Agenda item

Report of Councillor N Barker, Leader of the Council and Portfolio Holder for Strategic Leadership and Finance

The Managing Director and Head of Paid Service, Director of Finance and Resources (Section 151 Officer), and Director of Growth and Assets delivered a comprehensive presentation regarding the proposed Local Government Reorganisation (LGR) for Derbyshire. The presentation encompassed a review of the preparatory steps leading to the interim submission, an overview of the evaluation criteria set by the Ministry of Housing, Communities and Local Government (MHCLG), a detailed outline of the proposal itself, the outcomes of the consultation process, the development of the various options considered, the financial rationale underpinning the proposal, and the proposed implementation approach.

Councillor N Morley left the meeting.

Councillors were given the opportunity to ask questions of officers.

Councillor R Shipman asked about the proposed reduction in democratic representation under the proposals.  Using Clay Cross and Tupton as an example, it was noted that the current representation included nine councillors (district and county), which would reduce to two under the new model. Officers responded, acknowledging the reduction and its potential impact. The need for change was emphasized and highlighted the current complexity of managing 447 councillors across 10 authorities in Derbyshire.  The proposal aimed to streamline governance and improve efficiency.

Councillor R Shipman also asked about the financial impact of council tax harmonisation, specifically the increase for North East Derbyshire residents if harmonised to the highest rate. The officer responded that modelling had been completed and could be shared with members. The decision on harmonisation would rest with the new council and would depend on its Medium-Term Financial Plan (MTFP). Multiple scenarios had been modelled, including highest rate, lowest rate, and weighted average.

Councillor R Shipman asked a further question about the total debt of councils involved in the proposed North Derbyshire unitary authority, particularly under the worst-case scenario. The officer noted that most debt was Housing Revenue Account (HRA) related and tied to properties. It was approximately £560 million and included in the submission documentation.

Councillor R Shipman’s final question was regarding the independent financial assessments conducted on the four models submitted to government. The officer confirmed that financial risk assessments had been completed, including input from all nine Section 151 officers, KPMG (including their QA team), and independent consultants. These assessments were documented in the financial risk register.

Councillor A Dale expressed appreciation to officers for their work on the LGR presentation and their ongoing contributions throughout the process. It was noted that North East Derbyshire had played a significant role and had been highly engaged. He observed that while LGR was being presented as a move toward greater efficiency, it appeared that residents may face increased council tax. It was noted that projected savings may be absorbed by existing budget shortfalls, rather than resulting in reduced costs for residents. He highlighted that North East Derbyshire was currently the second highest in council tax rates in the area, behind Bolsover, suggesting that the impact on local residents may be less severe than in other districts.  Officers confirmed that North East Derbyshire sat in the middle of the proposed harmonisation range. The final impact would depend on the new council’s budget and chosen harmonisation model. Officers acknowledged the financial risks, referencing Appendix 2 of the submission, which outlined assumptions and associated risks. A financial risk register had been developed, identifying delivery risks and modelling savings primarily in years three and four to reflect realistic implementation timelines. The most significant risk identified was the alignment of staffing, terms and conditions across the new authority, and the integration of IT systems.

Councillor S Fawcett thanked officers for their work and stated that there was often public confusion stemming from the two-tier local authority system, and residents sometimes struggled to distinguish between district and county responsibilities. He stated that the issue of land ownership and asset management was an area where clarity and community involvement was needed, emphasizing the importance of enfranchising parish councils. He asked a question regarding the principles that would guide disposals during the transition to the new authority.  Officers confirmed that at some point a freeze date would be established following the issue of a Structural Changes Order by the Government.  After this point, major decisions, would be made by the new organisation. In the interim, Section 151 officers were working to develop guiding principes to ensure decisions were made sensibly and collaboratively across the current authorities. Officers stressed that business as usual would continue, and decisions would remain aligned within existing policies and strategies, including the Strategic Asset Management Plan.

Councillor S Fawcett also asked about the level of debt.  Officers stated that Derbyshire’s overall debt position was heathy, but with significant differences between authorities based on whether they held HRAs. The key concern was not the debt itself but the ability to service interest payments, especially under increasing pressure.

