Areas adjacent to bankrupt councils could share the pain in merger plan

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.

- Richard Partington

Under plans championed by Angela Rayner, the deputy prime minister, for a "devolution revolution", the government is pushing to merge dozens of small district and county councils to streamline services. However, some of the councils are in severe financial distress, including Nottingham, Woking in Surrey and Thurrock in Essex, raising the prospect that nearby authorities could be left picking up the pieces.

The government wrote to councils last week warning there would be no write-off of debts to smooth the process, with multibillion-pound debts subsumed into merged councils.