How charities can navigate local government reorganisation

The UK’s network of local councils is being transformed beyond recognition through reform being driven through by central government. Ministers in the Labour administration, which was elected in 2024, wants local government to move away from its familiar two-tier council set up.

 

This traditionally sees county councils oversee county wide services such as social care, meanwhile district councils run more localised provision, such as refuse collection and leisure facilities.

 

Instead, larger unitary authorities will be created to work alongside even bigger, region-wide combined authorities, which are led by a strategic mayor and are already in place in areas including West Midlands and London.  

 

The changes present charities with a raft of challenges as well as opportunities to consider as they navigate this new era for local government.

 

Here we look at the changes taking place, how charities can overcome the risks they face and the new opportunities that could emerge. 

 

 

Changing local government

 

The government outlined its plans to move local government away from the current system of district and county councils in its English Devolution White Paper.

 

It wants local government to have a consistent structure of strategic mayoral authorities and larger unitary authorities sitting underneath to service populations of 500,000. There may be exceptions to this population size based on characteristics of areas and decisions will be made by ministers on a case-by-case basis.

 

The White Paper outlines that while district councils will be removed from the new structure the aim of the transformation is to give more power to local people.

 

“England is one of the most centralised countries in the developed world,” it states. “Devolution across England is fundamental to achieving the change the public expect and deserve: growth, more joined-up delivery of public services, and politics being done with communities, not to them.”

 

Councils submitted interim plans for how local government will be reorganised in their areas in March 2025 and final proposals are required by September 2025. If approved elections for the new local authorities to emerge are pencilled in for May 2026 and they will be fully up and running by April 2027.

 

 

Risks

 

Charity sector body the National Association for Voluntary and Community Action (NAVCA) has warned charities to ensure they “prepare for major shifts in governance and geography, especially if they are used to working with district or county councils”.

 

While some existing council contacts, including councillors and officers, may move over to the new authorities, others may not and forging new relationships may be needed for charities.

 

NAVCA warns that reorganisation will leave councils facing further financial challenges that could put funding for charity contracts and grants at risk. “As decisions move to a higher level, strategies will be needed to maintain community influence and rebuild relationships,” it says

 

“With local government already under financial pressure, there is a real risk of funding cuts and disruptions to procurement...Adapting to new structures will take time and ensuring (voluntary sector) voices are heard will be crucial in shaping the future.”

 

To help charities navigate the changes NAVCA launched a partnership in 2025 with Action with Communities in Rural England (ACRE) to “identify and respond to the risks and opportunities”.

 

They will lobby government to ensure charities are part of the process due to the significant work and funding they already receive from councils.

 

Another priority is to “mitigate the risks of further funding reductions associated with new budgets and commissioning arrangements,” adds NAVCA.

 

 

Opportunities

 

By forging links with councillors and officers involved in setting up new authorities, charities can reap significant benefits.

 

This includes contracting and receiving grants from the new local authorities to emerge as well as building partnerships where charities and councils can work together to support residents, who may also be beneficiaries of charity support.

 

NAVCA has also linked up with council membership body the Local Government Association to offer practical advice on how charities and local authorities can work better together.

 

This advises both sides spend time building trust to assess shared and contrasting strengths, expectations and limitations. This involves honest and clear communication and a recognition that large councils can create power imbalances in this relationship.

 

Examples of good council and charity partnership working given in this NAVCA and LGA guidance includes a linkup between Oldham Council and its local charity infrastructure body Action Together CIO to better distribute housing support funding to priority groups, including those from minoritised communities. 

 

“The council benefited from Action Together knowing the needs of communities and the strengths of Voluntary, Community, Faith and Social Enterprise (VCFSE) organisations through its relational partnership working,” found NAVCA and the LGA.

 

“It also benefited from Action Together providing the practical mechanism to distribute funding quickly, to the right places.”