English Devolution and Community Empowerment Bill

(Limited Text - Ministerial Extracts only)

2nd reading
Monday 8th December 2025 Lords Chamber

Moved by

[Baroness Taylor of Stevenage]

That the Bill be now read a second time.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)]

My Lords, I first extend my thanks to the many noble Lords with whom I have already spoken about this Bill. I am grateful for their engagement with this very important legislation. I know that a number of noble Lords have been closely engaged in delivering front-line services over the years, so I would like to take this opportunity to thank all those in this House who have taken part in that. We know that our residents greatly value the services that impact their daily lives. This whole Bill will bring that decision-making closer to the areas and communities that it impacts.

This Government were elected on a manifesto to deliver change. We are determined to transform our economy and our country through a decade of reform that delivers better public services and growth in every community and every corner of our country. Many hard-working communities that are the backbone of our economy have been neglected for far too long. They have seen good jobs disappearing, their high streets in decline and the dream of a decent home pushed even further out of reach.

Rebuilding these foundations is central to this Government’s mission, but we will not achieve our goals unless we fundamentally change the way our country is run. That means handing power back to local people, who know their areas best, so they can make decisions on what really matters to their communities. This is what the English Devolution and Community Empowerment Bill will do—drive the biggest transfer of power out of Whitehall to our regions and communities in a generation. The Bill will make devolution the default setting. It will give mayors new powers over transport, planning, housing and regeneration; rebuild local government so that it can, once again, deliver good local services that people can rely on; and empower local communities to have a bigger say in shaping their local area.

Strategic authorities are at the heart of this change. The Bill is creating strategic authorities as a new category of authority in law. They will make it easier for local leaders to work together over larger areas to drive through big, pro-growth projects such as integrated transport networks and housing. Crucially, the Bill will give new strategic authorities powers to pilot and request new functions, with government having a duty to respond to requests by established mayoral strategic authorities. Strategic authorities will operate at three levels: foundation, mayoral and established mayoral, and the Bill will define the powers and responsibilities of each of those levels.

Working alongside parliamentarians and local councillors, mayors will drive forward the delivery of people’s priorities, igniting growth and unlocking opportunities for their local area. That is why the Bill will give them wide-ranging new powers in areas such as transport, planning and economic development, which have a real impact on people’s lives. For example, mayors will be able to intervene in strategic planning applications to unlock housing, and there will be powers for all strategic authorities to license shared cycle schemes so that they work for everyone and we do not see bikes strewn across all our pavements.

The Bill will also see more mayors take on police and crime commissioner functions and become responsible for fire and rescue authority functions, allowing them to take a joined-up approach to improving public safety. They will also be able to appoint commissioners to support them as their responsibilities grow, similar to the way this works in London.

The Bill is the floor, not the ceiling, of the Government’s ambition and we have already demonstrated how seriously we take mayors’ rights to request new powers. We announced at the Budget that mayors will be given the power to raise revenue locally through a new overnight visitor levy, and we are consulting on whether to also grant this power to foundation strategic authorities. This is a ground-breaking step for the future of devolution, with transformative investment potential for England’s tourism sector and the wider economy. This Government are committed to giving mayors the tools they need to drive growth and deliver for local people.

None of this reform can be achieved without strong local government. Councils are the bedrock of our state. They are critical to delivering local public services that people can rely on, but they have been neglected for too long. The Bill will help rebuild local government as a “fit, legal and decent” foundation of devolution. It will establish the local audit office to help fix the broken, fragmented local audit system—nobody who has been in local government over the last few years will pretend the audit system is working properly.

We will also reform local authority governance by requiring councils with a committee system to move to a leader and cabinet model or, otherwise, undertake and publish a review on the decision, while putting a stop to new local authority mayor roles being created. This change will streamline decision-making across all councils, making it easier for people to understand how their council is run, while also respecting local democratic mandates where the committee system was adopted more recently following either a council resolution or a public referendum. In those cases, we will allow them to continue for the period that was voted for.

The Bill will also give the Government the tools to deliver local government reorganisation across England, resulting in better outcomes for residents and savings which can be reinvested in public services. I know that noble Lords have raised concerns about the powers we are taking in the Bill to incentivise local government reorganisation. To be clear, reorganisation is a crucial part of the Government’s mission to fix the foundations of local government, creating unitary councils that can deliver the high-quality services that all our residents deserve.

I assure noble Lords that we are fully committed to working in partnership with local areas. Our long-standing position remains: we will always seek to work with local areas on proposals for reorganisation brought forward by local areas. This Bill will enable the Secretary of State to direct areas to submit proposals to reorganise, but this power will only be used as a last resort when areas have failed to make any progress following an invitation.

