Beyond establishing any new authority, the LGR process will demand a substantial investment of time and resources to ensure the smooth transfer of day-to-day operations and minimise any impact on service delivery. 

In this series LGR Practicalities, we break down the practical realities of LGR and how to approach dealing with it. In future articles in this series, we will look at the relevant law, contracts, procurement, companies, property and ongoing litigation.

In this article, we focus on what happens in terms of the transfer of functions. Based on the most recent experience of LGR, there are two likely outcomes:

• Outcome one: a continuing authority – in the last round of reorganisation, this has occurred in North Yorkshire and Somerset, where the county council received the transfer of district/borough council functions.
• Outcome two: a totally new authority where, as occurred in Cumbria and Northamptonshire, the county and district/borough council functions transfer.

Outcome two has been selected in Surrey and we wait to see if this is a sign of how the Secretary of State will approach all current LGR proposals or if we will see any variations on the outcomes above.

LGR is primarily implemented through a structural changes order (SCO) made by the Secretary of State^[1] with functions transferring pursuant to the SCO and regulations.^[2]

The transfer of functions will take effect on the vesting day stated in the SCO, but the SCO will also set out functions that are to be discharged prior to vesting day to assist in the transition. How (and by whom) these pre-vesting functions will be discharged depends upon which of the outcomes above applies.

With outcome two, the predecessor councils will be required to establish a joint committee to discharge functions set out in the SCO. This will be replaced post-elections by new shadow authorities. The primary function of the predecessor councils (in respect of LGR), joint committee and shadow authorities will be preparing for and facilitating the economic, effective, efficient and timely transfer to the new unitary authority of the functions, property, rights and liabilities as relate to the new unitary authority and its inhabitants. 

In the case of outcome one, the preparing council model is adopted. The primary function of the preparing council and the predecessor councils is as set out above. The preparing council will establish an implementation executive and decide how they will work with the predecessor councils – this does not have to be by way of a joint committee.

All of this work is on a collaborative basis, but section 24 directions under the 2007 Act enable the Secretary of State to limit the ability of any authority that is to be dissolved to dispose of land or enter into contracts with consideration above certain values without obtaining the consent of the Secretary of State or another authority/person. These directions have been used in previous LGR processes and the Secretary of State has indicated they will be used again. There is no time limit on when a direction could be made. In the case of outcome two, it does not necessarily have to wait until the shadow authorities are established. This control is an important part of the LGR process, but it can cause frustration if not explained and understood.

Regardless of whether or not a section 24 direction is in place, the LGR process requires collaboration and cooperation from all authorities involved. The Transfer Regulations place an obligation on authorities to share information, but it is essential to agree on flows of information and protocols for managing this early on. Where personal data is to be shared, it is important to have appropriate data-sharing arrangements in place.
 
On vesting day:

• the functions of the districts/boroughs and any existing unitary forming part of the proposals transfer to the new or continuing authority; and
• the functions of the county either remain with the continuing authority or are split between the new unitaries.

In the case of districts/boroughs and existing unitaries, the functions transfer wholesale. A complicating factor will arise if LGR includes splitting existing areas. This complication also exists for county functions when these are split between new authorities. The authorities now responsible for the split functions will need to consider how they manage delivery in the short term. 

The transfer of functions is effected by statutory transfer but as this LGR Practicalities Passle series demonstrates, there is a lot of due diligence and thought needed about how services will be delivered post vesting day to be able to implement LGR successfully. It can be a daunting task and one that has to take place in a short time period to ensure effective transfer. Our team at Anthony Collins is well versed in the issues arising from LGR and can assist authorities (whether predecessor, continuing or new) with the process, including due diligence and implementation.