English Devolution and Community Empowerment Bill

Debate between Baroness Bennett of Manor Castle and Lord Shipley

Consideration of Commons amendments and / or reasons
Monday 27th April 2026 Lords Chamber

[Lord Shipley (LD)]

My Lords, there have been four very powerful speeches on the agent of change principle. I support the Motion in the name of the noble Baroness, Lady McIntosh of Pickering. If she decides to test the opinion of the House, she will have the support of these Benches.

Not a lot has changed as a result of the votes that we made last week; there has been some amelioration, but our views have not changed on brownfield land priority or on strengthening parish governance. I welcome any improvement to those that the Government are able to come up with and have come up with, but I think we have some movement yet to achieve.

I say thank you to the Minister on the question of rural affairs being a competence. We are grateful to the noble Baroness, Lady Taylor of Stevenage, and to her colleagues in the other place for agreeing to our amendment on rural areas to be added as a competence of the Bill, and I am sure that those who live, work and enjoy rural areas for their recreation will find that this amendment will make a difference to the way in which the Bill affects their service delivery and environment.

I place on record too our thanks to the noble Baroness, Lady Scott of Bybrook, for her support and that of her team on this particular issue. I also thank the noble Lords, Lord Best and Lord Cameron of Dillington, from the Cross Benches. The noble Lord, Lord Cameron, in particular has been a vociferous advocate for the consideration of rural areas over many years. I hope that he, like us, will feel a sense of achievement in at last getting rural affairs to be fully part of the Bill.

I have Motion C1, which relates to the governance structures of local authorities and in particular who decides what the governance structure should be. It is a disappointment to me that the House of Commons has not agreed with the amendment that I moved and which was agreed by your Lordships’ House last week. The central issue remains. The Bill is about devolution and community empowerment, so I ask the Government again: why cannot a community decide for themselves their own model of local governance for their local council?

The Minister in the other place said that the Government wanted to create

“strong local authorities that can deliver for their people”.—[Official Report, Commons, 21/4/26; col. 265.]

It is the case that councils with committee systems do deliver for their people, and surely it is for local people to decide their governance structures. A committee system is more transparent and democratically accountable than a cabinet system, and it will involve more people—more elected councillors.

Since the passing of the Municipal Corporations Act 1835, the committee system has shown its effectiveness in bringing councillors of different parties together, because a committee structure engages all councillors with the decision-making processes of a local authority. The scrutiny system has not been that effective in local government because it tends to take place after a decision has been made. A committee will assess policy proposals before and as they are agreed.

In conclusion, this is a very simple issue. Who decides a local authority governance structure? Is it Ministers in Whitehall or local people? I submit that it is for local people to decide what they feel is best for their area. When we get to Motion C1, I will beg leave to test the opinion of the House.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I rise very briefly and with great pleasure to follow the noble Lord, Lord Shipley. I agree with all the House’s alternative amendments, but I am going to speak just on Motion C1. I have spoken at every stage of the Bill on this issue.

Rather than repeat what I have said before, I will reflect on what the Minister said to us in putting the Government’s argument. She said that the Government retain a strong preference for the cabinet executive model and want a consistent model of governance all around the country. Well, I do not mind what the Government prefer. I do not mind what the Government’s view is. I just do not want the Government imposing that on communities up and down the land. Democracy, not dictatorship, is what this amendment is about. I urge everyone to back Motion C1.

English Devolution and Community Empowerment Bill

Debate between Baroness Bennett of Manor Castle and Lord Shipley

Committee stage
Thursday 29th January 2026 Grand Committee

[Lord Shipley (LD)]

My Lords, I agree with the noble Baroness, Lady Scott of Bybrook, that Amendment 93 is sensible and proportionate. If you are going to have an annual report, the modest additional reporting proposed in this amendment would, as she said, help us understand better the success of devolution.

I will speak to Amendments 94 and 197 in the name of my noble friend Lady Pinnock. It needs to be demonstrated clearly in the annual reporting whether the Secretary of State has been exercising powers under this Act without the consent of or contrary to decisions made by locally elected officials. It would be entirely reasonable and helpful, when we are asked to pass a Bill about devolution from Westminster, to know what the Secretary of State has actually done in the previous year.

On Amendment 197, we will touch on parish and town councils later, but there is a fundamental issue here. If we have a Bill called the English Devolution and Community Empowerment Bill, the Government should be reviewing and promoting parish and town councils, maximising their geographical coverage and making an annual report to Parliament as to what has been done. The danger with this Bill is that so much power is being concentrated. I tried last week to get greater devolution from the strategic authorities to existing local government and then through to existing town and parish councils, but the Government were not amenable. I hope that further progress will have been made on that by Report.

There are two other amendments in my name. Amendment 252 would require the Secretary of State to undertake a review of local and community banking powers. I am grateful for the briefing I received from the Royal Holloway positive money group and its advice on this amendment. This is about the terribly important issue of how devolution drives growth in practice. One of the Government’s objectives is to drive growth, but how do you do that if the resources are not there? This amendment would be central to the success of the Bill, because it addresses a core structural barrier that currently undermines devolution: the centralised control of credit creation.

The Bill seeks to devolve political authority and fiscal responsibility, and it talks about community power, but I do not think that that will be fully realised without devolving financial capacity—that is, the creation of local, community and publicly owned banks. This amendment would ensure that devolved authorities are not responsible for growth outcomes when they lack the financial tools to influence those outcomes. Devolution means that powers have to accompany those devolved responsibilities. There are three aspects to devolution: devolution of powers, devolution of responsibilities and devolution of resources. But there is a problem for the devolved authorities in their ability to deliver local growth, resilient public finances and genuine community empowerment.

