Local Authority Governance

Jim McMahon Excerpts

Monday 23rd June 2025 Written Statements

[The Minister for Local Government and English Devolution (Jim McMahon)]

Today, I am updating Parliament on the Government’s plans to review governance arrangements for local authorities in England. Our goal is to ensure that local communities have the right mechanisms to engage effectively with their councils.

In the English Devolution White Paper, the Government committed to establishing consistent and accountable structures across local government. We are considering which governance models available to local authorities will best support their decision-making processes and will provide more detail on this shortly.

The English Devolution White Paper also committed to creating new opportunities for communities to have a say in the future of their area and to play a part in improving it. To support this, we will review how local authorities can integrate community engagement into their core functions. We are keen to work with the sector to co-design an approach which balances the need for consistent structures with local flexibility.

This programme of reform will create fewer but more empowered councils, frontline councillors and partners working hand in glove with the communities they serve, and support preventative and early intervention approaches, which are critical to the sustainability of local government and in driving better outcomes in the neighbourhoods where local people are invested. Local people will know exactly where to take local problems and solutions, and can work with their frontline councillors to drive visible improvements in the places they are invested in.

When these reforms are implemented, alongside devolution to new regional mayors and strategic authorities, and local government reorganisation, they will ensure that the right powers are in the right places. Locally, they will mean that people across England, regardless of where they live, will be able to take issues or concerns to empowered frontline local councillors. These councillors will have a clear and accountable route to act on them, either through neighbourhood structures or by taking them to the cabinet member responsible for the issue.

Every place will benefit from our agenda to decentralise power from Whitehall to local leaders. People will see the impact in more regular bus services, more affordable housing, and the presence of local champions with regional influence or frontline councillors championing their neighbourhoods.

[HCWS731]

Fair Funding Review 2.0 and Administration of Council Tax

Jim McMahon Excerpts

Friday 20th June 2025 Written Statements

[The Minister for Local Government and English Devolution (Jim McMahon)]

This Government were elected on a manifesto to fix the foundations local government so that taxpayers can once again rely on strong and reliable local services. After 14 years of service cuts and managed decline by the previous Government, councils across the country were on their knees. We are committed to delivering ambitious funding reform for local government based on need, alongside a renewed focus on prevention to get ahead of overwhelming pressures in adult social care, children’s services and temporary accommodation. We will work closely with the sector to reset local government so that it is fit, legal and decent and can once again reliably deliver for our communities. Today, we take the next step in our plan to ensure that local leaders have the systems and resources they need to deliver for their residents.

Too many areas have felt the combined impact of reducing Government support and low historical tax bases from which to raise income, coupled with high levels of need driving up demand for services. It is not fair that people in these places too often see hikes in council tax bills while neighbourhood services, which make areas clean, safe and decent, have felt the brunt of reductions. The current funding system is a decade old and reinforces the divide between deprived places and the rest of the country, and that is why we are taking action where previous Government failed. But this is not just about making the overall funding system fairer, this is also about making everyday life fairer for taxpayers too. This is a new settlement for councils and council taxpayers alike.

We took our first steps to reform local government funding through the local government finance settlement 2025-26, and today we are publishing a consultation on the next stage of our plans. As part of this, the formulae used to assess local authorities’ current needs, which are a decade out of date, will be updated to target money where it needs to go and ensure those places that have been overlooked get their fair share.

We will simplify the system and give security with multi-year settlements, reduce the vast range of small grants into simplified larger consolidated pots—scrapping bureaucracy and unnecessary reporting—and radically scale back wasteful competitive bidding. This will make funding more efficient, deliver better value for money for taxpayers and provide certainty to councils, turning the tide on micro-management from the centre, so that councils can spend their time and resources on services for local people, not filling out forms to satisfy central Government.

We will take decisive action to modernise the council tax system. This Government recognise that the administration of council tax has been left largely unchanged since 1993. This is why we are, in parallel, launching a consultation seeking views on changes to the administration of council tax which will support taxpayers with their bills and improve taxpayer experiences of the system—particularly for vulnerable groups.

