Stamp Duty: Periodic Tenancies
Baroness Taylor of Stevenage Excerpts(3 days ago)
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Lord Bailey of Paddington
To ask His Majesty’s Government what assessment they have made of whether periodic tenancies draw more tenants into Stamp Duty Land Tax lease returns than fixed-term tenancies; and what legislative or other steps they intend to take as a result.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, the Government are aware that the Renters’ Rights Act 2025, which abolishes fixed-term tenancies, may in some very rare circumstances bring more tenancies into the stamp duty land tax regime. We are working closely with His Majesty’s Treasury and HMRC to ensure that no tenant is brought into paying stamp duty on the rent they pay as a result of the Renters’ Rights Act, and we will update Parliament shortly.
Lord Bailey of Paddington (Con)
I thank the Minister for her Answer. Will any guidance be issued by HMRC or anybody else to tenants, landlords and agents to let them know whether their tenancy will come under stamp duty land tax and they have to issue some kind of return to HMRC? Many tenants are very worried that this will happen to them, and lots of agents have no idea that this is coming.
Baroness Taylor of Stevenage (Lab)
I want to reassure tenants and landlords that very few tenants will be affected by this in the first year. A tenancy must have extremely high rents or have been running for a very long time under the previous system to even approach the stamp duty threshold in the first year. HMRC’s assessment is that this will be a very small number of cases. We intend to ensure that even in those rare instances, tenants do not face a stamp duty land tax charge as a result of these reforms. We will work with HMRC to make sure that clear and accessible guidance is available for both tenants and landlords.
Lord John of Southwark (Lab)
My Lords, one of the ways in which we meet the concerns that the noble Lord has raised is by increasing the housing supply. Can my noble friend the Minister give us an update on the social and affordable housing programme that the Government are supporting?
Baroness Taylor of Stevenage (Lab)
I am very pleased to give the House an update on the social and affordable housing programme. We have now published its prospectus, and the Government have put in £39 billion of funding to kick-start social and affordable housebuilding at scale across the country. The core objective of that new programme will be to maximise supply, with a target to deliver at least 60% of the homes under the programme at social rent. That will be around 300,000 social and affordable homes over the programme’s lifetime. We published the guidance in November 2025, and we are now calling on all registered providers to review the details confirmed and to prepare large and ambitious proposals. We want to see the social landlord sector really embrace this. The bidding process opened in February, and we look forward to receiving some good bids.
Baroness Thornhill (LD)
My Lords, the Renters’ Rights Act places the full weight of delivery and its success on two public bodies—the courts to provide timely justice and local authorities to provide enforcement. Can the Minister please reassure the House that on 1 May, when these additional rights are switched on, both the courts and councils will have sufficient capacity and resources to deal with this additional workload, given that, at the moment, court delays are still long and council enforcement capacity varies according to your postcode?
Baroness Taylor of Stevenage (Lab)
We had much discussion about this during the passage of the Act, and we are working very closely with colleagues in the Ministry of Justice to implement the reforms. Work is progressing well to ensure that the courts and tribunals have the resources and capacity they need to handle the additional workload that the reforms may generate. Work is also progressing on the new digital end-to-end service for resolving all possession claims in the county courts in England and Wales. Ultimately, the Act should reduce demand on the county courts, because possession claims will be able to be brought only where there is a valid reason for the landlord to do so.
The noble Baroness is quite right about local authorities. We are helping councils to build their enforcement capacity and get ready for implementation. We have provided new burdens funding, and we have funded the Operation Jigsaw network of local councils to deliver bespoke training on the Act.
Lord Jamieson (Con)
My Lords, during the passage of the Renters’ Rights Act, many noble Lords across the House raised concerns about its impact on the private rental market—with landlords leaving the market, seeking to raise rents and using Section 21 before the implementation of the Act, which does little to stop rogue landlords. Does the Minister consider the reports of Labour donor Asif Aziz’s company Criterion Capital issuing large numbers of Section 21 eviction notices, if true, a rational response to the Act or the action of a rogue landlord?
Baroness Taylor of Stevenage (Lab)
As the noble Lord will know, the basis of the Renters’ Rights Act was made under the previous Government. We wanted to make sure that we tackle the issues in the housing market and have done so with a very effective piece of legislation. On mass evictions, the latest Ministry of Justice landlord possession action statistics published in February showed a 17% reduction in county court Section 21 landlord-accelerated possession claims in quarter 4 compared with the same quarter in 2024. We have given a strong message that responsible landlords have nothing to fear from the reforms; they will have access to a wide range of possession grounds where they are needed.
The Earl of Effingham (Con)
My Lords, the Government told us last year that there would be a consultation on creating a new ISA product to support first home buyers in early 2026. Can the Minister confirm the timeline of that consultation and clarify whether there will be any changes to the existing lifetime ISA, which is helping first-time buyers significantly?
Baroness Taylor of Stevenage (Lab)
I am currently working across the sector on a wide range of support to provide the framework that first-time buyers will need in order to take the practical steps to access the market and to build up confidence. That work is going very well. First-time buyers benefit from paying no stamp duty up to £300,000 and can claim relief on purchases up to £500,000. Further steps will be announced in due course.
English Devolution and Community Empowerment Bill
Baroness Taylor of Stevenage ExcerptsThursday 5th March 2026
(1 week ago)
Grand CommitteeRead Full debate English Devolution and Community Empowerment Bill 2024-26 View all English Devolution and Community Empowerment Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 150-VIII Eighth marshalled list for Grand Committee - (3 Mar 2026)
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, I thank all noble Lords and noble Baronesses for their amendments on the community right to buy and assets of community value, which I will refer to as ACVs. I know we debated this as far back as 11 February and, if it were not for the magic of Hansard, it would be a considerable memory test as to where we got to.
I hope I can reassure noble Lords of the determination of our Government to strengthen community right to buy and make it work. I will turn first to Amendment 222A tabled by the noble Lord, Lord Lucas, on the subject of funding for the purchase of ACVs. I assure the noble Lord and the noble Baroness, Lady Scott, that we are already putting record investment into communities, supporting them to take ownership of valued local assets and ensuring that they can make effective use of the new community right-to-buy powers in the Bill. The noble Baroness rightly pointed out that if you do not do that, there is little point in having a community right to buy at all. Our Pride in Place programme is providing up to £5.8 billion over 10 years to support 284 places to regenerate and improve their communities. The Pride in Place impact fund will also provide £150 million of funding for up to 95 places to support the development of community spaces, as well as revitalising local high streets and the public realm.
The Government launched the £175 million community wealth fund in September last year as part of our commitment to put power in the hands of communities and deliver on the Pride in Place strategy. The community wealth fund is funded, as the noble Baroness indicated, through dormant assets and match funding from the National Lottery Community Fund, our delivery partner. Disadvantaged communities will receive funding pots of between £1 million and £2.5 million each over a 10-year period, building community power in the places that need it most. Local people will have a say on where the funding should be spent, be that community cooking classes, after-school clubs, improvements to the look and feel of neighbourhoods, sports facilities or many other projects that have come forward for that funding. We believe that providing funding directly to the most in-need communities and putting them in the driving seat is the right approach. Communities can use their funding on the projects that are most important to them, including protecting local assets.
Baroness Scott of Bybrook (Con)
I understand all that money coming in, but it is targeted to certain communities. The community right to buy was for communities across the whole country. They had the ability to ask for support to save their pubs, or village or town amenities. I worry that those not in the schemes that the Government have now set up are going to be left behind.
Baroness Taylor of Stevenage (Lab)
The point is that many communities have managed to raise funding for schemes themselves. We are trying to target those communities that are less able to do that, and that is the point of the way in which this is funded.
Turning to Amendment 222D, I share the desire of the noble Baroness, Lady Coffey, to ensure that communities do not lose local assets that are important to them. She tabled an identical amendment to the Planning and Infrastructure Bill and, as she will be aware from the debates on that amendment, it is already the case that the demolition permitted development right excludes many types of buildings that may be designated as ACVs. This includes pubs, concert halls, theatres, live music venues and so on. Local planning authorities are able to use Article 4 directions to remove permitted development rights in their area where they consider it appropriate to do so.
However, as the Minister for Housing and Planning acknowledged during Commons consideration of Lords amendments to the then Planning and Infrastructure Bill,
“we think there are justifiable arguments for removing demolition of ACVs from permitted development rights”.—[Official Report, Commons, 13/11/25; col. 362.]
The Minister has, therefore, already committed to consult on this matter. We intend to include this proposal in the next consultation on permitted development rights, which we will publish in due course.
I turn now to Amendment 222E on the listing period for ACVs, which was also tabled by the noble Baroness, Lady Coffey. Under the provisions in the Bill, a local authority must remove an asset from its list of ACVs after a period of five years, with the Secretary of State able to amend this period through regulations. Although we want to ensure strong protections for ACVs, we do not think that it would be appropriate to remove this requirement and thereby make the listing period indefinite. Our intention is to empower communities at the same time as protecting the rights of asset owners. Indefinitely subjecting asset owners to the sale restrictions created by community right to buy would not be justifiable, given that the value of an asset to a community may diminish over time. There is also a risk that local authorities would be incentivised to make tougher judgments on requests from the community to list ACVs if listings are indefinite. This would conflict with the intention of the policy to allow communities to protect as many locally important assets as possible.
The noble Baroness pointed out that sporting assets of community value will, by contrast, be indefinitely listed. This is to provide sports grounds with longer-lasting protections, in recognising their inherent value to communities as places that foster local pride and identity and promote healthier lifestyles. It also reflects the low take-up of sports grounds under the existing regime for ACVs. Eligible sports grounds will also be listed automatically, meaning that there is not a similar risk of indefinite listing resulting in tougher listing decisions by local authorities.
The current five-year listing period for ACVs recognises that the needs of the community can change over time and that an asset may not retain the same value for a community in future. The policy must be responsive to this, but I will of course reflect on the noble Baroness’s proposal to ensure that this period is the right length.
I turn now to Amendment 222F. I agree that the scheme should not be limited to assets with a current use that furthers the economic or social well-being of the community. There are many assets that have had a community use in the past and continue to hold significant value for a community. It is right that these assets are also in scope of the policy. That is why proposed new Section 86B already allows buildings or land that furthered the economic or social well-being of communities at any time in the past to be listed as ACVs. We believe that Amendment 222F is, therefore, not necessary.
I turn now to Amendments 223, 224, 227, 229, 230, 231, 232, 233 and 234 on assets of cultural value. I agree in this case with the noble Earl, Lord Clancarty—I nearly always do—that it is important to safeguard arts and cultural spaces such as music venues, recording studios, theatres and rehearsal spaces. They ensure that artists can thrive and play an important role in the vibrancy and identity of local areas. However, a broad range of arts and cultural assets will already be in scope of the protection through community right to buy, provided that communities are able to demonstrate a social or economic value to the community. Indeed, the provisions are clear that the social interests of the community include cultural interests. Statutory guidance will make clear the types of assets that we expect to be listed by local authorities if they are nominated; I welcome the noble Earl’s feedback on its development. This guidance will also be explicit that cultural assets are in scope of the policy, with examples such as the spaces I have already mentioned.
The noble Earl will also be aware that the planning system already offers protection for cultural assets and that there is a range of other government support available for both these assets and the artists who use them. I hope he will agree that, taken together, these measures provide strong support for valued cultural spaces.
The Earl of Clancarty (CB)
Is the department still looking for feedback on this? It may not be complete yet, so I thought I should ask that question.
Baroness Taylor of Stevenage (Lab)
Indeed, I would very much welcome the noble Earl’s feedback as we start to develop the statutory guidance on that. He is very welcome to comment further on the issues around this use of cultural assets.
Amendments 223A, 224A, 225, 226 and 228 are on assets that further the environmental well-being of local communities. I reassure the noble Baronesses, Lady Bennett of Manor Castle and Lady Freeman of Steventon—I am sorry that she cannot be here today but I will send a draft of my speech to her—that the community right to buy will empower communities to protect a broad range of assets that are important to local life. That includes environmental assets. Communities will be able to nominate an extensive range of environmental assets, where they further their social or economic well-being, through the current provisions in this Bill. This could include allotments, playing fields, woodlands and farms, to name but a few. Statutory guidance will make clear that local authorities should accept nominations for such assets that meet the criteria.
However, the scheme is not intended to be used as a vehicle for general environmental protection. While excluding land allocated in local development plans will be helpful in preventing the scheme being used to block development activity, it is important that it remains focused on those assets that have an existing or historic role in community life. Environmental problems are best tackled through effective regulation, and this scheme should not act as a fallback or proxy for that.
Baroness Jones of Moulsecoomb (GP)
I feel that, once you have left the environment out of the legal safeguards on this particular aspect, you are inviting people to ignore them. I am very concerned about that. I am not just talking about sorting out problems; opportunities for local people could be completely disregarded.
Baroness Taylor of Stevenage (Lab)
As the noble Baroness will be aware, there is a whole range of safeguards in the planning system for environmental purposes. This asset of community value is there for communities to enable them to protect particular assets that they find of value in the environment. We will be developing the guidance for this and I hope the noble Baroness will take part in that guidance. She asked me earlier today if I will meet her and I am of course very happy to do that.
I turn to Amendments 232A and 232B. I agree with the noble Baroness’s sentiment that as many assets as possible should come into the scope of the policy; however, we have to recognise that there are some types of land that it will not be feasible or justifiable to designate as ACVs, as other interests may take precedence. That includes private residences and operational land used for statutory undertakings such as water, gas and electricity. It is right that the policy prevents the listing of land in these limited circumstances, which is why the Secretary of State has the power to set out land that is not of community value in regulations. We will continue to keep the list of exemptions under review to ensure that it is not unnecessarily restrictive and that communities can protect a wide range of assets.
