Somerset's leaders are divided about the best way to govern their county, and therefore Cheddar, in the years ahead.

Somerset County Council and the four district councils have been working together since May 2018 to find a way to fund public services most effectively in the future.

But nearly two years on, the county and the districts have diverged as to what the best option would be.

The four district councils – Mendip, Sedgemoor, Somerset West & Taunton and South Somerset – all favour maintaining the current two-tier system but working much closely together, sharing staff and resources.

The county council, meanwhile, is still broadly in favour of a single unitary authority to govern the whole county.

Here's everything you need to know about the future of local government in Somerset – and what happens next:

- How did we get to this point?

This is not the first time that Somerset played around with the idea of becoming a unitary authority (i.e. one which fulfils the roles and responsibilities of both county and district councils together).

In 2007, residents voted against replacing the current two-tier system with a single new council.

County council leader David Fothergill blew the starting whistle for this latest look at the issue back in May 2018 – mere months before his authority was forced to make £15 million of cuts in its "emergency budget".

At the time he promised the change would deliver £28 million in savings per year, and commissioned a report to look into the different possible combinations – including joining up with the existing unitary authorities of North Somerset Council and Bath & North East Somerset Council (BANES for short).

Mr Fothergill reiterated his call to look at the unitary question after the district council elections in May 2019 – which saw big losses for the Conservatives in every district barring Sedgemoor.

Now, nearly two years on, the FOLGIS report (which stands for Future of Local Government in Somerset) has finally been published, and the various councils have set out their stalls over their preferred options moving forward.

- Do the councils' leaders agree on anything?

The leaders of the five authorities do agree on one thing – that remaining as things are is not an option.

They also believe that any changes have to be driven by the ability to deliver services in a better way – despite the large sums involved, it is not all about saving money.

In a joint statement, they said: "The aim has not been to simply cut costs; the intention has been to find a way, through the better use of our resources, to sustain vital services now and for the future.

"We are convinced that staying purely to our own paths is not an option and that we can collectively do better.

"Service needs across Somerset are evolving, demand is increasing, and a new collaborative delivery strategy is needed."

- What are the big issues – and what needs to be done to solve them?

Somerset's leaders have identified five main issues which need to be addressed:

Disadvantaged children: Somerset has low social mobility and high numbers of "troubled families", with both poverty and deprivation being on the rise.

Young people: there are issues with children being able to access higher education, as well as high levels of self-harm and little genuinely affordable housing in the county.

The economy: Somerset's economy is generally low-wage and low-skill, with productivity also being a problem. The county has poor digital connectivity (e.g. broadband) and there are big problems with transport.

The environment: Somerset's councils are working to become carbon neutral, but more work is needed to tackle carbon emissions and reduce the risk of flooding across the county.

Older people: Somerset's elderly population is rising as its working population declines – in the next 15 years, the number of people aged 85 and over could rise by 88 per cent. With that comes issues about the provision and quality of health and social care, as well as tackling social isolation and loneliness.

Any form of local government in Somerset needs to do the following things in the most efficient and cost-effective way it can:

Dealing with the county's growing and ageing population

Provide more genuinely affordable housing

Hit the environmental targets which have been set

Support more struggling families

Stop young people from leaving for education or employment

Invest in digital technologies

What are the various options in the report?

The FOLGIS report outlines seven options for how local government should look in Somerset in the future – including estimates of how much money could be saved each year.

It should be noted these figures are "high level" – they are not based on any business case and therefore may not truly reflect the strength of each option.

The seven options presented in the report – which cost £167,000 – are:

Staying "as is": the current arrangements would continue with each council pursuing their own savings initiatives. Projected annual savings: up to £10 million.

Collaboration and integration (a.k.a. Get Fit and Sharing): each existing council would undertake transformation, with "increasing degrees of sharing and collaboration" – such as shared back-room staff and having the same broad policies. Projected annual savings: £10 million to £32 million.

Unitary – one new council for Somerset: this would exclude BANES and North Somerset, but see the county council and four districts replaced with a single unitary authority for the whole county. Projected annual savings £47 million.

Two unitaries (north and south): this plan would see a new unitary for Somerset and merging BANES and North Somerset together to form a new unitary authority. Projected annual savings: up to £80 million (but implementation costs are high).

Two unitaries (east and west): this plan would see North Somerset join up with Sedgemoor and Somerset West & Taunton to form one new authority, with the other comprising BANES, Mendip and South Somerset. Projected annual savings: up to £80M (but implementation costs are high).