We know we are facing huge financial challenges as a country. There is no magic wand, and fixing the foundations of local government requires tough decisions, on all sides. But with this bold action we can stem the tide of councils in financial crisis and allow the most disadvantaged places to reinvest in visible neighbourhood services and support for the vulnerable. It will take time and dedication to achieve this, and I urge everyone, inside and outside the sector, to share their thoughts on these proposals.

Fair funding review 2.0

Today’s consultation on fairer funding reform follows the fair funding review launched in 2016 by the previous Administration but abandoned in 2022. We are finally following through where previous Governments failed. We launched a consultation in December, which sought views on the principles and objectives underpinning funding reform. Respondents were clear that reform is needed.

We will work with councils to fix what is broken, moving around £2 billion of funding to the places and communities that need it most and modernising council tax administration. We have made a start, beginning with the £600 million recovery grant in the 2025-26 settlement which started to correct the unfairness in the system by targeting money to areas with greater need and demand for services and less ability to raise income locally, and beginning the process of consolidating grants into the settlement. In this year’s spending review, we have taken decisive action to allow councils to reliably deliver for their residents by confirming an additional £3.4 billion of grant funding for local authorities over the spending review period. This is above and beyond additional funding for services provided outside of the settlement.

The last time that funding was allocated to local authorities using an updated set of funding formulae that sought to account for local authority differences in demand, costs and council tax raising ability was in 2013-14. This failure to update since then and the subsequent mismatch between funding and need has manifested in unequal outcomes for people and places.

Our up-to-date system will use the best available evidence to take account of the different needs and costs faced by councils in urban and rural areas, and the ability of individual local authorities to raise council tax. This means no one will suffer from deteriorating services just because they live in an area with low house prices or high demand for social care, or in a rural part of the country. We are also inviting views on resetting the business rates retention system to restore the balance between rewarding business rates growth and aligning funding with need. After the consultation and once finalised, the changes will be implemented over three years, beginning in 2026-27 through the first multi-year settlement in a decade.

As part of this, we are inviting views on a package of transitional arrangements to enable councils to deliver service transformation and efficiencies. We recognise that there is a balance to strike between directing funding where it is most needed and allowing authorities time to plan for changes.

We are also moving away from wasteful competitive bidding pots and restrictive reporting requirements to give local leaders the flexibility they need to deliver. We intend to deliver at least four consolidated grants through the settlement which bring together funding to support prevention and service reform, including a homelessness and rough sleeping grant, a public health grant, a crisis and resilience grant and a children, families and youth grant. We want to update the new burdens doctrine, allowing local authorities to plan more effectively. Building 1.5 million homes is a cornerstone of our plan for change, but we also have heard clearly that the new homes bonus is an ineffective incentive for new house building. We are therefore proposing to end the new homes bonus, and return the funding to the core settlement, to be allocated where it is needed most.

The consultation brings together opportunities and interactions across funding reform and devolution, local government reorganisation, and reforming local government burdens. We invite views on the role the settlement could play in funding strategic authorities, the treatment of reorganised authorities and reducing unnecessary burdens on local government. Additionally, we are inviting views on where it might be appropriate to update some sales, fees and charges, to support the financial sustainability of key services without placing an unreasonable burden on service users.

Consultation on modernising and improving the administration of council tax

Today’s council tax consultation explores opportunities to modernise and improve the administration of council tax to deliver a fairer and more efficient system for taxpayers and local authorities.

Council tax is vital in ensuring councils have the funding they need to deliver essential public services. It is therefore right that council tax avoidance is not tolerated, and councils have reasonable powers to recover unpaid council tax. However, it is also right that households are not subject to disproportionate enforcement action and that they can access support they are eligible for. While many councils have shown strong leadership in this area, we know that this balance has not always been struck, and there are too many cases of vulnerable taxpayers bearing the brunt of heavy-handed collection by councils and their contractors.

We believe we can be both firm on deliberate tax avoidance, and fair to those needing support. Therefore, this consultation explores proposals to end unacceptable, aggressive collection practices that have seen vulnerable people who miss payments subjected to unmanageable lump sum payments and liability orders, which can lead to bailiffs being sent in, without the offer of a payment plan or a welfare check. These practices do not benefit councils, who can incur costs seeking punitive measures without recovering the tax in question, nor residents, who do not see improved services as a result of attempts at this sort of recovery. Put simply it is self-defeating and lacks common sense.

