Councils, Contracts and Consequences

Gawain Towler, Senior Adviser at Bradshaw Advisory and former Reform UK comms chief, on why the May 1 local elections matter for business

As the United Kingdom approaches the local elections scheduled for May 1, there is a compelling case for businesses to take note of what might in previous years have been dismissed as routine municipal proceedings.

These contests, encompassing council and mayoral races across England, are poised to carry implications that extend beyond the civic sphere, influencing local governance structures, budgetary priorities, and - critically - the commercial landscape.

The results, due to be announced on May 2, could herald shifts in policy and resource allocation that directly affect operational costs, contract opportunities, and market conditions for enterprises of all sizes.

Context

The backdrop to these elections is one of significant political flux. The Conservative Party, which has historically maintained a strong presence in local government—particularly in the English county elections—is widely anticipated to suffer substantial losses. This is significant because the English county elections, some of which have been postponed, are the ones being contested this year.

Projections from Electoral Calculus, based on polling data collected in March this year, suggest the party could relinquish control of numerous county councils and lose hundreds of seats. This anticipated decline follows last year’s General Election, where Labour secured a historic parliamentary majority but has since experienced a notable erosion of public support. Concurrently, the Conservatives, under Kemi Badenoch’s leadership, grapple with the fallout of governance challenges, economic pressures, and voter disillusionment. These factors have diminished their standing since the peak of their influence in 2021, when Boris Johnson’s popularity bolstered their performance in similar local contests.

Lessons from 2021

The 2021 local elections, conducted during a period of heightened Conservative approval, saw the party consolidate power in regions traditionally aligned with Labour, a phenomenon attributed to a temporary surge in support rather than a lasting realignment.

That context has since evaporated, replaced by a fragmented political landscape where multiple parties stand to benefit from the Conservatives’ retreat.

Labour, despite its national victory in 2024, faces uncertainty in translating this into local gains, given its declining approval ratings and internal policy wrangling. The Liberal Democrats, with a proven track record in local governance, remain a contender, though their momentum continues despite perceptions of leadership shallowness under Ed Davey. The Green Party, having expanded its foothold in rural councils such as Herefordshire and Norfolk in 2024, could further its reach by appealing to environmentally focused constituencies. However, it is Reform UK, the successor to the Brexit Party, that emerges as a particularly notable variable, with polling at 25% nationally—outpacing the Conservatives and occasionally rivaling Labour—suggesting a potential to reshape local power dynamics.

Impact on business

For businesses, the significance of these elections lies in their capacity to alter the operational environment at the local level.

For example, local authorities oversee budgets that fund essential services—social care, education, and infrastructure—while also managing discretionary spending on areas such as leisure facilities, road maintenance, and economic development initiatives. These budgets, in turn, influence the procurement processes and contract awards that many firms rely upon. A shift in council control could recalibrate these priorities, affecting both the cost of doing business and the availability of commercial opportunities.

To understand these implications, it is necessary to consider the profiles of the potential beneficiaries and their likely policy directions.

Labour

Labour’s approach to local governance, should it secure gains, would likely emphasise continuity with its national agenda—investment in public services, modest economic redistribution, and a commitment to environmental targets. However, its weakened public standing as of April 2025 raises questions about its ability to mobilise support in areas where Conservative losses are most pronounced.

For businesses, a Labour-led council might maintain existing contract frameworks, particularly in sectors aligned with public service delivery, such as healthcare and education support services.

Yet the party’s current trajectory suggests limited scope for bold initiatives, potentially leaving firms reliant on discretionary council spending - such as those in the leisure or cultural sectors - facing static or reduced opportunities. The impact of the Birmingham bin strike and the very public mounds of refuse piling up on the streets, also brings into question Labour’s handling of local governance at an awkward time for them in the electoral cycle.

Liberal Democrats

The Liberal Democrats, by contrast, have a well-established reputation for competence in local administration, often outperforming their national polling through effective grassroots organisation. Their policy platform typically balances fiscal responsibility with targeted investments in community infrastructure, such as housing and transport. For companies engaged in construction, urban planning, or public transport, a Lib Dem-controlled council could signal steady demand for services, though their leader’s recent public missteps may erode confidence among voters, capping their gains.

Businesses should anticipate a pragmatic approach from the Lib Dems, with fewer disruptions to existing contracts but also little appetite for expansive new projects that might strain budgets.

The Green Party

The Green Party’s potential expansion into additional councils presents a distinct scenario. Having demonstrated success in rural areas, the Greens advocate policies centered on sustainability—renewable energy projects, green infrastructure, and carbon reduction initiatives.

For firms in the environmental technology sector, such as those providing solar panels, wind turbines, or energy-efficient building materials, Green-led councils could open new avenues for contracts. Conversely, businesses tied to traditional industries—road construction, fossil fuel logistics, or heavy manufacturing—might encounter stricter regulations or reduced funding, as discretionary budgets are redirected toward ecological priorities. The Greens’ influence, while growing, remains constrained by their niche appeal, suggesting their impact would be felt most acutely in specific regions rather than nationwide.

Reform UK

Reform UK, however, represents the most dynamic and potentially transformative force in this electoral cycle. Polling data and recent by-election victories, such as those in Kent, indicate substantive voter support, challenging earlier assumptions of superficial popularity. Electoral Calculus forecasts suggest Reform UK could secure control of councils in counties like Lincolnshire, Durham, Derbyshire, and Staffordshire, while also contending for mayoral posts in Greater Lincolnshire, Hull, and Doncaster.

