Councils going through local government reorganisation (LGR) risk carrying fragmented legacy technology into their new authorities if they fail to make joint decisions early enough, according to public sector software provider, TechnologyOne.
The company’s local government lead, Emma Foy, said authorities that have spent decades competing with one another are now being asked to collaborate on the design of entirely new organisations.
“Overnight you are turning that on its head,” Foy told Think Digital Partners. “You’re turning decades of competition into something which needs to be collaborative, and that is real cultural change.”
The issue is becoming increasingly pressing as councils move from decisions over the shape of new authorities towards implementation. Surrey’s two new councils are due to vest on 1 April 2027, while new authorities elsewhere are expected to go live on 1 April 2028.
Foy said competition has historically extended from performance and funding to attracting scarce finance, digital and technology skills. During reorganisation, that can translate into organisations wanting to preserve their existing systems and the expertise of the staff who operate them.
“There is a real risk that the right decision won’t be made due to bias [alongside] good financial reasons,” she said.
Contractual commitments further complicate the picture, added Foy, with councils entering LGR with technology contracts of different lengths and potentially significant exit costs.
Legacy risk
Research published by think tank Localis in November 2025, supported by TechnologyOne, similarly warned that the digital readiness of English local government for LGR was “amber-minus”.
The report identified fragmentation, supplier lock-in, uneven cloud adoption, skills shortages and constrained finances as barriers to integration. It warned that the sector was capable of progressing with LGR, but “by no means ready to sprint at the pace that current LGR frameworks imply”.
More than 320 authorities largely negotiate their own technology agreements, according to evidence cited in the report, resulting in reduced bargaining power and duplicated effort.
However, Foy argued that councils should recognise the leverage they have over suppliers.
“Local government really underestimates its negotiation powers,” she said. “Be brave about what you ask for. Ask for that social value that you need to be delivered within your local area, whether that’s around skills, whether that’s around environmental, whether that’s around young people or community engagement.”
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The Localis report recommends that new authorities produce a single shared contract map before vesting, consolidate core corporate systems early and build portability, security and transparency into major contracts.
‘Think about transformation early’
Foy said the priority is ensuring councils don’t become so focused on achieving a safe transition that longer-term transformation gets postponed.
Some areas are already discussing common technology requirements before the detailed shape of their future organisations is settled, she said.
“You’ve got to think about transformation early, and you’ve got to make time for it, and you’ve got to invest in it,” said Foy. “If we don’t hardwire transformation in early, then…LGR will just be about statutory services and getting to vesting date on the first of April 2027 or 2028.”
That concern is also reflected in government guidance. The Ministry of Housing, Communities and Local Government’s Digital and Cyber Playbook, launched this year, says reorganisation creates complex decisions around systems, data, contracts and people, and is intended to help councils both achieve a safe and legal first day and make informed longer-term technology decisions.
Foy warned that putting off those decisions could leave new authorities operating fragmented systems for years.
“It’s so easy to think about, ‘Oh, hang on a minute… your finance system, your HR system, your ERP system, actually, we’ll keep that going. We’ll just cobble that together,’ and before you know, you’re five years down the line, and you’ve not done anything about it,” she said.
Skills are another significant constraint. The Localis research found that only around two percent of local authority headcount was in digital or data-adjacent roles, compared with a four percent benchmark, with enterprise architecture, data engineering and cybersecurity among the areas where capacity is particularly thin.
Foy said those pressures made collaboration between authorities even more important.
“Expectations are rising, funding is reducing,” she said. “Every opportunity to transform, to do things in a more efficient and better way needs to be taken.”
Australian-headquartered TechnologyOne currently supports 74 UK local government organisations. Foy said it is now developing its pre-configured local government offering with the incoming unitary authorities in mind.
