Question to the HM Treasury:

To ask the Chancellor of the Exchequer, pursuant to the Answer of 13 June 2025 to Question 57280 on Local Government: Reorganisation, what estimate she has made of the change in public sector net borrowing from local government reorganisation in each of the next four financial years; and whether she plans to limit the levels of that reorganisation.

HM Treasury has not undertaken an assessment of the impact of local government reorganisation on local authority borrowing nor the impact on public sector net borrowing. The OBR will continue to update its forecast for overall local government borrowing at each fiscal event, in line with standard practice.

The government announced its plans for local government reorganisation in the English Devolution White Paper on 16 December 2024. The ambition is to replace two-tier authorities with suitably sized unitary councils to create simpler structures, strengthen disjointed services and help councils pursue efficiencies. The Ministry of Housing, Communities and Local Government received interim plan responses from all areas in March. Surrey councils submitted their final proposals on 9 May 2025, and all other areas invited will be submitting their final proposals later this year. The government will set out next steps in due course.