As I have previously laid out, we want to give mayors the tools and opportunity to unleash the potential of their area with a more ambitious role and deeper powers. Each mayor will serve millions of people and manage multimillion pound budgets. This role has to be underpinned by elections that command public confidence. The Bill will revert elections for mayors and police and crime commissioners to the supplementary vote system after the May 2026 elections to provide greater accountability and a strong personal mandate. This was the voting system in place when mayors were first established, and it is the best system for electing people to single executive positions. In addition, the Bill will bar mayors from also sitting as MPs, ensuring that local places benefit fully from having dedicated local leaders.

We are not just giving mayors more power; we are also handing more control directly to the communities they serve. This Bill will give local communities a bigger say in shaping their place, with councils required to make sure that effective neighbourhood governance is in place. Communities will also have the tools to transform their high streets and neighbourhoods through a new community right to buy to save much-loved community assets such as pubs and shops from being lost, and to protect sports grounds, which are at the heart of so many communities and a source of great local pride. The Bill will also support our high streets by banning the unfair practice of upwards-only rent reviews, preventing the blight of vacant shopfronts. Every community should have the opportunity to thrive, and these measures are fundamental steps in achieving this.

I will now turn to a few amendments we made to the Bill in the other place. We have listened to parliamentarians and the sector and have introduced a modest number of amendments to ensure that the Bill functions correctly and delivers for local people. First, on London’s strategic licensing, I am sure noble Lords will agree that London’s pubs and restaurants are the beating heart of London’s cultural life. They contribute to our capital’s world-class status and to the growth of the economy. Yet for too long, hospitality businesses have been held back by a licensing regime that lacks proportionality, consistency and transparency. That is why we have brought forward amendments to establish a new licensing regime in London that will give hospitality businesses greater confidence and create the conditions for London’s night-time economy to thrive.

These amendments will also introduce a call-in power for the Mayor of London to determine borough licensing applications of strategic importance. The policy direction of the call-in amendment is clear. However, to ensure we fully digest any wider changes to the operation of licensing as a result of the call for evidence from the licensing policy taskforce—which closed on 6 November—we will bring forward more detailed amendments at a later stage in the Bill and we will continue to engage with noble Lords on this.

To support this Government’s commitment to deliver 1.5 million homes in this Parliament, we have taken steps to cut unnecessary and duplicative bureaucracy. Amendments have been introduced which will allow mayors to adopt a written representation procedure when determining certain planning applications of potential strategic importance and which remove the requirement that the local planning authority must consent to mayors of strategic authorities when making, revising or revoking a mayoral development order. However, I assure noble Lords that this change is not an attempt to bypass local planning authorities. Mayors will still have to bring them along as they will be crucial to delivering these orders. It is about empowering mayors so they can provide the strategic leadership that areas deserve.

We have also brought forward an amendment which will devolve the approval of lane rental schemes from the Secretary of State for Transport to mayors of strategic authorities, putting decisions in the hands of those with knowledge of their area.

On taxi and private hire vehicles, the Government recognise the challenges that the current licensing framework can cause, including inconsistent standards across the country and the practice of “out-of-area” working, where drivers choose to license in one authority area but work wholly or predominantly in a different authority area. As highlighted by the noble Baroness, Lady Casey of Blackstock, in her recent National Audit on Group-based Child Sexual Exploitation and Abuse, out-of-area working creates concerns in some authorities about the safeguarding standards applied to some of the drivers operating in their area. The Bill therefore creates a power for the Secretary of State to set national minimum standards for the licensing of drivers of taxis and private hire vehicles. Setting these licensing standards will help bring some consistency across licensing authorities.

Finally, we have taken concrete steps to ensure that local government members are able to perform their duties without fear for their own safety or that of their family. The world has changed a lot since I started being a councillor and this Government are clear that intimidation, harassment and abuse have no place in our democracy. This Bill puts it beyond doubt that a member’s, or co-opted member’s, home address should not be published by default. The amendment we introduced will also prevent the disclosure of home addresses when they are declared as interests at public meetings.

I know we all share a wish to set the sector on a firmer footing, ensure local government is fit, legal and decent, and empower communities to deliver real change and opportunities. We believe this Bill is a fundamental step in achieving this. By enabling the biggest shift of power from Whitehall to local areas in over a generation, this Bill will support the change residents expect and deserve: better joined-up delivery of public services, good jobs and politics being done with communities, not to them. I move the Bill.

[Baroness Scott of Bybrook (Con)]

My Lords, I declare my interest as vice-president of the Local Government Association, and the National Association of Local Councils.

