www.pwc.co.uk Final Heart of Hampshire Devolution and the future of local government Confidential November 2016 Future of local government in the Heart of Hampshire Final Contents Important notice .......................................................................................................................... 4 Executive summary...................................................................................................................... 5 Future of local government in the Heart of Hampshire ............................................................................................. 5 Key points from the analysis ........................................................................................................................................ 6 Key conclusions and securing a devolution deal ....................................................................................................... 11 Overall conclusion ....................................................................................................................................................... 12 1. Introduction ....................................................................................................................... 13 1.1. Purpose of this report ....................................................................................................................................... 13 1.2. Hampshire and the Isle of Wight ..................................................................................................................... 13 1.3. Heart of Hampshire .......................................................................................................................................... 15 1.4. Local Economies ............................................................................................................................................... 16 1.5. Local government in Hampshire and the Isle of Wight.................................................................................. 18 1.6. The future of local government ........................................................................................................................ 19 1.7. The devolution opportunity ............................................................................................................................ 20 1.8. The case for reform in the Heart of Hampshire .............................................................................................. 21 2. Enhanced two tier and Combined Authority ...................................................................... 27 2.1. Enhanced two / three tier working ................................................................................................................. 27 2.2. A Combined Authority ..................................................................................................................................... 29 3. Unitary authority options .................................................................................................. 31 3.1. The unitary authority options considered ....................................................................................................... 31 3.2. Option 1 – Six unitary authorities with some county wide services ............................................................. 32 3.3. Option 2 – Two unitary authorities ................................................................................................................ 33 3.4. Option 3 – A Single unitary authority ............................................................................................................ 33 3.5. Commentary ..................................................................................................................................................... 34 4. Providing value for money and delivering positive outcomes ........................................... 36 4.1. Approach .......................................................................................................................................................... 36 4.2. Baseline ............................................................................................................................................................ 36 4.3. Disaggregation of Hampshire County Council income and expenditure ..................................................... 38 4.4. Economy and efficiency ................................................................................................................................... 39 4.5. Summary results .............................................................................................................................................. 39 4.6. Payback period ................................................................................................................................................. 42 4.7. Council tax harmonisation .............................................................................................................................. 42 4.8. Summary and conclusions from value for money and cost of transition analysis ....................................... 42 Private and Confidential 2 Future of local government in the Heart of Hampshire Final 5. Strong local leadership and accountability ....................................................................... 44 5.1. Local government reform and the opportunity to strengthen leadership and accountability .................... 44 5.2. Clarifying accountability ................................................................................................................................. 44 5.3. Ensuring simplicity .......................................................................................................................................... 49 5.4. Summary and conclusions .............................................................................................................................. 50 6. Better public services ......................................................................................................... 51 6.1. Introduction ...................................................................................................................................................... 51 6.2. Current baseline position ................................................................................................................................ 52 6.3. Future opportunity .......................................................................................................................................... 52 6.4. Developing better public service ‘tests’........................................................................................................... 55 6.5. Appropriate scale .............................................................................................................................................. 57 6.6. Citizen centricity ............................................................................................................................................... 57 6.7. Connected government .................................................................................................................................... 59 6.8. Empowered to deliver ....................................................................................................................................... 61 6.9. Delivering the promise .................................................................................................................................... 62 6.10. Continuously Innovative ................................................................................................................................. 65 6.11. Summary and conclusions .............................................................................................................................. 66 7. Summary of findings .......................................................................................................... 67 7.1. Overall conclusion ........................................................................................................................................... 68 Appendix A Technical financial annex .................................................................................... 69 A.1. Six unitary option ............................................................................................................................................ 69 A.2. Two unitary option ........................................................................................................................................... 71 A.3. One unitary option ........................................................................................................................................... 73 A.4. Council tax harmonisation ............................................................................................................................... 75 A.5. Disaggregation of Revenue Support Grant (RSG) .......................................................................................... 81 Appendix B The Brief .............................................................................................................. 82 B.1. Unitary options analysis and devolution study May 2016 ............................................................................ 82 Private and Confidential 3 Future of local government in the Heart of Hampshire Final Important notice This document