The following Statement was made in the House of Commons on Wednesday 5 February.
“With permission, I would like to update the House on devolution in England and local government reorganisation.
The No. 1 mission of this Government is to unlock growth in our regions and put money back in the pockets of working people. Every one of our proud towns and cities has a vital contribution to make to growth, but for all the promises of levelling up, when the rubber hits the road, Governments’ first instincts have been to hoard power and hold our economy back. Since I launched the devolution White Paper in December, I have been overwhelmed by the excitement from communities wanting to join the devolution revolution. With the measures I will announce today, if all goes to plan, over 44 million people will see the benefits of devolution, which is close to 80% of the country. That is more progress in a shorter amount of time than under any Government in Britain’s history.
Today, I am delighted to announce six new potential devolution areas that will be part of our devolution priority programme with a view to mayoral elections in May 2026. These places will get a fast-track ticket to drive real change in their area. While devolution can sound techie, the outcome is simple. It is a plan for putting more money in people’s pockets, a plan for quicker, better, cheaper transport designed with local people in mind, and a plan for putting politics back in the service of working people. Today, I can confirm to Members across the House that the places on the devolution priority programme are: Cumbria; Cheshire and Warrington; Greater Essex; Hampshire and Solent; Norfolk and Suffolk; and Sussex and Brighton. Mr Speaker, a seventh area that is somewhat familiar to both of us, Lancashire, is already deciding its mayoral devolution options, and we will look at its proposals in the autumn in parallel with the priority programme.
When I became Deputy Prime Minister, I promised that this Government would change the future of the north of England so that northerners would no longer be dictated to from Whitehall. The programme I announce today will see the north of England covered by devolution, but this programme is for all of England, as is shown by the significant progress in the east and the south. Today, legislation comes into force creating mayoral devolution in Greater Lincolnshire and in Hull and East Yorkshire, which are electing their first mayors this May, as well as foundational devolution in Lancashire and in Devon and Torbay.
Every place can see a benefit from devolution, and we want to move quickly to realise these benefits within the first term of our Government. Whether it is more regular bus services, more affordable housing or the simple fact that local people will have a local champion with regional influence, mayors have a proven track record of delivering growth and higher living standards. But we are clear that where a mayor is not using their powers to benefit their residents, the Government will have the tools to ensure delivery. We will create strong accountability measures in the English devolution Bill to ensure that mayors deliver the housing, transport and infrastructure that their residents need.
But devolution is only as strong as the foundations it is built on. Despite the funding injection from this Government, councils of all political stripes are in crisis. A decade of cuts and sticky-plaster politics has left councils in a 14-year doom loop. That is why we are fixing the foundations of local government by reforming funding and focusing on prevention. I know how vital local government is for achieving our government missions. I also know that reforming local government means tough choices—choices that the Conservatives were simply too unwilling to take.
Councillors of all types, including district councillors, tell me that the two-tier system is not working, so alongside our wider reforms, this Government are committed to making simpler, more efficient and clearer structures so that residents can access good public services without eye-watering price tags. These kinds of reforms will not happen overnight, but we are determined to deliver fairer funding to end the postcode lottery so that everyone gets the support from public services that they deserve. That is why today I will be issuing a legal invitation to all 21 two-tier areas to submit proposals for new unitary councils. Letters and the accompanying Written Statement will set out the requirements for these proposals.
New unitary structures will be the right size to achieve efficiencies, improve capacity and withstand financial shocks, but I am clear about the need for flexibility when reorganisation goes hand in hand with mayoral devolution and when it is coupled with ambitious plans for housing growth, so these proposals will be developed with effective local engagement and dovetail with devolution arrangements. I want to reassure Members that this process will involve extensive engagement with local communities and Members of this House.
Turning to the timings of the local elections in May, for certain areas a significant amount of work is needed to unlock devolution and deliver reorganisation. For this reason, some areas requested to postpone their elections until May 2026. The Government’s starting point is for all elections to go ahead unless there is a strong justification for postponement. The bar is high, and rightly so. I am agreeing to only half of the requests that were made. After careful consideration, I have agreed to postpone elections only in places where this is central to our manifesto promise to deliver devolution.
