Sam Smith, the Conservative leader of Nottinghamshire county council, said ministers pushing to expand Nottingham city council’s borders would land residents of the county with worse services and higher taxes.
In a letter to affected authorities, Jim McMahon, the communities minister, said debt levels would need to be “managed locally, including as part of efficiencies possible through reorganisation”, including for areas where councils have declared effective bankruptcy.
Last month the Guardian revealed local leaders in Surrey had requested the government cancel £1bn in debt held by troubled Woking borough council to enable a merger between the county’s 12 local authorities.
Mergers of English councils could lead to tax rises due to high debt levels Labour’s ‘devolution revolution’ aims to simplify local authorities but will force some to combine with others in financial distress.
People in areas neighbouring bankrupt councils in England risk seeing their council taxes rise and services cut under Labour’s plans for the most radical shake-up of local government this century.
