Local Government (Structural and Boundary Changes) (Control of Disposals etc.) (Amendment) Order 2026

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Local Government (Structural and Boundary Changes) (Control of Disposals etc.) (Amendment) Order 2026.

My Lords, the statutory instrument was laid on 14 May 2026, and it will make a small but important amendment to existing provisions governing key financial decisions, including land disposal and contracts by councils during periods of local government reorganisation. The Government’s programme of reform, set out in the English Devolution White Paper, is designed to transfer power out of Westminster and fix the foundations of local government.

A central part of the programme is local government reorganisation—moving from two-tier structures to single- tier councils, which are simpler, clearer and more accountable to residents. The Government’s long-term vision is for simpler structures, which make it clearer who residents should look to on local issues, with more strategic decisions to support growth and improve public services. Delivering that vision requires not only structural change, but a transition process that is orderly, is legally robust and protects the public interest.

During reorganisation, existing councils will continue to operate while new councils are established, and it is essential that decisions taken in this period do not undermine the position of the successor councils. The framework, therefore, includes safeguards, set out in Section 24 of the Local Government and Public Involvement in Health Act 2007, which enables the Secretary of State to issue directions, controlling certain disposals of land and significant financial commitments.

In specified circumstances where a decision could affect the successor authority, councils must obtain consent before proceeding, typically from the relevant shadow council. These controls will ensure that significant decisions taken during the transition period do not adversely affect successor councils, with specific consents required for higher-risk decisions and general consents enabling routine activity to continue.

My Lords, I repeat my interest, though it is not so specific, of being a councillor, but not on one of the authorities affected. This is an entirely sensible change to make. I have a couple of questions about councils’ retention policies for details. Clearly, the strategic decisions will be retained for ever, but all councils have a policy of ridding themselves of mounds of paperwork, because it is very costly to retain them. I would like to know from the Minister about councils’ retention policies. Given that we are now in a digital age, where retaining such documents is much easier, although still with a cost, have councils had to reconsider their retention policies and what does that mean in practice? For example, there is a seven-year rule for a lot of decisions made by councils, after which material can be disposed of. Clearly, that will not apply to big contractual and budget decisions but, given the nature of this SI, it would be helpful if retention policies for councils’ documents and transactions were universal.

My Lords, I need to declare again that I am a councillor in central Bedfordshire, although I do not believe we will be impacted by these changes at the moment. At the outset, I make clear that we understand the practical problems that the Government are seeking to address through this instrument. It is sensible that, where local government reorganisation is taking place, there should be safeguards to prevent outgoing authorities from making significant financial commitments that could bind or disadvantage successor councils. The purpose of the Section 24 framework is therefore understandable.

However, while this measure may appear technical, it raises wider issues and questions about the Government’s management of local government reorganisation and the haste with which that programme has been pursued. We are being asked to amend legislation because the existing framework, left untouched for nearly two decades, no longer works in practice. One is bound to ask why this issue was not identified earlier as part of the Government’s work on local government restructuring. Given their determination to accelerate structural reorganisation across large parts of England, what other unforeseen consequences will arise as the process goes through?

Time and again, we are told that these changes to local government restructuring will deliver efficiencies, stronger strategic leadership and better services, yet councils continue to raise concerns about complexity, cost and disruption. Against that backdrop, this statutory instrument feels less like a routine technical adjustment and more like another example of the Government being forced to amend machinery when the train is already moving.

I am also interested in the Government’s decision not to review the financial thresholds. Section 29 provides the power to amend those thresholds, yet, while the aggregation date is being updated from 2006 to 2025, the thresholds of £100,000 and £1 million remain unchanged. There is a significant difference in real terms between the value of £1 million now and its value in 2006. Given that this problem arises because a fixed date was used in the previous legislation, why are we again using a fixed date in these changes to the legislation, rather than one that flexes, for example, with the vesting date of the councils concerned? There is also a question of consultation. The Government refer to discussions with Surrey County Council and other sector experts. It would be helpful to know more about the extent of that engagement.

