Local Government Reorganisation

(Urgent Question): To ask the Minister to make a statement on plans for local government reorganisation.

The English devolution White Paper sets out how this Government plan to deliver on our manifesto pledge to transfer power out of Westminster through devolution and to fix the foundations of local government. This Government’s long-term vision is for simpler structures, making it clearer for residents who they should look to on local issues, with more strategic decisions to unlock growth and to deliver better services for local communities.

On 16 December 2024, I wrote to all councils in the remaining two-tier areas and neighbouring small unitaries to set out plans for a joint programme of devolution coupled with local government reorganisation. We acknowledge that for some areas the timing of elections affects their planning for devolution, particularly alongside reorganisation. To help to manage these demands, we will consider requests to postpone local elections, as has been the case in previous rounds. Where local elections are postponed, we will work with local areas to move elections to a new shadow unitary council as soon as possible. This is a very high bar, and rightly so.

The deadline for such requests was Friday 10 January. Today, my Department has published a list of all county and unitary councils who have made requests, including those who want to delay elections from 2025 to 2026. For the avoidance of doubt, this is the list of requests; it is not the final list that will be approved. We will consider these requests carefully and postpone elections only where there is a clear commitment to delivering both reorganisation and devolution to the ambitious timetable set out. While not all areas listed will go forward to be part of the devolution priority programme, we are grateful for the local leadership shown in submitting these requests, and a decision will be made in due course as soon as possible.

We welcome the large number of areas that have come forward seeking to join the devolution priority programme, reflecting our own ambition for greater coverage across England. This Labour Government were elected on a manifesto to push power out of Westminster and to relight the fires of our regions, and I am delighted that local leaders across England are sharing that ambition.

Although it was not a manifesto commitment, the Government published their agenda for reorganising council structures in England before Christmas, and we support our local government colleagues who are clearly required to respond to that call from Government. With local elections scheduled to take place in May this year and councils already incurring significant costs arranging polling stations and electoral canvassing, and preparing to receive nominations and issue postal ballots, it is not surprising that many councils have acceded to the Government’s expectation of a delay in these polls. After all, why incur millions in costs to local council tax payers for electing people to councils that are to be abolished shortly afterwards?

However, there remains significant uncertainty about where and if those elections will be delayed. With deadlines looming for key points in the organisation of those elections, that uncertainty risks some wasted costs for council tax payers, so we on the Conservative Benches have a series of questions. We know that many of those councils are Conservative-run, and with Conservative councils charging on average £80 less per household than Labour ones and £21 less on average than Lib Dem ones, voters will want to understand the impact of the Government’s reorganisation on their council tax and on their back pocket.

May I ask the Minister, first, what assessment has he made of the Boundary Commission’s capacity to undertake the necessary reviews to ensure equal distribution of electors across the new local authorities? Can he give an indication to the House of when he will make decisions, so that local authorities will know whether they are preparing to organise elections and are willing to incur those costs or not? We know that a number of other announcements are in train, particularly the indication from the Deputy Prime Minister that areas currently setting a low level of council tax will be punished through revisions to the funding formula, so when can local authorities expect to know what impact such revisions to the funding formula will have? I look forward to informative answers from the Minister.

I thank the hon. Gentleman for those questions, and I am genuinely grateful for the spirit of consensus around the broader issue. I accept that there may be differences of opinion on pace, but we do not shy away from our ambition to see devolution experienced by the whole of England. I give a degree of credit to the previous Government for building out devolution in the north of England and the midlands, but surely we have to demonstrate that this project is not reserved for the north of England and the midlands. This is a project for the whole of England, and we are on with that.

Our determination to ensure that we deal with these structural changes early in the Parliament is clear, but that is shared by local government. It is important to say that although of course we will set the timetable and provide support on both the devolution priority programme and local reorganisation, it is for local areas to self-organise and to agree to be part of the programme. We are not mandating this; we are not forcing it. All the requests that we have had since Friday have been from areas who share our ambition.

The hon. Gentleman will know that it is sensible to take the approach that, if reorganisation is a genuine proposal—and the bar has to be high for that test—it is nonsense to have elections to bodies that simply will not exist. It is far better that we move at pace and create the new unitary councils and then hold elections at the earliest opportunity.