I hope the House will forgive me if I begin by noting a certain irony in the title of the Bill. It contains the words “community empowerment”, yet the measures before us would appear to do precisely the opposite, empowering the centre rather than the community. As we reflect on that, we cannot ignore the democratic chill cast by the Government’s decision to cancel the forthcoming local mayoral elections. When democratic participation is suspended for administrative convenience, it becomes difficult to sustain the claim that community consent lies at the heart of these reforms. Instead, what emerges is a model of compulsion over consent. These proposals risk leaving communities without a meaningful voice, enabling the Secretary of State to redraw local government boundaries, restructure authorities and compel mergers, against local wishes.

The introduction of sweeping powers under new Section 109B, and others, marks a striking departure from the voluntary, negotiated, deal-by-deal approach that has defined English devolution to date. That approach was rooted in respect for local identity, geography and choice. The Bill before us seems to move away from that principle with unsettling ease. Our discussions with colleagues and stakeholders underline something fundamental: that local consent is not an optional extra. It is the democratic foundation of any credible programme of localism, yet this Bill weakens that foundation at the very moment when it should be reinforced.

The Government claim that reforms empower localities, but too often we see the power devolved in name only, while genuine authority remains firmly centralised. Without clarity on what powers are truly being passed down, how responsibilities differ from those already held and how local leaders will be held to account, there is a real risk of creating an accountability gap at the very centre of the system.

These concerns are sharpened still further by the Bill’s uncertain financial implications. Community empowerment is impossible without financial empowerment. Local authorities cannot reasonably be asked to shoulder the burdens or the liabilities of their neighbours; nor can local taxpayers be expected to underwrite centrally imposed restructuring. Yet the Bill provides no assurance that council tax will not rise, no clarity on whether solvent councils may be required to absorb the debts of failing ones, and no explanation whatever of how these reforms will deliver value for money. Additionally, we are still in the dark as to how these new mayoralties will be paid for.

We hear much about synergies and efficiencies but nothing about what they are, how they will be realised, or what modelling, if any, underpins them. Rhetoric is not a substitute for a costed plan. The Government must commit to publishing a detailed cost-benefit assessment. Information available shows that the creation of more top-tier councils in place of the county councils may increase costs year on year, not reduce them. It reverses the economy of scale and offers no prospect of long-term savings.

Recent freedom of information disclosures reported by ITV Meridian indicate that the councils in Essex, Kent, Sussex, Surrey, Oxfordshire, Hampshire, and on the Isle of Wight have already set aside £11.22 million for 2025-26 to support this transition, with more than £1 million being spent in the current year alone. In Hampshire, over £500,000 has already been allocated to consultants for local government reorganisation. How can local taxpayers be assured that this represents value for money? Will there be a transparent framework, underpinned by evidence, to demonstrate whether these substantial outlays can genuinely be recovered through future efficiency gains?

This reorganisation will impose real costs on our constituents, at a time when many of them are already paying more in income tax and national insurance, whether through their earnings or their pension contributions, because of this Government’s choice to value welfare over work. We cannot in good conscience simply accept that reform must be expensive without being provided a credible vision for future savings and long-term fiscal stability.

Nowhere is that risk more acute than in social care. Adults’ and children’s social care are among the most vital, sensitive and fragile of all our local services, but the Bill is silent on how these functions will operate across new combined structures, how responsibilities will be shared and how accountability will be maintained. At a time when care systems are already stretched to their limit, reorganisation without clarity is not merely unwise but dangerous. Vulnerable people cannot be left to navigate the fog created by institutional reform.

This is not the only area where ambiguity prevails. The Bill creates new regulatory layers, including a local audit office, the relationship of which with existing bodies is left largely undefined in the Bill. We all agree on the importance of rigorous oversight, but the creation of new regulators must be justified by purpose, rather than just by preference. Likewise, spatial development strategies, critical tools for planning and housing, are referenced in a manner that leaves scope, governance and oversight uncertain. Without clarity, there is a real risk of slowing down the very growth and housebuilding the Government claim the Bill will accelerate.

I will touch on the significant alterations proposed to some of the Local Government Pension Scheme arrangements. When local government reorganisation occurs, and assets and liabilities are carved up, it is essential that independent assessments are undertaken, to allow proper oversight of what funds and actuaries in each region are doing. We must also explore the workability of the new duty requiring combined authorities to assist in identifying or developing LGPS investment opportunities. These are legitimate concerns that such a requirement will place authorities in direct conflict with the scheme managers’ fiduciary responsibilities, which must remain independent and focus solely on the interests of the scheme members.

Taken together, these examples illustrate a broad problem: the lack of clarity speaks to a wider issue in the Bill’s design. This is a substantial piece of legislation that is constitutionally significant in both scale and ambition, yet the Government have offered no clear explanation of what it is ultimately for. Is the goal efficiency, local empowerment, public service reform, fiscal consolidation, housebuilding or economic growth? A Bill of this breadth and consequence should be founded on a coherent purpose, yet the rationale before us is diffused, undefined and, at times, contradictory.

