LGR under review: what should councils do next?

Following ministerial statements on 7th September, previous reorganisation decisions affecting Essex, Hampshire, Norfolk and Suffolk have been withdrawn, while the wider programme is being reviewed. Councils in areas where decisions were announced earlier this year have been asked to stop implementation activity while this review takes place.

For authorities that have spent months preparing for structural change, the news may feel like a significant shift in direction. Teams have invested considerable time in developing proposals, reviewing governance, assessing service integration opportunities and working with partners to prepare for change.

However, while the reform programme itself is under review, many of the challenges councils face remain unchanged.

Financial pressures continue, demand for services is rising, workforces remain stretched, and expectations around climate resilience, digital transformation and cyber security continue to grow.

The immediate question for many leaders is not simply what happens next, but how best to use this period of uncertainty productively.

What does the review mean for councils?

At present, the review creates a period of reflection rather than a definitive end to local government reorganisation.

While implementation activities may have stopped, many councils will still need to make decisions about where to focus resources, how to maintain momentum and what preparations continue to make sense.

The challenge is striking the right balance.

Moving too far ahead without clarity carries risks. Equally, putting all strategic thinking on hold could leave organisations less prepared for whichever direction the review ultimately takes.

This is where a focus on organisational resilience can help. Actions that strengthen councils regardless of future structures are likely to represent the best use of time and resources.

Which activities still make sense whatever happens next?

Many councils have already made progress in areas that would benefit the organisation regardless of whether reorganisation proceeds, changes shape or is delayed.

Improving data quality, reviewing governance arrangements, understanding asset portfolios, strengthening risk management and building organisational knowledge all create value beyond any specific reorganisation programme.

Rather than focusing solely on preparing for one potential future, councils may benefit from asking how they can become more adaptable to a range of possible outcomes.

The authorities best positioned for change are often those with a strong understanding of their risks, responsibilities and operational dependencies.

Five questions councils could be asking while reorganisation is under review

1. Do we have a clear picture of our key risks?

Periods of uncertainty can expose vulnerabilities that may not be obvious during day-to-day operations.

Now may be a useful time to revisit strategic risk registers and consider:

• Are our principal risks still the right ones?
• Have any emerging risks increased in significance?
• Is risk ownership clearly established?
• Do decision-makers have a consistent understanding of risk priorities?

A refreshed view of risk can help councils make more confident decisions, regardless of future structural arrangements.

2. How effective are our governance arrangements?

Many councils involved in reorganisation discussions have spent significant time considering governance models and decision-making structures.

The review period provides an opportunity to reflect on current arrangements and identify areas for improvement. Strengthening governance today can create benefits whether structural reform proceeds.

3. Are we protecting critical organisational knowledge?

Workforce challenges remain a priority across local government.

Changes in personnel, retirements and recruitment pressures can all affect an authority's ability to maintain continuity and resilience. Preserving organisational knowledge can help reduce risk and improve resilience in any future scenario.

4. Is our data fit for the future?

Many councils began reviewing and cleansing data as part of their reorganisation preparations.

That work remains valuable.

Reliable information about assets, contracts, insurance arrangements, workforce structures and operational activity supports better decision-making regardless of organisational form.

Investments in data quality are likely to deliver benefits long after the review concludes.

5. Are we preparing for more than one possible outcome?

Perhaps the most important question is whether planning activity has become tied to a single future scenario.

The advantage of scenario planning is that it allows organisations to identify actions that remain valuable regardless of future decisions.

Councils may wish to explore:

• What would happen if previously proposed reforms proceed?
• What if proposals are amended?
• What if reorganisation is delayed significantly?
• Which actions would make sense in all circumstances?

A flexible approach can help organisations make progress while remaining responsive to changing circumstances.

Using uncertainty as an opportunity

Periods of change can create a natural tendency to wait for greater certainty before making decisions.

Yet uncertainty itself can be a valuable catalyst for improvement.

Whether local government reorganisation resumes, evolves or takes a different direction entirely, councils will continue facing the same core challenge: delivering resilient services while managing complex risks and competing priorities.

The organisations best placed to respond may not be those that correctly predict the outcome of the review, but those that use the time available to strengthen governance, improve data quality, deepen their understanding of risk and build organisational resilience.

For councils considering what comes next, that could be one of the most important preparations they make.

How we can help

Our focus is to support councils, align risk approaches, and help shape insurance arrangements that meet the needs of new unitary authorities.

• For support and insights, visit our LGR hub

Drawing on our experience working closely with local authorities, the hub brings together practical guidance, insights, and resources to help councils and stakeholders understand what is changing, why it matters, and what it means in practice.

If you would like to discuss next steps or need support at any stage, please contact your account manager or email LGR@uk.zurich.co.uk.