Fifteen new councils will be created in the south and east of England under the latest round of a major local government overhaul, aimed at boosting economic growth and accelerating mass housebuilding plans.

The new unitary councils will replace 43 counties and districts across Norfolk, Suffolk, Essex and Hampshire, with hundreds of councillors’ roles axed. A decision on future arrangements for East Sussex and West Sussex has been delayed.

Ministers said the new councils, which will come on stream in 2028, will sweep away outdated administrative structures and enable local authorities to focus on government priorities such as building 1.5m new homes by 2029.

The boundaries of Southampton, Portsmouth, Norwich and Ipswich will be expanded, in a move that ministers hope will help unblock resistance to housebuilding plans from rural districts.

The communities secretary, Steve Reed, said: “Reorganisation presents a once-in-a-generation chance to make sure our councils match the modern realities of our places, making sure outdated boundaries are not constraining growth, particularly in our towns and cities.”

He added: “These outdated and misaligned structures slow down decisions, stifle housing growth, and fragment public service delivery. This is particularly important for key government priorities on housebuilding, like our target of building 1.5m homes in England this parliament.”

However, the County Councils Network (CCN) warned the changes risked creating upheaval in adult and children’s care services and were likely to increase local government running costs, not least because of the need to hire hundreds of new senior managers.

Simon Edwards, chief executive of the CCN, said: “At a time when council finances have never been more under strain … these ministerial decisions will inevitably end up costing local taxpayers more while causing greater upheaval to services for the most vulnerable.”

Under the existing two-tier system, counties oversee children and adults’ social care, and highways, while smaller districts have responsibility for housing, planning and refuse collection.

In Essex, five new unitary councils will be created; in Hampshire, there will be four new unitaries, while the Isle of Wight will remain a standalone unitary; Norfolk will have three unitaries created, including a Greater Norwich council; and in Suffolk three unitaries will be set up, including Ipswich and South Suffolk council.

In most cases, the new councils will have populations of fewer than the 500,000 target originally envisaged by ministers. This will be welcomed by critics who feared the creation of distant “mega-councils”, but is likely to wipe out any hoped-for savings through economies of scale.

Reed said decisions on each area had been made “on a case-by-case basis, on its own merits, respecting the differences of local circumstances and local people’s views”.

Wednesday’s announcement follows a ministerial decision last year to create two new unitary councils, East Surrey and West Surrey. They will replace 11 districts and the existing Surrey county council in April 2027. Decisions on a further 14 council areas are expected in July.

Reed confirmed the government would pay off £200m of debts run up by Thurrock council, to ease reorganisation plans in Essex. Thurrock went bankrupt in 2022 after running up a £500m deficit in a series of reckless business deals.

This follows a £500m government bailout last year for Woking council, which collapsed in 2023 after running up £2bn of debts on risky commercial property deals. Woking’s finances were a stumbling block to any Surrey reorganisation plans.