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Costs of Unitary Plans Must be Checked Out

Costs linked to a bid to amalgamate local council services confirm that the price of change would be big according to district council leaders in North Yorkshire.

They say figures attached to a proposal to merge services in the Selby area with those of East Riding Council substantiate their view that the cost of creating a single unitary for North Yorkshire would be huge.

Members of the North Yorkshire District Council Network are concerned that costs attached to a bid to create a single unitary authority for the county could be understated - and are urging Government ministers to closely scrutinise them.

East Riding is bidding to take over all services in Selby - both district and county - as part of the government's plans to improve local authority structures. North Yorkshire County Council has submitted a proposal to create a single unitary to cover Selby, Scarborough, Ryedale, Richmondshire, Harrogate, Craven and Hambleton.

"East Riding says it will cost £9.6 million to amalgamate their services with those in the Selby area," said Councillor Arthur Barker, leader of Hambleton District Council and spokesman for the District Council Network.

"But North Yorkshire County Council says the costs of creating a new authority from the seven districts and the county council will be £13.5 million. The figures just do not add up - how can the set up costs of a new authority be just £3.9 million more than merging one - and one of the smallest of the North Yorkshire districts at that - with an already established unitary council?

"Our estimate is £44 million - much closer to East Ridings when multiplying the costs of merging eight authorities. East Riding has been through this process and should know where the hidden costs of change lie in the levels of redundancy, changes in IT and democratic costs, etc."

He said East Riding estimates that redundancy costs would be around £5.2 million - which if applied to the seven districts in North Yorkshire would suggest a figure of around £36.4 million. North Yorkshire's bid puts the total set up costs - including redundancy - at £13.5 million.

"We are so concerned that we have asked to look at the financial model used to come to these figures..

"The only independent research done on the costs of setting up unitaries - by Professor Chisholm of Cambridge - states that everyone underestimates the magnitude of transition costs and the hidden costs were ignored This certainly seems to be the case with the county council proposal"

The Network has written to Ruth Kelly MP, Secretary of State for Communities and Local Government, to stress its opposition to North Yorkshire County Council's bid to create one authority for the county. Instead it wants to see effort put into the current two tier system to improve the partnership approach already working and endorsed by the all the councils only six months ago - and not put money into a costly structural change with no guaranteed benefit.

The government is looking to change the way in which local government is administered in all areas of two tier working across the country - it is asking for views on creating either single unitaries or improving existing arrangements. But it has said it expects to create only a small number - eight - of new 'super' councils and that for the majority, improvements in the existing arrangements will deliver reform. It will consider the unitary bid over the next month and if deemed worthy of further investigation it will go out for consultation in March.