20 June 2003
Town hall leaders are demanding a thorough analysis of the costs of reorganising local government if next year's referendums lead to elected regional assemblies being set up.
Public Finance has learned that representative bodies, including the Local Government Association and the County Councils Network, have been lobbying the government to ensure voters know the true costs of the reforms before they are asked to vote on the issue.
LGA chair Sir Jeremy Beecham has claimed the move could add up to £25 a year to council tax bills.
Steve Rankin, director of the CBI in the Northeast, also expressed concern about the financial implications of the reforms. 'A few years ago the government promised that it would do a pre-audit so that any assemblies would be cost-neutral. That hasn't happened,' he said.
The news comes in the wake of Deputy Prime Minister John Prescott's announcement on June 16 that voters in three regions – the Northeast, the Northwest and Yorkshire and the Humber – would be asked if they wanted elected chambers. A 'yes' vote in favour will trigger a reform of local government and a move to unitary authorities.
The Boundary Committee for England has this week launched local government reviews in all three regions and will come up with at least two models of unitary government for each. Voters will be asked which option they want.
The CCN has been making representations to the Office of the Deputy Prime Minister on the cost issue since April. The Local Government Association has been making similar demands.
John Sellgren, director of the CCN, told PF it was vital that the public had this information before they voted in the referendums, which are due to be held in 2004. He said: 'There is a real dearth of information at the moment. How much is all of this going to cost?'
PricewaterhouseCoopers were commissioned by the ODPM to calculate the price of reform: they delivered their findings earlier this year. Sellgren, however, said this study used only a partial cost model, which does not reflect the total bill for restructuring.
He suggested updating the Ernst & Young model, used to calculate the total costs during the last local government reorganisation in the 1990s, to come up with the figures. He estimated a new study would take six months, which is well within the timescale for the referendums.
A spokeswoman from the ODPM told PF they had chosen a partial cost study because it was a comparative model that could be used by the Boundary Committee during its reviews.
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