There are a number of towns where this goes on. There is pressure put on the kids to play only with their town (especially the strongest players).

A "True Premier League" will only consist of 4 to 6 teams per grade. If you have two devisions you could have 8 to 10 teams total. At the end of the season you could move the bottom one or two teams down and the top one to two teams up.

If the goal is "player development" this is one way to do it. If the goal is winning games then keep the current format.