For that reason, although I recognise the rationale behind this order and do not dispute the need to ensure that Section 24 remains workable, I hope the Minister will acknowledge that this episode exposes wider weaknesses in this Government’s approach. If Ministers are to continue pursuing large-scale structural change in local government, they must do so with greater care, greater transparency and greater respect for the practical realities facing local authorities on the ground. I look forward to hearing the Minister’s response.

I am grateful to the noble Baroness, Lady Pinnock, and the noble Lord, Lord Jamieson, for their responses to this statutory instrument. I will try to respond to the questions.

There are no plans to change council retention policies for paperwork, and they are not affected by this SI, so that is not included in this piece of legislation.

I will answer the general points that the noble Lord, Lord Jamieson, made first on local government reorganisation and the management of it. He asked me, first, what other unforeseen consequences we can expect. Well, they are unforeseen, so I am afraid I cannot identify them. If I could, I would have a crystal ball. The timetable for local government reorganisation has not changed. I take the noble Lord’s point about the elections, but that was due to changing legal advice. I spoke to the Local Government Minister this morning and, as far as we are concerned, we are proceeding with the timetable as we had originally set out. We will work through the process for the other 14 areas that have not yet had their local government reorganisation announcements, with a view to making an announcement on them before the Recess. That work is still going on and going ahead.

On the noble Lord’s question about mayoral elections, we decided for very good reasons that it was important that we had established the foundation authorities and that they were working properly before the mayoral elections went ahead. That was the rationale for that decision. But the work is being done to the timetable that we set originally. I hope that is reassuring.

The noble Lord, Lord Jamieson, asked me about the thresholds and why we are not changing them. They are not changing: it is £100,000 for land disposals and certain non-capital contracts and, as he said, £1 million for capital contracts. The thresholds and timing are established features of the Section 24 framework. Those thresholds are intended to capture decisions that could have a material impact on successor authorities, while allowing routine activity to continue without unnecessary delay. The safeguards apply once a shadow authority exists, because that is the point at which there is a clear and accountable body able to give consent on behalf of the future successor council.

I thank the Minister for her responses, but I just wanted a little clarity on three of the questions that I asked. The first is on the impact of inflation. Roughly speaking, inflation has almost doubled, so £50,000 spent in 2006 is the equivalent of £100,000 now—not quite, but in approximate terms. That is a significant change. As we are updating the regulations, and the purpose in 2006 was to capture the important spend, it will now capture a lot more than the important spend. That was the point I was trying to make. I completely agree with why it is being put; I do not have any issue with that.

Secondly, one could argue that a mistake was made in 2006; we should not have had a fixed date or it should have been updated in the interim. I asked why we are not looking at a date that might relate to, say, vesting or something else, which might seem more rational.

Thirdly, I was also curious about the response on the timing of elections—and please correct me if I have got it wrong, because I may very well have. My understanding is that the elections for the original six priority mayoral areas will be in 2028, as will the 14 follow-ons—as I call them. The Minister said that that was in order to allow the foundation authorities to have the time to set up and get organised. I appreciate that the following 14 are not foundation, but they will operate to a much tighter timetable. That seems to be a bit of an incongruity.

On the subject of the amounts, I take the noble Lord’s point about inflation, but these amounts are intended to act as broad indicators of material financial decisions, not precise limits. It is relevant to keep the same amounts in place; it makes the amount at which they have to be referred reasonable and that is a rational way of doing things.

On his point around the date, if we did not have a specific date, it might complicate the accountancy practices. I will look into that and come back to him on that point.

On the issues around the mayoral elections, the decision was made to make sure that we have the new authorities vested and in place, with a chance to establish themselves. They are delivering key public services. There is a lot of work to do, as the noble Lord has pointed out to me on many occasions—and I properly understand that point—before the mayoral elections take place. We know that it is a tight timetable but, to be honest, in my 30 years in local government, nobody has bitten the bullet and sorted this out. It is time we got the foundations of local government into single unitary authorities, so that everybody across the country has the same type of local authority. That is why we are moving forward at pace with the timetable.

To conclude, the instrument makes a small but necessary technical amendment to ensure that existing safeguards on financial decisions operate effectively during local government reorganisation. It has been developed in response to engagement with councils and tested with local government representatives. I hope that noble Lords will join me in supporting the draft order, which I commend to the Committee.

Motion agreed.