The annual cost of splitting up social care services into multiple smaller councils could exceed half a billion pounds, according to new research by the County Councils' Network (CCN).

CCN calculated that establishing 58 new councils based on a minimum population of 300,000 would cost £850m over five years and deliver no savings due to the cost of splitting up social care services.

Drawing on data from PwC, CCN estimated the annual recurring cost of disaggregating social care services could reach over £500m, while the ‘one-off’ transition costs would cost over £660m.

CCN chairman Cllr Tim Oliver warned that establishing new unitaries with a 300,000 footprint would ‘create hundreds of millions of new unsustainable costs, piling further strain on already under pressure care services.’

The network’s research found that replacing all 21 two-tier areas with single unitary councils would deliver a net-saving of £2.9bn over five years.

Cllr Oliver added: ‘It is absolutely essential that the Government now stick to the statutory criteria they have set out, treating the 500,000 as a minimum not an optimum population scale. This will ensure we create new councils with the scale and capacity to deliver substantial savings to be reinvested in frontline services to the benefit of local taxpayers.’

In response, Cllr Sam Chapman-Allen, chair of the District Councils’ Network, criticised plans to create ‘mega councils’ and expressed scepticism of the predicted savings.

‘If such large councils are so efficient then why are so many of them warning of financial difficulties? Savings promised by past reorganisation have often failed to materialise – unlike the costs of such a major upheaval which have been fully apparent.’