Amendments 234ZA and 234A seek to broaden the definition of a sporting asset of community value. The current statutory definition of a sports ground in the Safety of Sports Grounds Act 1975 explicitly states that the ground must have a spectator facility, so that provides a clear objective framework to help councils assess eligibility for listing as an SACV. There is no comparable alternative legislation that provides a comprehensive or universally applicable statutory definition. Broadening this definition would place a considerable burden on local authorities to identify grounds they consider to be eligible for SACV listing and to retain up-to-date lists of them. Any ambiguity could lead local authorities to being less confident about listing these vital assets.
The current definition of an SACV, which encompasses the majority of grounds that have a spectator facility, will significantly increase the number of assets that communities can take ownership of under the new community right-to-buy scheme. Furthermore, a spectator facility is a sensible and objective indicator of community value. A ground with a built space for spectators is clearly designed for shared organised use and already serves a wider community purpose. Grassroots-level grounds that do not meet the definition under the 1975 Act will still be eligible for listing under the regular ACV scheme.
Baroness Coffey (Con)
If a council decides to designate, say, Hackney Marshes or some other area like that and it is clearly for sporting value, will it then get the same protection even if the council has not initially designated it because it did not have spectator facilities? Will it then get the same protection for life?
Baroness Taylor of Stevenage (Lab)
That is a very good question. Because those are sporting facilities, I would imagine that they come under the ACV scheme or the SACV scheme. I feel that they should be because they are all sporting assets but I will check that and respond to the noble Baroness in writing.
Lord Jamieson (Con)
My Lords, this is an issue that we remember well from debating the Planning and Infrastructure Bill, now an Act. I am pleased that the Government and my noble friend Lord Banner have been able to work together on this and have, I believe, come to an agreed position. I am also grateful that my noble friend has been able to lend his significant expertise to the drafting of Amendment 222C to help find a solution. However, as we are only in Committee, we will need a little more time to go through it thoroughly before we consider giving it our support.
In the meantime, can the Minister please update us on the wider review of existing protections, so that communities, local authorities and developers can have clarity about when and how land is protected, which she committed to during the passage of the Planning and Infrastructure Bill? Has this review been conducted? If so, what was the outcome and has it been published? If not, when will it be conducted?
We are also aware of the impact of the Supreme Court judgment in the Day case. That needs looking at in detail. Will the Government look into the case of Wimbledon specifically, given the enormous importance of Wimbledon to our national sporting life and the contentious issues at stake? Would a targeted inquiry into that case be appropriate? I would be grateful if the Minister could give her view on these points.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank everybody for their patience while we have had to adjourn the Committee several times for voting. I thank the noble Lord, Lord Banner, for his Amendment 222C and for his engagement on this matter. I thank all noble Lords who have spoken in this debate. I thank the noble Lord for his very careful consideration and constructive efforts to address the issue at hand. We need a mechanism to close this lacuna in the law, while ensuring balanced decisions can be made in the public interest. In my view, Amendment 222C does just that.
As the noble Lord, Lord Banner, set out, and as we discussed during debates on what is now the Planning and Infrastructure Act, there is currently no way of releasing such statutory trust if the statutory advertisement procedure is not followed. This means that the land is bound by the trust in perpetuity, which can risk holding up important developments that may be in the public interest—for example, the building of important new amenities and facilities for the local community. The amendment would provide a practical solution to this issue, while still ensuring that balanced decisions are made in the public interest. The noble Lord helpfully set out the safeguards enshrined in the qualifying conditions, which the Secretary of State will have to consider to make a discharge order.
The issues around community rights are, of course, very important. The noble Baroness, Lady Pinnock, raised this but the amendment would embed a robust public interest test and significant transparency safeguards. Before any statutory trust discharge order can be made, the Secretary of State must be satisfied that all six of those qualifying conditions are met, including full compliance with the new publicity requirements and a broad public interest test. I remind the Committee that the conditions are: nature conservation, landscape conservation, public rights of access, features of historic interest or archaeological remains, development proposals, and economic, environmental or social benefits, which the order would facilitate, if made. This is a transparent, evidence-based process and it would ensure that trusts can be discharged only where it is demonstrably in the public interest to do so.
The purpose of Amendment 222C is to provide clarity for those who are already impacted by this lacuna in the law. It does not address past failures to follow the advertising procedure. However, it places additional requirements on local authorities to co-operate with the Secretary of State to identify if this procedure has not been followed. Most importantly, the application process and advertising procedure in the amendment would maintain the core elements of the Local Government Act 1972 by ensuring that communities have opportunities to make representations, should they object to the release of the statutory trust held for public recreation.
The proposed amendment also provides that a statutory trust may be released only where this is in the public interest, which the advertised provision in the Local Government Act does not specify. I feel that, to some extent, the noble Baroness, Lady Pinnock, has misunderstood the narrow focus and purpose of this amendment, and the rigorous guardrails that have been placed around it. We need a method of resolving an issue. This amendment effectively allows that public consultation to be responded to in a Secretary of State process where it has been omitted originally.
Lord Jamieson (Con)
My Lords, I thank the noble Lord, Lord Foster of Bath, for his amendment. Having listened to his arguments, I believe he is right that local authorities should not only have the ability to but should take into account cumulative impact before deciding on planning applications for gambling premises.
This would not be an outright ban on premises being used for gambling, nor would it encourage local authorities to come to a particular conclusion or other. Rather, this would allow councillors to make a reference to cumulative impact assessments and adopt an evidenced-based approach on planning matters. Local authorities should be empowered to respond and make planning decisions according to their communities’ needs, and they are best placed to interpret the evidence and act proportionately. I look forward to hearing the Minister’s response.
Baroness Taylor of Stevenage (Lab)
I thank the noble Lord, Lord Foster, for his amendment, for all the work he continues to do on tackling gambling harms—it is much appreciated—and for raising this very important topic. I assure him the Government are committed to introducing cumulative impact assessments for gambling licensing. Once introduced, these will help local authorities take evidence-based decisions on premises licences, particularly in areas identified as vulnerable to gambling-related harms. They will also create a presumption against new gambling premises licences being granted in specific areas. As the noble Lord, Lord Jamieson, said, this is not about banning gambling premises; it is about assessing the harms and being able to deal with those.
Anyone who has been a councillor will know the issue, how this works and how it can cause detriment to high streets, so I absolutely support the spirit of the noble Lord’s amendment. As drafted, it would introduce cumulative impact assessments to guide planning decisions. However, the cumulative impact assessments will be most effective for local authorities when specifically applied to the licensing process and licensing applications, rather than simultaneously applying to planning and licensing. This would match the approach already taken by licensing authorities when using cumulative impact assessments in relation to the licensing of alcohol premises, which the noble Lord mentioned. The planning and licensing regimes are separate legal frameworks. This amendment risks creating inconsistencies between a local authority’s planning process and licensing process.
The amendment tabled by the noble Lord would require the planning authority to consider a cumulative impact assessment published by the licensing authority during the planning process. By granting this power to the planning authority, the amendment risks conflating the licensing and planning regimes. The noble Lord is quite correct to say that licensing is in the scope of the Bill. However, this amendment would not allow local authorities to use cumulative impact assessments in the most suitable and effective way and risks creating conflict between the planning and licensing regimes. That is our concern.
Baroness Scott of Bybrook (Con)
My Lords, I will speak briefly to my noble friend Lord Lucas’s opposition to the question. His intention is not to frustrate the purpose of the legislation but to probe an important constitutional question: how powers exercised by the national park authorities will intersect with those newly empowered devolved authorities. National parks occupy a distinctive position within our public framework. As devolution evolves, and as mayoral and combined authorities acquire broader strategic competences, clarity of responsibility becomes ever more important.
We would therefore welcome the Minister’s reassurance on two points. First, how do the Government envisage disputes of competence being resolved where priorities differ between the national park authorities and devolved bodies? Secondly, how will the statutory purposes of national parks be safeguarded within the new governance structures? This is not a question of resi1sting devolution but of ensuring that, in our enthusiasm to devolve, we do not dilute clear lines of accountability or the protection afforded to some of our most precious national landscapes.
This are sensible probing clause stand part Questions, and we are most grateful to my noble friend for raising them today. I look forward to the Minister’s response.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Lord, Lord Lucas, for opposing Clause 73 and Schedule 30 standing part in order to encourage a debate on the role of national park authorities in the production of spatial development strategies. We have discussed this issue during the passage of both this Bill and the Planning and Infrastructure Bill, and I know it is a matter of great interest to him.
As they are not strategic planning authorities, the legal duty to prepare a spatial development strategy does not apply to national park authorities. That means that they cannot be constituent members of a strategic planning board either. They remain local planning authorities with responsibility for preparing a local plan. Although national park authorities are not formally part of spatial development strategy governance, we still expect them to play an active role in preparing the strategy. This could be as a non-constituent member of a strategic authority or as a co-opted member of a strategic planning board.
Strategic planning authorities will be under a legal duty to consult any local planning authorities within or adjoining the strategic development area and affected by the strategic development strategy, including national park authorities, on their draft spatial development strategy. Planning inspectors examining a spatial development strategy will want to make sure that any views expressed by consultees have been properly taken into consideration.
During a previous Committee debate, I confirmed that the Government intend to publish guidance to support strategic planning authorities in engaging effectively with national park authorities on their strategic development strategies. I reassure the noble Lord that the Government still intend to publish guidance on this matter alongside other guidance to support the implementation of the new strategic planning system.
To respond to the noble Baroness, Lady Scott, that guidance will set out how protections are in place for the statutory purposes of national parks, how that can be conveyed as part of the strategic planning process and how park authorities can contribute to the development of strategic plans in that way, and it is the same with the competencies.
With this confirmation, I hope that the noble Lord will be able to withdraw his opposition to the clause standing part.
Baroness Scott of Bybrook (Con)
I did ask about this: if there is a disagreement between the national park authority and the mayor, who takes precedence?
Baroness Taylor of Stevenage (Lab)
When it comes to drawing up a strategic development strategy, it will be for the planning inspector—as they would, in the normal way, if there were a dispute between two of the parties engaged in that process—to work through that and determine whose view holds sway in the strategy.
Lord Lucas (Con)
Can the noble Baroness give me a little more comfort on the timescale for the emergence of this guidance? Without asking her to commit to it, roughly when does she expect it to appear?
Baroness Taylor of Stevenage (Lab)
I am sure the noble Lord will have heard me respond with frustration from the Dispatch Box many times when I cannot give specific dates. Once the Bill has reached Royal Assent, we will aim to make sure that the pieces of guidance that I have referred to throughout the passage of the Bill are dealt with as quickly as possible but, inevitably, there will be consultations to take place. I cannot give him a specific timescale for that. As soon as we have any idea about when that will be, I will let him know.
Lord Lucas (Con)
My Lords, I am grateful for that answer, as far as it went.
Lord Jamieson (Con)
My Lords, I have listened carefully to the valuable contributions of noble Lords in this debate and I thank the noble Lord, Lord Ravensdale, for bringing this amendment forward. As has been highlighted, local area energy plans could be helpful in addressing how local energy infrastructure can cope with the pressure of increased housing and commercial targets from central government in the context of a changing energy environment in their local areas.
Paragraph (d) would also require that the Secretary of State’s report includes,
“proposals for funding, technical support, training, and capacity building initiatives”
to ensure that local authorities are capable and well-equipped to introduce local area energy plans. In addition, the amendment insists on clear evaluation, criteria and success metrics for any pilots carried out.
I commend the noble Lord on his amendment, which rightly recognises that authorities must have the means to ensure that the local energy infrastructure can meet the needs of economic and housing growth and provide resilient energy. However, I would hesitate before introducing a statutory requirement for local area energy plans. If we are serious about community empowerment and trusting local representatives to determine what is right for the areas, it should be up to individual local authorities to set targets for which local area energy plans might be needed. There is also the question of the resources and powers that would be given to local authorities, without which plans would be undeliverable.
Finally, and crucially, energy systems are part of a broader national energy system, where all parts must work together in an integrated manner. This cannot be looked at in isolation, although those plans will obviously be a hugely helpful contribution. I look forward to the Minister’s response.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Lord, Lord Ravensdale, for Amendment 241 and for meeting me to discuss his proposals. The Government continue to work in partnership with local government, recognising the important role that local authorities play in reaching net zero and achieving our clean power 2030 mission.
We recognise that in support of local and national net-zero targets some local authorities have developed local area energy plans and have found them very helpful. We also welcome the work that many local authorities have already undertaken to incorporate planning for future energy needs into work such as the development of local growth plans and their contribution to the development of regional energy strategic plans.
Perhaps there has been a slight misrepresentation of the fact that there is no co-ordination to this. It is being co-ordinated. In fact, NESO published the transitional regional energy strategic plan on 30 January 2026. These plan for energy needs over the next few years at a regional level but include a lot of energy-related data at a lower super output area—that is, neighbourhood level. This will influence business planning for distribution network operators across the country. NESO recently consulted on the methodology for enduring regional energy strategic plans, which will be developed in partnership with local communities and implemented by the end of 2028.
However, the amendment, as drafted, risks duplicating or constraining current activity in this area. For example, the recently published transitional regional energy strategic plans contain a wealth of data on energy at local authority level and neighbourhood level as well as an assessment of regional energy infrastructure need consistently across all regions.
The local net-zero hubs have also worked with Energy Systems Catapult on Ready for RESP to support local and regional stakeholders to help deliver energy system planning aligned with investment plans and planning needs. This work included updating which places have already developed local area energy plans. Local net-zero hubs’ most recent report, published on 5 February, sets out some of the strengths and weaknesses of different approaches to local decarbonisation plans. I welcome that as a very helpful approach to take. In parallel, the Government are aware of work undertaken by the Local Government Association to consider options for a statutory duty that we plan to discuss at a future, ministerially chaired, local net-zero delivery group.
