Abolishing district councils and replacing them with single unitary authorities could save £2.9bn a year, a think tank has argued.

In a new report – due to be published on Monday – ResPublica will set out the case for a new form of local government to revolve the ‘devolution deadlock’.

Devo 2.0: The Case for Counties will call for the urgent reform of the existing two-tier system, arguing that county scale is the right size for councils to take the lead on creating local industrial strategies for their area.

It will propose two models for reform; either single unitary authorities at the county scale, or a reformed two-tier arrangement where county councils act as the ‘Strategic Authority’. In this case, the existing district councils would have cabinet-style decision-making powers.

As well as saving £2.9bn a year by having single local councils, the report will also claim that devolving extra powers to the counties could enable additional growth of up to £31bn over five years.

‘The needless confusion that frustrates the ambitions of business and government alike in our county areas must end now,’ said Phillip Blond, director of ResPublica.

‘With Brexit on the horizon and our city-regions already benefitting from devolution, we can’t afford the waste and complication that the current system creates. Single councils at the county scale are the future and we call on the Government to move rapidly to encourage them.’

The report will also recommend that Government should incentivise change in county areas through encouraging them to pool New Homes Bonuses, business rates and efficiency savings into a single investment fund.

Cllr Paul Carter, chairman of the County Councils Network, added: ‘As ResPublica argues, reformed two-tier structures could provide the pathway to empower counties. These ‘strategic authorities’ would be led by the county council, using their scale over a county geography to make decisions on growth, housing, planning, plus rate-setting abilities.

‘For those who wish to pursue more radical reform, this report clearly illustrates the huge economic and public service benefits of streamlining complex local government structures into singular county unitary authorities.

'Both models will enable counties to rise to challenges both nationally and locally; saving billions through public sector savings and allowing local areas to grow their economies and deliver the Government’s housing ambitions.’