The Bill professes to empower communities but many of its consequences appear likely to impose costs on them instead. New mayoral precepts, expanding borrowing powers, increased parking charges and the creation of further layers of local bureaucracy, including mayoral commissioners, will all place additional burdens on our residents. If that is empowerment, it is of a kind that, we believe, comes with a higher council tax bill attached to it.

The House will recall that we have made the point previously that uncertainty, particularly in planning, is the enemy of delivery. If responsibilities for housing, infrastructure and spatial strategy are to shift, the transition must be clear, orderly and transparent. Developers, councils and communities need certainty, not disruption. Local authorities understand their housing needs, their land, their constraints and their potential better than anyone in Whitehall ever could; therefore, reform should strengthen that local knowledge, not sideline it, as the Bill does.

Consistent with that theme, I will address another important issue: local identity. Imposing reorganisation from above, drawing maps in Whitehall and instructing local people to accept new boundaries pose a genuine threat to the character and cohesion of the communities we represent. Local identity is the foundation on which trust, participation and civic pride are built. We must also reflect the role played by our town and parish councils. They should and could be custodians of our children’s parks, our green spaces and the amenities that give neighbourhoods their distinct character. If their powers are to be subsumed into larger unitaries, dominated by broader, macro-level concerns, how can we ensure that the priorities of those towns and parishes across our country will still be recognised and respected? These councils are not peripheral; they are central to the everyday life and well-being of our communities. In fact, we believe that we should be encouraging more towns and parish councils when representation is subsumed by a larger geographic area.

If the Bill is truly to live up to its title, it must move from the rhetoric of empowerment to the practice of it. It must restore local democracy, not dilute it. It must clarify responsibilities, not obscure them, and it must build trust, not central control. Communities do not require permission to have a voice; they require the power to use it. True devolution rests on partnership, consent and clarity, not on imposition or ambiguity.

In Committee, I will challenge the Government on whether the Bill meets that aim, not only in areas where reorganisation is already under way but in areas such as London and Greater Manchester, where devolution exists but we believe it could deliver better. If the Government wish to empower communities, let the Bill begin by listening to them; only then can they claim with any confidence to speak in their name. As drafted, the Bill takes power away, increases costs for working people and, most of all, leaves communities without a voice.

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[Baroness Maclean of Redditch (Con)]

My Lords, a lot of good points have already been made in this debate and it is clear that the principle of devolution is supported across all of our Benches. I have personally seen really good results from devolution in the Midlands, where I have lived for most of my life. There, we have had serious and meaningful devolution that has already delivered real progress under the leadership of former Conservative Mayor of the West Midlands, Sir Andy Street. It is quite telling that people from across this House have mentioned him in particular. The noble Lord, Lord Storey, has just talked about pride, and Andy made us feel proud of our region and my home city of Birmingham for the first time in a very long time. That was truly precious, after a lifetime of being laughed at for being from Birmingham.

Nothing in the Bill, I am afraid, resembles that successful model. Instead, we are presented with a measure that centralises power and concentrates authority in the hands of a few individuals. It sidelines councillors and weakens scrutiny, and I am afraid that, against the backdrop of cancelling mayoral elections, it makes a mockery of the Government’s claim that they want to strengthen democracy.

I shall bring in some concerns that have been raised directly with me by councillors in my former constituency in Redditch and in the county of Worcestershire. These are people who actually deliver services and understand their communities. I pay tribute to them and to everybody else who steps up to serve their local area. As my noble friend Lady McIntosh said, it is far from clear how an area such as Worcestershire will be affected. It is too small a county to be a large strategic authority, but lumping it in with Birmingham or combining it with Herefordshire or Gloucestershire just would not work. It would be a million miles from the wishes of local communities, so I would be grateful to hear from the Minister how Worcestershire, and Redditch specifically, will be affected by the plans to combine those two tiers of government into one authority.

My noble friend Lord Trenchard is right to highlight the deep roots of counties. I am old enough to remember when my hometown of Solihull was kicked out of Warwickshire and put into the West Midlands. That caused everyone to go into a frightful tizzy and to vote against all the local councillors who had done it.

I have also heard concerns expressed about the concentration of power into the hands of a small number of individuals, and that really is a danger. To have good governance, you need a robust group on a committee challenging each other and making sure that alternative points of view are presented. I can see that we are creating a situation where influence can be captured by targeting a handful of individuals. We could find a small number of mayors who could create a cabal distant from the people that they serve, rather than the current model we have of ward councillors deeply embedded in their local areas, living and breathing those day-to-day problems affecting people every day. Without proper checks, a mayor can simply ignore scrutiny panels. There is no equivalent to parliamentary votes. If a mayor just says, “Well, it’s my way or the highway”, what can those local representatives do? Absolutely nothing.