We are sympathetic to the points raised in this debate and in previous debates on energy planning by the noble Lord, Lord Ravensdale. We are yet to be convinced that a national statutory requirement to produce local area energy plans would support local authorities rather than reducing their flexibility to produce plans that meet their needs. We continue to discuss with the Local Government Association and others the benefits of statutory duties on net zero, and we will continue current research in this area. I hope that, with these reasons and explanations, the noble Lord, Lord Ravensdale, will feel able to withdraw his amendment.
Baroness Scott of Bybrook (Con)
My Lords, we absolutely understand the intention behind this amendment. Social media clearly brings its challenges, particularly around misinformation, public confidence and data security—all serious matters. However, we do not agree that this is an appropriate statutory duty to place on local authorities.
Councils are already under immense operational and financial pressure. Their focus must be on delivering front-line services: social care, housing, waste collection, planning and public health. Requiring every authority to draft, publish and continually review a bespoke social media strategy, complete with formal risk assessments, would impose additional administrative burdens at a time when capacity is already stretched.
Local authorities should of course act responsibly and lawfully online, as they already must, but mandating a specific statutory strategy in primary legislation is neither necessary nor proportionate. For those reasons, we cannot support the amendment.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Lord, Lord Pack, for Amendment 241A, which would require local authorities to prepare and publish a social media strategy. When he talked about the values of social media, it reminded me that my local authority has recently introduced food waste recycling. The bin arrived on my doorstep, and I did not know what the system was—I am not the leader of the council any more, strangely, so I did not know it was going to do it. I did not think to open the bin. Inside was a lovely set of bags that you put your food waste in and a little bag you put on your worktop. I managed to get all that from the website before I actually opened the bin and found all the relevant information. As we know, not all social media is as helpful as that.
Although I have no doubt that the noble Lord’s amendment is well intentioned, we believe it is unnecessary, given the existing legislative requirements that all local authorities must have regard to when using social media. All local authorities are already required by legislation to consider the Code of Recommended Practice on Local Authority Publicity in coming to any decision on publicity, which is defined as
“any communication, in whatever form, addressed to the public at large or to a section of the public”.
That definition clearly includes any communications posted on social media. Given that the proposed amendment would, in effect, replicate aspects of the publicity code, to which every local authority must already have regard, I urge the noble Lord to withdraw his amendment.
Lord Pack (LD)
I thank both noble Baronesses for their comments on my amendment. Although I do not agree fully with them all, I welcome the recognition of the importance of social media for local government and the importance of getting it right. Reflecting the views that I have heard in this debate, I beg leave to withdraw my amendment.
Baroness Scott of Bybrook (Con)
My Lords, I will focus my remarks on the amendments standing in my name and that of my noble friend Lord Jamieson, which concern the proposed local audit office. Having read the statement of intent and the consultation on local audit reform, we recognise that the Government have identified three systematic challenges. Two are particularly pertinent. First, on capacity, there is a severe shortage of auditors and too few firms in the market. Secondly, on complexity, financial reporting and audit requirements are overly complex and difficult to deliver on time. They are modelled largely on corporate auditing, rather than tailored to local public bodies. That encourages risk aversion and delay.
We do not dispute that there are real problems, but we want clarity over the proposed solutions in this Bill and in the transition plan published last November. Our opposition to Clause 74 standing part is not an attempt to frustrate reform; it is a probing step to understand the necessity and design of the proposed local audit office. What specific problem does a new statutory body solve that reform of the existing framework could not?
Regarding capacity, how does establishing a local audit office increase the number of qualified auditors in the system? Will it expand the training pipeline and make local audit more financially viable or attract firms that have previously exited the market? The Bill provides that the office will determine audit fees, while audit firms must nominate a lead partner for each audit. On what basis will the fees be set, and will local authorities and firms have any input at all? If fees remain inadequate, capacity constraints may persist.
There is also the question of delivery. If public provision is intended to sit alongside private provision, what scale of direct audit activity is envisaged for the new body? If it begins conducting audits itself, what impact would this have on competition and the long-term health of the market?
We are also told that the local audit office will reduce the audit backlog and strengthen relationships between local bodies and their auditors. Will this be achieved through simplification of reporting requirements, reform of risk and liability expectations and the adjustment of fee structures, or simply through centralised oversight? We need solutions to underline market weaknesses, not just structural governance reform.
The proposed local audit office will have regulatory functions, including maintaining a register of firms qualified to conduct local audits. Amendment 244 probes why a register is proposed while the office is also able to designate another organisation as an external registration body responsible for holding such a register. How many more bodies do we need in this landscape? At the same time, it may have operational functions. How will a clear separation between those regulating and operational roles be maintained? What safeguards will prevent conflicts of interest if both bodies regulate and potentially participate in the market?
That concern lies behind Amendment 246, which is explicitly a probing amendment. It seeks to clarify why the local audit office should be given the powers to acquire interest in audit firms or to provide assistance to them. What is the rationale for allowing the regulator to act as a market participant? Under what circumstances would it exercise those powers? Would it provide financial support to prevent market exit? What principles would guide such decisions?
Amendment 247 seeks assurance that the local audit office undertakes local authority audits itself and that its works will be subject to the same standard, scrutiny and independent oversight as private firms. Therefore, will the local audit office be subject to equivalent inspections and ethical standards when acting as an auditor? We would quite like a yes or no on that point.
Finally, Amendment 248 probes how rotations of key audit partners will work in practice and how independence will be safeguarded. If the local audit office undertakes audits directly, what arrangements will ensure appropriate rotation of the individuals acting as the key audit partner? What rotation period is envisaged? What process will govern handover and continuity? What safeguards will be put in place to prevent overfamiliarity and to protect professional scepticism? Just as importantly, where will these requirements sit? Will they be set out in the legislation, in regulation or through reference to an external ethical or professional standard? If an existing framework will apply, which one, and how will compliance be ensured in practice? The principle of rotation matters for independence but requirements that are too rigid risk worsening capacity in an already stretched system. How will the Government therefore balance independence with operational resilience?
These are not wrecking amendments. They are intended to provide clarity to the Committee. I look forward to the Minister’s response.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Lord, Lord Shipley, for his amendments and the noble Baroness, Lady Thornhill, for speaking to them, and the noble Baroness, Lady Scott.
I will start with the clause stand part notice for Clause 74 from the noble Baroness, Lady Scott, which questions why a local audit office is required at all. The local audit office is critical to overhauling the local audit system. The Kingman review, Redmond review and Public Accounts Committee all recommended a new independent oversight organisation to simplify the system and drive change. The current model of dispersed functions across different organisations has not delivered for the system, local bodies, taxpayers or government. As someone who was involved for many years with the LGA resources board and as a spokesperson for finance in Hertfordshire County Council, I felt sometimes as though I were watching this audit problem occurring like a car crash happening in slow motion—you could see it coming along.
While audit can seem like the dry and dusty aspect of local government, it is of course, as both noble Baronesses have said, absolutely vital to ensuring that members, officers and the public can have confidence in their local authority’s financial systems. That is why when we came into government I was so determined that we would fix this. The noble Baroness, Lady Thornhill, has set out some of the reasons why this is even more vital and urgent now, as we enter the new era of devolution. The local audit office will play a crucial role in ensuring that the reforms are effectively implemented to provide better value for taxpayers.
The missing data and the backlog of unaudited accounts have led to the disclaimed opinion on the whole of government accounts for the past two years, providing no assurance to Parliament and a general loss of public accountability and trust. That is just not acceptable and we cannot carry on like that. Significant steps already taken by this Government mean that the backlog has been cleared and assurance is being built back. However, without the establishment of the local audit office and our wider reforms to tackle the root causes, the situation could recur.
To reassure the noble Baroness, Lady Scott, I will come to some of her other questions as we go through, but the local audit office will support and enable our wider audit strategy, which tackles capacity and capability issues among auditors and account preparers, as well as overly complex financial reporting and audit requirements. Without the establishment of this office and the wider reforms to tackle the root causes of these problems, we could end up back where we were a couple of years ago. The local audit office will be pivotal in rebuilding that transparency, accountability and public trust in local government and will restore a crucial part of the early warning system for local authorities to which the noble Baroness, Lady Thornhill, referred.
Amendment 243 would give the local audit office an additional function to investigate risk management issues identified by audit committees within local authorities. These committees play a vital role across all local authorities. That is precisely why this Bill requires every local authority to establish an audit committee and ensure that it includes at least one independent member to provide robust scrutiny.
If audit committees identify risk management issues within a body, they should ensure that appropriate measures are in place to address them effectively, escalating serious issues to full council where necessary. The statutory guidance for audit committees that this Bill will enable is the appropriate mechanism to consider such issues. While the local audit office will have an important role in overseeing the local audit system, the statutory audit committee framework will remain with the Secretary of State, who is responsible for the overall integrity and effectiveness of local government and, crucially, is directly accountable to Parliament. For these reasons, it would not be appropriate for the local audit office to have statutory responsibility for investigating risk management issues identified by audit committees.
Amendment 244 seeks to remove the statutory requirement for a register of local auditors to be held. The local audit register is a proven and effective regulatory mechanism for audit providers that has been in place since the Local Audit and Accountability Act 2014. Currently, the register is held by the Institute of Chartered Accountants in England and Wales, overseen in this role by the Financial Reporting Council. Audit providers that join the register agree to its rules and fund its regulatory activity through their fees. In the short to medium term, we expect the local audit office to continue the current model under which a professional accountancy body is recognised to register and oversee audit firms.
New Section 6A replicates that arrangement for the new system, with two changes. First, the register-holding body will be overseen by the local audit office, not the Financial Reporting Council, meaning that the local audit office will have the final say on enforcement where serious quality or professional conduct issues occur. Secondly, there is provision for the local audit office to hold a register itself, and regulate audit providers directly, in case this becomes a more suitable mechanism at a later stage. In the unlikely event that a register-holding body became unwilling or unable to continue in its function, this provision would also enable the LAO to step in at pace to maintain regulation. This arrangement strikes a sensible balance between independent regulation of private firms and the local audit office providing oversight and taking the final enforcement decision in the rare cases where serious infringements of quality or professional conduct occur.
Amendment 245 would remove the provision enabling the body responsible for maintaining the register of authorised local audit providers to charge a fee to applicants and registrants. The register will be both a statutory requirement and a critical regulatory mechanism, supported through a range of activities that need to be properly funded. It is right that the cost of maintaining the register should be borne by those applying and registered to receive public funding for undertaking local audit work, not through the public purse. It is also unreasonable to expect an external body to assume responsibility for the registration and regulation of the local audit market without a clear mandate to charge for the range of activities required to do so. While it would be possible for the local audit office to rely on more generic fee-charging provisions elsewhere in the Bill, it is more suitable for the register to be set up and maintained by an external registration body. Registration costs covered through fees is current practice, and continuing this is the most appropriate approach, at least in the short to medium term.
Baroness Thornhill (LD)
Your Lordships will be pleased to know that I have taken a scythe to my speech, so it might come out a bit disjointed. The short version should be directed to noble Lords at the other end of the table: I understand their position because turkeys do not vote for Christmas. It depends on which lens you look at this through.
So it is no surprise that I rise to oppose the stand part notices for Clause 85 and Schedule 34. They are the mechanism by which the Bill ends upward-only rent reviews for new and renewed commercial releases. Removing them would preserve the system that has been quietly hollowing out our high streets and small businesses for years. The noble Lord talked about evidence and there is plenty of evidence to show that. The real-world effect of upward-only rents is very simple: when trade is good, rents go up, and when trade is bad, rents go up. Rents do not come down. That might look neat in a contract but, on the ground, it has meant businesses paying yesterday’s rents in today’s economy.
We have all seen what that looks like: a shop where footfall has dropped, but the rent is still set at pre-pandemic levels and is going up; a café that has survived lockdowns, energy shocks and staff shortages, only to be hit by a rent review that moves in one direction regardless of takings; or a small local business doing everything right but that is forced out because the lease allows rents to rise but never to reflect reality. I confess to my hairdresser being exactly in that position: after 40 years of work in Watford, she is no more. “The rent rise”, she said, “was the final straw”. This is real.
Clause 85 matters because it allows rents to move down as well as up, so that they can reflect what is actually happening on a street, in a town centre or in a local economy. Markets work both ways and leases should be able to do the same. If we remove Clause 85, we are not defending the market; we are defending a one-way ratchet that has already failed our high streets.
I will blot out a big paragraph here. That does not mean that we should ignore the risks. Markets will adapt and some landlords may try to push the risks elsewhere through higher initial rents or shorter leases. This is why scrutiny, monitoring and review matter, but they are arguments for refining Clause 85, if necessary, not for removing it altogether. Perhaps the Government might consider this on Report.
Likewise, a small caveat: this is a broad reform applying across all commercial sectors, not just retail and hospitality, where the effects and problems are most visible. I would be interested to know what work has been done to understand the impact of this change on commercial property investment, particularly in struggling town centres and regeneration areas. How do the Government justify the big-bang breadth of this measure? Have they considered whether a more targeted approach might have achieved the same aims over time?
If we are confident that this is the right direction—we believe it is—we also have to be confident enough to measure its effects. Therefore, we have some sympathy with Amendment 254 in the names of the noble Baroness, Lady Scott of Bybrook, and the noble Lord, Lord Jamieson, but we feel that 12 months would not be enough time to measure the true effects of this significant change.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Baroness, Lady Scott, for Amendment 234. I will start with the stand part notices for Clause 85 and Schedule 34.
Upwards-only rent reviews have been a long-standing issue for businesses throughout England and Wales. The British Independent Retailers Association and UKHospitality gave evidence in the other place about just how damaging the practice is and why they have campaigned for decades for the Government to take action. The practice of upward-only rent reviews has an invidious effect on the efficiency and accessibility of the commercial property market—not to mention the impact on our high streets and town centres that the noble Baroness, Lady Thornhill, outlined. It is designed to ensure that landlords and investors are insured against market conditions, but there is a cost to this, which falls chiefly on the business tenants left paying excessive rents when they are already stretched to breaking point, unable to invest or improve their productivity, or, in times of hardship, to keep the lights on or pay their staff wages.
