Local Government Reorganisation: South-east

(Limited Text - Ministerial Extracts only)

Tuesday 10th March 2026 Westminster Hall

[The Minister for Local Government and Homelessness (Alison McGovern)]

It is a pleasure, as ever, to serve under your chairship, Mr Vickers. I am very grateful to the hon. Member for Surrey Heath (Dr Pinkerton) for securing today’s debate on local government reorganisation in the south-east. It is a very important issue for residents and businesses across the region and I welcome the opportunity to set out the Government’s approach, the progress that is being made and the opportunity that change presents.

Local government reorganisation is an opportunity to modernise how councils operate. For too long, many areas have been served by complex two-tier structures that divide responsibilities, duplicate cost and blur accountability. Residents often struggle to know which council is responsible for which service. I note the various contributions that have been made on that point. I think we would all agree that councils can always do better to help residents engage with them, but there is no doubt that there is evidence out there that the two-tier system does seem to add to confusion and a lack of accountability. Decisions to build and grow our towns and cities can take longer, with resources spread more thinly. We need clearer structures, stronger councils, quicker decisions, more homes and better services for local people. By moving to single unitary authorities we can create councils with the scale, leadership and authority to grow their economies, create jobs and opportunities, and deliver for communities, particularly in the services where pressure is greatest, including children’s services, adult social care and housing. Those areas were mentioned by a number of Members; I appreciate the contributions that they made.

I just want to make one point on identity, because I am sure we will debate the finances of the situation. As he often does, the hon. Member for Woking (Mr Forster) raised the very serious situation that that council has been through, but identity is also important. I hope Members will forgive me if they have heard me say this before, but before I was born, my own area was in a two-tier system, with Birkenhead and Cheshire as a two-tier council area. In 1974, before I was born, we became the Wirral in Merseyside. Now, we are the Wirral in Liverpool city region. Those different identities are complex and interconnected. There are some people I represent who would say that they are still Cheshire all these years later.

[Damian Hinds]

Yeah!

[Alison McGovern]

There are! And there are some people who identify as Birkenhead and many people who, as I do, think of themselves as Wirralian. These issues of identity are complicated. We need to take account of them and listen to what residents tell us, but my experience is that there is never one right answer.

Across England, the programme is progressing quickly. Proposals have been submitted and consultations undertaken, and the first decisions are now being implemented. The south-east is at the forefront of this work. It is home to cities such as Brighton, Southampton, Oxford and Portsmouth, which have a vital role to play not only in their local economies, but in our national growth story.



I turn first to Surrey, the most advanced area. Parliament has considered the order to establish two new unitary authorities, East Surrey and West Surrey, with elections taking place this May and new councils formally assuming responsibilities in April 2027. Alongside structural reform, we have committed unprecedented debt repayment support of £500 million for Woking borough council, reflecting historic capital practices at the council and the value-for-money case for acting to protect local and national taxpayers. A couple of Members with Surrey constituencies rightly pointed out the consequences for other Surrey residents; I agree that there are consequences for all citizens in the UK when that sort of thing happens. The hon. Member for Surrey Heath asked about financial sustainability. We are keeping that closely under review as we move forward with this process. The support that we have agreed is a first tranche, and we will continue to explore what further debt support is required at a later point.

A number of Members asked about modelling. In this process, it is for councils to bring forward their analysis of costs and benefits to make the case under the criteria. I add one word of caution: we have all discussed the situation with spiking demand in particular areas of cost. I am working with other Government Departments on that; as the shadow Minister, the hon. Member for Ruislip, Northwood and Pinner (David Simmonds) said, local government is a complex mix when it comes to central Government policy. I spent three years on the Treasury Committee poring over the modelling on Brexit and other matters. It is not a precise science, as Members who have experienced Government know only too well.

[Damian Hinds]

As with many projections, some things are more uncertain than others. Typically, in business, revenues are really hard to project, but costs are a lot easier. Can the Minister share with us what the costs of the reorganisation are anticipated to be?

[Alison McGovern]

I thank the right hon. Gentleman; that is exactly the point that I am making. I am very conscious that I have spoken to many council leaders and finance officers in recent weeks who have experienced significant cost pressures in areas where we are in quite an uncertain policy environment. The right response to that is to work with the Department for Education, particularly on children’s costs, and others, to get the policy in the right place so that we can get those costs down.

[Damian Hinds]

I meant reorganisation costs.

[Alison McGovern]

I accept the right hon. Gentleman’s point about reorganisation costs; I will think about whether I can say more to him in writing about that—otherwise we will just go over this forever.

I now turn to the really important point made by the hon. Member for Woking. I probably cannot respond in this context to his specific question about honours, but I will take it away. I have immense sympathy with the points he raised, but I am conscious that investigations are ongoing. I will leave it there, but he was correct to make his case.

The removal of the Audit Commission—and what happened to local audit under the Government from 2010 to 2015—was in my view an absolute disaster. We will put it right with the reintroduction of local audit and much greater constraints on the sort of behaviours we have seen not only in Woking, but elsewhere. I will leave that there, too, but I could go on about it for hours.

