Jump to section
Introduction
Socitm partnered with the Crown Commercial Service (CCS) to deliver a virtual workshop in July called: Empowering suppliers through Local Government Reorganisation (LGR). This was designed to raise awareness among suppliers, contractors, consultants and service providers about the implications, challenges and opportunities arising from the UK’s local government reorganisation and devolution programme.
Key outcomes will include an understanding of LGR, its structural arrangements, and potential opportunities for suppliers to innovate and effectively contribute amidst the proposed changes.
Background
The English Devolution white paper (published on 16 December 2024) set out the government’s long-term vision for simpler local government structures.
Simpler structures which can lead to:
- Better outcomes for people, communities and places.
- Improved local accountability.
- Savings that local governments can reinvest back into public services.
The restructure will reduce the number of councils and implement a consistent local government structure across the whole of England.
The proposed reorganisation focuses on creating larger, more efficient unitary authorities to improve service delivery, reduce administrative costs and ensure financial resilience. At the same time, the government is committed to maintaining local identity, engaging communities in decision-making and fostering collaboration between local authorities and public sector partners, such as health services, police and education providers.
Devolution seeks to empower strategic authorities with greater control over some public services including, transport, strategic planning and economic development.
Key points and potential implications for suppliers:
- Less councils to work with; could be both positive (less contracts to bid for and manage) and negative (bigger contracts which may be less attractive to SMEs) potentially 150 councils less [PDF].
- Simplified structure; all councils working to broadly the same operating model – one model of government, one solution.
- Council’s resource in the short term is absorbed by efforts and issues related to LGR.
- Delay to major contracts or investment decision.
- Acceleration of major contracts or investment decisions before new structures take effect.
What are the timetables?
| Area | Final Proposals | Decision (approx.) | Shadow council election (approx.) | Go live (Vesting Day) |
| Surrey | May 2025 | Autumn 2025 | May 2026 | 1 April 2027 |
| Devolution Priority Programme (DPP)* | 26 Sept 2025 | Early 2026 | May 2027 | 1 April 2028 |
| Non-DPP | 28 Nov 2025 | Spring 2026 | May 2027 | 1 April 2028 |
Discussion
Challenges for suppliers in navigating the complexities of working with local governments undergoing reform
Suppliers in the room expressed their concern about the significant resource demands of LGR, especially as multiple areas may undergo change simultaneously. Concerns about market capacity to support all councils at once and about the ability of organisations like Crown Commercial Service (CCS) and Ministry of House Communities and Local Government (MHCLG) to provide adequate support.
Whilst there are challenges for SMEs of competing against larger suppliers, the potential advantage for local suppliers in their ability to deliver on social value requirements will remain.
There are concerns about equal treatment of suppliers, contract novation and the risk of duplicate or misaligned contracts during transition.
Three essential recommendations
1. The Procurement Review Unit aims to raise standards in public procurement and can investigate contracting authorities for compliance with the Procurement Act 2023, providing a non-legal avenue for review of procurement practice.
Another point raised was how to ensure that assessment work – such as the ones offered by Socitm or other organisations during the local government reorganisation process – are fair, unbiased and genuinely considers all options, rather than just recommending what feels best or defaulting to a particular supplier or solution.
2. Socitm emphasises objectivity and independence in their assessments. Socitm’s assessments focus on helping councils understand their current state, especially when multiple councils are merging. They cover areas like digital skills, capability, contract reviews, digital and data maturity and IT architecture. They do not recommend or select specific suppliers; instead, they provide councils with a clear view of their “As Is” situation and support them in making informed decisions.
And finally, there was a question whether CCS will be providing advice to councils on how to handle contracts that will still be running during the consolidation period – specifically, how to manage deals that may overlap or become redundant as councils merge, and whether there is overarching guidance for these situations.
3. CCS can offer a contract analysis service, where they amalgamate contracts registers from districts and counties within an LGR area, in order to identify contracts either running beyond or expiring before vesting day. This can help councils to plan for solutions such as novation, termination, amalgamation, or aggregation. Once council structures are confirmed, CCS can apply analysis to real-world scenarios, advising on which contracts need action before or after vesting day. For any contracts let through CCS frameworks, their commercial teams can provide legal and practical advice to councils on handling contracts during reorganisation, if they are approached directly.
Opportunities for suppliers that can arise because of planned reorganisations
While the reorganisation process presents significant challenges for suppliers, it also opens a range of valuable opportunities:
- Proactive engagement: Suppliers are encouraged to reach out early to councils undergoing LGR, positioning themselves as partners who can help navigate the transition and provide continuity, rather than waiting for formal tenders.
- Supporting digital transformation: There is a significant opportunity to assist councils with digital front doors, automation, smarter workflows and common platforms as they consolidate systems and processes. Suppliers with expertise in these areas can add value, especially in the early and mid-stages of reorganisation
- Collaboration and clustering: Suppliers can explore opportunities to work with clusters of councils or through collaborative frameworks, making it easier to deliver services across multiple authorities and align contract timelines.
- Ongoing transformation support: The transformation process will continue well beyond vesting day, offering long-term opportunities for suppliers to support system integration, contract alignment and further digital upgrades.
- SME agility: SMEs with strong, specialised value propositions and the ability to work in an agile way may find opportunities sooner, especially if they can demonstrate how their solutions outperform larger, less agile competitors.
Conclusion
LGR represents a once in a generation change of the sector, influencing the scale, structure and operations of councils across England. The scope and complexity of these changes mean that suppliers should consider the potential effects LGR may have on their current and future relationships with local authorities. This period requires proactive review and strategic planning from all suppliers.
To successfully navigate this transition, suppliers must invest in deepening their understanding of the principles and objectives behind LGR at the national level, while also examining how proposed changes will specifically affect the councils with which they already work. By understanding both the broad vision and local implications, suppliers can anticipate challenges, respond to evolving needs and align their offerings more effectively.
Finally, suppliers are encouraged to approach LGR as an opportunity to collaborate constructively with the public sector. Their focus should be on building lasting partnerships that support councils in achieving better outcomes for their communities. By fostering trust, contributing expertise and prioritising genuine value over short-term gains, suppliers can help ensure the long-term success of local government reorganisation for everyone involved.
More LGR content you might also like
- LGR North Yorkshire Council. If I knew then, what I know now: a blog post by Madeline Hoskin, Assistant Director for Technology at North Yorkshire Council.
- A survivor’s guide to LGR: an interview with Helen Blake, Assistant Director for Customer and Digital at Westmorland and Furness Council.
- Get your house in order or risk paying the price: local government is hurtling into transformation without a map, a shared plan, or the confidence that we’re ready for what’s ahead.
- Making things happen: aligning people, process and technology before the real hard yards of LGR kick in.