Ultimately, these clauses make running a business less viable, damaging the competitiveness of the economy. Alongside reform of business rates, banning these clauses will help make commercial rents fairer and more efficient, help businesses invest and give them greater resilience to economic conditions. In recognition that these clauses can provide some security to investors, we have committed to consult on how caps and collars could be used. I reassure noble Lords that the Government intend to work carefully and closely with the property industry and others to implement this policy, help manage risk and maintain confidence in the market, without relying on one-sided mechanisms such as upwards-only rent review clauses.
I turn to Amendment 254. I understand the desire to consider the impacts of legislation once it has passed. However, 12 months is too limited a period to see the ban fully implemented and the market adjusted. The Bill’s impact assessment also finds that the ban is likely to have a net positive impact on the UK economy because it will make the commercial property market more efficient, reducing rents for tenants who can instead invest in their businesses and help keep consumer prices low. For those reasons, I hope that noble Lords will not press their amendments.
Lord Jamieson (Con)
I am grateful to both noble Baronesses for their comments. There may be a slight misunderstanding here. Our key point is that this is a very significant change to the commercial property market, and it has not been done with the industry. The Minister said that she would “work carefully and closely” to implement it. It would have been better to have worked closely and carefully with the industry in developing it. I agree with the noble Baroness, Lady Thornton. Our issue is with a blanket ban rather than looking at how we can come up with a potential system that works better for all parties. I am glad that she is more supportive of our amendment.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the noble Lords, Lord Pack, Lord Norton and Lord Wallace, for their amendments in this group.
Amendment 251, tabled by the noble Lord, Lord Norton, does not specify how the objectives of the Bill are to be identified and, as such, it is not clear from the amendment what the Government would be required to report on. The Government already produce the annual report on English devolution, which covers many of the key elements of this Bill, including the establishment of new strategic authorities, and the functions and funding devolved to strategic authorities.
I thank the noble Lord, Lord Pack, for Amendment 256, and I appreciate his desire to see primary legislation which passes through both Houses commenced following Royal Assent. I commend his desire to tidy up the statute book—I am a bit of a tidy-upper myself, so I appreciate that. However, it is my view that the Government should not prioritise parliamentary time and resource for the repeal of uncommenced provisions in existing Acts which have no impact on the effective running of local government.
Although I appreciate the noble Lord’s intention to ensure that legislation which passes through both Houses is then commenced after Royal Assent, this amendment would not be appropriate and risks unintended consequences. Most provisions in the Bill will be commenced either at the point of Royal Assent or two months after it. However, some provisions will need to be commenced by Ministers after Royal Assent using commencement regulations, and some of these provisions will require secondary legislation or guidance to be published before the provisions can come into effect.
The automatic commencement of all provisions in the Bill risks unintended consequences, especially if powers are devolved to strategic authorities and communities without the necessary guardrails in place. Therefore, it would not be sensible to set an arbitrary date at which all provisions need to have been commenced. However, I reassure the noble Lord that the Government are fully committed to delivering on all the reforms in this Bill, so I ask that he does not move his amendment.
Amendments 257, 258 and 259 were tabled by the noble Lord, Lord Wallace. Taken together, they would introduce definitions of the terms “community”, “local” and “neighbourhood” into Clause 86. The Bill already provides definitions where they are needed to interpret provisions effectively. Through regulations, we will define what a neighbourhood area is and set out the criteria for these arrangements. However, we recognise that there are differences between places and communities across England and we want to ensure that regulations include an element of local choice. For these reasons, I invite the noble Lord not to move these amendments.
Turning to the government amendments, Amendments 261 and 262 remove the subsections on the publication of councillors’ addresses and the extension of the general power of competence to English national park authorities and the Broads Authority from Clause 92(4), which would commence them upon Royal Assent, and insert them into Clause 92(6), so they will commence two months after Royal Assent, as was the original intention for these measures.
Amendments 265 and 267 are minor and technical amendments. Amendment 265 changes a reference from “regulations” to “secondary legislation” to ensure that order-making powers are also covered by the commencement provision and to be consistent with references elsewhere in the Bill. Amendment 267 changes the Long Title of the Bill to replace reference to “local councils” with “local authorities”. This reflects the Bill’s application to authorities other than just “local councils” following an amendment made in the other place to extend the general power of competence to English national park authorities and the Broads Authority. I am sure that will be a great comfort to the noble Lord, Lord Lucas, in that respect.
I will move the government amendments, and I thank all noble Lords who have participated in Committee. We have had some great discussions, and I have really appreciated the contributions that have been made.
Lord Norton of Louth (Con)
My Lords, the Minister’s response is not just disappointing but extraordinarily worrying. It suggests that the Government do not know what they are committed to. All I am seeking is to put in the Bill what the Government say they intend to do anyway. By the sound of it, the Minister is reflecting a view that does not fully understand what the Government have themselves agreed to do. It sounds as if departments are acting in silos, because the response today is very different from the response of the Minister in Tuesday’s debate on the Tobacco and Vapes Bill, which was very constructive and welcome. I was simply replicating more or less the provision that the Government accepted to that other Bill. As I say, the Minister’s response is not just disappointing but very worrying in what it conveys. It reflects very badly on the department and is therefore something I shall most certainly come back to.
Baroness Taylor of Stevenage (Lab)
I have to take issue with what the noble Lord is saying. I pointed out quite clearly that we already produce an annual report on devolution. Most of this Bill relates to the provisions that we are putting in place for the devolution agenda, so they will be covered in the annual report on devolution. It is not that the department thinks that we do not need to report on what is being done; it is that we already have a provision to report on an annual basis on the devolution agenda.
Lord Norton of Louth (Con)
My Lords, there is a difference between reporting what is happening and actually reviewing an Act in its totality and—as my noble friend mentioned when we started this Bill, and as she referred to today—identifying what it is designed to achieve, its objectives, and therefore something against which it can be measured. That is why I think it is so important, and certainly something to which we will return on Report. In the meantime, I beg leave to withdraw the amendment.
Member’s explanatory statement
This is consequential on the amendment of clause 92(6) which would provide for sections 62 and 73 and Schedule 30 to come into force two months after royal assent.
“(z1) section 62 (publication of addresses of members etc in authority registers);(z2) section 73 (and Schedule 30) (extension of general power of competence to English National Park authorities and the Broads Authority).”Member’s explanatory statement
This would provide for sections 62 and 73 and Schedule 30 to come into force two months after royal assent.
Member’s explanatory statement
This would make subsection (8) consistent with subsection (1)(c) (so that they both refer to the wider concept of “secondary legislation”).
Member’s explanatory statement
This would change the long title of the Bill to refer to “local authorities” instead of “local councils”. This would reflect the inclusion of clause 73 and Schedule 30 in the House of Commons (which relate to National Park Authorities and the Broads Authority).
Local Government Reorganisation
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Lord John of Southwark (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In so doing, I declare my interests as a peer mentor adviser for the Local Government Association and Thurrock Council.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, local government reorganisation is a once-in-a-generation reform. Our vision is clear: stronger local councils equipped to drive economic growth, improve public services and empower their communities. We are working with 204 councils across 21 areas. We have already announced two new councils for Surrey, with elections expected there this May. We anticipate decisions on a further six areas later in March, following the closure of consultation on 11 January. For the remaining areas, the Government are on track and committed to the indicative timetable published last July. Decisions on which proposals to implement, if any, will be announced before the start of the Summer Recess 2026; elections to new councils will follow in May 2027, with the go-live date will be April 2028.
Lord John of Southwark (Lab)
I thank my noble friend for her Answer. One part of the country that is not included in the current plans for local government reorganisation is London, despite it now being nearly 30 years since the current model of London governance was introduced. Given that the London model is idiosyncratic in comparison with other combined authority models, does my noble friend share my belief that a review of London’s governance is long overdue? If she does, can she tell me when the Government might undertake such a review?
Baroness Taylor of Stevenage (Lab)
Noble Lords will be aware that the Mayor of London is directly elected by the people of London every four years, alongside the London Assembly, which scrutinises the mayor’s work. This model is unique among strategic authorities and has successfully served the people of London for the last 25 years. The Government are regularly in contact with the GLA to understand how its governance and partnership working arrangements are delivering for Londoners. As London’s devolution settlement evolves, the Government hope to continue to see positive working between the GLA and its partners, including London borough councils, to deliver on shared priorities, and we hope to build on these where possible.
Lord Grayling (Con)
My Lords, in a county such as Surrey, where the new arrangements are to come into play shortly, we also seem to be getting parish councils. Why are the Government replacing a two-tier system of local government with a two-tier system of local government?
Baroness Taylor of Stevenage (Lab)
A large number of areas in the country already have town and parish councils, although I accept that some do not. But town and parish councils are not in scope for local government reorganisation; they will continue to operate as they do now. Central government has no role in funding town and parish councils, but local government reorganisation should facilitate better and sustained community engagement. We need a clear and accountable system of local area working in governance. Local authorities may wish to collaborate with their town and parish councils to determine how they can most effectively contribute to the delivery of services in future arrangements. Those arrangements for town and parish councils are well established and work well at that very micro local level. So it is not the Government’s intention to do anything with town and parish councils at the moment.
Lord Laming (CB)
My Lords, in recent years there has been a growing concern about the failure of front-line range of local services to collaborate effectively with each other to exchange vital information. Will the Minister ensure that, during this transition period in local government, every effort will be made not only to preserve collaborative working at local level but to build on it, so we can continue to learn from the failures of the past?
Baroness Taylor of Stevenage (Lab)
Collaboration is clearly a very important part of local government, but it is not helped by the confusion between the tiers of local government and over who does what at which tier. For the 20 million people who currently live in two-tier areas, where services are split across county and district councils, which can lead to fragmented public services, this reorganisation will help to drive that collaboration across areas and bring services together into one local authority, so that everybody knows which council to talk to when they have a problem with their service.
Baroness Winterton of Doncaster (Lab)
My Lords, local councils are huge employers, so will my noble friend the Minister use the opportunity of these reorganisation discussions to emphasise the part that local authorities can play in training and apprenticeships, both in-house and through their procurement practices?
Baroness Taylor of Stevenage (Lab)
My noble friend makes an important point. As we go through the reorganisation process, it is important that we continue to pay tribute to the local government staff who are driving this forward, and that we continue to keep a focus on what local government has to offer in terms of employment. One thing that really surprised me when I first became a local councillor was the huge range of employment in local government. We must strive to make sure that students and others know about that, and that we continue to protect the wide range of apprenticeships and training opportunities that local government provides.
Lord Fuller (Con)
My Lords, I was surprised that the noble Baroness did not give a more positive response to her noble friend, the noble Lord, Lord John of Southwark, because he knows that there are more councillors within the M25 than in all the county councils of England. It takes just 3,108 electors to elect a London councillor, but in other parts of the country it takes over 10,000. That is an unacceptable dilution of democracy. What plans do the Government have, when they make their announcement by the end of March, to ensure that there is broad electoral equality across all the councils in England so that, directionally, people’s electoral votes are equal?
Baroness Taylor of Stevenage (Lab)
Proposals have come from all areas, which have put their own proposals forward; they have worked on them locally. In the areas that we are considering, we have a number of different proposals, but they have focused absolutely on making sure that there is proper representation for people in the new councils. That is very much part of the consideration as we make the decisions on these new areas, and we look at that as carefully as we look at all the other evidence that has been submitted in those proposals.
Baroness Janke (LD)
My Lords, what have the Government done to engage local populations and groups in communities to ensure that local people have the chance to feed in to the plans for the new arrangements and engage more fully in voting, thereby lifting the voting figures?
Baroness Taylor of Stevenage (Lab)
I very much agree with what the noble Baroness says about encouraging people to get engaged with local elections and with their local authorities. We take local people’s views very seriously. Community engagement and neighbourhood empowerment are both part of our criteria for judging the proposals on new councils, and new councils, like current councils, must listen to their communities and deliver genuine opportunities for people to shape the neighbourhoods where they live, because people generally judge their well-being by what they see when they walk out of their front door. We are determined that communities should have their say in the future of public services, so we have gone through an extensive consultation process and we have made sure that, as we judge the proposals put forward, the authorities putting forward those proposals have done that as well.
Lord Sahota (Lab)
My Lords, in 2015, the previous Government abolished the pension for local councillors— I believe that the noble Lord, Lord Pickles, was responsible for that. Do the Government have any plan to reintroduce the pension for councillors?
Baroness Taylor of Stevenage (Lab)
I am delighted to tell my noble friend that the Government are bringing back pensions for local councillors. It is very important that they do that; local councillors provide outstanding service for their communities and many of them have to give up considerable aspects of their working life to do so. I am delighted that this Government see the value of that and have brought back pensions for councillors.
Baroness Scott of Bybrook (Con)
My Lords, the estimated outcomes of the local government reorganisation are very unclear, so could the Minister clarify how much money overall that reorganisation is going to save taxpayers? What are the geographic boundaries of the new unitary authorities? If she cannot answer today, will she please tell us when she can?
Baroness Taylor of Stevenage (Lab)
The Government’s ambition with local government reorganisation is to simplify local government, ending the two-tier system and establishing new, single-tier unitary authorities. Over and again, I have said at this Dispatch Box and in committee on the Bill that we are working on that strong local government will help to growth the economy and drive up living standards. Having one council in charge of each area, making sure that decisions can be taken quickly, will speed up housebuilding, get infrastructure projects moving, attract new investment and help us reform local public services effectively.
On the costs and benefits, each proposal has come forward with its own costs and benefits, and that information will be available when decisions are made on those proposals.
