With Oxfordshire's local government landscape set for radical change, Blake Morgan commercial lawyer Penny Rinta-Suksi explains why early action on contracts and supplier relationships is essential.

Statutory consultation on proposals for local government reorganisation across the UK officially closed on 26 March. Oxfordshire is one of the counties set to see a huge change in its local government landscape and in recent months the local authorities in the region have put forward their proposals for consideration.

A decision by Government is expected in July. Regardless of whether the outcome is one, two or three unitary councils, Oxfordshire’s local government boundaries, as we know them, will radically shift.

While much of the debate around LGR in the region will understandably focus on identity, representation and geography, my mind is on the practical commercial ramifications for councils and communities.

From my perspective as a commercial lawyer, one of the most immediate challenges coming out of LGR are the adjustments to the contracts foundational to Oxfordshire’s day-to-day operations.

All councils rely on a network of other businesses to deliver their services, from waste disposal to infrastructure maintenance. Behind each of these services sit sub-contractors, equipment, consultants, suppliers and staff. These arrangements are often long-term, operationally crucial, and legally complex.

How they operate under a new governing system will depend on the boundaries chosen. The contracts that currently function within one authority’s footprint may no longer align with future structures and geographies. Suppliers may find themselves needing to operate across new or unfamiliar boundaries. Otherwise, they may no longer fit within a newly consolidated supply chain – and that’s if the service in question will even be outsourced under the new system. The reality is that Oxfordshire’s supply chain cannot avoid disruption under LGR. The question now is the scale of that disruption, and how both councils and contractors can prepare.

Key to minimising disruption is visibility and understanding. The sheer number of contracts a local authority holds, and the frequent changes in administration and officer staff, creates a situation where there is often no single perfect source of information. Before any structural changes take effect, councils need to fully assess and create a central inventory of its commercial landscape. This means identifying which suppliers and partners operate each service, how and where they are delivered and on what contractual terms.

Then this can be used to categorise which contracts allow for novation, amendments or early termination. Categorisation will help councils understand their options for their contracts and any potential risks caused by disruption –but also how it will need to manage its relationships. Trust is important in any contract and to keep a contractual relationship stable it requires transparency and dialogue. If a council is unable to communicate its obligations in the face of LGR and provide sufficient notification and information – it could risk its reputation as a credible client.

As such, conversations need to happen now so that businesses too can adequately prepare. Some contracts can naturally come to an end; others may risk breach of contract. The nature of this – the loss of business, possibly fewer contracts overall, and the simplification of services – will lead to challenge, carrying with it financial and operational risks that will impact the people delivering the services and those using them.

Crucially, the unitary councils that will be formed will likely have different attitudes on whether or not to source services externally or in-house. Transparent communication with the market will be essential to reduce uncertainty and dispel rumours or misunderstandings.

Another important factor is timing. Local government reorganisation will not happen overnight, but the legal and commercial work required cannot wait for final structures to be confirmed.

Authorities face the challenge of planning in a state of partial uncertainty; but delaying decisions increases the risk of disruption. Consultation comments are now in consideration by the Secretary of State. While no official timeframe has been given on the decision to implement the recommended boundaries – a new authority is expected to take effect in April 2028.

Whatever happens, this will be a major practical and mindset change – but such changes are manageable, and impacts on people and services can be minimised, with the right plan in place.

To learn more about LGR, check out Local Government Reorganisation: What It Means and Why It Matters.