Contact: Jo Ouvry
Deloitte
Public Relations
+44 (0) 20 7303 0587

Deloitte, the business advisory firm, has today launched a report looking at the principal lessons to be learned from previous government reorganisations, both in the UK and other countries. This report comes ahead of the government’s White Paper on local government reform, and examines what role both central and local government will have in ensuring its success.

Mike Turley, head of public sector at Deloitte, comments: “The purpose of any reorganisation is to produce local authorities which are more efficient, effective and accountable to local communities. But whether these objectives are achieved depends on government and authorities ensuring that it is used as an opportunity to introduce deeper changes to working practices. Evidence from the reorganisations in the 1990s suggests that how a reorganisation is implemented is at least as important as the exact structures that are selected for reorganisation.”

The process of reorganisation has three main phases:

• The review process – how government determines the exact proposals for reform, with input from local authorities;
• The preparation for the transfer of responsibilities from existing or outgoing authorities to new ones;
• The creation of the new, reformed authorities.

The review phase

The most successful reforms have been those that combine an element of ‘top down’ direction from government in implementing reforms, with the involvement of an independent commission to review the process. The evidence suggests that a degree of central direction from government is a necessary means to achieving significant or coherent reform, but that authorities and the public still have an important role to play in the process.

The transition phase

The implementation of reforms, and the process of transition to a new organisation (involving the transfer of staff, assets and service responsibilities from one authority to another) is viewed as the most difficult part of the reorganisation process.

Experience from reorganisations in the 1990s suggests that there are three actions that government could take to improve the transition phase during a reorganisation:

• Encourage authorities to establish a joint transition committee to prepare for change;
• Introduce rules giving new authorities more control over significant financial transactions made by those authorities relinquishing control;
• Use a property commission to resolve disagreements about the allocation of assets.

Achieving transformation

Local authorities are invariably responsible for implementing any reorganisation, but in managing the implementation they will face two, potentially conflicting goals: to provide a seamless transition and to achieve transformation. Evidence suggests that in future reorganisations, authorities need to place more emphasis on the goal of transformation and potentially less on the goal of transition.

Authorities which achieve transformation take action early on to:

• Adapt to a tighter financial situation;
• Create a new corporate culture;
• Rationalise and renew their systems and infrastructure;
• Harmonise and improve services.

Mike Turley concludes:

“Reorganisation is a difficult undertaking in any industry, requiring major changes in staffing, culture, and systems. It is especially difficult when the organisations are the basic units of local democracy, responsible for the provision of vital services such as child protection, schooling and community safety.

“Reorganisation is not an end in itself, but a potential means to achieve improved services, greater efficiency and better accountability. But whether or not these outcomes are achieved depends as much on how a reorganisation is implemented, as on the exact structures that are chosen. It is undoubtedly a difficult and potentially fraught process, with significant risks for both government and local authorities. However experience in the UK and elsewhere suggest some clear lessons on how to maximise the likelihood of success.

“Above all, reorganisation should be seen not just as a task to be carried out, but as an opportunity for authorities for introduce deeper reforms to working practices and services.”

- ENDS -

Notes to editors

The government is currently considering a reorganisation of local government as part of a White Paper expected in the Autumn. The possible changes are: the introduction of a new tier of government at a ‘city region’ level, and more unitary authorities in shire areas.

The last reorganisation of local government was in the 1990s when unitary authorities were introduced throughout Wales, and Scotland and in some parts of England.

About this research

This report analyses the lessons from the reorganisations in England, Scotland and Wales in the 1990s. Evidence was also gathered from local government reorganisations that occurred in Canada (City of Toronto), New Zealand, Australia (State of Victoria), and Denmark.

The methodology used was:

• Interviews with several Chief Executives and other senior officials from English, Welsh and Scottish authorities who have experience of implementing a reorganisation;
• Literature reviews of available evidence on the reorganisations in the above countries;
• Interviews with Deloitte practitioners who have advised authorities undergoing reorganisation.

About Deloitte

In this press release references to Deloitte are references to Deloitte & Touche LLP which is among the country’s leading professional services firms, providing audit, tax, consulting and corporate finance services. Known as an employer of choice for innovative human resources programmes, it is dedicated to helping its clients and people excel. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein whose member firms are separate and independent legal entities. Neither DTT nor any of its member firms has any liability for each other’s omissions. Services are provided by member firms or their subsidiaries and not by DTT. Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority. The information contained in this press release is correct at the time of going to press. For further information, visit our website at www.deloitte.co.uk

Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority.

The information contained in this press release is correct at the time of going to press.