As I am speaking after the noble Lord, Lord Ravensdale, I follow him in talking about the Midlands. I was fortunate enough to work very closely with Sir Andy Street as he started out as the first mayor of that combined authority. The reason he was successful is that he was able to navigate relationships with other local authorities of different political colours. He was able to deliver significant benefits for the region and put that authority on a path to being an outstanding authority, and he did it just through relationship building and developing trust, despite their different political colours. I genuinely do not think it would have worked if the then Conservative Government had just said, “You have to do it this way. We’re dictating from MHCLG”—as it was at that time. That would not have worked; they would all have dug in and refused, as Labour authorities, to work with a Conservative mayor, but Andy Street was able to bring them together and deliver something. The Government would do well to reflect on successful models of devolution that have worked well and delivered benefits for those areas.

Reorganisation, if done properly, could potentially save millions of pounds, and I think the Government are planning to do that. My worry is that any cost saving could get swallowed up into more bureaucracy. I fear, and I think many of us share this concern, that it looks as though the Government are potentially using this to do their favourite thing, which is put up taxes. When I listen to the Government Front Bench, at no time do they say they have the aspiration of lowering council taxes on hard-pressed council taxpayers. They talk instead about more taxes for tourism, which will cost money to administer and collect and might well have the opposite effect to the one that they imagine.

Real devolution means trusting local people, not bypassing them, but the Bill does none of that. Local government, in the words of one of our noble Peers who I was just having a cup of tea with, is one of those things that is boring but really important because it touches the lives of so many people. It is vital that we get this right, and I hope the Minister will take on board the suggestions of noble Lords to improve it throughout its passage.

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[Baroness Taylor of Stevenage (Lab)]

I thank noble Lords from all sides of the House for their excellent contributions. It has been an engaging and constructive debate and, for someone as passionate about devolution and local government as I am, it is heartening to hear that passion echoed around the Chamber. We may have different views on how we do things, but that passion for moving some of the powers and funding that are currently held in this little bit of London to local areas has been echoed today. We all know the pressure that the current system is under. It is not working in many places now, and it certainly is not sustainable for the future. We can see the signs of the system cracking all around us, and we need to move forward with this.

I will answer a couple of points made by the noble Baroness, Lady Scott of Bybrook, and the noble Lord, Lord Jamieson, before I start picking up particular detailed points in the Bill. The noble Baroness spoke about respect for local identity. These proposals have come from local government. We have not devised them in the office—there is no map-drawing going on in Marsham Street. That has been done by local people in their own areas. I will not take any lessons from the Tories, who dithered and delayed on local government review and devolution. They did some devolution, but they left huge areas of the country stranded from the increased powers and funding that some areas have benefited from. That cannot be right, and we need to address that now.

The accountability gap that the noble Baroness, Lady Scott, mentioned is there now; what we are doing is introducing locally elected mayors to provide local accountability for local decision-making. With the powers that will be devolved from Whitehall to those local mayors, they will have a powerful democratic mandate to take decisions on behalf of their residents. With the strong local authorities that will sit alongside them and the neighbourhood governance that will take that accountability to the very local level, this is an empowering Bill in terms of accountability, not the other way around.

The noble Baroness asked about funding. There is £200 billion of funding being devoted to this mayoral project, and that gives areas a real chance to make decisions on their own behalf. There are other powers, which I will come to.

The noble Baroness, Lady Scott, mentioned fiscal stability. Fiscal stability comes from having growth and investment in every part of our country, not just in the bits of it where it is decided that it will be. We will get that fiscal stability only where we are making decisions on growth and investment at local level. It is therefore very important that we take these steps now.

Just briefly on the noble Baroness’s point about adult social care—which is well made; we know that there are huge problems with adult social care—each of the proposals for local government reorganisation contains the area’s ideas of how to do the transformation to adult care services. With that local input and the work that the noble Baroness, Lady Casey, is doing, I think that we have a chance to make a real step forward on adult social care after a long time of waiting for that to happen.

I will endeavour to respond to different points in turn, but I would be happy to discuss topics of interest in detail in advance of Committee. The noble Lord, Lord Shipley, asked an important question about other government departments and how they are reacting to the Bill. I simply point to the huge amount of co-operation that we have had from other government departments on, for example, skills, transport, public health and prevention, policing and the fire service. There has been a great cross-governmental project to work on this. I have some of my fellow Ministers sitting on the Front Bench with me and I know that they will be working in their own departments on how we devolve these powers to the local level.

The noble Lord, Lord Shipley, also asked whether this devolution can really be delivered with local government finances in the state that they are. I very much regret that they are in that state, and we need to move that on. The answer to that question is that we simply cannot deliver the public services that people deserve and the growth that people need to see without making these changes. To the noble Baroness, Lady Bennett, I say that we absolutely understand the pressures: many of us have been very close to those pressures over the years, but we need to move this on now.

