Thank goodness Labour’s ‘shambolic’ plan to reorganise local councils has been paused. What was it thinking? | Polly Toynbee

Shock reverberated through England’s councils last week. “Beggars belief!” “Shambolic!” council leaders protested to the Local Government Information Unit (LGIU), which says: “We’ve never before heard such expletives. They’re apoplectic, incandescent.” And they have every right to be.

The government has slammed the brakes on its unexpected reorganisation of local councils. This almost certainly ends the one-size-fits-all, politically damaging remapping of England’s councils, which was never forewarned in Labour’s manifesto.

Councils hired extra staff to manage gigantic mergers and changes on the running of social care, waste collection, libraries, special educational needs, children in care, roads and parks – absolutely everything sliced and diced, with hundreds of thousands moving jobs under new brass plates.

Take Worcestershire county council. It just hired a local government reorganisation director on about £120,000 a year who started in August to abolish six district councils, dividing the county into two new unitary authorities. But like everywhere else that’s paused, subject to “rapid review”, much of it is dead in the water.

Why this emergency stop? Facing legal challenges from objectors over proposals to reorganise councils in Essex, Hampshire, Norfolk and Suffolk, the local government secretary, Angela Rayner, received new legal advice that the reorganisation may not comply with law. From the start, I could see no political purpose in her launching this fiendishly complicated restructuring that has now crashed. On the contrary, it would have done Labour and the Liberal Democrats considerable harm. Under the original plan, progressive-voting urban strongholds would vanish as separate entities, absorbed into surrounding county councils with historically more conservative electorates.

Rayner is not to blame for this. Neither is Steve Reed, who took over the brief before Burnham reinstated her to it. “Angela did not come into government to reorganise local councils,” her people say indignantly. Her focus and purpose are fixed on housing, as the motor to drive growth. This was forced on her. By whom and why?

It’s yet another misconceived Treasury pet project foisted on a new government. Those closest to events have told me that the Treasury threatened to refuse funds for councils or capital for her housing targets unless she agreed to its plan. It took down a dusty 2020 PriceWaterhouseCoopers report from its shelves that purported to show that abolishing district councils and creating huge unitary authorities of up to 500,000 citizens throughout England would save money. Not very local.

Whose idea was it originally? The then Conservative-dominated County Councils Network, which commissioned the PwC report, promising cost savings if district councils were absorbed into county councils. How much? The small print of that six-year-old report suggests a mere £2.9bn – over five years. Then factor in the costs in wasted staff time: disruption, endless meetings, recruitment, unpicking contracts and energy not spent on myriad acute problems.

Treasury orthodoxy always thinks bigger is better and cheaper. Hampshire, with its district councils, is no better or worse run than, say, Shropshire or Buckinghamshire unitaries, Prof Tony Travers of the London School of Economics tells me. The House of Commons library finds no evidence that unitary councils save money compared with the current two-tier system.

If there is no profit, then look at the loss. Dwindling interesting in community activism has led to a decrease in volunteers, members of political parties, trade unions, churches and sports clubs, those who keep society alive. So let’s not lose platoons of district councillors who help hold the social fabric together: these are people who know their communities, and whom residents know they can turn to. Experts at the Localis thinktank believe that abolishing district councils means “unsustainable workloads on remaining councillors”. There has been a huge reduction in the number of councillors in England over the past 60 years. Last year, Localis warned that nine in 10 councillors in shire areas could be culled by the reorganisation. A 2024 poll showed that in England people were twice as likely to trust local politicians to improve their areas as they were national politicians. There is clear evidence that councillors shore up people’s confidence in democracy.

Andy Burnham’s devolution of powers to mayors (or strategic authorities) across every region will move much faster if these council reorganisation plans are permanently shelved. Yes, it means that some places will have three layers of government – district, county and mayoral. But surely that is preferable to sweeping away local representation. There are worse things than having more local people getting involved as councillors, helping to run and shape their communities.

Even some who think the unitary principle is “a better system”, as Vince Maple, the Labour leader of Medway council, says, also think redrawing borders is “no panacea” for councils devastated, like his, by a “91% cut in the revenue support grant after 2010”. Under these plans, Maple tells me, they were preparing mergers for all the complex ways that next-door councils do things – from professional approaches to social care to contentious rates for councillors’ remuneration and allowances. Unitaries may be better in principle, but he concedes reorganisation may not be worth the upheaval.

Who should pay for this fiasco of a plan, and the chaos of its abrupt pause? The Treasury, who imposed it without due legal scrutiny. I trust the National Audit Office will record this classic case of Whitehall’s urge to create new organograms instead of solving practical problems on the ground. The former Tory MP Eric Pickles, who as local government secretary wielded an axe over council funding, had only one good thought: “I intend to keep a loaded pearl-handled revolver in my drawer, and the first civil servant who suggests local government reorganisation will be shot.”

Apply that thought to every department – the NHS is a frequent victim. Learn from the expletives emitted by the usually quiet battalions of public servants who keep services running, even amid this needless pandemonium.

• Polly Toynbee is a Guardian columnist