Local Democracy Upgrades

1. Purpose and Scope

This appendix sets out the data sources, assumptions, and calculations underpinning the cost estimate for the Democracy Revival legislation, which proposes converting local government councillors across the United Kingdom from part-time, allowance-based roles into full-time, salaried positions paid at twice local median earnings with dedicated office support. The estimate covers the gross annual cost of the reformed system, the current baseline expenditure it would replace, and the resulting net additional fiscal burden expressed in aggregate and per-household terms.

The Democracy Revival legislation sits within the broader programme of Universal Services as a Devolution & Legal measure under the Community Government implementation strand. Its financial impact is recorded at a net budget cost of £2 billion per annum from Year 2 of the programme.

2. Structural Assumptions

2.1 Number of Councils

The estimate uses 380 primary local government councils as the base count. This figure represents a modest consolidation from the current structure of approximately 382 principal councils across the four UK nations: 317 in England (comprising 21 county councils, 164 district councils, and 132 single-tier authorities including 33 London boroughs and 36 metropolitan boroughs), 22 unitary authorities in Wales, 32 local authorities in Scotland, and 11 local councils in Northern Ireland.

The 380 figure is a user-specified assumption reflecting the anticipated post-reform local government landscape. Ongoing devolution and local government reorganisation in England — with several county and district councils expected to merge into new unitary authorities during 2025–27 — makes the precise number of councils at the point of implementation uncertain. The estimate is not sensitive to small variations in this figure; reducing from 380 to 370 councils while holding councillors per council constant reduces total cost by approximately 2.6%.

Sources: House of Commons Library, "Local government in England: structures" (SN07104, February 2026); LGA membership data (315 of 317 English councils); Welsh Local Government Association; Convention of Scottish Local Authorities; Northern Ireland Local Government Act 2014.

2.2 Councillors per Council

The central estimate assumes 50 councillors per council, with sensitivity analysis at 40 and 60. This yields a central case of 19,000 full-time councillors nationwide.

The current system has approximately 18,520 councillors in Great Britain and an estimated 460 in Northern Ireland, totalling roughly 19,000. This alignment is not coincidental: the reform proposes to convert existing councillors to full-time status rather than to expand the total number of elected representatives. The 50-per-council assumption is therefore a simplifying average; in practice, London boroughs and metropolitan districts tend to have 50–65 councillors, county councils 50–85, district councils 25–50, and Scottish and Northern Irish councils 35–80.

The sensitivity range of 40–60 per council captures the plausible range of outcomes depending on whether reorganisation consolidates wards (pushing toward the lower end) or whether the reform preserves existing multi-member ward structures (tending toward the upper end).

Sources: House of Commons Library, Research Briefing CBP-10272 (July 2025): "In total, there are currently 18,520 councillors in Great Britain"; LGA Census of Local Authority Councillors (2022); NISRA council composition data.

3. Earnings Data

3.1 National Median

The salary anchor is the UK median gross annual earnings for full-time employees: £39,039 as reported in the ONS Annual Survey of Hours and Earnings (ASHE) for April 2025 (provisional). This is rounded to £39,000 for the purposes of the estimate. The ASHE figure is derived from a 1% sample of HMRC PAYE records and is the ONS's preferred measure of typical earnings because the median is less affected than the mean by the skewed upper tail of the earnings distribution.

The corresponding weekly figure was £766.60 (a 5.3% nominal increase on the April 2024 figure of £728.27, representing a 1.1% real increase after CPIH adjustment). Annualising weekly earnings at £766.60 × 52 yields £39,863, modestly above the reported annual median of £39,039 because the annual ASHE figure captures only employees who have been in their current job for at least a year and includes periods of reduced pay due to absence.

The estimate uses the reported annual median (£39,039, rounded to £39,000) as the more conservative and methodologically appropriate figure.

Source: ONS, "Employee earnings in the UK: 2025", published 23 October 2025. ASHE Table 1 (all employees) and Table 8 (residence-based regional breakdowns).

3.2 Regional Medians

The regional breakdown uses residence-based median full-time weekly earnings from ASHE Table 8, annualised by multiplying by 52. The resulting regional annual medians used in the estimate are:

Weekly figures are approximate mid-points derived from the ASHE 2025 provisional release. London weekly median pay was the highest across all regions; the North East was the lowest. Northern Ireland saw the largest year-on-year increase (7.4%) reflecting backdated multi-year public sector pay settlements.

The "2× local median" formulation means that a councillor in the North East would earn £67,600 gross per annum while a London councillor would earn £93,600 — a ratio of approximately 1:1.4, mirroring the existing geographic pay differential in the wider labour market. This design choice anchors councillor pay to local economic conditions and avoids the political difficulty of a uniform national salary that would be generous relative to local norms in lower-cost regions and uncompetitive in London.

Sources: ONS ASHE 2025 provisional (Table 8, residence-based); Scottish Government analysis of ASHE (gross median weekly earnings for Scotland: £773.80); NISRA ASHE bulletin (Northern Ireland: £713/wk).

4. Employer Cost Loading

4.1 Components

Councillor gross salary is subject to two principal employer-side costs:

Employer National Insurance contributions at 13.8% of earnings above the secondary threshold. The secondary threshold for 2025–26 was reduced to £5,000 per annum (from £9,100) as part of the October 2024 Budget, increasing the effective employer NI cost on a £78,000 salary. The estimate uses 13.8% applied to the full salary as a simplifying assumption; the actual effective rate would be marginally lower due to the threshold, but this is offset by the employer NI on pension contributions which is not separately modelled.