I say to the noble Baroness, Lady Janke, that mayors will have powers devolved from Whitehall, not upwards from local government. That is very important. We will have stronger, more sustainable unitary local authorities delivering services to local people. As my noble friend Lady Griffin very articulately pointed out, that will instead create the opportunities and growth that we need to see across our country. Of course, people are worried about change, but I point to the success that we have seen right across mayoral areas already. Those areas that already have mayors are making great strides forward with economic growth, housebuilding, skills, transport and infrastructure.

Let me be clear, particularly to the noble Viscount, Lord Trenchard, who I have spoken to on many occasions at Hertfordshire events as well as in this House, that the historic institutions, such as lords-lieutenant and high sheriffs, remain a fundamental part of local life and will continue to do so.

A number of noble Lords raised issues about the functions of local government. As I said, no one is drawing maps in Whitehall; they are being devised and owned by local people. This place-shaping goes right to the heart of the local government reform that the noble Baroness, Lady Pinnock, referred to. Devolution by default is the principle right at the heart of the Bill. As mayoral authorities grow and get more established, they can request more powers, as we have already seen our colleagues in Manchester and other mayoral authorities doing. The Bill sees our system of devolution move away from an ad hoc and inconsistent model, replaced with a model where it is clear what places can access, when they can access it and under what conditions. Our new system of conferring functions on levels of strategic authority is devolution by default, which will streamline the devolution of functions. All areas can be confident about the functions they will receive and, as the framework deepens over time, they will know that they will have access to the new powers as they are introduced.

I am very grateful for the examples of great local action that we have heard. My noble friend Lady Elliott is right that accountable responsible mayors must have the funding that they need to deliver local outcomes and the right framework to demand further powers when they are ready to take them. The noble Baronesses, Lady Scott, Lady Shephard, Lady Bennett and Lady Maclean, and the noble Lord, Viscount Trenchard, all spoke about issues relating to the establishment and the expansion of functions. The Government have been clear that devolution can deliver growth, unlock investment and deliver the change that the public want to see. That is why we want to see more parts of England benefit from devolution. Our engagement with councils to date has demonstrated that there is real appetite for this devolution across England, and the Bill will streamline the process for establishing new strategic authorities. It is our strong preference for devolution to be locally led.

However—and I hope this addresses some of the points about the powers that we have put into the Bill to deal with issues through ministerial-led routes—there are powers providing those routes to establish or expand strategic authorities or provide a strategic authority with a mayor. I reassure the noble Lord, Lord Storey, and others who have raised this issue that these powers will be used only where no local agreement can be reached, where this cannot be moved forward at a local level. We much prefer this to be done at a local level, and this measure will definitely be a last resort. The powers will be subject to conditions and statutory tests and will not be commenced automatically. Instead, they will be commenced by regulations only when Ministers consider it necessary and we will ensure that Parliament has the opportunity to engage further on this matter.

My noble friend Lord Bassam’s points on pace are noted. I thank him for all the work that he did in Brighton. I agree that we need to establish stable unitary authorities as the foundation for devolution, and I am grateful for his comments.

As it has been mentioned in the debate many times, I will briefly refer to the devolution priority programme mayoral elections. Although we had a Question on it earlier, it is important to reiterate those comments, as they were questioned by the noble Baronesses, Lady Scott and Lady Shephard, and the noble Lord, Lord Wallace. The noble Lord, Lord Lansley, spoke about the importance of pace in the devolution priority programme associated with this, and the noble Lord, Lord Pack, mentioned this as well. Of course, we are committed to this extension of devolution and, for Cumbria, Cheshire and Warrington, the first mayoral elections for the new strategic authorities will take place in 2027, as those local authorities had already requested that that be the date for them. For Norfolk and Suffolk, Greater Essex, Sussex and Brighton, and Hampshire and the Solent, which are all areas that currently have two tiers of local government, we have announced that we are minded to hold the first mayoral elections for those areas in May 2028, because we know mayoral devolution is most successful when mayoral strategic authorities are underpinned by strong unitary councils. Therefore, holding elections for new mayors in 2028 will allow enough time for the reorganisation process to conclude and unitary councils to be well established.

On the issue of why culture and heritage are not included in the competence list—the noble Lord, Lord Shipley, the noble Baroness, Lady Prashar, and my noble friend Lady Griffin mentioned this—the current list of thematic policy areas is deliberately broad and is intended to allow a wide range of activities to fall within the scope of the areas of competence. Many initiatives relating to culture, heritage and tourism would naturally be encompassed within the economic development and regeneration area of competence. Strategic authorities will remain key players in supporting culture and heritage initiatives locally. Many are already using their existing powers to support culture, heritage and tourism.