The consultation also looks more broadly at wider opportunities to make improvements to local government efficiency in the collection and administration. It also looks to make changes to support taxpayers with their bills and enhance their experience with the system. This includes proposals to spread council tax payments over 12 monthly instalments by default, saving the average band D household £38 a month by spreading the total cost across more instalments. Councils will still have the flexibility to offer taxpayers, on request, the option of retaining the current default of 10 monthly instalments. We will also make changes to help taxpayers better hold councils accountable for how their taxes are spent. It also considers the outdated nature of the “severely mentally impaired” council tax disregard, seeking to bring its name and definition in line with modern parlance to reduce the stigma around accessing the support it offers. We are issuing a call for evidence on people’s wider experiences with existing support in the system, including views on the effectiveness of council tax disregards for carers and apprentices, wider support with council tax bills Government might consider, and potential future changes to the process of appealing a home’s council tax band.

We know these issues are complex, and we are ready to make difficult decisions where they are the right decisions. We therefore particularly urge residents as well as the local government sector to share their views on this consultation on the administration of council tax.

Conclusion

The consultation on the fair funding review 2.0 will be open for eight weeks, closing on 15 August 2025. The consultation on council tax modernisation is open for twelve weeks, closing on 12 September 2025. We encourage views from the sector and beyond on each of these consultations.

This written ministerial statement covers England only.

[HCWS724]

Local Government Best Value: Thurrock Council

Jim McMahon Excerpts

Thursday 19th June 2025 Written Statements

[The Minister for Local Government and English Devolution (Jim McMahon)]

As I have previously stated when updating the House, this Government are committed to resetting the relationship with local and regional government, and to establishing partnerships built on mutual respect, collaboration and meaningful engagement. Local councils must be fit, legal and decent, and this Government are taking the action necessary to fix the foundations of local government. I am today updating the House on the steps that we are taking to support Thurrock council to recover and reform.

I am today publishing the commissioners’ most recent report, which I received in May. It is clear that the council is in a very different place from where it was when the previous Government first appointed commissioners to it in September 2022. I want to commend the council’s members and officers and the commissioners for the improvements that they, together, have made; and I am pleased that the commissioners consider that the council

“continues to own the recovery agenda”.

However, the issues that the council faced at the start were both broad and deep, and the commissioners’ fifth report makes it clear that the recovery remains fragile, as the improvements still need to be embedded across the organisation.

While progress has been made to address its historical financial accounts and governance, the council still relies on Government support to set a balanced budget and there remains an annual structural deficit. The council’s general fund debt position is estimated at £800 million by the end of 2025-26. The Government have indicated that we will provide an initial tranche of financial support for debt repayment for Thurrock council in 2026-27, ahead of local government reorganisation. We will continue to work with the council to ensure that any support represents value for money for local and national taxpayers.

The council still needs to evidence deliverable plans to make corporate transformational savings to secure sustainable services, and there remains a need for it to strengthen its internal controls, especially across internal audit and risk management. A robust transformation plan is needed to deliver the council’s proposed operating model and meet savings targets. Organisational capacity challenges remain and the commissioners consider that the council has not yet

“demonstrated that it has the capacity and capability to sustain its own journey of continuous improvement”.

Having considered the report carefully, I am satisfied that the council is not yet meeting its best value duty.

While proposals for local government reorganisation and devolution present the council and its residents with real opportunities, it is vital to ensure that the council has the capacity and capability to continue to drive its own recovery and reform alongside the implementation of either or both of these substantial change programmes.

Proposed package

I am minded to exercise powers of direction, under sections 15(5) and 15(6) of the Local Government Act 1999, to issue new directions to Thurrock council extending the intervention at the council until 30 April 2028. These would require the council to take actions to address the outstanding issues and priorities, as well as continuing to engage with commissioners who would be able to exercise specific council functions. The commissioner team, if appointed, would continue to consist of a lead commissioner, a finance commissioner and a managing director commissioner.