I am asking the Minister to do some further work and give more consideration to this. I will bring this back on Report, but I am not asking for the solution to be identified immediately. A range of issues need to be addressed and some are complex. I fear that, when this Bill is an Act, it will get into difficulty with its delivery—in generating growth and jobs. I hope that the Minister does not seek to rule out this amendment offhand.

My other amendment in this group is Amendment 253. I was tempted to degroup, but I decided that it is probably better to bring together all the amendments where I am asking for reviews, to raise these issues and ask the Government to think about them, because I will also bring back this amendment on Report.

There needs to be a review of regional and national public spending. Different parts of the United Kingdom have significantly different amounts of public expenditure. I quote from Table 9.1b of total UK identifiable expenditure on services, per head, from 2023 to 2024, which is the last year in which information is available. The information is from the Government’s Public Expenditure Statistical Analyses 2025. That shows that, if the average for nations and regions in the UK is 100, some are well above that and others are well below. London is at 115, when the average is 100. Scotland, Wales and Northern Ireland are all well in excess of 100.

There are some reasons for these differences that are unique to those places, which means that work has to be done to understand why that is. However, the Barnett formula is at the heart of it. That formula, designed by the late Lord Barnett and introduced in the late 1970s, is a very useful instrument for the Treasury to disburse money to the nations, but it hides the significant differences in public spending across the UK.

To that extent, I have tried before to get the Government adequately to explain why, when the average public expenditure is 100, the east Midlands is only 90—in other words, 10 percentage points below the average. The great danger of the Bill is that, when it becomes an Act, it will promote a blame culture. The mayors will blame the Government for not having enough resource, and the public will blame the mayors. The whole democratic system will be in some difficulty if it is not understood why some places get much higher levels of public spending than other areas.

All I am asking the Government is that they are aware of this matter and review it. It implies reviewing the Barnett formula, and I have previously moved Questions for Short Debate and proposals for that to happen in your Lordships’ House. I have not been alone in doing that. A number of years ago, there was a Select Committee of your Lordships’ House that urged reform of the Barnett formula to one that has a needs assessment across the UK. I ask the Minister whether the Government might think about that.

I am going to bring this back on Report. I understand that it is primarily a matter for the Treasury, but somebody does have to explain all this, because otherwise the public are simply going to say, “As mayors compete with each other for the favours of the Treasury, whose fault is it that they are getting more money than us?”

I want devolution to succeed, but the Government have to understand this issue a bit better. How can we empower community banking? How can we invest for growth outside the existing structures? How can the Government make sure that, when they are spending public money, they are allocating it fairly across the United Kingdom? I hope that the Minister will give me some indication that the Government are prepared to look at this.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I am sorry if I am speaking out of order; we are missing quite a few signatories. I will speak to Amendment 197 in the name of the noble Baroness, Lady Pinnock, and Amendment 252—about local and community banking powers—which the noble Lord, Lord Shipley, just addressed. The timing of this debate is interesting, because just this morning Santander announced that it is closing a further 44 branches after an earlier announcement that it would be closing 95 branches around the country. Lloyds is closing more than 100 branches by March. A total of 432 bank branches closed in 2025; this puts the figure of bank branches lost at some 7,000.

Large banks, whether based in London or globally, will say that everyone is going digital. What I find, however, when I travel to communities up and down the land, is that quite often the fact that they no longer have a bank or that their last bank is about to close is a major issue. If you speak to a small or even medium-sized enterprise and ask if they are getting financing from the banks, they just laugh at you. The kind of application you have to make includes filling in an enormous number of forms. You do not speak to a person, and the application churns through the computer; computer says no and that is the end of it. Historically, you would have a local bank manager who knew the local community and its businesspeople, and was able to support people whom they knew were worth the punt. The large banks are physically evacuating out of communities and are just not interested in anything except large, multinational companies and their like.

This is why, with regard to local and community banking powers, getting local banks set up is in the interests of local communities and absolutely something to be looked at as an option by Government. I note that, although I am not entirely praising it—I should declare that I am a customer—Nationwide, with its co-operative model, is staying in communities far more, but it still cannot do everything that communities need by any means. Amendment 252 is therefore terribly important.

I turn to Amendment 197’s duty to review parish and town councils. I declare my position as a vice-president of the National Association of Local Councils. Despite the rhetoric around it, this Bill is taking local democracy far further from the people. In many places—as has been happening through more than a decade of austerity—parish and town councils have been picking up the slack where larger bodies have stepped away and not had the money to engage.

More than a dozen years ago I was in Leominster, and the list of services that the local town council had picked up there ran from keeping the public toilet open—I am sorry; I seem to have a theme today, but it was not my intention—to keeping the tourist information centre open to cutting the grass and looking after the green spaces. These tasks had been abandoned by the unitary authority and were therefore picked up by the town council. The problem is that Leominster is an historic town—there is a wonderful, medieval town hall to meet in—but it is often the more disadvantaged communities around the country that do not have parish and town councils. One example is the large new council estates. Those who need it most do not have that local representation. A review, therefore, would be welcome in examining the Government’s heading to take democracy away from the people and enabling us to see how we can restore it at grass-roots level. To me that is essential.