We are not in the business of holding elections to bodies that will not exist, and where we do not know what will replace them. This would be an expensive and irresponsible waste of taxpayers’ money, and any party calling for those elections to go ahead must explain how this waste would be justifiable. To that end, I have agreed to postpone local elections in East Sussex and West Sussex, in Essex and Thurrock, in Hampshire and the Isle of Wight, and in Norfolk and Suffolk. I have also agreed to a postponement in Surrey, given the urgency of creating sustainable new unitary structures, to unlock devolution for this area. I intend to move to elections to the new shadow unitary councils in all these areas, as is the usual arrangement for local government reorganisation.
We are postponing elections for one year, from May 2025 to May 2026. There is a well-established precedent, as the Conservative Party knows all too well. North Yorkshire, Cumbria, Somerset, Buckinghamshire and Northamptonshire all had their elections rescheduled by the previous Government. I will table the relevant secondary legislation when parliamentary time allows, and local elections will take place as scheduled in all other areas. I make it clear that all two-tier areas should be making plans to move to simpler structures, regardless of election delays. The invitation will be sent to all two-tier areas, with a timetable taking into account that their election has been delayed.
I know that the devolution journey may not always be comfortable for politicians in Whitehall, but it is not supposed to be. After all, we are undergoing a generational power shift from Whitehall to the town hall. We have already seen a huge amount of good will from Labour Secretaries of State who are willing to give up newly won powers for the sake of our towns and cities. The Secretaries of State for Energy Security and Net Zero, for Transport, for Work and Pensions and for Science, Innovation and Technology have led the devolution charge, and now the Prime Minister and I ask Members to do the same.
My Lords, the Government’s announcement on local government restructuring is a hugely significant upheaval for local democracy. We support the principles of devolution, but we do not support the Government’s method of achieving it. No council should be bullied or blackmailed into top-down restructuring. This was not in the Labour Party manifesto, and the Labour Government have massively rushed this whole exercise.
The Conservative Party has a proud record of supporting devolution. While we were in government, we empowered residents and their councils. We gave councils more control over local planning, improved accountability through elected mayors and police and crime commissioners, and decentralised power to the people by letting parents create free schools and giving residents power over neighbourhood planning.
In December 2024 we set out five tests for the Government that we believed any form of devolution should satisfy. Is this a genuine choice for local councils? In two-tier areas, do both district and county councils agree with restructuring? Will local government be more accountable to local residents? Will the overall changes help keep council tax down? Finally, will restructuring avoid disruption of social care?
We already know that the Government have failed each of these tests. Restructuring is compulsory. There has been no attempt to gather consensus within two-tier areas. Residents have not been consulted, and there has been no time for proper communication with local people about the plans that local councils are putting in place. The Government are incentivising council tax rises across the board—no, worse: punishing councils that keep council tax down. I have not been reassured by the Government that they understand the needs of adult and children’s social care, and the impact that this could have on it, compounded by Labour’s national insurance hikes. Nevertheless, I would be grateful if the Minister could address these five points in turn, and explain what consideration the Government have given each of them.
I remind the House that I have relevant interests as a councillor and as a vice- president of the Local Government Association. This is a wide-ranging Statement about the future of local government. There are three different elements within the Statement, and I want to address each separately.
First, I want to think about the creation of the so-called strategic authorities. The Government, in the headline to their Statement, described it as “devolution”. It is not devolution; it is delegation of powers from the centre in Westminster. True devolution will occur only when funding is raised locally and decisions are made locally, without the iron grip of Whitehall being exerted. This is a bit of a challenge for the Minister: if they are to have devolution, can she describe the route to the place where there is freedom for local government to make and fund its decisions, without the diktat from above?