This extension to April 2028 would give the council time to deliver further improvements and embed the necessary changes across the organisation, but it would also ensure that the intervention timetable reflects the broader context for the area and aligns it to the proposed timelines for local government reorganisation. This seeks to ensure that there is external oversight and assurance of the council’s improvement journey as it prepares for any future arrangements and provides flexibility to review the model of intervention throughout this period. It will be important that there are clear measurable milestones over the next phase of the intervention, and I would intend to review the proposed arrangements, if implemented, by summer 2026, when I would expect there to be further clarity on broader plans for devolution and local government reorganisation across greater Essex.

Representations

I am now inviting representatives from Thurrock council and any other interested parties on the proposed intervention package by 2 July. All representations will be carefully considered and any other evidence received, before I take a final decision about how to proceed.

Conclusion

I am committed to working in partnership to provide the necessary support to ensure Thurrock council’s compliance with the best value duty and the high standards of governance that local residents and service users expect.

I will deposit in the Library of the House copies of the documents referred to, which are being published on gov.uk today. I will update the House in due course.

[HCWS714]

Local Government Reorganisation

Jim McMahon Excerpts

Tuesday 17th June 2025 Written Statements

[The Minister for Local Government and English Devolution (Jim McMahon)]

As I told the House on 5 February, I have issued invitations under the Local Government and Public Involvement in Health Act 2007 to all councils in two-tier areas and their small neighbouring unitary authorities to work together to develop proposals for unitary local government. This reform will mean more accountable structures, making it much clearer who residents should look to on local issues. It will also mean fewer, but more empowered, local political leaders, who can focus on delivering for residents. I told the House on 3 June that I had received proposals from Surrey councils by the deadline specified in their invitation of 9 May. I will now provide an update on local government reorganisation in Surrey.

I received two proposals—one from Elmbridge borough council, Mole Valley district council and Surrey county council for two unitary councils, and one from the borough councils of Epsom and Ewell, Guildford, Reigate and Banstead, Runnymede, Spelthorne, Surrey Heath, and Waverley and Woking, and Tandridge district council, for three unitary councils. I also received a joint submission from the borough councils of Reigate and Banstead and Crawley, in West Sussex, which I have decided does not meet the statutory requirements for a proposal, or the terms of the invitation, and is accompanied by insufficient information to enable a decision to be taken to implement it.

Today I have launched a consultation on the two proposals from Surrey councils. This is available at https://www.gov.uk/government/collections/surrey-local-government-reorganisation and I will deposit a copy of the consultation in the Library of the House. I would welcome views from any interested people, including residents, and I am consulting the councils that made the proposals, other councils affected by the proposals, and councils in neighbouring areas. I am also consulting public service providers, including health providers, the police and fire services, and certain other business and voluntary sector bodies.

The consultation period will run for seven weeks until Tuesday 5 August. The consultation document is available, and those responding may do so on the Department’s online platform, “Citizen Space”, or by email or post. The consultation will provide information to help my assessment of the merits of each proposal, and I will carefully consider all the representations I receive, along with all other relevant information available to me.

The context of this consultation is that the 2007 Act provides that before any proposal is implemented, I must consult any council affected by the proposal that did not make it, and any other persons I consider appropriate. Once the consultation is concluded, I will decide, subject to parliamentary approval, which, if any, proposals are to be implemented, with or without modification. In taking these decisions, I will have regard to all the representations I have received, including those from the consultation, and all other relevant information available to me, and will reach a judgement in the round, assessing the proposals against the criteria in the invitation—whether they achieve for the whole area concerned the establishment of a single tier of local government; whether the councils are the right size to achieve efficiencies, improve capacity and withstand financial shocks; whether the unitary structures prioritise the delivery of high-quality and sustainable public services to citizens; whether councils in the area have sought to work together to come to a view that meets local needs and is informed by local views; whether new unitary structures support devolution arrangements; and whether new unitary structures enable stronger community engagement and deliver genuine opportunity for neighbourhood empowerment.

With regard to the submission from the borough councils of Reigate and Banstead and Crawley, my view is that it does not meet the statutory requirements, as the 2007 Act specifies that a council can only make one proposal, and that a proposal must specify the area that it covers. For the same reasons, and because the submission does not cover the whole of the invitation area, the submission does not meet the terms of the invitation. Further, it does not provide enough information for an assessment to be made as to whether all criteria would be met, and it would require significant work to enable it to be resubmitted, causing delay in what was intended to be an accelerated process. It would mean essentially drafting a new timetable, which would have the potential to see elections to the new unitary authorities delayed.

