Local government reforms improve services for residents but present challenges to councils

The reform of local councils 10 years ago improved service delivery but cost effectiveness cannot be comprehensively assessed due to a limited study timeframe and a lack of information, a report by the Department for Communities (DfC) indicates.

In a November 2024 report – Impact of local government reform on service delivery and cost effectiveness – DfC states that annual costs in local councils increased in the seven-year period after reforms but the report indicates that inflation, the transfer of functions from Executive departments to local government, and investment in capital infrastructure contributed to this increase.

For 2012–2015, the combined average income of the councils stood at £952 million. This figure rose by 4.7 per cent to £997 million for 2015–2022. Average expenditure for 2012–2015 equalled £966 million and rose by 7.5 per cent to £1.04 billion for 2015–2022. In the seven-year period after reform, local authorities’ spending deficit equalled £286 million, an average of £40.8 million per year. Councils used their reserves and borrowed funds, “mostly from central government”, to address the deficit, the report states.

In the five years before reform, capital investment by councils averaged £99 million, and this figure climbed to an average of £119 million for 2015–2022. The report notes that this figure stood at £128 million for 2015–2020, before budgets were impacted by Covid-19-enforced lockdowns.

The report claims that during the study period, local authorities made £21.5 million in efficiency savings – savings made without cutting services. Local authorities also identified future investment opportunities worth £1 billion due to their “enhanced scope of powers”.

Transferred functions

The following responsibilities were transferred from executive departments to local authorities under reforms:

• planning;
• off-street car parks;
• urban regeneration and community development;
• housing;
• local economic development; and
• local tourism.

Overall, the DfC report finds that councils were able to improve services while cutting costs due to greater collaboration between councils, and economies of scale created by amalgamated councils. However, it also identifies challenges including budgetary shortfall from central government to deliver new functions and responsibilities.

Transferring planning duties to local government gave residents a “voice in decision-making” and local councillors’ had a more in-depth understanding of their districts than central government. This enabled more sustainable development in communities, according to the report. Increased collaboration between councils also led to more “consistency and efficiency” in planning decisions, the report claims.

Increased collaboration between councils facilitated the procurement of better contracts. The report says local government pooled resources together to leverage more competitive contracts for waste management, electricity, gas, and fuel. It also enhanced their ability to attract investment and acquire funding from DfC and Invest NI among others.

During the study period, local government invested in various sectors, including IT infrastructure, and the construction and renovation of public spaces, parks, and leisure facilities. Councils also invested in measures to reduce environmental impact, including cycling infrastructure, electric vehicle charging points, solar panels, geothermal heating and cooling systems, energy-efficient lighting, and smart building systems.

Reforms enabled local government to “undertake large scale strategic capital and regeneration projects which require a multi partner approach from a financial and logistical/delivery approach”, according to the report.

It outlines various measures local government took to improve existing systems following reform. Approval layers were removed, clear guidelines were established to streamline decision-making processes, and asset management systems were implemented to enable regular inspections, proactive maintenance, and asset lifecycle planning.

During the study period, councils formed partnerships with local businesses while providing support programmes and investment incentives. The report claims this has increased investment, attracted new businesses to districts, and upskilled employees.

Challenges

Transferred functions also presented challenges to local government as councils had to deliver additional duties without additional budgeting from central government. The report states that this “limited councils’ ability to deliver against expectations and meet the needs of the community”.

Amalgamating 26 councils into 11 also posed challenges including the duplication of roles in the initial stages of reform which dented staff morale and impacted efficiency. The report states that staff were reassigned, and a severance scheme was introduced to address this. Constituent parts of the newly formed councils had differing procedures and processes which was addressed through the implementation of standardised procedures.

The report notes that councils faced “political uncertainty” in the years after reform as the Assembly dissolved in January 2017 and did not reform until January 2020. It also highlights that Covid-19 public health lockdowns impacted service delivery.

The report claims: “A number of councils faced difficulties in engaging with central government during the collapse of the Executive. This created challenges in delivering community planning without a detailed programme for government and clear guidance.”

It is noteworthy that the report identifies collaboration between amalgamated councils as the greatest benefit from reforms, while also highlighting a lack of support from central government as one of the key challenges faced.

Elected members and staff faced upheaval under reforms while they were tasked with delivering additional services without additional support. External pressures such as the Executive’s collapse, Covid-19, and inflation further exacerbated these challenges.

The Northern Ireland Local Government Association (NILGA) says: “A decade of reform has laid the foundation for efficient, responsive, and dynamic local government in Northern Ireland. Councillors have played an instrumental role, providing leadership, fostering partnerships, and advocating for their communities. However, the journey of transformation is far from over, and Northern Ireland’s councils are committed to creating new opportunities, addressing challenges, and delivering impactful results that benefit all citizens.

“It is NILGA’s objective to work in partnership with the Northern Ireland Executive, other sectors and communities to deliver social and economic prosperity and sustainability for all. To that end, local government reform should not be viewed in isolation and instead seen as part of a wider and longer-term reform of public services across all parts of government.”