The party’s platform emphasises rigorous budgetary oversight, the elimination of expenditures deemed non-essential - such as Diversity, Equity, and Inclusion (DEI) programs and Net Zero commitments - and a focus on cost efficiency. Should Reform UK gain traction, businesses could face a markedly different local governance model.

In Lincolnshire, for instance, a traditional Conservative stronghold, Reform UK’s projected majority of the 70 council seats could pair with a victory in the inaugural Greater Lincolnshire mayoral election, where their candidate, Dame Andrea Jenkins, polls competitively. This dual control would enable a cohesive implementation of their agenda: a line-by-line budget review to eliminate perceived waste, reductions in DEI-related staffing and programs, and a scaling back of environmental spending not mandated by statute.

For companies currently contracted to provide DEI training, environmental consultancy, or climate-focused infrastructure, this shift could curtail opportunities, as councils redirect funds toward statutory obligations like social care, which consume up to 80% of local budgets according to the Institute for Government. Conversely, firms offering cost-effective solutions - such as budget road maintenance, basic facility management, or streamlined waste disposal - might find favor under Reform UK’s efficiency driven ethos.

In Durham, a region historically tied to Labour, Reform UK’s messaging on fiscal discipline and opposition to progressive spending resonates with voters frustrated by economic stagnation. Predictions indicate significant seat gains, potentially disrupting longstanding procurement patterns.

Businesses in sectors like adult social care, which rely on statutory funding, would likely see continuity, but those in discretionary areas—libraries, cultural programs, or green initiatives—could face reduced budgets as Reform UK prioritises core services.

Similar dynamics are projected in Derbyshire and Staffordshire, where the party’s emphasis on value-for-money governance could reshape tendering processes, favoring providers who can deliver at lower costs over those tied to ideological priorities.

The mayoral races in Hull and Doncaster further illustrate Reform UK’s potential impact. Candidates in these economically challenged areas campaign on revitalization through cost-cutting, promising to address voter discontent with national neglect.

For businesses in logistics, retail, or small-scale manufacturing, a Reform UK mayor could signal streamlined permitting processes or reduced regulatory burdens, though larger infrastructure projects might stall as discretionary funds dwindle.

The party’s approach - described by some as a “local government DOGE” (a reference to Elon Musk’s Department of Government Efficiency) - aims to maximize taxpayer value, a stance that could appeal to firms adept at lean operations while challenging those reliant on expansive council support.

These potential shifts must be viewed against the structural realities of local government finance. Statutory obligations - primarily youth and adult social care - account for the lion’s share of council budgets, leaving limited room for discretionary spending. The Institute for Government estimates this figure at up to 80%, meaning that even a party like Reform UK, with its aggressive cost-cutting rhetoric, would face constraints in reallocating resources.

Traditional areas of business engagement - road repairs, leisure facilities, and economic development - will remain under pressure regardless of who holds power, as councils prioritize mandated services. This dynamic underscores the importance for businesses to anticipate continuity in essential contracts while preparing for variability in discretionary ones.

Conclusion

For the corporate sector, the implications of these elections are multifaceted.

A Labour or Lib Dem victory might preserve existing procurement frameworks, offering stability for firms already embedded in council supply chains. A Green surge could catalyze demand in sustainability-focused industries, though at the expense of traditional sectors. Reform UK’s rise, however, introduces the greatest uncertainty, potentially upending established relationships in favor of a leaner, more utilitarian model.

Companies must assess their exposure: those in DEI, environmental services, or high-cost infrastructure may need to diversify client bases or adapt offerings to align with efficiency demands, while those in essential services or low-cost provision could position themselves to capitalise on emerging opportunities.

Historically, local elections have garnered scant notice from the business community, overshadowed by the drama of Westminster. The 2021 contests, buoyed by Boris Johnson’s then-peak popularity, bucked this trend, delivering Conservative gains that bolstered their local influence.

Today, in April 2025, that tide has receded, and the forthcoming elections assume a heightened relevance. They serve as a barometer for national trends - Reform UK’s performance, in particular, will be scrutinized as a precursor to the 2029 general election - while directly shaping the local conditions under which businesses operate. The interplay of council control, budget priorities, and procurement policies will dictate operational costs, market access, and competitive landscapes for years to come.

For executives and strategists, this necessitates a proactive stance. Monitoring regional polling, such as that from Electoral Calculus, and tracking candidate platforms will provide early indicators of potential shifts. In Lincolnshire, for example, a Reform UK sweep could prompt firms to rebid contracts under tighter cost constraints, while in Durham, a Labour hold might preserve existing service agreements. In mayoral races like Hull’s, understanding the economic priorities of frontrunners could guide investment decisions.

Beyond immediate tactics, businesses should consider longer-term adjustments, recalibrating supply chains, diversifying revenue streams, or lobbying for favorable policies as local governance evolves.

The May 1 local elections, then, are not a peripheral concern but a critical juncture. Their outcomes will influence the allocation of billions in public funds, the direction of local economies, and the viability of countless commercial relationships.

When the results emerge on May 2, they will offer not just a snapshot of political sentiment but a roadmap for navigation in an increasingly fragmented landscape. To ignore them is to risk being caught unprepared; to engage with them is to secure a foothold in the shifting terrain of British local governance.