Local Authority Size in Theory and Practice

In this paper we develop a model for local authority size that is based on the approach towards local government reform that was used by the UK governments in the 1970s and the 1990s. To do so, we examine the different aspects of costs for local services, the minimum cost size facility used to provide local services, and the minimum efficient size for a local authority. We then argue that, for a given level of service, the belief that a tendency for local authorities to become enablers rather than producers would reduce the minimum efficient size of authority may not be correct. Finally, the model is developed to determine simultaneously the optimum quantity of local services and the minimum efficient size. It shows that the solution depends on how preferences vary among different citizens, and argues that governments paid too little heed to these variations. Thus we conclude that it is very doubtful whether either the 1970s or the 1990s reforms produced the structure of local government that would have emerged if the approach adopted by the governments concerned had been used with more care.