Written statement on Local Government Reorganisation - March 24

Minister for Local Government (Jim McMahon): This government was elected on a manifesto that pledged to fix the foundations of local government alongside a transfer of power and funding out of Westminster through devolution. That means creating clearer, more sustainable local government structures to unlock crucial efficiency savings, with more resources directed to the frontline. This reform will mean more accountable structures, making it much clearer for residents who they should look to on local issues, with fewer, but more empowered local political leaders, who can focus on delivering for residents. This government will not waste this opportunity to achieve stability for local government across England and increase value for money for council taxpayers, so they are no longer paying an inefficient two-tier premium. I would like to update the House on progress on local government reorganisation.

Interim plans

Last month I invited all councils in two-tier areas and their small neighbouring unitary authorities to work together to develop proposals for reorganisation. I requested interim plans by Friday 21 March to contain updates on thinking in areas about their options for creating new unitary councils.

I recognise the challenges of producing these plans and I would like to thank members and officers in district, county and unitary councils for their hard work in preparing these documents. This demonstrates the commitment of colleagues across the local government sector to drive forward better outcomes for their citizens. We know that in many areas, local leaders have been working together on their plans for reorganisation for many years and are pleased to be invited to work with government to seize this opportunity.

All district and county councils in two-tier areas and their neighbouring small unitaries were invited, and I am pleased to confirm that every single area - comprising councils of all political stripes - have responded to the invitation to reorganise, demonstrating without doubt the ground-swell consensus from communities that change is overdue and needed. These areas are: Cambridgeshire and Peterborough; Derbyshire and Derby; Devon, Plymouth and Torbay; East Sussex and Brighton & Hove; Essex with Southend-on-Sea and Thurrock; Gloucestershire; Hampshire, Isle of Wight, Portsmouth and Southampton; Hertfordshire; Kent and Medway; Lancashire, Blackpool and Blackburn with Darwen; Leicestershire, Leicester and Rutland; Lincolnshire, North Lincolnshire and North East Lincolnshire; Norfolk; Nottinghamshire and Nottingham; Oxfordshire; Staffordshire and Stoke-on-Trent; Suffolk; Surrey; Warwickshire; West Sussex; and Worcestershire.

Criteria for delivering new authorities

The government has set out its criteria for these changes to provide confidence that new councils are right for individual areas. On the population size, the guidance is clear that new councils must be the right size to achieve efficiencies, improve capacity and withstand financial shocks. As set out in our English Devolution White Paper, we outlined a population size of 500,000 or more – this is a guiding principle, not a hard target – we understand that there should be flexibility, especially given our ambition to build out devolution alongside local government reorganisation.

The published guidance sets out that “there may be certain scenarios in which this 500,000 figure does not make sense for an area, including on devolution, and this rationale should be set out in a proposal.” In discussions with individual councils, to parliamentarians, and in interviews given throughout the process, the government have reinforced this position to aid local discussions. Equally it may be decided that population sizes around this figure or greater than it are the best fit locally. Instead of presenting a top-down solution for each area, our starting point is to support and empower local leaders and to respect their knowledge, expertise and insight. This approach is in line with the new partnership between government and local government.

There is a clear expectation that though councils will change, the communities they serve remain, along with the strong sense of history, identity and belonging which gives them the character local people hold dear. That matters, and it will not just be accepted, but celebrated for the pride of place it instils.

Support

Local government reorganisation is a complex process, and we are at the beginning of this journey. We will continue to reset the relationship and work in partnership with the sector to ensure they receive the necessary support as we work together to deliver this ambitious agenda.

Councils need our full backing and support to drive these changes forward – and this government is acutely aware of the difficult financial situation facing all councils following a decade of financial mismanagement by the previous administration. I am pleased to announce that £7.6 million will be made available in the form of local government reorganisation proposal development contributions, to be split across these 21 areas. This is the first time that capacity funding has been made available for reorganisation proposals, recognising the priority that this government attaches to this. Further information will be provided on how this will be allocated and we intend to make payments as soon as possible.

Beyond funding, we understand that practical support and learning from those who have undergone reorganisation before is crucial. My Department has been working closely with the LGA, trade unions and sector bodies to develop support for areas. The LGA Hub will host a central repository for practical advice and support. A programme of webinars and events will be available and the LGA and other sector bodies will be launching networks for peer support.

Next steps

The submission of interim plans is not a decision-point. It is the next stage in the process and enables councils to engage with the government on the issues that matter locally and receive support to develop their full proposals. We expect local leaders to continue working collaboratively and proactively with each other, including by sharing information.

In the coming weeks my officials will follow up with areas to discuss their interim plans, provide feedback and understand the collaboration and information sharing arrangements. The department will be speaking to Surrey as a priority in the coming days, then with councils on the Devolution Priority Programme during April and other areas after the local government elections in May. For Surrey, the deadline for proposals is in May and for other areas later this year in September or November.

My Department will consider these proposals against the criteria set out before consulting and taking a decision on which of those proposals will be taken forward and implemented. This is a statutory process – and affirmative legislation will be needed to establish new councils and abolish any of the predecessor councils.

Conclusion

I acknowledge this is a significant undertaking; the largest structural reform of local government in half a century and a fundamental part of our project to reform the British state, so that it delivers for working people. We need to push forward together and deliver these changes, so communities can see the benefits of simpler structures and so councils can deliver better value for money public services. Local leaders are central to our mission to deliver change for hard-working people in every corner of the country through our Plan for Change, and our councils are doing everything they can to stay afloat and provide for their communities day in, day out. I will update the House after receiving full proposals and explain how these will be taken forward.