Replacing two-tier counties with one unitary authority could deliver almost £3bn savings over five years, according to research published by the County Councils Network (CCN) today.

By comparison, replacing councils with two unitary authorities in each county would reduce savings to £1bn nationally.

CCN chairman Cllr David Williams said: ‘This government has already signalled that it wants to see many more unitary councils created and it is important we get it right for our residents – we do not want to look back on this period as a missed opportunity.’

The PricewaterhouseCoopers (PwC) study comes as county and district councils around the country prepare rival bids for unitarisation ahead of the publication of the Government’s Devolution and Local Recovery White Paper.

It puts the additional cost of splitting county council services between unitaries at a minimum of £1.9bn.

The research also warned creating multiple unitaries risks creating and concentrating economic disparities, in which one council benefits from higher economic activity and tax income, and where children’s and adults’ services are split ‘the likelihood of performance dropping is high’.

PwC concludes that the ‘implementation of single unitaries in each of England's two-tier areas would deliver significantly greater benefit’.

Advocates of creating two or more unitaries within counties have argued that while the benefits of scale are reduced, they retain closer links to the communities they represent and there is less risk of a democratic deficit.

In addition, the Government is understood to be looking at setting a maximum population for new unitaries of 600,000 – significantly smaller than most counties.

Cllr Williams said: ‘The findings from PwC show there is a compelling financial case for the creation of more unitary counties where councils seek reorganisation.

‘In contrast, an arbitrary population threshold that limits the size of any new council will cap our areas’ ambitions and create significant risks in delivering care services.

‘This evidence shows it would mean a worse deal for local taxpayers, create confusion, costs, and complexity, and potentially deliver a postcode lottery for local services and the economic recovery.’

However, the District Councils' Network said the research was based on a 'false and unproven' premise.

Cllr John Fuller, chairman of the District Councils’ Network, said: We are not out of the woods on COVID-19 so not only is now the wrong time for major reorganisation, it will force us to choose between reorganisation at huge financial cost or recovery, which should be the most important current priority. This what our residents, businesses and governments want us to do and need us to focus on.'