The noble Baroness, Lady Prashar, raised important points about the ability of local government, confidence in its institutions and how that can drive community cohesion. She is absolutely right to raise that, which is why it is important that these institutions are stable and people have confidence in them. The noble Lord, Lord Ravensdale, mentioned the environment, which is the specific competence of mayors, and energy, which is the subject of new powers over local growth plans and strategic planning.

The issue of the appointment of commissioners was mentioned by the noble Baronesses, Lady Scott and Lady McIntosh, and the noble Lord, Lord Shipley. I think that the noble Lord asked why they are not local government leaders. They can be local government leaders if that is the way that the mayor decides to take this. Local authorities will have critical new functions to undertake. They require representation on national bodies and joint working. It is not realistic to expect a mayor to do all this on their own. That is why mayors will be able to appoint and remunerate commissioners to lead on one of seven areas of competence, helping to increase the capacity in their strategic authorities. The noble Baroness, Lady McIntosh, asked about rural communities in this respect. Mayors can set an expectation that one or all of their commissioners should focus on rural issues. This is rightly a local decision.

The noble Lord, Lord Fuller, and many other noble Peers raised issues around local government funding. We are making good now on long-overdue promises to fundamentally update the outdated funding system and its decades-old data. We are targeting money where it is needed most by properly accounting for local need and equalising local income. We are giving local authorities greater flexibility and certainty as we simplify the more than 30 funding streams that were there when we came into office, worth almost £47 billion through the first multi-year settlement in a decade. Giving local authorities that certainty over funding, and over multi-year settlements, is critical here. We will publish the local authority allocations later in December and they will be subject to consultation and the usual parliamentary process.

On mayoral combined authority precepts, to empower mayors to deliver change in their communities, they need to be able to spend money effectively. Previously, mayors could use their precept only to raise money for mayoral functions. This did not cover some areas vital to growth, such as adult skills provision. The Bill will allow mayors to spend money raised through the mayoral precept across the whole of an authority’s function. The introduction of a precept will need to be approved through the budget voting process within each strategic authority.

On council tax, we are committed to empowering local leaders to drive growth and deliver for their communities, without placing excessive tax burdens on people. We are delivering the long-awaited local government funding reforms and the multi-year settlements, and we are consulting on modernising and improving the administration of council tax, to make the system fairer, more efficient and more transparent. That package builds a more sustainable, accountable and locally empowered system that focuses on the needs of communities.

There has been a broad agreement that local audit reform was needed. I agree with my noble friend Lady Armstrong that audit is essential for public confidence. When the whole-government accounts cannot be cleared because of the issues with local government funding, something has to change. Local audit is vital for ensuring trust and confidence that taxpayers’ money is being used wisely. We have acted decisively to clear the backlog, but significant further reform is needed. Last December, we published a strategy and consultation on measures to outline a road to recovery and set the system up for long-term, sustainable success. The Bill delivers core elements of this strategy, creating a clear statutory remit for the local audit office to oversee and streamline the system. I hope that picks up the points that noble Lords mentioned.

The noble Baronesses, Lady Bennett and Lady Pidgeon, my noble friend Lady Armstrong and the noble Lord, Lord Evans, all mentioned the scrutiny of combined authorities and local public accounts committees. All combined authorities will be required to establish both overview and scrutiny committees, and audit committees. Beyond these structures, the current system of accountability and scrutiny is guided by the English Devolution Accountability Framework and scrutiny protocol. We are reviewing both documents to reflect the changes brought forward by the integrated settlement and the Bill. We recognise that there is scope to further strengthen the system of accountability and scrutiny for mayoral strategic authorities. That is why we committed in the White Paper to exploring models for local public accounts committees and local accounting officers. We are committed to strengthening accountability alongside the strengthened devolution offer, and we will confirm our policy approach in due course.

The noble Baronesses, Lady Scott, Lady Janke, Lady Bennett and Lady McIntosh, and the noble Lord, Lord Wallace, among others, mentioned the important issue of our parish and town councils. The Government value the role that town and parish councils play; they are an important part of local democracy. There are no plans to abolish town and parish councils or to change their powers. Our plans on neighbourhood governance in the Bill are about hardwiring community engagement into local authorities themselves. Parish councils will be an important partner in creating stronger, more responsive neighbourhood governance, as will the whole range of grass-roots groups that support community empowerment. I hope that answers the point raised by the noble Lord, Lord Addington, about community groups and their engagement in this. It is for local authorities to determine whether new parish and town councils are needed, and this is done through the community governance review process.

