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

(Limited Text - Ministerial Extracts only)

Wednesday 24th June 2026 General Committees

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

I beg to move,

That the Committee has considered the draft Local Government (Structural and Boundary Changes) (Control of Disposals etc.) (Amendment) Order 2026.

It is a pleasure, as ever, to serve under your chairship, Mr Vickers. This statutory instrument was laid before the House on 14 May 2026.

The order makes a small but important change to existing arrangements that govern significant financial decisions made by councils during local government reorganisation, including those on land disposals and contracts. The Government’s programme of reform, as set out in the English devolution White Paper, will move power out of Westminster and strengthen the foundations of local government. A key part of that programme is local government reorganisation, replacing two-tier councils with single-tier councils that are simpler, clearer and more accountable to the communities that they serve.

The Government’s long-term aim is to create local government structures that make it easier for residents to understand what group is responsible for local services and decisions, while enabling more strategic choices that support growth and improve public services. To meet that ambition, the transition must be orderly and legally sound, and must properly protect the public interest. Existing councils must continue to discharge their functions while new councils are being established, and decisions taken during that period should not undermine the position of the successor councils.

For that reason, the framework includes safeguards, which are set out in section 24 of the Local Government and Public Involvement in Health Act 2007. Those provisions allow the Secretary of State to issue directions that control certain land disposals and significant contractual commitments. Where a decision could have implications for the successor council, councils may, in certain situations, be required to secure consent before proceeding. In practice, that consent will usually come from the relevant shadow council. Those controls ensure that major financial decisions taken during the transition will not adversely affect successor councils. Specific consent will be required for larger decisions, while general consent can be used to enable day-to-day activity to continue.

The order, made under section 29 of the 2007 Act, makes a targeted change to the way that those safeguards apply. As the framework currently operates, councils may need to take account of previous land disposals and contractual dealings when assessing whether the relevant financial thresholds have been reached. The starting point of that aggregation period has remained fixed at 31 December 2006, which could require authorities to examine almost 20 years of historical activity. That was not the intention of the policy. The controls were intended to focus on recent and relevant activity in the period leading up to reorganisation, rather than to create unnecessary retrospective burdens.

The order updates the beginning of the aggregation period to 31 March 2025, to ensure that the framework captures relevant activity without requiring unnecessarily extensive historical analysis, while leaving the underlying safeguards on disposals of land and contractual dealings unchanged. The Committee should note that the order does not represent a change of policy, and does not alter the underlying safeguards.

[Lincoln Jopp (Spelthorne) (Con)]

I am a little unclear on the implications of what the Minister just said. If, for example, Barratt Redrow and the Jockey Club submitted a planning application, under the new national planning policy framework, to flatten Kempton Park racecourse to build 2,000 homes on that land, would no one be able to consider what had happened in retrospect? Would they be allowed to consider only what happened under this Government’s current NPPF?

[Alison McGovern]

The hon. Gentleman asked about a specific example, which sounds like it relates to a specific concern.

[Lincoln Jopp]

indicated assent.

[Alison McGovern]

He is nodding, which is helpful. In that case, I will write directly to him about that important local issue. I am not overly concerned that the example the hon. Gentleman raised is engaged by this change, but I will write to him to confirm that, because it sounds like an important issue in his constituency.

The clarification in the order is designed to make sure that the existing safeguards operate as intended and can be applied with greater consistency across councils. The order preserves the balance between enabling councils that are due to be abolished to continue to operate effectively, and protecting successor councils, residents and taxpayers’ money.

Although the amendment in the order was first identified through engagement with Surrey, it has been tested more widely with local government representatives, including engagement with the Chartered Institute of Public Finance and Accountancy and the Department’s local government reorganisation advisory group, which brings together senior officers and experts from across local government. It is therefore not a measure designed only for Surrey, but an update that will apply across the local government reorganisation programme.

This statutory instrument supports a legally robust transition by reducing uncertainty in the operation of the framework and promoting consistent application across the reorganisation programme. It makes a small but necessary technical change to ensure that the safeguards that govern significant financial decisions during transition work as intended, thereby supporting the whole local government reorganisation programme.

[Lincoln Jopp]

Will the Minister give way?

--- Later in debate ---

[Alison McGovern]

I am afraid I am finishing.

