£66m revealed as cost of Derbyshire’s local government reorganisation

Derbyshire councils are to each set aside more than £16 million for the initial costs of closing down their own organisations and creating new ones - including laying off many staff.

A new report details the expected cost of abolishing Derbyshire’s 10 councils, including the county, city and eight districts and boroughs, and creating two new larger north and south replacements, will be £66 million. 

In a worst-case scenario - or “stretch case” - this could reach more than £81 million, the report details. 

As the first step to launching the new councils, which will become legal entities in waiting following the “shadow” elections next May, and officially launched in April 2028, the current 10 authorities are to set aside £16.2 million for the necessary preparations. 

This forms the first tranche of the expected £66 million setup and deletion costs, with the remaining £48 million to follow after the new councils are formally launched in May 2028. 

The report also confirms that the Government’s chosen option of splitting Amber Valley in half between the replacement Derbyshire North Council and Derbyshire South Council will cost taxpayers an expected additional £1.042 million due to extra complications. 

It details that the largest portion of the setup and “disaggregation” costs are for “staff exits”, totalling more than £26 million, with the number of employees needed at the two councils compared to the existing 10 to drop drastically. 

Details on the number of proposed redundancies have not yet been provided and will be decided much further down the line. 

Other costs within the £66 million setup and disaggregation process are £12 million for technology and IT, £6.5 million for a transition support team and £4.1 million for buildings and facilities changes, along with £2 million for “communication and culture change”. 

The councils say the expected annual savings from local government reorganisation, from year three onwards, would be £44 million. 

It has been decided to split the £16.225 million fairly between the current councils based on their current service provision, with the county council to set aside £10.17 million, Derby city to set aside £3.51 million and the districts and boroughs to set aside £2.54 million overall, and varied based on tax base. 

This split between the boroughs and districts sees Bolsover District Council setting aside the least (£223,436) and Amber Valley Borough Council setting aside the most (£400,933). 

To date, the councils have spent £304,623 in total on preparations for local government organisation, with almost all of that money going to the consultants KPMG. 

The Government is providing £1.8 million to help with the setup and disaggregation costs, with a further £300,000 to follow at a later stage to help maintain adult social care, children’s services and public health provision in the interim stages. 

It was announced in July that the Government had made its decision on local government reorganisation, after around a year and a half of rapid work from councils. 

The chosen option is to split the county into two councils for the north and south, with Amber Valley being split in two between the new authorities. 

The split will see Bolsover, Chesterfield, Derbyshire Dales and North East Derbyshire councils abolished and, with the upper half of Amber Valley (21 parishes), will form the northern council. 

Meanwhile, Derby, Erewash and South Derbyshire councils will be scrapped and will form the southern council with the lower half of Amber Valley (14 parishes). 

Council documents on the research behind the options show the chosen reshuffle selected by Government would see two councils of near equal population size, with the northern council containing 539,000 people and the southern authority containing 538,000. 

However, the geographical split is stark, with the northern council covering 2,012 square kilometres, and the southern council a quarter of the coverage at 617 square kilometres.