Five unitary councils - achieving efficiencies, improving capacity

The five unitary proposal outlines that four new unitary authorities on the main land, with the Isle of Wight remaining a separate unitary council, unlocks efficiencies - savings of £63.9 million per annum - improves capacity and withstands financial shocks by:

• Empowering each authority to manage its entire budgetary process from start to finish.

• Centralising procurement, including IT, highways maintenance, and social care placements.

• Enhancing transformation teams across each distinct area to achieve savings from service redesign tailored to local needs and secure post-vesting day milestones.

• Unifying capital and revenue planning to ensure major projects are funded from a strategic fund tailored to local requirements, rather than a broad model that overlooks specific resident, community, and local ecosystem requirements.

• Leveraging local relationships to support key localised service provision and service integration and transformation through a total place based approach, building and scaling capacity across distinct areas.

• Fostering competitiveness within the supplier market as unitary authorities cover balanced geographical and population areas.

• Enabling growth and increasing financial resilience in major and emerging industries by forming unitary structures that focus on the distinct economic areas and industries, such as defence, maritime, agriculture, and digital. Local interventions can enhance diverse economic areas across rural and urban settings, positively impacting the local economy, skills, and employment and generating significant income.

• Ensuring the best democratic representation for each new unitary with balanced populations connected to distinct communities, reducing current councillor numbers by 40%, and reviewing member allowance schemes across Hampshire and the Isle of Wight.

• Ensuring the size of the organisation is proportionate to the services that are being delivered by enhancing operational efficiency and delivering more impactful roles.

• Reviewing and rationalising the property portfolios to ensure alignment with each authorities’ overall objectives and community needs, optimising the return on assets.

• Enhancing customer contact facilities by ensuring the needs of residents are met through proportionate customer engagement services, including developing self-service digital channels alongside driving operational efficiencies and improving overall customer satisfaction.

• Consolidating the fleet portfolios to realise route efficiencies and minimise environmental impact through sensible geographies for each of the unitaries.

The proposal strikes the balance of being large enough to deliver and benefit from financial efficiencies, while remaining closely connected to local areas.

Here’s a summary of the financial case in the proposal:

Implementation and disaggregation costs: One-off implementation costs by year 3 for Options 1 and 2 are estimated at £128.2 million (base) and £155.5 million (high), with additional annual disaggregation costs of £17.9 million (£19.7 million in High). For Option 1A, there are one-off implementation costs of £133.0 million (base) and £160.3 million (high), primarily driven through the additional complexities and costs of disaggregating with boundary changes.

Recurring savings: By year 3, the reorganisation is projected to deliver annual recurring savings (net of existing partnerships) of £81.8 million in the base case and £111.5 million in the high case across options 1, 2 and 1A. These savings represent 2.2% and 3.0% respectively of the combined total service expenditure of £3.8 billion.

Payback and net benefit: Payback is achieved within 3.0 years (2.3 years in high), with an annual net financial benefit of £63.9 million (£91.8 million in high) by year 4 for Options 1 and 2. In Option 1A, Payback is achieved in 3.1 years in the base case (2.3 years in high) with the same annual net financial benefit as Options 1 and 2.

Comparative viability: All three modelled options (Options 1, 2, and 1A) deliver a positive net financial benefit, with Option 1A incurring slightly higher implementation costs due to boundary changes but achieving similar long-term savings.

You can read more detail in full proposal document on page 167 - 194