The SI reflects engagement with councils and wider consideration with local government representatives, and will help to support the safe, orderly and effective delivery of our programme of reorganisation. I commend the draft order to the Committee.

[The Chair]

Before I call the shadow Minister, may I suggest that Members should not be tempted into a wider debate about the merits of any particular boundary changes or council abolitions?

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[Alison McGovern]

I thank members of the Committee for their contributions to this debate. Before concluding, I want to address some of the points raised.

The shadow Minister asked about disputes between councils. I want to be explicit that councils remain responsible for their decisions during the transition and must act in line with their legal duties. We expect councils to act transparently and have regard to their fiduciary duties and wider public responsibilities when taking such decisions as local authorities do week in, week out—and local authority officers know that. Decisions regarding ongoing service delivery and the medium-term financial strategies of existing councils should not compromise the future sustainability of new councils—I say that just for clarity.

We have published an explanatory note to councils undergoing reorganisation about financial decisions before reorganisation and we continue to work with councils to support orderly and effective transitions. However, decisions on individual assets are the responsibility of local authorities. I will happily circulate the explanatory note to members of the Committee if that would aid them. The officials in my Department are in touch with councils on a regular basis. This framework tries to create safeguards to make sure that significant actions taken during transition do not adversely affect successor authorities.

[Lincoln Jopp]

Will the Minister give way on that point?

[Alison McGovern]

I will do so in a moment.

The shadow Minister makes a very reasonable point on councils in receipt of exceptional financial support and the disposal of assets. He knows that the number of councils in EFS is a great concern of mine. We liaise with those local authorities week in, week out to do all we can to support them. It serves none of us to have exceptional financial support become normalised, and we are in touch with them.

[Zöe Franklin (Guildford) (LD)]

Will the Minister give way?

[Alison McGovern]

I will give way to the hon. Member for Spelthorne and the hon. Lady in a moment once I finish responding to the shadow Minister.

On arm’s length management organisations and academies, this depends on the specifics of the contract and the transfer that has taken place. Again, we are working actively with councils. On the value of sites and the issue that the hon. Member for Ruislip, Northwood and Pinner mentioned with developers being able to garner extra value from their sites, we have provided councils with checklists and much information about things that they should be wary of. Nevertheless, I thank him for raising it. I will double check that it is on the checklist.

[Lincoln Jopp]

I am so grateful to the Minister for giving way. I am also conscious of the Chair’s prohibition on stretching the envelope and referring only to the Minister’s own words. She said that the purpose of this whole procedure today was to make local government reorganisation easier for residents to understand and for a safe, orderly and effective transition. I pay tribute to my hon. Friend the Member for Broxbourne for his expertise in this area.

The Minister and I have privately discussed the powers of shadow unitary authorities and their ability to propose name changes: in my case to the “West Surrey”, and if I had my way, “and South Middlesex”, unitary authority. Would she like to put on record the fact that, if the newly elected shadow unitary authority makes a proposal with a majority for the renaming of that unitary authority, she would be bound to accept it?

[The Chair]

Order. That is way beyond the scope of the order before the Committee, but if the Minister wants to comment on it, I will allow her to do so.

[Alison McGovern]

You are very generous, Mr Vickers. The hon. Member knows that I am sympathetic; it is a matter for the authorities themselves, of course, but he makes a good case.

[Zöe Franklin]

The Minister spoke about exceptional financial support. I was interested to hear her say that we do not wish EFS to be normalised. I suggest that we are in circumstances in which it is normalised, given that so many councils require it and so many of them expect to have to use it. A lot of councils are struggling to balance their annual budgets on that basis.

--- Later in debate ---

[Alison McGovern]

I thank the hon. Lady for raising that important point. I will happily come to this House and spend hours talking about local government finance any time anybody wants—

[The Chair]

But not today.

[Alison McGovern]

I fear that it would test your patience, Mr Vickers.

Let me make a final point to the hon. Member for Broxbourne. He makes a reasonable point, but the issue is that local government finances are in such a state—I am thinking particularly about the situation in Woking. All of us, up and down the country, will pay the price for that, so there is a sense in which responsibility is always collectively shared. I will say nothing further, Mr Vickers, in case you tell me off.

In conclusion, the draft order will make a small but necessary technical amendment to ensure that existing safeguards on disposals operate effectively during local government reorganisation. I hope that the Committee will join me in supporting it.

Question put and agreed to.