Local government reorganisation is key to unlocking growth

When we talk about economic growth, local government is rarely front and centre.

National debates focus on fiscal policy, planning reform or major infrastructure announcements. Yet it is the structure and capacity of local government that determines whether growth is actually delivered.

Local government touches people’s lives every day — from bin collections to road maintenance — but it also plays a decisive role in housing delivery, infrastructure investment and placemaking.

“Local government reorganisation is not a sideshow. It is a central part of the growth agenda.”

However, England’s local government system is still too fragmented to deliver with the pace and ambition we need – particularly outside of our major cities.

Around 1,300 statutory services are delivered by a complex mix of district, borough, county, metropolitan and combined authorities. Even where relationships are strong and visions aligned, split responsibilities inevitably create friction.

A council may approve thousands of new homes, but lack control over the transport or utilities investment needed to support them. Accountability is blurred, decisions are slowed, and risk increases.

For investors, developers and delivery partners, that fragmentation matters. Without an effective and efficient local government sector, investors lose confidence.

Both the previous Conservative Government and the current Labour Government have reached a similar conclusion: scale, clarity and alignment are essential. Larger authorities, covering wider geographies, with clearer powers and more predictable funding, are better placed to plan strategically and deliver consistently.

Combined Authorities are already demonstrating the benefits of this approach. Integrated funding settlements, stronger mayoral leadership and new fiscal levers create the conditions for more joined-up decision-making — across housing, transport, skills and regeneration. Elsewhere, more fundamental local government reorganisation is already underway.

Counties such as Staffordshire and Warwickshire are grappling with what new unitary structures could look like in practice. These conversations are complex and, at times, politically difficult. But they are also necessary.

Reorganisation is not about administrative tidiness, and it should not be about saving money. It is about creating institutions that are capable of supporting growth — aligning planning, infrastructure and investment decisions around a shared place-based vision.

Done well, it enables clearer leadership, more effective service delivery and stronger engagement with the private sector and communities. Done poorly, it risks becoming a distraction.

The difference lies in how clearly the purpose is articulated and how well change is communicated.

Local government reorganisation is not a sideshow, it is a central part of the growth agenda. It will shape how quickly homes are built, infrastructure is delivered and places are transformed over the next decade.