Councillor M Foster raised concerns regarding the language used around council tax harmonisation, that it presented an opportunity to generate additional income.  He suggested that the language implied a predisposition toward increasing council tax. Officers responded that the modelling presented was purely financial and based on assumptions necessary for planning purposes. Final decisions regarding council tax harmonisation would be made by the two new councils, based on their respective Medium-Term Financial Plans (MTFPs).

Councillor H Wetherall asked about how risk management and benefit realisation would be handled and communicated. Officers stated that the choice was not simply between raising council tax or maintaining the status quo but rather addressing the unsustainable trajectory of current service delivery under the two-tier system. Risk management would be handled proficiently and technically, whilst benefit realisation required strong leadership and strategic vision from both officers and elected members. Internally, staff have been kept informed through employee liaison groups, trade union engagement, and balanced messaging. The officer stressed that the goal was not merely structural change (e.g., fewer councillors or managers), but the creation of a more agile and responsive governance model that better served communities.

Councillor H Wetherall also asked about budget implications, specifically regarding services like SEND and children’s social care, which were currently underwritten by central government. Officers responded that the statutory override currently in place for SEND and children’s social care deficits had been extended to April 2028, but this was not a long-term solution. The financial risk associated with this had been included in the proposal’s risk register, with a request for continued support until the new authority was stable. Officers also confirmed that financial modelling had been based on the status quo, as the details of the upcoming Children’s Act were not yet known.

Councillor A Dale raised a query regarding another district council’s budget allocation to support joint working on LGR.  Officers responded that the Council currently held sufficient reserves should further funding be required and if any further financial provision was needed this would be brought forward as part of the MTFP once any requirements were better understood.

Councillor N Barker thanked officers for all their work on this project. He stated that the initial reaction had been disappointment and frustration; however, the Council had chosen to engage constructively to secure the best outcome for North East Derbyshire.  The process had involved extensive meetings, consultations, and communications with ministers, all of which had confirmed that reorganisation was progressing and not likely to be withdrawn. He emphasised that the reorganisation was only the beginning of a broader transformation in local government. The goal was to create joined-up, seamless services built around real people. He stressed the importance of financial resilience, sustainable use of public funds and transparent service delivery. He stated that the creation of mayoral authorities had highlighted the unsustainability of current structures, particularly the limited influence of district councils. The proposed unitary authorities were expected to strengthen regional representation and improve integration with the mayoral framework.

Councillor N Barker went on to highlight key statements from the proposal document, including the opportunity to create a brighter and more responsive future, unify and coordinate social care, and sharpen focus on wellbeing and prevention to address inequalities. He talked about the evaluation of the options and why he considered Option A1 to be the way forward.  He stated that option A1 built on the strength of option A, reflected both technical data and lived experience, used parish boundaries for clarity, offered strategic flexibility for Derby City’s growth, and aligned with government criteria and community realities.

Councillor N Barker moved the following Motion:

‘That Council recommends to Cabinet that the proposal for local government reorganisation in Derbyshire “Case for Change” is approved and submitted to government on or before 28^th November 2025 with option A as the base case supported by modification A1 as the preferred boundary option.’

Councillor P Kerry seconded the Motion.

Councillor D Hancock expressed his concerns regarding the LGR proposal. He stated that the proposal did not reflect a people first approach, despite claims to the contrary. Councillor Hancock stated that the proposed change would significantly dilute democratic representation. The complexity of merging multiple authorities with distinct operational cultures, particularly in housing and environmental services, was highlighted. Examples from other reorganisations were cited, noting prolonged transitional periods, cultural misalignment and delayed savings. Councillor Hancock challenged the framing of the “do nothing” option in the report, noting that legislation did not require a proposal to be submitted and that he would not vote for the proposal.

Councillor G Baxter left the meeting.

Councillor F Adlington-Stringer spoke, expressing concerns on the proposed LGR, raising concerns about democratic representation, service delivery, and the impact on younger residents. The proposal would result in the loss of valuable local knowledge and erase North East Derbyshire from the map. He noted that the vote was symbolic, as the final decision rested with central government. He also expressed scepticism about promised efficiencies, citing previous examples when efficiencies had failed to materialise. Councillor Adlington-Stringer concluded by thanking council staff for their work and dedication.