The next challenge I have for the Minister—I am sorry, there are one or two here—is that of the democratic deficit that is being deliberately created. We are, apparently, going to have mayors for these so-called strategic authorities. If the evidence from the past in the election of mayors is to continue, mayors are elected—when they are stand-alone elections—by less than 20% of the electorate, which is hardly a resounding vote of confidence in that system. Those of us who care about local democracy are rightly concerned about increasing powers. For example, the mayors of the strategic authorities will have the power to create policy on housing and on strategic planning, which really affect the lives of residents. How will those decisions be respected when the mayors have been elected by such a low number of electors?
One small step that the Government could take to help reverse this democratic deficit is to return to the voting system that prevailed in the election of mayors until the previous Government, in their last throes, decided to remove the additional vote system and return to first past the post. I guess they thought it would help their cause; it did not. At least having an additional vote—albeit that is not what would I want—means that more people help to support the person who is elected.
I thank both noble Baronesses for their questions. The number one mission of our Government is to unlock growth in our regions. It is to this end that we are working very hard to start this generational opportunity to devolve powers and funding from Whitehall and Westminster to our local areas, where local leaders have skin in the game in making things happen for their communities. It is a very important part of our mission. With the measures we announced last Wednesday, over 44 million people will see the benefits of devolution. That is close to 80% of the county—more progress in a short amount of time than any Government in Britain’s history.
It is very important that we get on with this. This issue has been hanging around for most of my local government career, which is longer that I care to admit to. I have been involved in at least four long-term proposals for devolution in my time, and it is time that we got on with the job.
We have heard from councils that unitarisation or council mergers can help strengthen local leadership, improve local services, save taxpayers money and improve local accountability. That is why we invited formal unitary proposals from all the councils in two-tier areas and their neighbouring small unitaries.
We acknowledge that, for some areas, the timing of election affects their planning for devolution, particularly alongside reorganisation. To help manage these demands, we have considered requests to postpone elections from May 2025 to May 2026. We have been very clear that we would consider these requests only where it would help the area to deliver reorganisation and devolution to the most ambitious timeframe. That is a very high bar, and rightly so. Of these requests, the Government agree that for Norfolk and Suffolk, Essex and Thurrock, Hampshire and the Isle of Wight, and East Sussex and West Sussex, postponement is essential for the delivery of the devolution priority programme and complementary reorganisation. The Government have also agreed to postpone elections in Surrey, where reorganisation is essential to locking devolution options. We had a much larger number of proposals than that but, as I say, it was a very high bar.
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The shadow Secretary of State in the other place, Kevin Hollinrake, asked a number of questions of the Secretary of State, Angela Rayner, that went unanswered. Now the Government have had more time to consider these serious and reasonable questions, I ask the Minister to answer some of them, but this time with substance and not politics.
First, how exactly will this restructuring put more money into people’s pockets? How is it compatible with Labour’s changes to the local government funding formula that punish councils that keep their council tax low? Do the Government accept that these changes, which will mean that every single council employee in two-tier areas has to reapply for their job, will have an impact on local services, including planning delays? How will this impact on the Government’s plans to deliver 1.5 million homes in this Parliament? Finally, what support will the Government give to authorities—such as Woking and Thurrock—facing significant levels of debt? Will this debt be written off or passed on to the new unitary authorities?
We support stronger local accountability, but there are different ways to do this, and there should have been proper, full and open consultation. Local government must remain local and accountable to its residents. The whole process should be considered more slowly, to ensure that the people understand their future representation and have their say on it.
The next element of the Statement is the abolition of district councils. I serve on a metropolitan council, so district councils are not anything I have experienced, but we know that they are very efficient in running very local services and are very close to the residents they serve. Systems always need reform, so if there is going to be reform of this two-tier system, why do we not think of change rather than abolition? Is it because the county councils are running out of money, and they need the district council reserves to prop them up?