The noble Baronesses, Lady Scott and Lady Griffin, and the noble Lord, Lord Wallace, raised issues around community empowerment. Of course, communities need power returned to them. We want to empower local leaders so that they can better affect the decisions impacting on their areas. That is why we are giving communities stronger tools to shape the future of their local areas, such as the new community right to buy, to help protect against the loss of cherished local assets. Some 350 of the most deprived communities are receiving funding from the Government. This includes the 75 plan for neighbourhoods areas and 25 new trailblazer areas, which will receive £20 million in funding over the next decade, including the pride in place funding. There is a clear ambition to hardwire that community engagement into this new system.

On the neighbourhood governance plans, the noble Lord, Lord Wallace, talked about removing powers from local areas. It is the opposite of that; we are creating a clear neighbourhood governance system for local authorities to hardwire community engagement and neighbourhood working into their governance. The goal of that neighbourhood governance is to move decision-making closer to residents. Decisions about local communities should be made by people who understand local needs. That is why we are introducing a new requirement for all local authorities to make appropriate arrangements for the effective governance of local neighbourhood areas.

The noble Lord, Lord Fuller, and the noble Earl, Lord Devon, raised issues about rural versus urban. Like the noble Lord, Lord Jamieson, I will not get involved in the cream and jam debate. I am afraid the planning Bill and the English devolution Bill are quite controversial enough for me; I will not get involved in a debate about scones. The Government recognise that neighbourhoods across England are diverse, and that rural and urban communities have different needs and characteristics. Through the review of existing council-led neighbourhood governance models, we are working closely with local authorities and the community sector to understand what works best in different contexts.

The noble Lords, Lord Best and Lord Lansley, raised important issues around mayoral development corporations. I agree with the noble Lord, Lord Best, about the value of the New Towns Taskforce report and Sir Oliver Letwin’s report relating to master planning and development corporations. That is why the Bill extends to all mayors the power to create mayoral development corporations, to drive economic growth and regeneration. Mayoral development corporations will benefit residents by delivering new homes, better transport and economic opportunities, revitalising areas for future generations.

I can see I have run out of time. I am sorry; I knew I would not get through all this, but I will respond in writing to any noble Lords whose questions I did not get to. I will conclude my remarks now. I reiterate my thanks to your Lordships for their engagement with the Bill to this point. I thank the noble Lord, Lord Porter, for raising the issue of the District Councils’ Network and the County Councils Network, which have contributed hugely to the work going forward and to briefing noble Lords.

As the Bill progresses, I am happy to accommodate any requests from noble Lords for meetings or additional briefings wherever helpful. As I have set out earlier today, this ambitious legislation will deliver top to bottom redistribution of power, putting decision-making in the hands of local areas and delivering real change for working people. With this Bill, the Government will deliver on our manifesto commitment to empower local leaders and mayors to unlock growth and opportunities right across our country by making the right decisions for the communities they serve. I look forward to working with your Lordships during the passage of this legislation. I commend the Bill to the House.

Bill read a second time.

Moved by

[Baroness Taylor of Stevenage]

That the bill be committed to a Grand Committee, and that it be an instruction to the Grand Committee that they consider the bill in the following order:

Clauses 1 to 4, Schedule 1, Clauses 5 and 6, Schedule 2, Clauses 7 to 9, Schedule 3, Clauses 10 to 20, Schedule 4, Clauses 21 to 23, Schedule 5, Clause 24, Schedule 6, Clause 25, Schedule 7, Clause 26, Schedule 8, Clauses 27 and 28, Schedule 9, Clauses 29 and 30, Schedule 10, Clause 31, Schedule 11, Clause 32, Schedule 12, Clause 33, Schedules 13 and 14, Clause 34, Schedule 15, Clause 35, Schedule 16, Clause 36, Schedule 17, Clause 37, Schedule 18, Clause 38, Schedule 19, Clause 39, Schedule 20, Clauses 40 to 43, Schedule 21, Clauses 44 to 46, Schedule 22, Clause 47, Schedule 23, Clauses 48 to 50, Schedule 24, Clauses 51 and 52, Schedule 25, Clauses 53 to 57, Schedule 26, Clauses 58 and 59, Schedule 27, Clauses 60 and 61, Schedule 28, Clauses 62 and 63, Schedule 29, Clauses 64 to 73, Schedule 30, Clause 74, Schedule 31, Clause 75, Schedule 32, Clauses 76 to 84, Schedule 33, Clause 85, Schedule 34, Clauses 86 to 93, Title.

[Baroness Taylor of Stevenage (Lab)]

I beg to move.

[Baroness Scott of Bybrook (Con)]

I understand that there has been no agreement in the usual channels for the Bill to be committed to a Grand Committee. I put on record that it is very disappointing that the Government have tabled this Motion without the agreement of the usual channels.

[Baroness Taylor of Stevenage (Lab)]

My Lords, my noble friend the Chief Whip consulted the usual channels in the usual manner. I am also aware that he spoke to some key Peers with an interest in the Bill.

Motion agreed.