LATCos offer flexibility for service integration and disaggregation

Norse Group Chief Executive Officer, Justin Galliford explains how the LATCo model can help councils merge services effectively while providing a practical alternative to disaggregation.

As local government reorganisation (LGR) gathers pace, authorities are beginning to consider the challenges posed by bringing some services together, largely those currently delivered at district level, and potentially separating others, primarily county services. The creation of larger unitary councils will place significant pressure on capacity. Managing elections, integrating workforces, rationalising support functions and developing property strategies will stretch organisations already operating under intense demand.

The integration of frontline services such as waste and environmental management and facilities and compliance management has the potential to deliver economies of scale, improve productivity and generate efficiencies, provided it is managed effectively.

However, some services face the opposite challenge. As county councils are reorganised, disaggregation may be required, potentially reducing economies of scale and increasing costs. Different political priorities and service approaches across the new unitary authorities may also make it harder to establish a consistent operating model. Transferring an existing service into a local authority trading company (LATCo), with the successor authorities becoming joint shareholders, can provide an alternative to disaggregation and help retain the benefits of scale.

This need for both control and flexibility highlights the value of the LATCo joint venture model. It gives councils greater influence and adaptability than traditional in-house arrangements, while also creating opportunities for commercial activity and external income generation.

However, establishing a new LATCo is not straightforward. It requires careful planning, strong governance, clear objectives and upfront investment. Against the backdrop of reorganisation, creating a new company may be a step too far for some authorities. Partnering with an established LATCo, such as Norse Group, can provide the flexibility needed to maintain service continuity and manage costs, while preserving future choices around outsourcing, insourcing or continuing the partnership.

In a period of significant change, this approach offers new unitary authorities a practical route to maintaining resilience, protecting economies of scale and retaining the flexibility to adapt as local priorities evolve.