Abolishing district councils could boost economy by £31bn

District councils have hit back after a report claimed abolishing lower-tier authorities could boost the UK economy by £31bn.

The report by the ResPublica – Devo 2.0: The Case for Counties – was launched today at the County Councils Network annual conference.

It claims that scrapping district councils could lead to huge improvements for businesses, housing and public services. Giving English counties devolved powers similar to those in Manchester and London could help benefit the UK economy by £31bn over five years, it says.

The report claims the move would free up £5.8bn to invest from savings, which could lead to an increase in gross value added (GVA).

It argues that by switching to single, unitary county authorities would give businesses a consistent framework for regulations and a ‘clear input’ into strategic planning.

The report warns ‘accepting the cost of problems’ with the current two-tier system is ‘no longer an option’.

‘Inaction could see the withdrawal of frontline services, failure to deliver more homes and opportunities for business growth and job creation lost,’ the report says.

‘There are increasing concerns that the two-tier system of local government presents a structural barrier to both dealing with the political and financial demands placed upon it and maximising the opportunities from devolution.’

The director of ResPublica, Phillip Blond, said single councils at a county level ‘are the future and we call on the government to move rapidly to encourage them’.

County Councils’ Network reform spokesperson and Wiltshire Council leader, Baroness Jane Scott said that the ‘need for change has never been greater’, with a ‘real risk of counties being left behind’.

‘ResPublica’s report highlights that streamlining counties will contribute billions to the national economy and will be good for business,’ said Baroness Scott. ‘But the real winners are local residents who will benefit from improved public services, less bureaucracy, and access to more housing and facilities that meet local need and demand.’

The report follows recent comments by the communities secretary, Sajid Javid that he is ‘minded’ to approve new unitary authorities in Dorset and Suffolk.

In a written ministerial statement earlier this month, Mr Javid revealed he supported proposals to establish two new unitary councils covering Dorset.

Under the proposals, a unitary covering Bournemouth, Poole and the borough of Christchurch would be formed, as well as a single unitary council for the remainder of the current county area.

Mr Javid has said he will continue to consult until 8 January.

But the ResPublica report was strongly criticised by the chairman of the District Councils’ Network (DCN), John Fuller, who said it is ‘at odds’ with recent comments by government ministers.

‘The local growth minister, Jake Berry, was crystal clear this week, “that the government does not want to get in to a top-down reorganisation of local government”,’ said Mr Fuller.

‘The minister also confirmed that ‘the role of district councils has never been more important in delivering growth across our country, and we need them to be fully engaged with our industrial strategy’.

‘Districts have long demonstrated their appetite for increased devolution and the transformation of local government in localities,’ added Mr Fuller.

‘These principles reflect the DCN’s long held position that local government transformation should be driven by bottom up solutions, that drive growth and improve people’s lives, while operating at a functional economic geography that makes sense to residents and which transforms service delivery.’

• Read the report here.