I am not going to get into the subject of council tax, partly because it is outside the scope of the hon. Gentleman’s urgent question. Also, he was slightly mischievous in the way that he framed his remarks. On the point about capacity, however, it might be helpful if I lay out what the process will be. Local areas will make the request. We will issue statutory invitations at the end of the month, and areas will need to self-organise. It is not for the Boundary Commission or the Government to lay down which plans come forward. It is for local areas to submit proposals to us, and at that point the Government will decide on the right proposals among what could be a number of options that come forward from local areas. Again, it will be for local areas to self-organise and make those proposals to us.

I call the Chair of the Housing, Communities and Local Government Committee.

I thank the shadow Minister for securing this important question; he has highlighted some key issues.

Sadly, we know that our councils are at breaking point. The Select Committee’s first major inquiry is to look at local government finances, and we look forward to engaging with the Minister on it. It was reported that local authorities in England were facing £77.5 billion-worth of debt by the end of last year. Much of that is debt to central Government or from borrowing. Sadly, because of that, vital frontline services such as housing and social care are at breaking point. Residents cannot afford to be caught up in buck-passing or discussions about accountability if this reorganisation goes through, so can the Minister assure the House that residents will still have the same level of power and scrutiny over vital services during the reorganisations?

I thank the Chair of the Select Committee for those questions. What I hear from residents and even from councillors in two-tier areas is that, more often than not, local residents have no idea which council to go to in order to get the answers they need on local services. Reorganisation will provide efficiency savings in organisational costs that can be directed towards frontline services, which we believe are the priority for taxpayers. There should not simply be the cost, in many cases, of such services existing. We also believe that it is right, from a democratic accountability point of view, that residents have a clearer line of sight on which body to hold to account for local decisions.

On the point about local government finance, which we absolutely understand and accept, we have worked hard and I would say we have been relatively successful on rebalancing the funding crisis in local government. We have done that by providing £5 billion of new money, taking the total allocation to £69 billion. We cannot undo 14 years of damage in six months—it has been damaging over the 14 years—but we are now bridging to that multi-year settlement where we can really begin to repair the foundations. I think we have made progress on that.

I call the Liberal Democrat spokesperson.

There is no doubt that local government needs significant reform, and Lib Dems are passionate about putting power into the hands of local communities, but we are concerned that rather than producing true devolution, these plans will end up as a top-down diktat from Whitehall. MPs and district councillors from areas including Devon, Surrey and the midlands have told me that submissions appear to have been made without their district councils being involved or consulted, and without the opportunity to undertake consultation with residents and businesses. What steps are the Government taking to ensure that they engage meaningfully with every level of councils?

Councils such as Bournemouth, Christchurch and Poole, which I used to lead, face Hobson’s choice. Tonight, councillors will be voting on whether to join proposals to their east or their west, neither of which reflect their urban needs or their distinct character. Or do they sit it out and hope for the best? What plans do the Government have to ensure that residents will have the democratic ability to decide on the right devolution plan for them? Can the Minister confirm, given that these plans will take more than a year to implement, that all the elections due in May 2025 will go ahead?

I do not want to disregard the good work of district councils in this conversation about reorganisation, and about redirecting money to operational costs on the frontline, so that taxpayers get better value for money and see the benefit in their local public services. I pay tribute to council officials, frontline workers and councillors, whether they are in unitaries, counties or districts, for their work. I just set out the view that the best way to achieve efficiency is by having more streamlined local government structures that enable money to go to the frontline.

On whether district councils will have a voice in the process, it is a fact that we have received requests for reorganisation, and statutory invitations go out at the end of the month, but it would be usual for the Government to be faced with a number of options for what those new boundaries might look like. The county might have a view about how many councils should be included in the reorganisation, and I suspect that districts might have a very different view.

It would be quite usual for a number of different proposals to come forward for a county. It is for the Government to try to strike a balance that takes into consideration identity, efficiency and having an anchor to the area that makes sense. We genuinely want this to be a collaborative process, so that we get the right outcome for local people.

As the Minister is aware, I was a district council leader in Lancashire until 5 July, when I got the Avanti train down to Westminster. As I have said for many years, the challenge we face is that the two-tier system does not work. It confuses our residents. The Local Government Association’s map of the different structures of local government in England is a mishmash, and it does not work. West Lancashire and South Ribble borough councils have put forward detailed proposals for local government reorganisation to the Minister, but the Conservative-run county council has not. My concern is that some elections will be cancelled and some will not. On the priority programme, will the Minister please consider enforcing the cancellation of all elections in places where he is moving forward quickly with reorganisation?

