Options appraisal summary

Overview

To assess the different options for LGR in Cambridgeshire and Peterborough, a comprehensive evidence base has been developed and reviewed. This includes commissioned reports from specialist consultancies, including PricewaterhouseCoopers (PwC), Newton, and Pixel Financial Management, alongside Office for National Statistics (ONS) and Census data, local engagement outcomes, and firsthand evidence from operational staff.

The evidence was reviewed and a two-phased options appraisal completed to ascertain which options best met the Government’s six criteria set out in its letter of invitation.

Phase 1

The first phase of the options appraisal considered whether evidence supported the creation of one, two or three new unitary councils for the area. Each option was scored against individual criterion using a scale of one to three where:

1 = proposal does not meet criteria
2 = proposal meets some criteria
3 = proposal meets all the criteria

The total score for each of the options is indicated at the end of the table with a simple ranking of lowest, middle, and highest scoring, where the highest ranking best meets the Government criteria and the lowest ranking does not meet the Government criteria well.

Criteria One unitary PCC and CCC unitary Two unitaries Three unitaries
1. A proposal should seek to achieve for the whole of the area concerned the establishment of a single tier of local government. The Government has indicated there must be at least two principal authorities under each Strategic Mayoral Authority. As this would not be possible under a single unitary model, this model is not viable. 2 3 1
2. Unitary local government must be the right size to achieve efficiencies, improve capacity, and withstand financial shocks. 2 2 1
3. Unitary structures must prioritise the delivery of high quality and sustainable public services to citizens. 3 3 1
4. Proposals should show how councils in the area have sought to work together in coming to a view that meets local needs and is informed by local views. 2 3 2
5. New unitary structures must support devolution arrangements. 3 3 2
6. New unitary structures should enable stronger community engagement and deliver genuine opportunity for neighbourhood empowerment. 3 3 3
Total Not viable 15 (Middle ranked) 17 (Highest ranked) 10 (Lowest ranked)

The first phase of the options appraisal highlighted proposals creating two new unitary councils for the area as the highest scoring and proposals for creating three new unitary councils as the lowest scoring. The reasons for this are most apparent in the financial analysis.

A two-unitary model for Cambridgeshire and Peterborough offers the most financially sustainable future for the new councils and best meets the Government’s criteria for LGR. The table below highlights that three unitary councils for the area would deliver significantly less recurring financial benefit than a two-unitary council model, with a payback period of more than 20 years - the point at which the costs of implementing new councils are recouped in savings. This is not surprising as three unitary councils creates significant duplication that results in higher costs, for example requiring three senior leadership teams.

Option £000 Gross annual benefit Additional annual costs Recurring net annual benefit One-off transition costs Payback period Net benefit after one year Net benefit after seven years
Baseline £22,100 £5,500 £16,700 £25,300 2.8 years -£18,300 £69,200
Two unitaries £26,200 £14,100 £12,100 £34,400 6.1 years -£35,100 £10,700
Three unitaries £23,500 £22,100 £1,400 £40,700 20+ years -£48,800 -£66,300

The 'Baseline' case, which would see the retention of Peterborough City Council in its current form and the creation of a county unitary covering the existing footprint of Cambridgeshire County Council, would deliver the most financial benefit of any model, but this has been discounted as it does not meet other Government criteria for LGR.

Phase 2

Given the clear disbenefits of creating three unitary councils for the area, and the lack of alignment between the Government criteria and maintaining existing upper tier boundaries by establishing a county unitary, in June 2025, council leaders agreed on three proposals that create two new unitary councils to be explored in more detail – Option A, Option B and Option C.

In the months since, two further proposals have emerged, known locally as Option D and Option E, both of which create three new unitary councils. Whilst these two options have been developed – Option D by Peterborough City Council and Option E by Huntingdonshire District Council - it remains our view that based on the evidence reviewed in the first phase of the options appraisal, that any model which results in the creation of three or more unitary councils does not provide the size or financial sustainability to be considered viable.