Three unitaries (a.k.a. the Heappey plan): this option – preferred by current Wells MP James Heappey – would see three new authorities created. BANES would join up with Mendip, Somerset West & Taunton would merge with South Somerset, and North Somerset would join with Sedgemoor. Projected annual savings: up to £80 million (but implementation costs are high).

"A very different way of working": the vaguest of the options would see a complex form of devolution of county-held powers, allowing more services to be run by the districts and then in turn by town and parish councils. Projected annual savings: £38million to £50 million.

- What do the district councils want?

The four districts favour pursuing Option 2 – closer collaboration and integration without abolishing the two-tier system.

In a joint statement, the four leaders said: "We have already effected massive changes successfully over the past few years to ensure efficiency and protect services in the face of unprecedented cuts in funding and growing demand.

"Building on these changes, we have agreed to collaborate and integrate in

a number of new and innovative ways."

This closer way of working will include the following aspects:

One set of strategies and outcomes (rather than different policies for each council)

Integrating existing leadership and management (possibly resulting in a single senior leadership team)

Shared internal support teams (e.g. human resources, finance)

Integrating community support teams, sharing more knowledge at a local level

A ingle commercial strategy (rather than having the councils competing to purchase or run the same assets)

- Why don't the districts want a unitary authority?

The district councils have given the following arguments against creating any form of unitary authority:

Millions of pounds of taxpayers' money will have to be spent on redundancies and work to change existing structures

Staff may find it hard to focus on delivering existing services to a high standard if they are wondering about whether they will be laid off

A one-size-fits-all approach, centralised in Taunton, does not take account of local variations and local knowledge

District services will be run down and closed to fund the "endless" growth in children's and adult services – which won't fix the underlying financial issues

A unitary authority will be "distant" and could result in a "democratic deficit" – where people feel their council doesn't reflect their views or meet their needs

The savings promised by a unitary authority could take five to ten years to be achieved – if they materialise at all

- What does the county council want?

Mr Fothergill has said he still believes the best option is a single unitary authority covering the whole county.

Under these proposals, a new Somerset Council would replace the current county council and four district councils – reducing the number of elected representatives from around 300 to between 100 and 125.

He said: "We can no longer stay quiet on a report that offers so much potential investment for our residents, businesses and communities.

"Extra money, from new schools, better roads, investing in climate change, more buses; there's so much we could do with funding on this scale."

Mr Fothergill said that all the options in the Ignite report "have merit" but believes the single unitary – excluding North Somerset and BANES – was still the best way forward.

He said: "Even if it only saves half of what the report suggests, that's more than £23 million extra to spend on residents, every year.

"Just imagine what we could do to improve lives across Somerset with that sort of investment – to me it's a no-brainer.

"It makes sense for our residents to deal with just one authority. It makes sense to our businesses who will find it easier to grow the economy, and makes sense for councillors to speak with one voice to central government."

As well as BANES and North Somerset, Somerset has a number of other unitary authorities on its doorstep – including Wiltshire, Torbay, Plymouth, Cornwall and the recently-formed Dorset Council.

Mr Fothergill said these authorities were already "benefiting from huge savings" and said he would continue to work with the districts on a way forward.

He said: "I know there will be differences of opinion, but I am more than happy to work with my district colleagues where we have common ground.

"It would be easier to keep the status quo and leave this report in the long-grass, but I want to do what I believe is best for this county and its residents."

- What happens next?

The four district councils will quickly begin to develop a business case for closer collaboration with each other – beginning with the respective executives or cabinets granting permission to begin the process in February.

This joint business case would be developed and consulted upon between March and June, with further detailed scrutiny in July.

If all goes well, the changes would begin to be implemented from August – though, considering the scale of the changes, the entire transition could take up to 2022.

The county council has been invited to take part in this process if it wishes – but it cannot just overrule the districts and impose plans for a unitary authority on them.

Any unitary authority would have to come about with the approval of central government – and it would probably involve another referendum, similar to that held in 2007.

Additionally, this process would not mean either Somerset West & Taunton or South Somerset would ease up on their existing transformation programmes (which seek to deliver services more efficiently, including the use of new technologies). If anything, the implementation of the business case would feel like a continuation of that.

- Will we still have elections in 2021?

Yes – Somerset voters will still go to the polls in May 2021 to elect their county councillors for the next four years.

The only way this election could be postponed or called off entirely is with the permission of the communities secretary – and that would only happen if a new authority was about to replace it.

If the districts get their way, the two-tier system will continue to be in place – meaning their next elections will be held in May 2023.