When my hon. Friend said he got the Avanti train down on 5 July, I think the Chamber was half expecting him to say that he had only just arrived, but he has been here for some time.

I know there are different views in Lancashire on what a good outcome looks like, and there are certainly different views on what a good process looks like, but I think there is a shared view that the time has come for devolution in Lancashire. When people look to Greater Manchester and the Liverpool city region, and see that Cumbria and Cheshire are organising to be part of the next stage, of course they want to be part of that. Lancashire is unique, in that we were already in discussions with it about its timetable and process. The level 2 agreement that is in place of course comes with investment, funding and other powers. Lancashire has agreed that by autumn, it will submit proposals to the Government that reconcile its organisational status; it will also bring forward a plan to move forward with a mayoral combined authority. Lancashire took the view that given that the timetable was already in place, it did not need to request that the election be cancelled.

To be clear, we absolutely see Lancashire as part of our priority work. It is critical. The prize for the north of England is completing the work on Cheshire, Lancashire and Cumbria, so that the whole north of England has mayoral devolution. That will be game-changing.

I draw Members’ attention to my entry in the Register of Members’ Financial Interests.

In the devolution White Paper, the Government set half a million people as the appropriate size for these new councils. Can the Minister therefore rule out creating big super-councils that represent more than a million people? Will he meet me to discuss devolution and local government reorganisation in Hertfordshire?

It is important that the Government set out the framework. We were very directive in the White Paper about our view on reorganisation and devolution. In every conversation we had with the LGA, the County Councils Network, the District Councils Network and others, we heard that the worst outcome would be the White Paper speaking to an issue without going close to clarifying what outcome we want. The response to the priority programme has been reflective of that clear direction.

We were up front in saying that, for efficiency, new unitary authorities should have a population of around 500,000, but we also made it clear that if the reorganisation went hand in hand with devolution, a degree of flexibility would be needed to make sure we balanced strategic oversight of the combined or strategic authority with the local identity and sense of belonging that people need. I also make it clear that it does not matter whether we are talking about councils going through reorganisation, or about existing councils and metropolitan authorities, be they in London or the north of England. Wherever they are, we expect councils to organise their neighbourhoods and communities, local public services and democratic engagement so that people feel more power in the place where they live.

My residents in Crayford, in the London borough of Bexley, have their services provided by one council, but in many cases, residents on the same road have their services provided by two councils—by Kent county council and Dartford borough council—which causes confusion, as the Minister said. Does he agree that the changes introduced in the English devolution Bill will make local government more effective and save money for those taxpayers?

That is exactly what this is about. This is the most ambitious reorganisation in England for at least 50 years, maybe longer. We need to avoid the sense that this is just rearranging the local government deckchairs. It is not about that. The devolution White Paper is ambitious, and that ambition is about wresting power from Westminster and Parliament and putting it in the hands of communities up and down the country. For far too long, power has been held in a very narrow way by a handful of people, at the exclusion of millions of people in this country. Frankly, people have had enough, so we have to find a different route.

I am fortunate to work with two local authorities, Basingstoke and Deane borough council and Test Valley borough council, which, after many decades of careful stewardship, are debt-free and have significant assets on their balance sheets, to the benefit of their residents. What will the Minister do in this local government reorganisation to protect that legacy? Would it not be profoundly unfair if those many years of careful stewardship were wiped out by amalgamation with more profligate neighbouring councils?

It is not my intention to set one council against another. When areas begin to look at what new unitary boundaries might look like, they will need a view on identity, scale and achieving efficiency, and, ultimately, what construct will deliver good public services, be it adult social care, children’s services or those neighbourhood services that, in many places, have been eroded to the point where people wonder if they exist at all.

We have to rebuild from the ground up. This process, regardless of a council’s debt or financial status, is part of that rebuilding. Let us be honest: nobody in this Chamber, or in this Government, can put a number or this. We do not know what the outcome will be. If this is genuinely about local areas self-organising and presenting to Government their view of what a good outcome would be, we need to be open about that.