Employer pension contributions under the Local Government Pension Scheme (LGPS). The LGPS is a defined-benefit scheme with employer contribution rates set by triennial actuarial valuations. Rates vary by fund but typically fall in the range of 15–22% of pensionable pay. The estimate uses 15% as a conservative assumption.

4.2 Total Loading

The combined employer loading is 13.8% + 15.0% = 28.8%, yielding a loaded salary of £78,000 × 1.288 = £100,464 at the national average. The spreadsheet rounds the loading to 28.8% and applies it uniformly; the regional breakdown applies the same percentage to each region's 2× salary figure.

For context, HM Treasury's standard public sector pay uplift factor (used in Spending Review costings) typically assumes employer on-costs of 25–30% of gross salary, placing this estimate within the conventional range.

Sources: HMRC, "Employer National Insurance rates and thresholds" (2025–26 tax year); LGPS Advisory Board, "Fund Valuations" (employer contribution rates by fund); HM Treasury, "Public Expenditure Statistical Analyses" (standard employer on-cost assumptions).

5. Office Support

5.1 Composition

Each full-time councillor is assumed to require £25,000 per annum in office support costs, covering:

• Shared administrative and casework staff. A constituency caseworker or administrative officer shared between two to three councillors, at an annual cost of approximately £30,000–£35,000 including employer costs, yielding a per-councillor share of £10,000–£17,500.
• Workspace provision. Desk space within council buildings or shared constituency offices, including heating, rates, and facilities management, estimated at £3,000–£5,000 per councillor.
• IT, communications, and digital infrastructure. Laptop, mobile phone, secure email, case management software, and video conferencing provision at £1,500–£2,500 per annum.
• Constituency expenses. Travel within the ward, meeting costs, and incidental expenses at £2,000–£4,000 per annum.
• Training and professional development. Induction, ongoing skills development, and conference attendance at £1,000–£2,000 per annum.

The £25,000 figure is a deliberately round central estimate. It is conservative relative to the office cost allowances available to Members of Parliament (whose staffing allowance alone exceeds £200,000 per annum for typically four to five staff members) but reflects the expectation that councillors would share more infrastructure and operate within existing council premises.

5.2 Sensitivity

Office support is the least well-anchored component of the estimate. At a lower bound of £15,000 per councillor, the aggregate office support bill falls from £475 million to £285 million, reducing the gross total by £190 million. At an upper bound of £35,000, it rises to £665 million, adding £190 million. This range shifts the per-household figure by approximately ±£7 per year.

6. Baseline Deduction

6.1 Current Expenditure on Councillors

The estimate deducts current expenditure on councillor allowances and support to arrive at a net additional cost figure. Current expenditure is estimated at approximately £342 million per annum, based on 19,000 councillors at an average loaded cost of £18,000 each.

The £18,000 average is built up from:

• Basic allowance. The LGA Census of Local Authority Councillors (2022) reported that basic allowances ranged from approximately £4,000 to £16,000 depending on council type and size, with a median in the range of £10,000–£12,000 for principal authorities.
• Special responsibility allowances (SRAs). Cabinet members, committee chairs, and opposition leaders receive SRAs that can range from £5,000 to £50,000+. Averaged across all councillors (most of whom receive no SRA), this adds approximately £2,000–£3,000 per head.
• Expenses and support costs. Travel, subsistence, IT provision, and other reimbursable expenses average £1,000–£3,000 per councillor.
• Employer costs on allowances. Where allowances are subject to NI, the employer loading adds a further margin.

The £18,000 figure is approximate and likely conservative (i.e., it may understate current costs slightly, which would reduce the reported net additional figure). An independent audit of all 382 councils' members' allowances budgets would provide a more precise baseline but is beyond the scope of this estimate.

Sources: LGA, "National Census of Local Authority Councillors 2022"; Independent Remuneration Panels annual reports (various councils); Local Authority Revenue Expenditure and Financing (DLUHC).

7. Results and Reconciliation

7.1 Central Estimate

At the central case of 380 councils with 50 councillors each:

7.2 Scenario Range

8. Limitations and Caveats

Regional council allocation. The regional breakdown allocates councils to regions using approximate figures that sum to 344 rather than the full 380. This reflects the difficulty of cleanly assigning all councils to ASHE earnings regions, particularly where two-tier structures span regional boundaries. The national total uses the aggregate formula (380 × 50 × cost per councillor) and is not affected by the regional allocation.

Uniform councillors-per-council assumption. In practice, the number of councillors varies substantially by council type and population. London boroughs typically have 50–63 councillors, county councils 50–85, and smaller district councils as few as 25–35. A population-weighted allocation model would produce modestly different regional totals but is unlikely to shift the national aggregate by more than 5–10%.

Static earnings assumption. The estimate uses April 2025 earnings data. Councillor salaries linked to local median earnings would increase annually in line with ASHE updates, creating a built-in cost escalator. Over a five-year implementation window, assuming 3–4% nominal earnings growth per annum, the Year 5 cost would be approximately 12–17% above the Year 1 figure in nominal terms.

No allowance for transition costs. The estimate captures the steady-state annual cost. There would be additional one-off transition costs for recruitment, training, workspace reconfiguration, and the design and implementation of new remuneration and pension arrangements. These are not quantified but are unlikely to exceed £50–100 million in aggregate.

No allowance for productivity benefits. Full-time, professionally paid councillors would be expected to deliver more effective governance, scrutiny, and constituent service than the current part-time model. Any fiscal benefits from improved decision-making, reduced failure demand, or more effective commissioning of local services are not captured in this cost estimate.

9. Data Sources Summary