In the new era of unitary authorities, the Government are talking about the average size of these unitary authorities being a population of 500,000. That is very much like the metropolitan area that I serve in. I can tell the House that this means that the wards that councillors will be elected to serve in will be large, and in rural areas they will be geographically large. I suspect that the Government are considering a ratio of councillor to electors of about 1:5,000. That is a very large number of people, and it would take local democracy away from people.
The last item I want to raise is the cancelling of elections. I do not think that, in a democracy, we should ever cancel elections. I know that the previous Government cancelled elections, so there is a bit of a precedent, but I do not think that it is one that should be repeated. People have a right to have their say in electing people to represent them. The difficulty that cancelling these elections creates is that the existing councillors who were elected four years ago will be the ones who determine the set-up for the new unitary councils in their area. If you do that you need the electoral mandate to do it, which they will not have.
I am very disappointed that the Government have decided that democracy is not worthy of the name, and that we are moving local government further and further away from local people. I hope that the Minister will be able to answer my questions and put some life back in local democracy.
I will address the questions posed by the noble Baronesses. I completely disagree with the characterisation from the noble Baroness, Lady Scott, that local authorities are being bullied and blackmailed, and that this is a top-down reorganisation. That is completely wrong. We asked local authorities to put proposals forward, and the fact that we were oversubscribed, with the number of local authorities that did so, shows the enthusiasm for this. I met with a large number of local authorities over the course of the consultation, and they are all very enthusiastic and positive about this proposal. We have driven local authorities to the edge of this then marched them back down the hill so many times. It is time that we just got on with the job.
On the noble Baroness’s points about consultation, we are undertaking extensive consultation in all the areas that I outlined just now. The Government will be starting that next week. We have asked for the local authorities to help us contact their stakeholders—whether they are community stakeholders, business groups or other channels—so that consultation is as wide as possible. We will continue to use consultation as the basis for the plans we take forward.
On council tax, I remind the party opposite that the failure properly to fund local government over many years was the worst thing that happened to social care and children’s services in my time in local government. We need to take steps now to restructure local government to make it sustainable for the future, and to make sure that it works properly to deliver the services that we need now, not the services that were needed 30 years ago.
On how restructuring will put more money in people’s pockets, I note that people will get better services from their local councils. The addition of a strategic level will make sure that every region in this country will benefit from the growth that we hope to see going forward, and every region will contribute to it. I am afraid that the levelling-up mission of the previous Government did not reach out to many areas of our country, so it is now time we did that.
We are of course aware of the issues with council staff, and we will work very closely with the Local Government Association and council colleagues on that.
On the impact on housing delivery, I genuinely believe that having mayors in a strategic role in our local areas, driving forward both housing and growth—in a way that makes sense for their area, which is the important part of this procedure—will be critical to seeing the housing delivery and growth that we want to see.
On the significant levels of debt that the noble Baroness mentioned, it is the responsibility of councils to manage their debts, and it is standard for councils to borrow and hold debt. We will work with local leaders to explore how best to support local government reorganisation where there has been failure, and we will continue to work with best value commissioners to support councils’ financial recovery.
The noble Baroness, Lady Pinnock, raised a number of issues, some of which I have already answered. The devolution of powers from Westminster down to local areas is a critical, once-in-a-generation step that we want to see. I am afraid that I disagree with her point that that is not devolution; I genuinely believe that it is. It will then be for the councils to facilitate further devolution out to the people in their local areas.
The noble Baroness mentioned the democratic deficit. If you look at what mayors have been able to achieve in their areas in improving skills, transport and many other things, you will see that there is no democratic deficit. In fact, the people in the areas that already have elected mayors are really benefiting from that. We have decided at this stage not to return to an alternative voting system, and we will stick with first past the post for these elections.
On district councils, the two tiers make for a complex picture. I was in a two-tier area for all my local government career. Many people do not understand which council does which services. Now is the time to address that issue once and for all, to make sure that there is only one council delivering for the people it serves. It will be for the Local Government Boundary Commission to decide the size of the wards and their representation. As I explained, cancelling elections will give local authorities the space to manage the process in order to get their new structures in place in time for mayoral elections in 2026.