would require careful consideration to avoid overburdening councils.

The Chief Executive added that there was a risk of imposing unsustainable costs on even the larger town councils if not managed carefully. He suggested that the only way to make sense of the process was to use practical examples, such as youth work, to illustrate how responsibilities could be shared appropriately between strategic and local levels, ensuring consistency without duplication or excessive burden.

Cllr Kerr and Cllr McLean left the meeting at this stage.

·       Whether Mayoral Strategic Authorities might gradually assume the responsibilities and powers of unitary authorities, potentially centralising functions such as planning, procurement, and service delivery. Members were concerned about underrepresentation in a large unitary authority, as reducing the number of councillors could weaken local responsiveness. Further concerns included the risk of inefficiencies in large organisations, the limitations of shared services, and the possibility that local area committees would lack real decision-making power and become ineffective.

The Leader responded that the structure of the strategic authority would include a committee with representation from all local authorities, not just the mayor, which should help prevent excessive centralisation of powers. She expressed hope that this arrangement would avoid the scenario where all powers were concentrated in the hands of the mayor.

The Chief Executive stated that scale may offer resilience as well as potential inefficiencies, but, in the current financial climate, the advantages of resilience and the capacity to manage major challenges were considered to outweigh the risks of inefficiency. He indicated that shared services could be implemented, although statutory accountability remained individual and could not be shared; he identified this distinction as significant. The Chief Executive also referred to the importance of local engagement and emphasised that, for local area committees to be effective, they should have a clear purpose rather than being purely formal.

·       When considering alternative proposals for housing and transport, the single Oxfordshire model's role in coordinating planning and integrated transport should be prioritised. Dividing responsibilities among multiple authorities may create challenges for unified planning. The Chief Executive emphasised valuing all proposals and noted that the team is focused on presenting the strongest case for the unitary model whilst acknowledging other approaches. He supported sharing proposals between groups to highlight key advantages like strategic planning and transport integration before formal submission.

Cllr Brant left the meeting at this stage.

·       The possibility of clustering services such as housing, transport, planning, economic development, and energy within a single unitary authority was discussed, particularly in relation to whether this approach would replicate the functions of district councils. The Chief Executive and Programme Director clarified that clustering was intended to improve service delivery across a large area and was not designed to establish another layer of government or recreate district councils. They noted that services may be delivered in clusters for practical purposes, but the structure would remain a single, unified unitary framework without creating additional authorities or incurring extra costs. It was also emphasised that, whilst strategic direction could be provided by the mayor, operational delivery would continue to be managed by the unitary authority rather than new entities resembling district councils.

·       The discussion included queries regarding resident feedback on the Oxfordshire model, with observations that some parishes were unfamiliar with it but more accustomed to district and city models. There was also interest in lessons learned from local authorities involved in the government's initial phase, such as Hampshire and Surrey.

The Programme Director stated that the County Council had distributed the Let's Talk Oxfordshire survey to all town and parish councils, as well as having undertaken a resident survey, focus groups, and youth engagement initiatives. She noted that whilst some parishes may not have received or responded to the information, statutory consultation planning was progressing to enhance outreach. Feedback consistently emphasised the need for simplicity, cost-effectiveness, and a single point of access for services, alongside concerns about the scale of a single unitary authority and the potential for local needs to be overlooked.

In reference to insights from other regions, the Executive Director of Resources and s.151 Officer reported ongoing reviews of business cases from areas such as Hampshire, West Sussex, and Suffolk, whilst underscoring the importance of tailoring the Oxfordshire proposal to deliver local benefits, given each area's distinct context.