The biggest reorganisation of local government in England in more than 50 years is underway. And, although the new authorities will not be in place until 2028, Pete Rayner, public sector practice leader – Central and South West at Aon, says insurance managers need to start their preparations now.
Through its reorganisation plans, the government aims to deliver better outcomes for residents, improve local accountability and save money. But, as the journey to procuring insurance cover for each new authority is going to be challenging, any preparation insurance managers and their teams can do will pay dividends when the time to tender arrives.
The government set out its proposals for reform in the English Devolution White Paper, which was published in December 2024. As well as creating six new regional strategic authorities with elected mayors, the current two-tier county and district council system will be replaced with new unitary authorities, each with a population of at least 500,000.
All change
The reorganisation project is set to turn more than 200 councils in England into just 50 or so unitary authorities. The government is giving feedback on the various proposals put forward by each region, with the expectation that those on the devolution priority programme will submit a final proposal by 26 September 2025, and all the others by 28 November 2025.
All sorts of different proposals are being put forward. While we’re likely to see a couple of instances where the county council effectively retains control, most regions will see the county landscape split two or more ways.
The government is expected to make decisions on the proposals by the end of the year, with new ‘shadow’ unitary councils in place by the middle of 2027, and the new authorities taking over in 2028.
Time to prepare
Although, this is still a few years away, it’s important to start thinking about future insurance requirements now. The new authority will have to go to tender for its insurance at a time when the market will be under a great deal of pressure so having the necessary information and data is key to securing the right cover and the best possible terms.
But this can take time. Even the simplest reorganisation will see different authorities coming together, each with its own risk profile, insurance arrangements and claims history. Understanding these differences – and how they will shape the new authority’s insurance requirements – is essential.
These are our tips on how to prepare for the insurance requirements of the new authority:
It’s essential to set up working groups now to understand what’s involved. These groups should include insurance managers from each of the councils but also property and fleet teams with risk management insight. Expertise is often lost during a restructuring exercise so it makes sense to prioritise this task.
The new organisation will need to have details of all its assets as well as the insurance arrangements that are currently in place. It’s worth collecting up to 10 years’ data where possible as this will enable claims analysis to support the new insurance programme. This process can take several months, especially where each organisation has its own approach and preferences over formats and spreadsheets.
Once collected, it’s likely that the data will show a range of variables across everything from cover and indemnity limits to excesses. For example, a county council might have a £250,000 excess, while the district council only has a £1,000 excess. As the new authority is likely to have a different risk profile to the previous councils, modelling potential claims can give insight into the most appropriate and cost-effective approach.
The new authority will inherit the long-tail liabilities of the previous organisations and could find itself receiving historic claims for abuse and occupational diseases. During this rationalisation exercise, it’s important to determine how these would be allocated, especially where an existing authority is being divided. It may also be worth establishing a fund to cover these historic claims, especially where councils have historically self-insured some of the liability risk.
Detailed underwriting information is key to achieving the best outcome with insurers. Collecting information on the construction and occupation of buildings will help to secure the best terms on property insurance while details of risk management strategies across housing, highways and adult services can improve a liability underwriter’s view.
Insuring a completely new organisation can make underwriters nervous so it’s worth engaging them in advance of the tender process. Talking to them about the rationale behind the new authority’s approach to risk can help to calm nerves and achieve the best possible terms at tender.
Local government reorganisation is set to drive efficiencies across the new organisations, with benefits for residents and the broader society. Allowing plenty of time, and collecting and analysing all the necessary data, will enable you to develop and procure an insurance programme that delivers too.
More information
To find out more about how Aon can support your organisation’s reorganisation project, speak to your account manager or contact Pete Rayner at
[email protected]
About Aon
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This article has been compiled using information available to us up to 16/06/2025
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