Very few of the changes that will happen in the BBC will come as a result of ideas from staff. Somebody is working on a financial strategy that will be imposed, top down. And, from tweets I'm picking up, it may be that the very un-radio-friendly head of strategy, John Tate, is still part of that team.
It was John and his strategists who offered up both 6Music (saved) and the Asian Network (growing quietly, but effectively in limbo). Now someone is "floating" some sort of merger between the rump of BBC Local Radio in England, and 5Live. 5Live would abandon its medium wave frequencies of 909 and 693, but still be heard uninterrupted on DAB, cable and satellite. Local radio stations would mount only breakfast and drive time shows on their FM transmitters, and carry 5Live at all other times - perhaps with some weekend sport opt-outs.
If this is a float (like the News-Channel-On-BBC2 daytime offer) to demonstrate they're prepared to consider radical stuff, then somebody warn them off. If it's a serious float, it needs sinking fast. Both services lose. The local radio audience is old, tending downmarket. 5Live is fighting to stay younger than Radio 4. You save electricity at the transmitters, but very little else in terms of staff and accommodation. If this is the creative stuff coming out of Delivering Quality First, I'd be very surprised.