To assess the three options that create two unitary councils for the area, a second phase options appraisal was completed, with the evidence base further reviewed against the Government’s six criteria, supplemented with the insights from two phases of local engagement.

The full options appraisal can be found in the Option A proposal document, but a summary overview is provided here:

Proposals should seek to achieve for the whole of the area concerned the establishment of a single tier of local government.

Option A Option B Option C

Sensible economic areas

  • Appropriate tax bases (both economies are of a sustainable size and productivity)
  • Balanced employment and unemployment rates

Sensible geographic areas

  • Equal distribution of landmass and minimum annual housing need - supports housing growth

Not sensible economic areas 

  • Southern unitary is too small to support ongoing economic growth
  • Southern unitary likely to have limited purchasing power due to its small size 

Not sensible geographic areas

  • Unbalanced landmass and minimum annual housing need, likely to constrain housing growth

Sensible economic areas

  • Appropriate tax bases (both economies are of a sustainable size and productivity)

Sensible geographic areas

  • Relatively equal distribution of land mass and minimum annual housing need - supports housing growth
Criteria score = 3 Criteria score = 1 Criteria score = 3

Councils must be the right size to achieve efficiencies, improve capacity and withstand financial shocks.

Option A Option B Option C

Meets guiding principle of 500,000+

  • Population of 420,100 in the southeast raising to 507,680 by 2040 
  • Population of 520,140 in the northwest raising to 581,110 by 2040 

Improved council finances  

  • Both councils projected to be financially viable  
  • Balanced resources per head 

Transition costs  

  • £34.4m transition costs – higher than the baseline projections

Does not meet guiding principle of 500,000+ 

  • Population of 326,670 in the south raising to 401,530 by 2040 
  • Population of 613,570 in the north raising to 687,260 by 2040 

Improved council finances  

  • North projected to be financially viable, south potentially unviable 
  • Balanced resources per head 


Transition costs  

£34.4m transition costs – higher than the baseline projections

Nearly meets guiding principle of 500,000+  

  • Population of 423,800 in the east raising to 474,830 by 2040 
  • Population of 516,440 in the west raising to 613,960 by 2040 

Improved council finances  

  • Both councils projected to be financially viable 
  • Balanced resources per head 

 

Transition costs  

£34.4m transition costs – higher than the baseline projections
Criteria score = 2 Criteria score = 2 Criteria score = 2

Councils must prioritise the delivery of high quality and sustainable public services to citizens. 

Option A Option B Option C

Does support improved local government services and public service reform 

  • Does align to existing public service footprints such as ICS Care Partnerships 

Considers impact on crucial services   

  • Does create two adult and children’s social care services that are big enough to be sustainable, with relatively balanced levels of spend per resident 
  • Does provide opportunity for partnership working with health to improve SEND and homelessness services 
  • Does align with hospital flow data

Does not support improved local government services or public service reform 

  • Does not align to existing public service footprints such as ICS Care Partnerships 

Does not consider impact on crucial services 

  • Does not create a sustainable adult’s social care service in the northern unitary (challenging geography) 
  • Does not create a sustainable children’s service in the southern unitary (too small)  
  • Does not support increased supply of housing to support homelessness services in the south 
  • Does not align with hospital flow data 

Does not support improved local government services or public service reform 

  • Does not align to existing public service footprints such as ICS Care Partnerships 

Somewhat considers impact on crucial services  

  • Does create two adult and children’s social care services that are big enough to be sustainable 
  • Does create concern regarding homelessness services, as local identity is not respected  
  • Does not align with hospital flow data
Criteria score = 3 Criteria score = 1 Criteria score = 2

Proposals should show how councils in the area have sought to work together in coming to a view that meets local needs and is informed by local views. 