Councillor M Foster reaffirmed his longstanding opposition to LGR. He stated that he was supportive of shared services but emphasised the importance of maintaining local accountability. He also expressed concern that Neighbourhood Area Committees lacked detail and would not be embedded in day-to-day decision-making. He noted that 49% of consultation respondents had disagreed with the proposal, citing loss of local accountability. Councillor Foster expressed doubt that the savings would materialise, and the proposal could potentially cost more than it saved.

Councillor C Cupit stated that she had previously supported exploration of reorganisation when a County Councillor but none of the options presented offered a clear, workable solution. She highlighted the low level of public engagement, with fewer than 1% of residents submitting responses to the consultation, and only 35% of respondents in Amber Valley supporting Option A. She also expressed discomfort with the idea of separating Amber Valley to facilitate Derby City’s expansion, arguing that such a decision should rest with Amber Valley itself. Councillor Cupit proposed that rather than submitting a preferred option, the Council should submit a formal response acknowledging the divided views and request that the government support a referendum to provide a clearer democratic mandate.

Councillor A Dale spoke against the Motion, stating that he did not object to LGR in principle but expressed concern about the current proposal. He referred to the absence of alternative models, such as a county/city option, which had not been presented for consideration. It was suggested that the proposal could be made more localised, particularly in areas like social care, which was inherently locality based. He argued that residents were more concerned with service quality than the administrative location of service delivery. He noted that none of the options presented would resolve long-standing challenges in SEND, adult social care, and children’s services, which required national reform rather than structural reorganisation.

Councillor S Pickering spoke about the significance of the issue under discussion and described his initial reaction to the announcement as one of shock and stated he continued to hold concerns and reservations. He also raised concerns about the potential loss of local democracy, citing past experiences where district-level advocacy was necessary to prompt county-level action. Councillor Pickering noted that there was little difference between the options overall, but expressed a preference for Option A1, citing the need to begin spending from day one and a more balanced distribution of resources.

Councillor M Durrant thanked council officers for their hard work and acknowledged the potential job losses under the proposed changes and emphasised that the proposal was not a panacea, especially in areas such as SEND. Councillor Durrant stated that rejecting all options outright would not halt the process. Instead, the council should aim to steer the reorganisation to secure the best possible outcome for North East Derbyshire residents.

Councillor H Wetherall spoke on the Motion.  She noted that for some larger services, the reorganisation could potentially improve representation and agreed that reform of local government was necessary but expressed concern about the astronomical cost of the current proposal. Councillor Wetherall also spoke about the projected 3% savings, highlighting scepticism about whether they would be realised.

Councillor R Shipman spoke against the Motion and stated the proposal was not in the best interests of residents. He stated that the proposal would weaken local democracy, removing a valuable tier of local government. He stressed that the public opposition must be acknowledged and respected and the loss of hundreds of councillors was a significant democratic deficit. Councillor Shipman questioned the projected 3% savings, suggesting the margin was so small it could easily be negated by cost overruns.

Councillor K Gillott talked about his previous opposition to reorganisation. He highlighted the emergence of a three-tier system with the introduction of the Mayor, noting that district councils no longer had a seat at the top decision-making table. He stated that he had attended the last EMCCA Board meeting as a public observer and expressed concern that billions of pounds were being spent without direct district representation.  Councillor Gillott talked about his 28 years serving in local councils and acknowledged the difficulty in seeing them potentially dissolved. He emphasised the commitment to serving the community, not just the Council, and acknowledged that this involved making difficult decisions. He cited Storm Babet and issues in Clay Cross as examples of fragmented service responsibilities between authorities, as well as Disabled Facilities Grant, and planning processes as current service delivery challenges. The current system was no longer working, especially with the permanence of mayoral governance, and expressed support for Option A1, stating it was the best choice for North East Derbyshire residents, while acknowledging that Option B1 may be more suitable for southern areas. Councillor Gillott emphasised the need to submit a base option with potential for modification, rather than relying solely on scoring metrics.

Councillor N Barker expressed sympathy with some of the concerns raised during the meeting but acknowledged the current position and the need to act in the best interests of North East Derbyshire.

The Motion was put to the vote and passed.

RESOLVED - That Council recommends to Cabinet that the proposal for local government reorganisation in Derbyshire “Case for Change” is approved and submitted to government on or before 28^th November 2025 with option A as the base case supported by modification A1 as the preferred boundary option.