Ballot Secrecy Act: Breaches
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Lord Jackson of Peterborough
To ask His Majesty’s Government whether they plan to discuss alleged breaches of the Ballot Secrecy Act 2023 in relation to the Gorton and Denton parliamentary by-election with (1) Manchester City Council, and (2) the Greater Manchester Police.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, I understand that the allegations have been reported to Greater Manchester Police, which is considering the matter. The Electoral Commission is in close contact with Greater Manchester Police and the returning officer. If coercion at the polling stations had occurred, it would have been a breach of the law under the Ballot Secrecy Act 2023. It is essential that electors can cast their vote in secret and without the risk of coercion. Your vote should be yours alone. If anyone believes they have witnessed family voting occurring at this by-election or at any time, they should contact the police.
Lord Jackson of Peterborough (Con)
I thank the Minister. She will know that the previous Government introduced a power in the Elections Act 2022 for the Electoral Commission to draw up a strategy and policy document containing measures to tackle electoral fraud and corrupt and illegal practices, including family voting. However, Ministers have now U-turned on this by indicating that they will repeal the legislation and dump their own 2025 elections strategy. Given the substantial concerns after Gorton and Denton, why are the Government removing safeguards introduced because of the endemic fraud in Tower Hamlets, deleting guidance for local authorities on how to stop family voting and introducing secret election pilots for their own partisan advantage? Are the Government going soft on electoral fraud, or is it worse than that?
Baroness Taylor of Stevenage (Lab)
I fundamentally dispute the tenor of the noble Lord’s question. The Representation of the People Bill, which we will discuss thoroughly in this House, had its Second Reading in the Commons on Monday. The point about the Electoral Commission is that it will set its own strategy, which is a step towards, not away from, democracy. On the voter pilots, it is very important to note that Governments of all political persuasions have had voter pilots to see how we better encourage people to vote. We are seeing increasingly low turnouts, particularly in local elections, as well as in general elections and by-elections. The pilots are intended to see whether we can better tailor voting to people’s lifestyles now. We will examine the results of those very closely and make sure that all the people who vote in those pilot areas are as well protected under electoral law as people using more traditional voting methods.
Lord Wallace of Saltaire (LD)
My Lords, family voting, as it is now called, is not an entirely new phenomenon. When I first started out as a candidate, a very long time ago, it was most common in working-class communities; it is now rather more common in communities of south Asian origin. There should have been sufficient staff and police to observe whether the report by Democracy Volunteers—that there was an unusually high incidence of family voting in this by-election—was correct. Was there a problem with staffing? Are the Government ensuring that adequate staffing and policing of polling stations is being maintained?
Baroness Taylor of Stevenage (Lab)
It is an offence to accompany a voter into the polling booth with the intention of influencing how they vote. That was brought forward by the noble Lord, Lord Hayward, as part of the Ballot Secrecy Act, and it put that matter beyond doubt. Elections are run by independent returning officers, who will take account of guidance from the Electoral Commission. The commission’s polling station handbook provides guidance for polling station staff on this matter. It is for returning officers to ensure that their polling stations are staffed. In all the areas I have ever been involved with, returning officers have taken this role incredibly seriously, and they make sure that their staff are well trained and kept up to date on election law. On the police, in my own area I have always found the police very co-operative and supportive of what returning officers and their staff do. We will continue to work to make sure that polling station staff are aware of the rules and confident in challenging individuals, and we will continue to work with the commission and Crimestoppers on the annual Your Vote is Yours Alone campaign to raise awareness of these issues.
Baroness Jones of Moulsecoomb (GP)
My Lords, if there were these alleged breaches of electoral laws in the Gorton and Denton by-election, any investigation would obviously be supported by the Green Party. However, it is quite interesting that, in view of the size of the victory of the Green Party over the Reform Party, I am assured by psephologists that there is absolutely no case to be answered that the result could be changed by these alleged breaches of electoral law. Is that the Government’s advice?
Baroness Taylor of Stevenage (Lab)
We do not want to see breaches of electoral law at any time, whatever the outcome of the election. It is very important that voters going to cast their vote can have complete confidence in the system that is operating, whether it influences the outcome of the election or not. It is also very important that we all want to see, both in practice and in the policy that sits behind it, that elections are safe and secure and that people can cast their vote knowing that the elections are above board and legal.
Lord Hayward (Con)
My Lords, I thank the Minister for identifying my involvement in the passage of the Ballot Secrecy Act 2023, but may I say that it was passed with all-party support throughout this House and the other Chamber? That was very important. In relation to family voting, it should be recognised that Democracy Volunteers identified that this was a national problem at the last general election. It was identified in places such as Stirling and Strathallan, Ceredigion Preseli, and Camborne and Redruth, so it is not new and it is not concentrated solely in certain places. The Minister will be aware, as I am, that urgent discussions have been taking place with the police, the returning officers, the Electoral Commission and Democracy Volunteers. Is this not the opportunity to urge all concerned to concentrate their minds so that we get it right on 7 May?
Baroness Taylor of Stevenage (Lab)
I thank the noble Lord for the work he did on the Bill in 2023. Of course, it is completely right that it should receive cross-party support; none of us wants to see corruption or any kind of illegal activity around our democratic processes. He makes a very valid point about the local elections taking place on 7 May. I know that the Electoral Commission will want to work with Greater Manchester Police to make sure that any lessons that can be learned from that by-election can be carried forward as quickly as possible so that we get any additional steps we need in place before the elections on 7 May and for all future elections.
Baroness Falkner of Margravine (CB)
My Lords, is the Minister able to explain the status of Commonwealth citizens who are not dual nationals but merely resident in the United Kingdom for the purposes of voting? Do any residency lengths of term apply to them before they qualify and does the Electoral Commission have any idea of how many there are in the UK who may qualify?
Baroness Taylor of Stevenage (Lab)
The entitlement of resident Commonwealth citizens to vote reflects our close historic ties with Commonwealth countries, and the Government will not be removing Commonwealth citizens’ voting rights. I cannot give an answer on numbers right now but I will write to the noble Baroness.
Baroness Scott of Bybrook (Con)
My Lords, the Government have announced voting pilots, as we have heard, in a number of local authorities for the May 2026 local elections, which, apart from other things, will allow electors to vote at polling hubs up to seven days prior to actual polling day. How will the Government ensure that the security and the safety of the ballot box—which is so important to us all—will continue in these hubs? In particular, what about the chances of duplication of votes in that system?
Baroness Taylor of Stevenage (Lab)
We are looking to test several ways of making in-person voting more efficient, more convenient and better aligned with the expectations of today’s electors. Two types of flexible voting will be piloted during the local elections in May. The first is centralised voting hubs, as the noble Baroness indicated, where any elector in the authority can cast their vote on polling day. The second is to offer advance in-person voting at designated hubs in the days leading up to polling day, potentially including weekend access. That said, there is no diminution, in either of those processes, of the security arrangements around voting. They will have trained polling staff, people will have to show their ID when they vote, and we expect those pilots to be as secure as voting in the traditional way.
Surrey (Structural Changes) Order
Baroness Taylor of Stevenage Excerpts(1 week, 1 day ago)
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Baroness Taylor of Stevenage
That the draft Order laid before the House on 14 January be approved.
Considered in Grand Committee on 2 March. Relevant document: 49th Report from the Secondary Legislation Scrutiny Committee.
Surrey (Structural Changes) Order 2026
Baroness Taylor of Stevenage Excerpts(1 week, 3 days ago)
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Baroness Taylor of Stevenage
That the Grand Committee do consider the Surrey (Structural Changes) Order 2026.
Relevant document: 49th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, this order was laid before the House on 14 January 2026. If approved in the House and in the other place, it will implement a proposal submitted by Elmbridge Borough Council, Mole Valley District Council and Surrey County Council for two unitary councils, east Surrey council and west Surrey council, covering the entirety of the county of Surrey.
This proposal, alongside a three unitary option, was taken to consultation after councils in Surrey responded to the invitation to submit proposals issued on 5 February. On 28 October 2025, Minister McGovern announced the Secretary of State’s decision to implement, subject to parliamentary approval, the two unitaries proposal. In reaching this decision, we considered the proposals carefully against the criteria in the invitation letter, alongside the responses to the consultation, all representations and other relevant information. In our judgment, although both proposals met the criteria, the proposal for two unitaries better met the criteria in the case of Surrey. In particular, we believe that it performed better against the second criterion, as it is more likely to be financially sustainable.
Putting Surrey’s local authorities on a more sustainable footing is vital to safeguarding the services that its residents rely on, as well as investing in their futures. To deliver new unitary councils, the order requires May 2026 elections for the new councils, which will assume their full powers on 1 April 2027. These elections will replace the scheduled county council and some district council elections. Subsequent elections to the unitary councils will be in 2031 and every four years thereafter. Establishing these new unitary authorities will help with our vision: stronger councils in charge of all local services and controlling local economic powers to improve public services and help grow local economies.
Before I outline the content of the draft order, I would like to bring to the attention of noble Lords two related issues: the level of unsupported debt in Woking and devolution for Surrey. On Woking’s debt, the Government recognise that Woking Borough Council holds significant and exceptional unsupported debt that cannot be managed locally in its entirety. We have committed to unprecedented debt repayment support of £500 million for Woking council, reflecting historic capital practices at the council and the value-for-money case for acting to protect local and national taxpayers. This is a first tranche of support and we will continue to explore what further debt support is required at a later point, including following greater certainty on the rationalisation of assets in Woking. Any support will need to consider what further action can be taken locally to reduce debt, and value for money for the national and local taxpayer. We are also committed to providing the new unitary authority with interim financial support, for example, capitalisation support, until this process is complete.
On devolution for Surrey, on 12 February we set out our intention to deliver a new wave of foundation strategic authorities across England. In Surrey, the Government are working with partners, which will include the new unitary authorities, to establish a foundation strategic authority. This will ensure that relevant functions held at county level, such as transport and adult skills, can continue to be delivered on that geographic footprint, where possible. The establishment of a strategic authority will be subject to the relevant statutory tests and local consent. The Government will also ensure that fire and rescue functions continue to be governed on the same geography.
I turn to the content of the order. It provides that, on 1 April 2027, the county of Surrey and the districts of Elmbridge, Epsom and Ewell, Guildford, Mole Valley, Reigate and Banstead, Runnymede, Spelthorne, Surrey Heath, Tandridge, Waverley and Woking are abolished. The councils of those districts and the county will be wound up and dissolved.
In their place, their functions will be transferred to the two new unitary authorities—east Surrey council and west Surrey council. This order places a duty on the existing councils to co-operate with each other and the shadow authorities. It also places a duty on existing councils to create joint committees for east Surrey and west Surrey, which will be dissolved after the first meeting of their respective shadow authorities. I take this opportunity to thank all the Surrey councils and everyone involved for their continued hard work and collaboration on local government reorganisation in Surrey.
In conclusion, through this order we are seeking to replace the existing local government structures in Surrey with two new unitary councils that will be financially sustainable and able to deliver high-quality services to residents. I beg to move.
Lord Jamieson (Con)
My Lords, I thank the Minister for her explanation of this statutory instrument. I wish to make noble Lords aware of my interest as a councillor in Central Bedfordshire Council. I do not think it is an interest, but I am an ex-chairman of the Local Government Association.
There are a number of concerns here, which I hope the Minister will be able to address, some of which overlap with those that have been aired. First, as has just been said, the Government’s consultation demonstrated that there was a clear preference among residents—albeit a fairly small number of them: 5,000 out of 1.2 million—for a three-unitary model, not the two-authority model imposed by this order. However, on 28 October 2025, the Secretary of State confirmed that there would be a two-unitary structure. The Minister argued that two authorities will be cheaper and deliver greater efficiencies, but, if efficiency alone were the overriding criterion, would that not point logically towards a single unitary? Where local preference and ministerial preference diverge so clearly, this Committee is entitled to ask why local voices were overridden and what weight was truly given to the consultation process.
Secondly, on finance, Surrey’s councils face acute financial pressures, not least because of the high debt levels at Woking Borough Council of around £2 billion and more than £1 billion at Spelthorne. Although the Minister mentioned the £500 million of support for Woking, there has been no central debt write-off. The financial risks of reorganisation, including the risk that projected savings fail to materialise, will ultimately fall on local taxpayers. The Minister said that this would be under review, but can she provide more certainty for local residents than a tenuous statement that this will be looked at in the future?
I would like to raise the issue of SEND deficits, which are around £350 million for Surrey. The recent announcement was that SEND deficits will be covered up to 90%, yet in the negotiations as part of this reorganisation a figure of £100 million has been mentioned. Clearly, that is different. Can the Minister clarify whether there will genuinely be 90% funding for SEND deficits, or whether this is also a tenuous statement?
The Government have announced £63 million nationally to support local government reorganisation. While any support is very welcome, that figure has to be shared across all areas undertaking structural change. Can the Minister confirm how much Surrey will receive, when those funds will be released and whether the Government accept that the real implementation costs, which locally have been estimated to be substantially higher, will exceed this funding envelope, particularly given the delays and changes in direction of the process?
Thirdly, on devolution, residents were led to believe that the structural change would be accompanied by meaningful devolution and a mayoral model. The Government have referred to a foundation strategic authority for Surrey, but assurances about its powers, funding and timing remain ambiguous. What is the Government’s firm commitment to establishing that body, when will it be created, what additional funding will accompany it and when will that funding be received? Structural upheaval without genuine devolution would be a poor bargain for the residents of Surrey. Reorganisation on this scale must command confidence. It must be locally supported, financially credible and embedded with a clear devolution settlement. At present, serious questions remain on all three counts.
We seek clarity about transitional governance. Commissioners were appointed to oversee financial sustainability and governance improvements at Woking and Spelthorne Borough Councils. We are now beyond the indicated review period for these appointments. Have they been extended and, if so, until when? Will they continue into the shadow authority period following the upcoming May elections? Where will they be placed in the subsequent authorities? The Committee deserves clarity about who will hold responsibility and accountability during the transition.
More broadly, I reflect on the process. In Surrey, the pathway to reorganisation has been clear for more than a year, with the timetable for elections to the new unitaries and implementation on 1 April 2027 set out. Why has the same clarity not applied to the mayoral timetable? Why have the Government not adhered to a clear and published schedule for the establishment of a mayor of Surrey?