Option A Option B Option C

Does respect culture and history 

  • Does respect local identity  
  • Does respect historical boundaries and connections to anchor cities  

Does respect everyday patterns  

  • Does respect shopping and socialising patterns, accessing healthcare patterns, and travel to work patterns

Somewhat respects culture and history 

  • Protects an established ‘Greater Cambridge’ identity 
  • Somewhat respects historical boundaries and the connection between Fenland and East Cambridgeshire  
  • Does not respect historical boundaries connecting Cambridge and East Cambridgeshire 

Somewhat respects everyday patterns  

  • Somewhat respects travel to work and shopping and socialising patterns 
  • Does not respect accessing healthcare patterns

Does not respect culture and history  

  • Somewhat respects historical boundaries and the connection between Fenland and East Cambridgeshire  
  • Does not respect historical boundaries connecting Cambridge and East Cambridgeshire  
  • Does not make sense for local residents 

Does not respect everyday patterns  

  • Does not respect travel to work, shopping and socialising patterns, or healthcare patterns
Criteria score = 3 Criteria score = 2 Criteria score = 1

Proposals must support devolution arrangements.

Option A Option B Option C

Does support devolution arrangements 

  • Does create balanced unitaries for the CPCA to work with  
  • Does create unitary authorities on already established footprints, making sense to partners such as the CPCA 
  • Does have sensible economies to support the CPCA’s growth ambitions  
  • Does align with ICS Care Partnerships, assisting the CPCA’s future responsibilities around health and public service reform

Does not support devolution arrangements 

  • Does not create balanced unitaries for the CPCA to work with  
  • Does not create unitaries with sensible economies, potentially hindering the CPCA’s growth ambitions  
  • Does not align with ICS Care Partnerships, creating a disconnect between principal authorities and health that the CPCA will have to overcome

Somewhat supports devolution arrangements  

  • Does create balanced unitaries for the CPCA to work with  
  • Does have sensible economies to support the CPCA’s growth ambitions  
  • Does not align with ICS Care Partnerships, creating a disconnect between principal authorities and health that the CPCA will have to overcome
Criteria score = 3 Criteria score = 1 Criteria score = 2

Proposals should enable stronger community engagement and deliver genuine opportunity for neighbourhood empowerment.

Option A Option B Option C

Neighbourhood governance 

  • Does provide opportunities to implement neighbourhood governance that will bring local decision making close to communities, empowering neighbourhoods, and strengthening local accountability

Neighbourhood governance 

  • Does provide opportunities to implement neighbourhood governance that will bring local decision making close to communities, empowering neighbourhoods, and strengthening local accountability 

Neighbourhood governance 

  • Does provide opportunities to implement neighbourhood governance that will bring local decision making close to communities, empowering neighbourhoods, and strengthening local accountability
Criteria score = 3 Criteria score = 3 Criteria score = 3

Conclusion

Following the full review, the table below shows the total criteria points for Option A, B, and C.

Option Total criteria points
A 17
B 10
C 13

Option A creates two unitary councils that meet the Government’s criteria and will deliver one fairer future for the whole area.

  • Balance the populations, land mass, and base budgets of the existing councils in Cambridgeshire and Peterborough, ensuring a fair distribution of existing resources.
  • Provide sufficient scale, size, and mass to manage financial shocks and deliver value for money through economies of scale in service delivery and commissioning.
  • Align boundaries with existing healthcare footprints to limit disruption for residents, support high-cost and complex services, and protect established structures and relationships that can drive radical public service reform.
  • Reflect functional economic areas and the distinctive, yet interconnected economies of our area, creating a solid foundation for supporting inclusive growth and the objectives of the Cambridgeshire and Peterborough Combined Authority.
  • Respect historic identities and the patterns of our residents' daily lives, such as their travel to work and travel to learn patterns, allowing for services to be appropriately tailored to the distinctive needs and aspirations of our diverse places.

This provides the foundation for the delivery of a new organisational blueprint for the unitary councils set out in the proposal document, that will allow a focus on prevention, place-based, evidence-led, and collaborative ways of working.

Option A proposal copy

Read our full LGR proposal, Option A, submitted on 28 November 2025 (opens as PDF)

Closes 1 Apr 2028

Opened 27 Nov 2025