A Greater Oxford Council could generate £170bn for the UK’s economy – new research

Oxford City Council commissioned economists Volterra to look at the economic impacts of reorganising local government in Oxfordshire and West Berkshire.

There are three proposals for how local government in the region could be reorganised, which would see Oxfordshire's six councils abolished and replaced with either three, two or one council(s).

Volterra found that the three-council proposal, by focusing on growth in and near the city, would generate £168.8bn for the UK’s economy over the next 25 years.

The economists found that the two- and one-council proposals would generate significantly less for the UK’s economy – with the one-council proposal generating £43.1bn less by 2050.

The Government has asked councils, when coming up with proposals for simplifying local government in their areas, to achieve both efficiency savings and growth. The three-council option does both.

Local government reorganisation 

In December 2024, the government asked councils across England for proposals on simplifying the structure of local government in their regions. 

There are three proposals for how local government in Oxfordshire and West Berkshire could be reorganised. They would see Oxfordshire’s six existing councils abolished and replaced with either: 

• Three councils: 
  • Greater Oxford Council – covering Oxford and its Green Belt
  • Northern Oxfordshire Council – covering most of the existing Cherwell and West Oxfordshire districts
  • Ridgeway Council – covering most of the existing South Oxfordshire and Vale of White Horse districts combined with existing West Berkshire unitary
• Two councils: 
  • Oxford and Shires Council – covering all of the existing district areas of Cherwell, Oxford City and West Oxfordshire
  • Ridgeway Council – covering all of the existing district areas of South Oxfordshire and the Vale of White Horse, and the whole of West Berkshire Council’s area
• One council: covering Oxfordshire County Council’s current boundaries

Each of the new councils would be responsible for all council services in their area, including those currently provided by district/city and county councils.

Oxford City Council has proposed the three-council model. For more information about the proposal, visit the Council’s website.

Economic research

Volterra’s research found: “Oxford offers an unusually complete innovation ecosystem of research excellence, deep talent, specialist real estate, and global firms – an environment that other UK regions cannot match.”

The economists said that for many businesses, if they cannot be accommodated close to Oxford, they will not go elsewhere in Oxfordshire or the UK – they will go to other global knowledge centres like Boston or Silicon Valley.

Volterra concluded that the three-council option would provide the best possible chance of delivering greater levels of growth across Oxfordshire.

Volterra also concluded that concentrating more companies and individuals close to each other in Oxford would provide an economic advantage – known as an “agglomeration benefit” – that would further boost productivity and growth.

As a result, Volterra found the three-councils model would create £43.1bn more gross value added (GVA) between 2023 and 2050 than the one-council model, and £26.8bn more GVA than the two-council model.

Three councils proposal

Alongside more jobs and growth, the three-unitary model would also enable 40,000 new homes – including 16,000 social and affordable homes – to be built within Greater Oxford by 2040.

Our study shows that this much-needed scale of house building and job creation would be achieved by using 2.6% of Oxford’s 35,000-hectare Green Belt up to 2040.Oxford is one of the least affordable places to live in the country. Average house prices are now £570,000 – 13.6 times the average household income of £42,000 a year.

The three-council proposal would also provide separate councils for Greater Oxford and Northern Oxfordshire, protecting the local identities of Banbury, Witney and Oxford, and providing the ability to tailor services to the different needs of urban and rural Oxfordshire.

The model would also provide separate seats for Greater Oxford, Northern Oxfordshire and Ridgeway on the Thames Valley Mayoral Strategic Authority, which will coordinate strategic issues – such as housing, transport and economic growth – across the region.

Business survey results

Oxford City Council held an online survey with 35 local businesses and employers in September/October to gather their views on local government reorganisation.

Over 80% of the employers said being located in or near Oxford is very or extremely important to their business success, which supports the findings of the Volterra report.

More than two thirds of the employers (68%) strongly agreed that Oxford should go beyond the government's housing delivery targets, and 85% agreed that affordable housing near Oxford is important for business growth.

Comment

“Oxford already has one of the strongest economies in the UK, but it has the potential to be one of the world’s leading places for computing, AI and creating life-saving vaccines and cancer treatments.

“By expanding Oxford’s boundaries with a Greater Oxford Council, we could create thousands of new jobs across the whole region – not just scientists and AI experts, but in logistics, HR, education, hospitality, culture and more.

“These would be secure, well-paid jobs, which would bring more prosperity to families in Oxford and Oxfordshire – as well as generating £170bn for the UK’s economy.”

Councillor Susan Brown, Leader of Oxford City Council