This raises a wider question. Other devolution deals and local government reorganisations have appeared to be far less orderly, with altered timetables and delayed and then not delayed elections but without the equivalent certainty about the final structure. Those of us who have been through previous rounds of local government reorganisation know that while elections were sometimes postponed for a year, that was done on the basis of clarity about the end state. Why could the Government not achieve the same coherence elsewhere?
Finally, I return to the question that the Minister studiously avoided answering in the Chamber last week. While the Government initially decided to postpone the council elections scheduled for May 2026, relying on statutory powers and legal advice, that decision was subsequently reversed on 16 February 2026, following further legal advice. I am not seeking disclosure of that advice; I simply ask what changed. What change of circumstances or what change of information provided meant that the legal advice changed? Legal advice is revised when there is a change of circumstance or in the information provided, so what changed? The Committee is entitled to understand the reasoning behind such significant changes in democratic decisions. I look forward to the Minister’s reply.
Baroness Taylor of Stevenage (Lab)
I thank the noble Baroness, Lady Pinnock, and the noble Lord, Lord Jamieson, for their considered contributions today. I recognise that they have a great deal of experience in this area, so they were very thoughtful contributions indeed. I will try to pick up all the points that have been made. If I miss any, I am sure noble Lords will let me know, but I will try to pick them up from Hansard.
The noble Baroness, Lady Pinnock, talked more broadly about the benefits of reorganisation and pointed to the savings that might accrue. Although financial savings are important, this restructuring is also about delivering the kinds of profiles for councils that are able to drive forward the growth and improvement in public services that we all want to see, and having a system that is not as confusing for residents as the two-tier system has been in the past. In their proposal, Surrey County Council, Elmbridge Borough Council and Mole Valley District Council estimated ongoing net annual benefits after five years of up to £46 million, with a midpoint of around £23 million and total implementation costs of £85 million. So there are financial savings to accrue from this, after the initial cost of doing the reorganisation.
We hope that there will be savings, but it is important that we focus on sustainability. With the way it was going, we were not looking at a sustainable future for local government. We have partly addressed that through the fair funding formula—I will talk more about that in a moment—and in this reorganisation and devolution process. Reorganisation creates the conditions for stronger local democracy, fewer politicians, and a clear picture with no conflicting mandates and agendas.
I appreciate what the noble Baroness said about the local voice, and I will come on to the wards and things in a moment, but clear local leadership allows councils to take the decisions needed to drive growth, deliver better public services and allow communities to be represented, while clear accountability makes sure that communities can properly hold leaders to account. Strong leadership and clear accountability are harder to achieve, where, for the same place, there are two council leaders, each with a legitimate democratic mandate and sometimes having different and conflicting agendas. Bringing services such as housing, public health and social care under one roof means that one council can see the full picture and spot problems early. That is important. Making sure we have preventive, holistic services, which are far more effective in picking up problems early, instead of them being split between two local authorities, is important.
Residents can access the services that they need with one council in charge. To give noble Lords an example, in 2018, Leicestershire County Council reported that more than 140,000 people called the wrong local council when they were trying to get help. I understand that it is not always the same as that everywhere, but it is an important principle to keep to.
Baroness Taylor of Stevenage (Lab)
To continue from where we were before the vote, both noble Lords have understandably asked about the Surrey consultation outcome, and I understand why they would ask that question. As the noble Baroness mentioned, we received 5,617 responses: 26 from named consultees and the rest from residents and local organisations, including businesses and town and parish councils. That consultation ran from 17 July to 5 August.
As the noble Baroness has pointed out, the responses demonstrated a preference for the three unitary proposal. However, as the proposals were assessed against the criteria set out in the statutory guidance, and having regard to all representations received throughout the consultation and to all the other relevant information we have been looking at as a way of determining these proposals, in our judgment, although both proposals met the criteria, the proposal for two unitaries better meets the criteria in the case of Surrey. In particular, we believe that it performs better against the second criteria, as it is more likely to be financially sustainable. The criteria are particularly relevant in the unique context of Surrey, where reorganisation is a critical intervention to improve the financial viability of the area’s councils. That is because of the unprecedented levels of unsupported debt in two of the area’s councils.
The important thing about all this is that the new councils are able to drive the growth needed, providing high-quality public services on a geography that works locally. But to meet the second criteria, around the financial viability, it was really important that we consider the consultation responses alongside that. That has been an important part of our consideration.
Baroness Pinnock (LD)
I am sorry to interrupt, but this is an important issue. I accept what the Minister is saying about the importance of councils being financially stable but, if I were a resident of Surrey, I would think that I was being punished by the fact that I was having to absorb Woking Borough Council and being saddled with its £2 billion-worth—is that right?—of unsupported debt, and forced to pay that price when the council of which I was a member, in another part of Surrey, was financially stable. That does not seem fair. Residents are picking up the tab for speculative investment that never had any future in providing the council with anything other than a huge debt, which is what has happened. Is that fair?
Baroness Taylor of Stevenage (Lab)
I certainly do not want to be seen to be condoning or commenting on that speculative debt, but we are where we find ourselves, and the important thing is that residents of Surrey must have sustainable councils going forward. It will not help them if the new structure that we create is equally as unsustainable as that with which they have dealt in the past. The important thing is to make sure that we can deliver effective public services and deal with the levels of debt that we are having to deal with now. I will go into a bit more detail in a moment, if I may, about the support we are providing around Woking, but I think that all those who responded to the consultation would want to make sure that they have a sustainable structure that can take them well into the future. After a lot of reflection and a great deal of work on the proposals, we felt that this two-authorities model would work better from that point of view.
Lord Jamieson (Con)
I appreciate the Minister’s response. I have a question for clarity, as it potentially impacts some of the comments that she might make subsequently. If I heard her correctly, this whole reorganisation is being driven by the need to have sustainable councils to cover the debts of Woking and Spelthorne—
Lord Jamieson (Con)
That is fine—that is why I am seeking clarification. If we put that to one side, the Minister’s implication was that the Government might not have gone with this structure. I want to be clear that the residents of the other nine borough councils are not being impacted or hamstrung by the need to address the issues with the other two. That would be a very unfortunate scenario. I am just asking for clarity.
Baroness Taylor of Stevenage (Lab)
I understand why the noble Lord asked that question. I apologise— I hope that I did not mislead in what I said. The criteria that we set out for this process are very clear. We looked at the criteria right across the board, and they are there to make sure that this new structure is less confusing for people, that all the services are in one council and that the structure can drive the economic growth needed and provide high-quality public services. However, as we look at those important wider criteria, it is very important that we take account of the unique circumstances of Surrey—you cannot ignore them. It is in that sense that we took the decision to have two councils.
The noble Baroness, Lady Pinnock, raised the issue of the size of these new councils. East Surrey will have a population of 556,000, and West Surrey 672,000. Councils of this size are not without precedent. Many of the councils formed in the past 20 years had populations of more than 500,000 when they were established, including North Yorkshire, Somerset, Buckinghamshire and Cornwall. However, it is very important that I stress the point that 500,000 is a guideline. I do not think any inference should be drawn across the wider programme of local government reorganisation from these decisions taken for Surrey. Each application will be considered on its own merits. We have said all the way through this that 500,000 is a guideline, not a template. I hope that is helpful.
The noble Baroness, Lady Pinnock, asked me about the number of councillors and wards. For east Surrey there will be 72 councillors, which is two per ward on 36 strategic council divisions, and for west Surrey it will be 90 councillors, which is two per ward on 45 divisions. I hope that is helpful in terms of the straightforward sizes.
Lord Jamieson (Con)
If the Minister has almost finished, I shall just intervene on a couple of points for clarity. On the unsupported debt that we have talked about, the Minister talked about a 7.5% increase in core funding over three years. I assume that that is based on 5% increases in council tax over three years. Residents of Surrey will see council tax rising twice as fast as core funding and, if inflation stays at its current level, see core funding in real terms being less than inflation. I would call that a cut rather than an increase in funding.
I appreciate the Minister’s comments on SEND funding. In the discussions that are going on as part of the reorganisation, the offer was substantially less than 90%. I think that Surrey would be delighted if the Minister could confirm that it would be 90% of the figure. I appreciate that she may not be able to answer that here and now.
On the point of legal advice, you go and seek legal advice a second time when something has changed, when you have received new information or circumstances have changed. I am not looking for the legal advice itself; I am asking what prompted going to get legal advice a second time. What was the change in circumstance or information that prompted the need to get legal advice a second time? Good legal advice should not change if circumstances and information are the same. I would appreciate some clarity on that but, again, I recognise that the Minister may not be able to answer that here and now.
Baroness Taylor of Stevenage (Lab)
I will take the last point first. My understanding is that the usual practice is for legal advice to be reviewed over the course of a legal case going on. That is standard practice and is what happened in this case. I cannot add anything further to that at the moment, but I shall take the noble Lord’s comments back and, if we have anything further to say on it, I shall write to him.
On core funding, I simply add that this was the best settlement that local government has had for a long time. The council tax capping to which the noble Lord referred is something that his own Government introduced and kept in place. We have not changed that, so local authorities will be able to continue with the 5% increase. The funding settlement is far more generous than many that I had when I was the local government leader trying to do battle with a system that was gradually reducing my funding every single year. Many councils have had an increase this year and many have had a substantial increase this year. When I look online at the budget speeches of colleagues around the country—which I do, because I am a bit of a sad geek in that respect—it is absolutely amazing to see councils talking about what they are able to do now because of the increases in funding that they have received. I am very proud of that, and I am certainly not going to apologise for it.
This Government’s ambition is to end the two-tier system and establish single-tier unitary councils. It is a once-in-a-generation reform. Our vision is clear: for stronger local councils equipped to drive economic growth, improve public services and empower communities. This order provides for two new unitary councils in Surrey to help to ensure that local government is financially sustainable and able to deliver high-quality services to residents. We will continue to work with the leaders in Surrey to develop their proposal for a foundation authority but, for now, I hope that the Committee will welcome this order.
Lord Jamieson (Con)
I apologise: I should have asked this earlier. It is just a point of clarity; I am not making a political barb here. We asked about the role of the commissioners. I appreciate that the Minister may not be able to give us an answer now, but it would be very helpful, certainly for the people in Surrey and the councils involved, if we could have clarity on the role of the commissioners, when they will be extended and how their roles will fit into the shadow authorities. I appreciate that the Minister may not be able to answer now, but that would be helpful to have.
Baroness Taylor of Stevenage (Lab)
I am sorry, I thought I had covered that when I spoke about the detail of the support being provided to Woking. The commissioners are still working there, and we will continue to work with Woking and the other authorities involved in west Surrey, as is necessary.
New Housing: Flood Risk
Baroness Taylor of Stevenage Excerpts(2 weeks ago)
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Lord Blencathra
To ask His Majesty’s Government what steps they are taking to mitigate the risks arising from new housing being built in areas of medium or high flood risk.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, the National Planning Policy Framework is clear that inappropriate development in flood risk areas should be avoided by directing development away from areas at highest risk. If necessary in such areas, development should be made safe for its lifetime without increasing flood risk elsewhere. The framework also requires any development which could have drainage impacts to incorporate sustainable drainage systems. We are consulting on a clearer, more rules-based framework, including a dedicated chapter on flood risk.
Lord Blencathra (Con)
My Lords, I am grateful to the Minister for that reply. The framework may suggest that, but reliable figures from the insurer Aviva reveal a trend of more and more new homes being built in medium and high flood risk areas, up from 8% 10 years ago to 11% last year, and potentially rising to 15% of new homes by 2050. In addition, of course, the Flood Re insurance scheme does not apply to houses built after 2009 and is due to end in 2039. Will the Government publish their own figures on this worrying trend, and what will they do to ensure progress towards reducing housing construction in flood risk areas?
Baroness Taylor of Stevenage (Lab)
I am pleased to tell the noble Lord that 96% of all planning decisions and 99% of all new homes proposed in planning applications comply with Environment Agency advice, so we are making progress with this. I accept his point that it is very important, as we continue to work towards our target of 1.5 million new homes in this country—desperately needed because of the housing crisis—that we continue to push forward with the National Planning Policy Framework guidelines that homes should not be built in flood risk areas. The sequential test still applies to new-build homes and the planning applications for them, as does securing high-quality sustainable drainage systems to support flood risk management. It is impossible to push forward with this without sometimes using areas that might be at risk of flooding. The important thing is that the mitigation is put in place properly when that happens.
The Earl of Devon (CB)
My Lords, given that flood risk and housing demand are only going to increase, what steps are His Majesty’s Government taking to allow flooding and housing to coexist? Are they considering the urban planning model of sponge cities, using nature-based solutions such as permeable pavements, planted roofs and urban wetlands to absorb, store, purify and reuse rainwater to mitigate both flooding and drought?
Baroness Taylor of Stevenage (Lab)
I had heard about that very interesting concept. We need to make sure that all steps to mitigate flood risk are taken, even in areas that are not subject to traditional flood risk. The increase of surface floodwater is an issue and we need to make sure that, where possible, permeable surfaces are laid down. It is very helpful that both the building guidelines and the National Planning Policy Framework direct as much attention as possible to make sure that applications mitigate the flood risk when they come forward and that buildings are built with that mitigation built in.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, the Government’s White Paper A New Vision for Water gives a case study on page 40 of how a housing development was stalled on a habitat site with protected species. The Government’s water delivery taskforce was able to unblock it, resulting in 4,000 houses being built. Unblocking challenges could result in additional flooding, endanger protected species and ultimately result in new home owners being refused access to Flood Re, which has only 15 years left to run. How will the Minister ensure that this does not happen?
