On 16 December the UK Government unveiled its long-awaited English Devolution White Paper Power and Partnership: Foundations for Growth. This ambitious blueprint aims to revolutionise the relationship between Westminster and local authorities, promising to shift the balance of power and deliver a new era of local empowerment.
We welcome this as a unique opportunity for local government to transform, bringing about historical new powers and structural reforms that will empower local leaders and enhance the prosperity of communities across England. These changes present a landmark shift in how public sector organisations will drive innovation, achieve greater economic prosperity and opportunity for all and deliver improved services to residents. However, while the potential is immense, there are significant challenges and uncertainties that require careful consideration.
At its heart, the White Paper proposes a significant shake-up: the creation of new strategic authorities and the reorganisation of local government into unitary authorities. The introduction of directly elected mayors with enhanced powers over transport, housing, and economic development promises streamlined decision-making, reduced bureaucracy, and a focus on regional growth. For residents and businesses, this could mean less confusion and more consistent, joined-up services.
The potential for larger, better-resourced authorities to secure investment and drive innovation is compelling. Standardised devolution agreements aim to level the playing field across England, ensuring fairness in how powers and funding are distributed. Meanwhile, multi-year financial settlements should give local authorities the breathing room to plan for the future with confidence.
The proposed ‘unitary by default' model represents the most transformative structural reform in a generation. While some may view this as a cost-saving policy, others will see this as an evolution of governance that aligns with modern societal and economic realities to create more agile and responsive local government structures and leadership.
While evolution is necessary, the District Councils' Network, however, expresses concern at the potential size of proposed unitaries, stating that reform must retain ‘strong localised delivery units with a clear focus on place-making'.
With great ambition comes equally great complexity. Transitioning to unitary authorities isn't just about redrawing administrative boundaries; it requires the creation of wholly new organisations, with new organisational values and leadership structures designed around the uniqueness of place, the careful management of redundancy processes, significant investment in IT system integration, as well as asset and estate consolidation – all of which come with significant upfront costs.
Estimates suggest costs could range from £20m to £80m per area, with potential savings of approximately £2.9bn over five years, equating to around £600m annually, or £25m per year per county area, according to analysis from the House of Commons Library and a report by PricewaterhouseCoopers. However, past reorganisations suggest these savings may take longer to materialise and could be offset by unforeseen expenses.
One of the key challenges is ensuring these larger authorities remain connected to the communities they serve. Bigger is not always better when it comes to local representation. Residents in smaller or rural areas may feel their voices are lost in a centralised system. Ensuring that strategic authorities deliver for all communities will require robust accountability mechanisms and inclusive governance frameworks.
Another pressing issue left largely unaddressed in the White Paper is funding. While there are indications of a move toward longer-term financial settlements, the details remain unclear. Decades of underfunding have left many councils struggling to deliver essential services, and restructuring alone will not bridge this gap. Areas such as adult social care and housing continue to face immense pressure, requiring sustained investment beyond structural reforms.
Local government is facing a talent crisis, with shortages of skilled professionals in areas such as planning, housing, and social care. As devolution advances, the demand for experienced leaders and specialists will only increase, risking a serious shortfall if left unchecked. This puts HR directors at the forefront of addressing workforce needs. There will be a need to plan strategically to identify future skills requirements, run targeted recruitment campaigns, and position local government as an appealing career choice.
Retaining staff is equally important. Clear progression pathways, along with professional development, mentoring, and leadership training, can help keep talented individuals engaged and motivated through this period of significant change. Collaboration with national agencies and professional bodies will prove vital in closing skills gaps, while advocating for policy and funding support will ensure local authorities have the resources to invest in their workforces.
We know that a strong, well-prepared workforce is crucial to making devolution a success and delivering real benefits to local communities. It is our role, as we have experienced in our work with the creation of combined authorities and previous local government reorganisation processes, to support new organisations identify and develop talented leaders that will deliver transformation within and beyond their own organisation.
Regional inequalities also loom large. Wealthier areas with stronger economies are likely to be better positioned to capitalise on devolved powers, potentially widening the gap between different parts of the country. Addressing this disparity will require careful calibration of funding formulas and a steadfast focus on levelling up.
The English Devolution White Paper is a bold and visionary step towards reshaping local governance. It holds the promise of empowered local leadership, streamlined structures, and the chance to address long-standing regional disparities. However, its success will depend on thoughtful implementation, adequate funding, and a relentless focus on inclusion, fairness, and citizen engagement.
For local leaders and communities, this is a moment of opportunity. By tackling the challenges head-on and filling the gaps in the current proposals, you can create a governance system that not only empowers regions but also delivers real, tangible benefits for the people who live there.
The journey won't be easy, but the prize is worth striving for: a governance system that truly reflects the needs and aspirations of 21st-century England.
Ben Parsonage is senior consultant and Philip Emms is principal consultant in GatenbySanderson's local government practice
