Council leaders sound alarm over financial sustainability of new authorities and supply of senior social care leaders, as government unveils next phase of local government reorganisation.
Fifteen new councils will take responsibility for social care from eight existing authorities in 2028, under the government’s local government reorganisation (LGR) programme.
Responsibility for services will be overhauled across Essex and surrounding areas, Hampshire and adjoining localities, Norfolk and Suffolk, through the break-up of the existing county councils and the incorporation of existing unitaries into new structures.
Under the proposals, Essex, Southend-on-Sea and Thurrock councils will be replaced by five unitaries, Norfolk by three unitaries, Suffolk by three unitaries and Hampshire, the Isle of Wight, Portsmouth and Southampton by five unitaries. The only authority in the four areas that will remain intact is the Isle of Wight.
Communities secretary Steve Reed announced the changes yesterday in a ministerial statement that follows a consultation on competing proposals for reorganisation in the four areas put forward by the existing authorities, including district councils, who are not responsible for social care.
The news provoked an angry response from some councils whose preferred options had been rejected, with Essex County Council suggesting it would legally challenge the government.
It has also sparked concerns from local government about the financial sustainability of the new authorities, existing social care services being broken up and whether there will be sufficient senior social care leaders to staff the increasing number of councils.
About local government reorganisation
LGR is designed to replace remaining two-tier local government areas – where county and district councils take responsibility for different services – with unitary councils responsible for all functions, in order to improve the efficiency, effectiveness and speed of decision making.
The first area to be reorganised is Surrey, where the existing county and 11 districts will be recrafted into two unitaries in 2027, with all other remaining two-tier areas following in 2028.
The government is yet to decide on arrangements for East Sussex, Brighton & Hove and West Sussex; Cambridgeshire and Peterborough; Derby and Derbyshire; Devon, Plymouth and Torbay; Gloucestershire; Hertfordshire; Kent and Medway; Lancashire, Blackburn with Darwen and Blackpool; Leicester, Leicestershire and Rutland; Lincolnshire, North Lincolnshire and North East Lincolnshire; Nottingham and Nottinghamshire; Oxfordshire; Staffordshire and Stoke-on-Trent; Warwickshire, and Worcestershire.
County council considering legal challenge over Essex overhaul
In Essex and surrounding areas, the government opted for a five-unitary authority proposal put forward by Southend-on-Sea and nine of the district councils, rejecting two four-unitary proposal and the three-council idea proposed by Essex County Council. This will create authorities in the west, north east, middle, south west (including Thurrock) and south east (including Southend) of the county.
In a letter to council leaders, Reed said he chose the option because it had the support of most of the existing authorities, reflected local identities and created councils that were linked to each of Essex’s five key urban centres.
Reed also confirmed that the council planned to repay £200m of the debt accumulated by Thurrock Council, on the grounds that the authority “holds significant unsupported debt that cannot be managed locally in its entirety”.
However, Essex County Council rejected the decision and threatened legal action. Leader Kevin Bentley said: “The government set out criteria for the new councils on fragmentation, sustainability of services and the ability to withstand financial shocks. The justification for their decision is thin. Given the Government’s reasons for their decision, we will be looking to legally challenge.”
Plans for change in Hampshire
In Hampshire, the government selected the five-unitary proposal put forward by Portsmouth, Southampton and five district councils, rejecting two other five-council proposals and the four-council model advocated for by Hampshire County Council. This will create authorities in the north, middle, south east (including Portsmouth) and south west (including Southampton) of Hampshire, alongside the Isle of Wight Council.
Reed told leaders he judged that it was the most financially sustainable option, better reflected local identities and communities, would support house building and economic growth and provided a “coherent” geography for delivering services including social care.
Proposals for county-wide authorities rejected
In both Norfolk and Suffolk, the county councils proposed creating unitary authorities covering their current areas, which would have avoided breaking up existing social care services.
However, instead, the government has chosen three-unitary models in each county supported by most of the constituent district councils. This was despite all six of the new councils having populations of less than 500,000, despite a “guiding principle” set by the government being that they had at least this number of people, to ensure authorities were of sufficient scale.
In relation to Norfolk, Reed said the decision to choose the model of having councils in the west and east of the county, and one around Norwich, was based on it being “better aligned to Norfolk’s distinct communities” and better considering Norwich’s role as an economic hub.
He made a similar argument in relation to the government’s decision to choose the option of having councils in central and eastern, and western, Suffolk, and one based around Ipswich. He said it reflected the “different local identities and communities across Suffolk, and would more effectively support Ipswich’s role as the key urban area”.
In both cases, he said that the 500,000 population measure was “a guiding principle, not a fixed threshold”.
‘Huge risks to service provision’
Norfolk County Council stressed that the “government must ensure that the full costs of reorganisation are met and that implementation arrangements are robust, realistic and fully deliverable”, while Suffolk County Council delivered an angry verdict on ministers’ decision.
“Dividing our county into three new areas carries huge risks to service provision for vulnerable people and long-term financial resilience,” said council leader Matthew Hicks.
The authority has calculated that the three-council model would make the county £145m worse off after five years, with its cabinet member for LGR, Richard Rout, adding: “Splitting up key county-wide services that vulnerable residents rely on, such as adult social care and children’s services, is an enormous risk.”
Smaller council ‘bad for social care’
Similarly, the County Councils Network (CCN) criticised the government’s decisions across the four areas to create relatively small authorities, claiming 12 of the 15 new councils had populations of substantially less than 500,000.
A report by CCN and consultancy Newton, published last year, argued that setting up councils of this size would increase the prices authorities paid for social care because smaller bodies had less purchasing power.
The report also warned that creating smaller councils would significantly increase the number of senior social care leaders required to staff them, and posed a risk to performance, citing data showing county authorities were more likely to receive good or outstanding ratings from Ofsted.
Following Reed’s announcement yesterday, CCN chief executive Simon Edwards said: “We now face the prospect of widespread disaggregation of care services and unprecedented levels of complex boundary changes to create small, under-bounded city based unitary councils.
“At a time when council finances in two-tier areas have never been more under strain… the evidence clearly shows that these ministerial decisions will inevitably end up costing local taxpayers more while causing greater upheaval to services for the most vulnerable.”
ADASS sounds alarm over funding and lack of senior leaders
The Association of Directors of Adult Social Services (ADASS) raised similar concerns around the impact of the government’s LGR agenda on adult social care.
President Jess McGregor said there was “no clear plan or funding to ensure new councils are financially sustainable”, without which there was “a real risk that some authorities will not be able to meet their legal duties as soon as they are created”.
She said the changes were “likely to concentrate responsibility for care homes in areas with lower land values”, which also tended to have the smallest council tax bases, creating a “structural risk that some councils will inherit significantly higher levels of need without the funding to match”.
Echoing the CCN’s October 2025 report, McGregor said that LGR risked “exacerbating” the “significant strain” on the leadership pipeline in adult social care, which was already resulting in with “persistent challenges in recruiting and retaining experienced directors of adult social services”.
The changes risked “increasing turnover, disrupting leadership continuity, and creating additional demand for roles that are already hard to fill”, she added.
“Strong, accountable leadership will be critical to a safe transition, yet the system is not currently equipped to meet that challenge. Urgent action is needed to strengthen and expand the pool of senior leaders capable of delivering statutory duties.”
Source: Community Care, Mithran Samuel