Baroness Taylor of Stevenage (Lab)
I do not accept the premise of the noble Baroness’s question that we cannot protect the biodiversity arrangements at the same time as dealing with flood risk. Defra established the water delivery taskforce to make sure that water companies delivered on their planned investments to provide water and wastewater capacity. The Government have worked hard to secure £104 billion of private sector investment into this and, in partnership with water companies, investors and communities, we will introduce a new water reform Bill to modernise the whole system. That will make it fit for decades, leading to clean rivers, stronger regulations and greater investment. We are focusing on both the provision of good water supplies as we build the homes that we need and protecting biodiversity. These things go hand in hand; they are not mutually exclusive.
Baroness Jones of Moulsecoomb (GP)
My Lords, I do not want to get into the water reform Bill too much—it is a terrible Bill and the Government ought to withdraw it—but on this issue of flood risk, the fact is that houses are still being built on places that risk flooding. Some of the solutions are much wider than just putting a few ditches around the housing project. We must think very big when considering floods, because we have to look uphill and downhill. At the moment, I feel that some of the measures are very limited in scope. Do the Government agree?
Baroness Taylor of Stevenage (Lab)
I do not agree with the noble Baroness. Some amazing work has been done by the development industry to tackle and mitigate the risk of flooding. I have been to visit sites with very attractive-looking sustainable drainage systems; they not only deal with the issue of surface water and floodwater but provide fantastic environmental features for those estates. That encourages people to get involved and—to speak to the previous questioner’s point—encourages biodiversity, as well as tackling the flooding issues. Developers are doing that. We need to make sure that we share the work of those providing the best practice in this area and that everybody is working to enhance that best practice.
The Earl of Kinnoull (CB)
My Lords, does the Minister agree that the time is right for a review of the Flood Re programme? As we heard from the noble Lord, Lord Blencathra, it does not apply to buildings which were built after 1 January 2009; it also does not apply to blocks of flats that have more than three dwelling units within them or to buildings that have any elements of small or micro-commercial businesses within them. These are all things for which it would be very helpful to have the availability of the Flood Re insurance, which is a very good programme. Is it time now for this to be looked at very hard?
Baroness Taylor of Stevenage (Lab)
We know that Flood Re has provided cover for 346,000 household policies and 650,000 properties have benefited since the scheme’s launch, so I agree with the noble Earl that it has been a very valuable scheme. We know that all homes built since 2009 are excluded from Flood Re, as that would be inconsistent with current policy. With the planning policy, we are trying to make it clear that inappropriate development in flood plains should be avoided and, where development is necessary in a flood risk area, it should be made flood resistant, resilient and safe for the lifetime of the development.
Build Back Better is the UK home insurance sector initiative, which I am sure the noble Earl is aware of, and is designed to help home owners recover from flooding in a smarter way. It enables eligible policyholders to access £10,000 to install flood measures during repairs over and above the usual cost. We are looking at supporting those who have been at risk of flooding and, through the National Planning Policy Framework, making sure that we absolutely reduce that risk to a minimum.
Lord Jamieson (Con)
My Lords, flood risk management is a complex issue that requires co-operation and collaboration between developers, local authorities, insurers and home owners. What steps are the Government taking to ensure that institutional knowledge and specialist risk management expertise is not lost during local government reorganisation?
Baroness Taylor of Stevenage (Lab)
I am sure that my colleagues in local government, who address these issues every day through the planning system, as the noble Lord will be well aware, are more than alert to this issue. When the new authorities are set up, they will have more resilience in their planning functions because there will be fewer of them and they will be able to focus on planning issues using the capacity funding that the Government have put into planning. As importantly, there will be a strategic level enabling planning across a combined authority area, which will make sure that issues of flood risk are taken into account right from the strategic level to the local plan. We are developing our new National Planning Policy Framework and making sure that it supports local authorities to do just that.
Baroness McIntosh of Pickering (Con)
My Lords, the noble Baroness referred to the sequential test. She will be aware that that was overturned recently in the case of Gladman in the High Court. Will her department respond to that case and ensure that the sequential test is met in every case?
Baroness Taylor of Stevenage (Lab)
That High Court judgment has been raised in recent debates on the English devolution Bill. I cannot comment on specific cases, but the case does not disapply the strong protections in the National Planning Policy Framework relating to development in areas of potential flood risk. The sequential test is a procedural step to assess relative degrees of risk and is used to steer development to areas of lower risk where possible. However, where development is necessary in such areas, the framework is clear that it should proceed only if made safe for its lifetime, without increasing flood risk elsewhere, which is the other danger. I reassure the noble Baroness that the sequential test remains firmly in place as part of the planning process.
Local Government Reorganisation
Baroness Taylor of Stevenage Excerpts(2 weeks, 1 day ago)
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The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
I thank the noble Baroness and the noble Lord for their questions and comments on the Statement. Your Lordships have now heard in full the Statement made by my right honourable friend the Secretary of State in the other place, and the House has raised a number of thoughtful and serious points about process, legality and democratic principle, which I appreciate.
I wish now to draw together the key arguments and restate clearly why the Government acted as we did, in answer to the questions that I have been asked, and why we have now changed course. First, as noble Lords will know, this sits in a much wider programme of reform. The Government are determined to fix local government through a fairer funding settlement based on need, through devolving power out of Whitehall and into the hands of local leaders and through reorganisation designed to deliver stronger, more sustainable unitary authorities and better services for residents.
It was in that context that the original decision was taken, and the Government were guided by two clear principles. First, the postponement of elections should occur only in exceptional circumstances. I repeated a number of times in this House that it would be only in exceptional circumstances and only where there is compelling evidence-based justification. Secondly, as a Government committed to devolution, we should be guided by local leaders themselves. Following extensive engagement with councils in the areas concerned, a number from across the political spectrum expressed serious anxiety about their capacity to run elections while simultaneously undertaking structural change. They warned of duplication, uncertainty, additional cost and the risk of impeding the reorganisation process at a critical phase.
On the basis of those representations and on the legal advice then available, the Secretary of State concluded that statutory tests were met in 30 cases. An order was therefore brought forward using powers provided by Parliament that had been exercised by previous Governments in comparable reorganisation contexts. However, as is entirely proper, the legal position was kept under review and further legal advice was subsequently received. At that point, the responsible course was clear and the proposal was withdrawn.
After reconsideration, the conclusion was that elections in the affected areas should proceed as scheduled in May 2026. A further instrument has been laid to give effect to that decision. I recognise, as the noble Lords have said, and as our friends in the other place said, that this has been a significant change for councils, and it will of course mean some additional pressures for them in making sure they are ready for elections. That is precisely why the Government acted swiftly once the new advice was received so that clarity could be provided as early as possible. We are working very closely with returning officers, suppliers, the Electoral Commission and sector bodies to ensure that elections are delivered safely and effectively.
Local authorities have a strong track record of administering polls within compressed timeframes—as I know only too well from my experience—including snap general elections and by-elections, and we are confident in their ability to do so again. At the same time, our focus remains firmly on supporting reorganisation itself. Last week the Secretary of State announced up to £63 million in additional capacity funding—to answer the comment from the noble Baroness, Lady Scott—building on the £7.6 million previously provided to develop proposals. That is substantial support, and no previous Government have provided dedicated capacity funding for reorganisation on this scale. This funding is there to help councils manage both the transition and service delivery sustainably. We will continue working hand in hand with councils across the 21 reorganisation areas to progress toward unitarisation. As has been made clear, subject to Parliament, for Surrey there will be elections to the new unitary councils as planned this year.
Noble Lords also raised the question of ministerial powers over the timing of local elections, and both the noble Baroness, Lady Scott, and the noble Lord, Lord Pack, asked me a specific question about the English Devolution and Community Empowerment Bill. As the Secretary of State set out in his Statement, our Bill provides an opportunity to look again at the statutory framework, and the Government are reflecting seriously on the amendments tabled and the concerns expressed by noble Lords. To respond to the noble Lord, Lord Pack, we will do that as quickly as possible. Reforming local government is not optional. Councils are the front line of the state; they shape whether communities feel they are thriving or falling behind. The public are entitled to expect better local services, and rightly so.
When we received the legal advice, the Government acted swiftly. I do not pretend that this has been easy for the councils concerned—I spoke to many of them—and nor do I dismiss the disappointment that has been expressed, but responsible government requires that when the legal position changes, we respond accordingly. Elections will go ahead in May 2026. Reorganisation will continue, and we will proceed in a way that upholds both democratic accountability and the long-term sustainability of local government. I hope I have picked up the noble Lord’s questions as I have gone through.
On the election pilots, as far as I know, only one council has pulled out of the pilot, but for a reason that has nothing to do with reorganisation and is a specific local issue. If that is not correct, I will respond to the noble Baroness in writing.
On the question asked by the noble Lord, Lord Pack, about last May’s election, there are legal powers to cancel elections. Each situation is taken on its merit. I do not have any detail, and I could not give legal detail because this year’s is privileged information, so I do not know what the difference is.
On prejudging the outcome in a Times article, I say to the noble Lord, Lord Pack, that the Secretary of State, other Ministers and I received many representations from councils about the possibility of cancelling elections, so it may be that the Secretary of State was reflecting on that rather than prejudging the extensive consultation that we carried out.
Lord Pickles (Con)
My Lords, the Minister referred to the powers. They come out of Section 87 of the Local Government Act 2000. In its present form, those powers have existed for more than 25 years. Custom and practice and advice have been consistent throughout, so what was this new legal advice to suggest that this blanket postponement, and particularly the double postponement, would have been possible? Why did the Secretary of State not pay some attention to the Electoral Commission and question this advice? It has taken a junior Minister only a little bit of time to look at the advice and come to the conclusion that most people in that office would have come to, which is that this was not right. Am I being unfair to the Government in agreeing with Jonathan Carr-West, the chief executive of the Local Government Information Unit, when he said that the Government are
“reckless … to play fast and loose with the foundations of democracy”?
Baroness Taylor of Stevenage (Lab)
I have the greatest respect for Jonathan Carr-West and have worked with him on many occasions, but he has not seen the legal advice. It is a long-standing principle, as the right honourable Gentleman James Cleverly said at the other end—I could quote him if I had the quote in front of me—that the Government do not comment on or publish legal advice.
Lord John of Southwark (Lab)
My Lords, one of the concerns expressed to me by colleagues in local government has been about the cost of preparing submissions and scoping work for local government reorganisation. My noble friend talked about the £63 million of additional funding that will go to local government to support it going forward. Can she give reassurance to those in local government that the £63 million will meet the costs that they are going to incur? As I say, some of the concerns expressed to me have been that previous government tranches of money have not met all the costs incurred.
Baroness Taylor of Stevenage (Lab)
I can reassure my noble friend that an unprecedented amount of funding has been provided to support the capacity that local councils will need to help them as they go through this transition process. It is important that we have also been working closely with those councils. I have done much of the engagement myself, and Minister McGovern has done an awful lot of engagement with councils as well. Our officials in the department have been hugely supportive to local government as they have gone through this process, so it is right that we provide some funding to support that as well. The £63 million is to undertake that reorganisation to support the implementation, and it will include those councils that have been impacted by the changes that were made on Monday.
Lord Fuller (Con)
My Lords, I do not want to add to the embarrassment that the Government must be feeling about the U-turn on the election cancellations, but I am grateful that the Secretary of State is going to look at some of the amendments, including those in my name, that would extend the cancellation to PCCs and mayors. Now is the time to look at what the cost of LGR may be, not only to the individual but in terms of council tax. Those who said LGR would save money now say it will not. We know that there will be about a billion pounds-worth of pension strain costs from those retiring on efficiency grounds. We know, from arithmetic, that nobody will pay less council tax as a result of this, but 50% will pay more, and there will be more layers of local governance, each able to raise council tax without limit. What assessment have the Government made of the cumulative impact of all this? When will the Minister honestly explain to the electorate that LGR is going to cost them more? They have been kept in the dark, but at least they will have an opportunity to express their views at the ballot box in May.
Baroness Taylor of Stevenage (Lab)
It is a shame that the noble Lord has not had a chance to look at the proposals as I have. They set out very clearly the anticipated savings. More importantly, they provide a much more cohesive form of local government for those who will be on the receiving end of these services. Taking out layers of chief executive and finance director salaries all helps to push money back to the front line, where it is needed to deal with much-needed services such as filling in potholes, looking after vulnerable adults and children, and making sure that our environment is taken care of. All the things that local councils do so well will be done more effectively and the public will understand where to go to, instead of having two councils responsible for their area.
Lord Forbes of Newcastle (Lab)
My Lords, I declare an interest as a non-executive director of MHCLG. Can my noble friend the Minister remind the House of the original purpose of local government reorganisation? It is surely not just for the sake of it but for a wider purpose. Does she think it is a coincidence that, with the exception of Cambridgeshire and Peterborough, all other areas of England that have pioneered regional devolution arrangements have been in areas with only one tier of local government? Does she agree that two-tier areas can struggle to align strategic combined authority-wide ambitions with fragmented delivery arrangements, and often lack the bandwidth and staffing capabilities to deliver ambitious combined authority-wide programmes at pace and at scale? Furthermore, does she share my concern that a failure to address the inefficiencies of the two-tier system in this context creates unnecessary complexity and delays in delivering this Government’s ambitious devolution agenda?
Baroness Taylor of Stevenage (Lab)
I agree with my noble friend—of course I do—that driving forward the strategic ambitions of our country and our Government, to ensure not only that we see the economy grow in the way we all want and get the housebuilding that we need to deal with the housing crisis but that the key public services that are so needed by vulnerable adults and children are taken forward efficiently and effectively, required us not just to tinker at the edges but to do the most radical reorganisation of local government for at least half a century, which is what we are doing. This has been kicked into the long grass nearly all the time that I have been in local government. I think there have been some four attempts to do this and they always stopped short of doing what is needed, which is to create local government that will drive the economy of our local areas and support the public services that people deserve.
Lord Bellingham (Con)
My Lords, Conservative county councillors in Norfolk have no fear of democracy, and in fact are very much looking forward to these elections in 74 days’ time. It is worth pointing out that the elections will be conducted by the district and borough councils. Certainly, the Borough Council of King’s Lynn and West Norfolk is incredibly professional and competent at handling those elections; it will take this in its stride and deliver a professional service.
