Local Government Reorganisation (LGR) is reshaping the local government landscape in England as two tier systems give way to larger unitary bodies. This shift brings the chance to simplify governance, rationalise existing estates, and improve the efficiency of services. It also raises immediate questions about how existing capital programmes fit with the approach and priorities of the new authority.
Capital programmes are usually prepared on a longer-term timeframe with projects taking time to be developed, approved and implemented. Any authority on the verge of LGR with an approved capital programme must now consider how its current capital investment plans support the future operating model of the new organisation post reorganisation.
Decisions taken in the short term will shape the financial flexibility and strategic choices of the reorganised body for many years to come.
The Strategic Challenge
Current capital programmes have been planned based on present day boundaries, service models, political priorities and the condition of legacy estates. LGR changes all of these paramaters. Some schemes will still be required. Others may need to be reshaped. Some may not stand up when assessed across a wider geography and larger population base.
The main risks include duplicated provision, service models that no longer match the new structure, and long-term financing costs that act as a constraint to the new organisation from day one.
Debt consolidation and asset transfers will also alter the funding and service delivery picture. Early and clear evaluation is essential to avoid passing on commitments that weaken resilience in the short, medium or long term.
What Existing Authorities Should Assess
As part of the LGR process, a structured review should highlight schemes that:
- Remain essential to service delivery that will continue in the new authority.
- Need adjustment due to integrated services or a rationalised estate.
- Duplicate or conflict with the plans of neighbouring bodies.
- Create long-term borrowing or revenue pressures that may not represent value for the new organisation.
Arlingclose Support
Arlingclose has a strong track record in supporting Councils going through reorganisation and provides specialist advice throughout the LGR lifecycle to ensure that capital plans are aligned, affordable and strategically sound. This protects both outgoing authorities and the new organisation in terms of financial resilience.
Arlingclose has supported authorities to:
- Assess capital programmes for duplication, misalignment, affordability and long-term revenue impact.
- Model future debt, MRP, reserves and CFR under different LGR scenarios.
- Review asset and liability positions and advise on a capital financing strategy.
- Demonstrate a clear and Prudential Code compliant approach to any review.
Arlingclose can also assist during the reorganisation itself through:
- Running joint planning workshops across finance, services and programme teams.
- Building combined capital and financing models with full visibility of future costs.
- Advising on debt consolidation, treasury operations and risk management.
- Supporting the development of a single Capital Strategy, Treasury Management Strategy and Investment Strategy.
Once the new authority is created, Arlingclose can continue to provide support through:
- Optimisation and assurance that the consolidated capital programme is affordable.
- Strategic treasury restructuring, refinancing and liability management.
- Training for members and officers and continued support with financial reporting.
LGR is more than a structural change. It is a chance to rethink capital ambitions across a wider footprint and create more sustainable services. Authorities that act early, take a rigorous approach and work jointly will reduce risk and strengthen the financial position of the new organisation.
Arlingclose’s experience throughout the full LGR process ensures that capital programmes remain credible, efficient and aligned with the needs of the reorganised authority. If you are starting on the LGR journey then please contact us at info@arlingclose.com to see how Arlingclose can support your capital planning through the process.
07/05/2026
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