I turn to Hampshire, Portsmouth, Southampton and the Isle of Wight. The Government have received a number of proposals and representations from councils. Across those areas, different authorities have put forward different visions for the future, some favouring multiple new unitary authorities while others, such as the Isle of Wight, have been clear in their preference to remain stand-alone. Those views, alongside the evidence submitted by other councils and stakeholders, will be assessed carefully against the criteria of sustainability, geography and public engagement.

I turn briefly to Sussex. Proposals for reorganisation have been received and the consultation has now closed. The Government are considering all the evidence submitted and will take decisions guided by the statutory criteria and what will best support effective and sustainable local government.

I turn to Oxfordshire. The Government have now launched a statutory consultation on proposals for unitary reform across the country, which closes this month. A range of options have been proposed, including a single county-wide authority, a two-unitary model and a three-unitary configuration, including a Greater Oxford council.

At this point, I note the remarks made by the hon. Member for Bicester and Woodstock (Calum Miller). He will appreciate that I cannot comment on the specifics, but he asked for a meeting on finance with me and my hon. Friend the Member for Banbury (Sean Woodcock), which I am very happy to arrange. Oxford is a vital cog in helping to grow our national economy, but that is exactly why the consultation and the process are so important. Decisions must be informed not only by structural and economic arguments made by local councils but by the views of residents, businesses and communities themselves.

Across all areas undergoing reform, the Government’s priority is that change must not come at the expense of vital decisions to keep building homes and delivering frontline services. We are also providing practical support to councils delivering reorganisation to help with this capacity, including up to £63 million nationally to help manage implementation pressures alongside expert advice from across the sector and the Local Government Association. I note the comments made by the hon. Member for Guildford (Zöe Franklin) about parish councils being responsible for their own services and so on. If she has particular concerns about that, I will welcome a note from her.

Reorganisation also sits alongside wider action to place local government on a stronger financial footing. Earlier this year, the Government confirmed the first multi-year local government finance settlement in a decade, which has been welcomed by Members from across the House because it provides councils with greater certainty and ensures that funding better reflects needs and deprivations.

We should remember that the benefits of strong unitary councils are not theoretical. For example, where they already exist, we are seeing results. In South Yorkshire, four unitary councils working with the mayor are helping places such as Barnsley and Doncaster not only to grow their local economies but to translate that into higher wages for local people. South Yorkshire is one of the places that has suffered worst with unemployment in our country’s history, but it is now making serious and significant progress. That is the real economic growth that improves living standards.

Newer unitary councils such as those in Buckinghamshire and North Yorkshire are delivering millions of pounds of efficiencies through streamlined structures that have reduced duplications, delivering savings that will be reinvested in frontline priorities such as supporting vulnerable children and funding local transport. The hon. Member for Woking made his point about vulnerable children very well; I will alert the Minister with responsibility for children’s care to his comments so that he can get a response.

[Zöe Franklin]

I want to return to the Minister’s point about how mayoral authorities are making such economic progress, and to my question. When foundation authorities are formed on the journey to reorganisation, they do not get the same funding support as a mayoral authority. They are therefore losing out on essential kick-starting resources to help them on their journeys to successful economic growth. Will she clarify what support is coming?

[Alison McGovern]

When my own area in Merseyside started off on the journey to get a mayor, it was really unclear how to build the right resources; the time it took to do that should not be underestimated. The Association of Greater Manchester Authorities started 20 years before the city had a mayor.

The right way is to get the foundation strong first: get the unitary authorities in place and then move forward from there. I know that the hon. Lady will have more conversations with my hon. Friend the Devolution Minister, who will talk to her about the specific process for Surrey. It is important to me, as Minister for Local Government, to get the foundations strong so that we can build devolution up in that way.

I recognise that Members have raised a number of specific concerns about the implications of reform in their own areas, and those concerns matter. They are being carefully considered. Whether the issue is financial sustainability, which we have discussed, local identity, which I went on about again, or the impact of potential boundary changes, decisions will be taken carefully, transparently and in the interests of residents.

Although they are out of scope of our reorganisation programme, town and parish councils will continue to play an important role in representing their communities. New unitary authorities will also be expected to develop strong, local, area-based working, so that decision making remains close to the communities that it affects. As we look ahead, the next steps are clear: the Government will move forward with decisions and continue working with councils across the region to ensure that change is delivered smoothly and responsibly.

In conclusion, local government reorganisation offers an opportunity for the south-east: an opportunity to give local areas the capacity to grow, build the homes their communities need and see better public services; an opportunity to replace complex and outdated structures with councils that are simpler, stronger and more accountable; and an opportunity to ensure that local government is fit for the future.

I thank the hon. Member for Surrey Heath again for securing this debate. I look forward to continuing to work with Members across the House and with local partners to make changes that will benefit communities right across the south-east.