The Minister did not reply to the point put forward by my noble friend a moment ago. This legal case cost a lot of money. She said herself that front-line services are under a lot of pressure. It was egregious that this case ever took place. Can she tell the House what those legal costs were?
Baroness Taylor of Stevenage (Lab)
I thank the noble Lord for recognising the way in which local government responds to things such as this—and I know that colleagues in electoral services and on the political side of local government will do what they need to do and be ready for these elections. As I said, they are more than used to responding to very short-notice elections, including snap general elections; they work very well in those circumstances. In my experience, councils’ electoral services departments are extraordinarily efficient and effective, so I welcome his comments in that regard.
The costs are now being assessed, although I cannot give the noble Lord a figure at the moment. I am afraid that that will have to wait.
Baroness Shah (Lab)
I declare an interest as the head of the Labour office at the Local Government Association. As my noble friend will know, councils of all colours have worked together with communities to put forward proposals, knowing the opportunities and benefits that local government reorganisation will bring. Whatever the outcome of the elections in May, can my noble friend the Minister provide reassurance to those councils and communities on the timeline of the local government reorganisation?
Baroness Taylor of Stevenage (Lab)
There is no dimming of the Government’s ambition around devolution and local government reorganisation. We are pushing on with the agenda. I thank my noble friend for recognising how well councils have worked together. I have been in meetings with many groups of councils, and they have said to me that this has got people talking together. They may have had a falling out 20 years ago and they could not even remember what it was about, but having to sit around the table and work on these proposals has been a really positive experience right across local government. I welcome that and think that it bodes well for the future. Certainly, the Government’s intention is to carry on with both the local government reorganisation and the devolution process.
Baroness O’Neill of Bexley (Con)
My Lords, the Minister said that she recognised the value of the electoral returning officers. I absolutely agree with that, but the fact is that they are always looking at the next set of elections, so the fact that they stood down some elections would have caused a difficulty. The Minister said that the Government got legal advice before they proceeded to cancel the elections. If they did, what changed in that legal advice to make the change to reinstate them?
Baroness Taylor of Stevenage (Lab)
It is usual practice continually to review legal advice. The legal advice came forward and, as I have said before, there is a long-standing convention not to reveal the content of or publish legal advice, so I cannot enlighten the noble Baroness any further on that. When the legal advice was received, the Government took a very prompt decision to withdraw the cancellation of the elections, because we knew how important it was for local authorities to deal with this promptly.
Lord Davies of Brixton (Lab)
Would my noble friend agree that, although the proposal to cancel the elections has been dropped, the Opposition have no basis to complain about such proposals because they have done this themselves? I bear personal witness to this, as I was a member of the Greater London Council—I am always grateful for the opportunity to remind people of that. I was due to stand for re-election, and the elections were cancelled by the noble Lord, Lord Baker of Dorking. So both parties do this, and on both occasions it was probably a reasonable thing to do, but to make the criticism is really a bit thick.
Baroness Taylor of Stevenage (Lab)
My noble friend is quite right. There is precedent for cancelling elections. We have seen it done because of reorganisation and for other reasons. However, we have the opportunity, during the process of the English Devolution and Community Empowerment Bill, to look at that, which we will continue to do.
Lord Bach (Lab)
My Lords, local government reform is essential and should have happened years ago. That is why I am delighted to hear the Minister say tonight that it is the Government’s intention to carry on with it. I hope that it is at the same speed that they have shown so far.
I am from Leicestershire. The settlement that was reached 50 years ago was monstrously unfair to a number of cities—my own, Leicester, but other cities too—which were not given special status and their boundaries were kept the same. It is almost impossible for those cities to provide the services that they are duty bound to provide on the present boundaries. I hope that it is still very much in the Government’s mind that some of those cities need their boundaries redrawn so that they are fair and do justice to their citizens.
Baroness Taylor of Stevenage (Lab)
It would not be appropriate for me to comment specifically on any of the proposals that have come forward at this stage—I would get myself into very hot water indeed. However, we are looking closely at all the proposals. The priority programme has now completed its consultation, and Ministers are reviewing all the responses to it. The other proposals are out for consultation. No doubt we will receive some very robust feedback, as we have on the priority programme, but my noble friend is quite right. We have attempted partly to respond to the issues that he raises in the fair funding formula. We have completely changed the funding system for local government. Those areas that were least able to raise the revenue they needed to provide good services to their citizens were also penalised through the funding system. We have changed that, to be much more closely linked to the indices of multiple deprivation. I do not know whether he has had a chance to talk to Leicester City Council yet, but I hope that this has provided some additional revenue to enable all councils to deliver their services properly.
Lord Porter of Spalding (Con)
The current Secretary of State was held in quite high regard across the whole of the sector before we started this. Let us not allow him to take the blame for this. It was not the department’s idea to cancel the elections but No. 10’s—and it was No. 10’s decision to reinstate the elections. Can I tempt the Minister to agree with me that perhaps the blame for this should lie with somebody sitting in No. 10 rather than with MHCLG?
Baroness Taylor of Stevenage (Lab)
I simply say in response that I hold the Secretary of State in the highest regard. I have known him for decades. We were deputy leaders together when the noble Lord was the chairman of the LGA and were deputy leaders of the Labour group at the same time. He is determined to carry on with this devolution programme and with local government reorganisation and has a passion for local government. I am delighted that he is now our Secretary of State in the department. I am sure that he will progress this with the passion that I know he feels for localising services and making sure that decisions are taken by people who have got skin in the game out there—like most of us I see around the Chamber who have been involved in local government. We want to make sure that the people who take the decisions are those closest to the communities they affect. I know that is the Secretary of State’s mission.
Lord McNicol of West Kilbride (Lab)
My Lords, I am quite heartened that the questions from across your Lordships’ House have not descended into an attack on local authorities’ electoral registration officers and their ability to carry out these elections. Many of us in the House tonight have spent years working with those officials and have seen them turn around elections quickly, whether by-elections or snap general elections. The fact that that has not been called into question heartens me.
I want to take my noble friend the Minister back to the guiding principle that has got a bit lost but deserves to be pulled out, which is the devolution aspect of what His Majesty’s Government, through the Secretary of State and the ministerial teams, are looking to do. Can I tempt the Minister to talk a bit more about the principles of devolution and the move away from those centralised powers down to local levels and more local decisions affecting the daily lives of local communities?
Baroness Taylor of Stevenage (Lab)
There are strong guiding principles here that have been part of the core mission of this Government. Our belief is that, to drive the economic growth we want, decisions have to be taken at local level, where people understand the economies, the base of the workforce and skills, and the way that they can shape the economy in their local area.
With regard to the delivery of public services, back in 2015, I did a report with another member of my ministerial team and other people, including the leader of Manchester City Council and the then mayor of Hackney, which talked about making sure that we start tackling public services from the prevention point of view, which is much better done at local level than at national level, and that we deliver services properly. These key services—adult care, children’s services and, to some extent, community safety services—are delivered much better at local level. The result of all that is that we get economies and local services that are tailored to local need far more effectively and efficiently. That is our mission. That is what we want to do. Britain has been one of the most centralised countries in Europe for as long as I can remember, and it is time that we turned that around. That is the mission of this Government, and it will be good for the country and for the communities that we all serve.
Donations to Political Parties
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The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, I am very pleased to respond to this QSD. As many Lords have said, it is timely indeed, as we are pleased to introduce the Representation of the People Bill today; I look forward to many further discussions as that Bill works its way through our House.
I thank my noble friend Lord Sikka for opening the debate, and other noble Lords for their contributions. My noble friend always brings an interesting approach to this subject. Although I do not quite share his conspiracy theory approach to matters, I would say, as a veteran of many elections, that the power of the vote is still as strong as ever. We all need to inspire confidence that the vote is mightier than the pound; I hope that we will all strive for that.
The speeches we have heard today illustrate a shared desire to protect our democracy from those who seek to disrupt it. We all know that this is a clear and present danger, which our Government are resolutely determined to tackle. The Government committed in their manifesto to strengthening the rules around donations to political parties, including enhanced safeguards against foreign donations. The threat of foreign interference is evolving and is becoming increasingly hostile and sophisticated, while the current rules are no longer sufficient to address these risks.
The Government take a zero-tolerance approach to foreign interference, and we cannot afford to wait. That is why the reforms set out today in the Representation of the People Bill put prevention first, reducing pressure on law enforcement, protecting parties from exploitation and delivering greater transparency and stronger safeguards against malign foreign actors. These reforms implement a number of recommendations made by stakeholders, including the Ethics and Integrity Commission, formerly the Committee on Standards in Public Life; the Electoral Commission; and the National Crime Agency.
I turn to the specific measures set out in the Bill. Current electoral law sets out who may donate and the basic checks that campaigners must make, but these rules no longer reflect modern anti-money laundering standards. So, we are strengthening the system by introducing new “know your donor” checks for donations over £11,180. I know that is a random amount: I did raise that. Recipients will now have to carry out a risk assessment, checking for signs of foreign or unlawful funding, before deciding whether to accept or return a donation.
Key stakeholders have warned that the current eligibility criteria for companies to donate are far too weak and expose political parties and other recipients to the risk of accepting foreign donations and proceeds of crime. This means that shell companies—companies that are registered today, owned by anyone and funded from anywhere, without a single day of trade—could donate to our political parties. That is why we are introducing new stringent eligibility criteria for companies wishing to make political donations. Companies will have to show sufficient revenue to cover their donation, be headquartered in the UK and be majority-owned or controlled by UK electors or citizens in order to be eligible to make a donation.
Stakeholders are also concerned that unincorporated associations could be used to funnel illegitimate foreign funding into our political system. Unincorporated associations can currently give large sums with limited transparency. This leaves clear vulnerability to foreign or illegitimate money, so we are tightening the rules. We are reducing the thresholds for when unincorporated associations must register with the Electoral Commission and for when unincorporated associations must report gifts to the Electoral Commission. We are also requiring unincorporated associations intending to make significant donations to check the permissibility of the political gifts they receive to ensure that they come from permitted UK sources. We are also reinforcing the principle that only permissible donors may fund UK politics.
Where illicit funds enter the system via impermissible donors, such as individuals not on the electoral register, they will be subject to full forfeiture, providing a clear deterrent and supporting compliance by political parties and campaigners. Beyond these measures, we will commence existing provisions in law, which will require anyone making contributions of more than £11,180 to declare any benefits linked to their donation. This will ensure that we can identify the true donor and prevent people acting as fronts for others. Forced declarations will be a criminal offence, supporting enforcement authorities to take action against illegal donations.
Robust regulation and enforcement of political finance rules are crucial for combating the threat of foreign interference. That is why we are addressing enforcement gaps by extending the Electoral Commission’s enforcement role and civil sanctioning powers. This will enable police resources to be directed towards the most serious criminal offences. We will also increase, via secondary legislation, the Electoral Commission’s maximum fine from £20,000 to £500,000 per offence, with safeguards to protect against disproportionate burdens on campaigners with fewer resources. This will create a more meaningful deterrent against serious breaches of the rules.
Finally, to ensure that we are leaving no stone unturned, we have launched an independent review into foreign financial interference in UK politics, which will make recommendations to government by the end of March. The Rycroft review will focus on the effectiveness of the UK’s political finance laws, as well as the safeguards in place to protect our democracy from illicit money from abroad, including crypto assets. The Government will carefully consider all recommendations made in that report.
I want to respond to a few of the points made. If I do not get to them all, I will reply in writing. The noble Lord, Lord Hayward, asked about polls. Transparency requirements under electoral law exist for third-party campaign spending, including market research and canvassing. They are all in scope of the spending rules. The imprint rules also apply to those market research issues. On leadership elections, I am afraid they are a matter for political parties.
The noble Lord, Lord Pack, asked about donations and registers of interest. Parliament sets the rules around registers of interest, so that is a matter of parliamentary rule-making. I thank my noble friend Lady Shah for her points about voting for 16 year-olds. She hit on a crucial point. Extending the franchise to 16 and 17 year-olds means that we must make sure that they have trust in the system, and we are increasing civic education to provide that background to their voting.
On the question from my noble friend Lord Watson, I am sure the Rycroft review will be looking at international models to make sure we learn from them.
In reply to the noble Lord, Lord Rogan, Irish citizens remain permissible donors in Northern Ireland, and political parties there can also accept donations from Irish sources, such as Irish companies, that meet the prescribed conditions. That is consistent with the Good Friday agreement.
In reply to the noble Lord, Lord Leigh, the issue about China is a Home Office question. I will revert to colleagues in the Home Office and get back to him on that one.
In reply to my noble friend Lord Sahota, there is no intention from the Government to cap donations at the moment. The new Bill is all about transparency, so I hope I have covered some of those issues.
In reply to the noble Lord, Lord Mott, political parties and other campaigners will remain able to raise sufficient funds to communicate their views to the electorate, while protecting our democracy against those who seek to covertly undermine it. We do not consider tax relief on political donations to be part of the solution, I am afraid.
In reply to the noble Lord, Lord Wallace, I think I covered overseas interference in my speech. Overseas electors are subject to the same counter-fraud measures as domestic electors, including having their identity confirmed as part of the registration process.
I hope that I covered most of the comments of the noble Baroness, Lady Scott, in my speech. I will check Hansard, though, and respond further if I missed anything.
In closing, I thank my noble friend Lord Sikka for raising such an important debate and Members across the Committee for some very key contributions. I am sure we will have more of those as the Bill makes its way through the House.
The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)
My Lords, the Grand Committee stands adjourned until at least 2 pm, in the hope that we can get the clocks fixed.
Cheshire and Warrington Combined Authority Order 2026
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Baroness Taylor of Stevenage
That the draft Orders laid before the House on 18 December 2025 be approved.
Relevant document: 47th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 10 February.