As I have received two proposals that meet the statutory requirements and the terms of the invitation, I have decided to take these to consultation. It is of course open to the borough councils of Reigate and Banstead and Crawley to respond to the consultation. With reference to their desire for the Gatwick Diamond economic area to be within the area of one strategic authority so as to best provide for economic growth, I would like to provide reassurance that local government reorganisation in Surrey does not mean that this is not an option to be considered in the future, and I encourage councils in Surrey to continue to engage with their neighbours as they consider options in the short and medium term to secure devolution and the advantages it brings.

[HCWS704]

Local Government Best Value: Croydon Council

Jim McMahon Excerpts

Thursday 12th June 2025 Written Statements

[The Minister for Local Government and English Devolution (Jim McMahon)]

As I have previously stated when updating the House, this Government are committed to resetting the relationship between central and regional government, and to establishing partnerships built on mutual respect, genuine collaboration and meaningful engagement. Local councils must be fit, legal and decent, and this Government are taking the action necessary to fix the foundations of local government. I am today updating the House on the steps that we are taking to support the London borough of Croydon to recover and reform.

London borough of Croydon

I am today publishing the latest report of the London borough of Croydon improvement and assurance panel, which I received in April. The report acknowledges and welcomes the hard work of the council’s members and staff and notes that there has been some progress over the course of the intervention, which is due to end on 20 July this year. However, the council’s financial position is deteriorating rapidly and the report documents serious concerns, particularly on the council’s ability to improve, on some aspects of leadership and on the use of resources.

Croydon remains one of the most financially distressed councils in the country. The council’s general fund debt sits at around £1.4 billion and it relies on the allocation of exceptional financial support through in-principle capitalisation directions to balance its budget. The dramatic increase in the council’s £136 million EFS for 2025-26, from £38 million granted for 2024-25, is highly concerning. The council has received approximately £553 million in total EFS since March 2021. This is simply not sustainable.

Failing to change course would condemn Croydon’s residents to a worsening position without an exit strategy. The report sets out that there has been a lack of pace throughout the intervention, but the deteriorating financial position, which is not being gripped and tackled adequately by the council, is reaching a “financial crisis”. The stabilisation plan has been in development since late January, but this does not yet provide a concrete plan to achieve the efficiencies and transformation that the council has committed to. Poor financial information and forecasting and a lack of controls have contributed to the deterioration of the financial position. There is an increasing reliance on Government support to balance the budget, operating costs continue to be “unreasonably high” and the medium-term financial strategy projects the general fund debt to rise to over £1.9 billion by 2029.

The panel documents the council’s ambition to deliver transformation but is concerned that the council will find it “enormously challenging” to deliver the necessary transformation and reduce spending while maintaining day-to-day delivery. The report notes that, based on benchmarking data, the council’s operating costs can be improved to be more in line with other authorities. I have carefully considered the report and other relevant material, including the Local Government Association’s corporate peer challenge. I am satisfied that the London borough of Croydon is failing to comply with its best value duty. I am therefore minded to exercise powers of direction under section 15(5) and 15(6) of the Local Government Act 1999 to implement an intervention package that ensures the council’s compliance with its best value duty.

Proposed package

I am satisfied that the scale of the financial difficulties facing Croydon, the failure of the council to adequately respond to these difficulties and the assurance required moving forward means that a short and sharp reset, with fast action, is required to shift the dial on the council’s recovery. On balance, I believe this is best achieved by escalating the statutory intervention to a commissioner-led model, to ensure that the council can achieve sustained change at the pace needed.

The finalisation and implementation of the council’s stabilisation plan, and in time a recovery plan, will be fundamental to Croydon’s transformation, reform and recovery. Commissioners will have greater scope to challenge and support the council to finalise and implement its stabilisation plan and deliver realistic transformation and savings, in line with what the council has committed to. I envisage the appointment of commissioners until 20 July 2027, with a review of the progress of the intervention after 12 months.

Representations

I am inviting representations from the London borough of Croydon and any other interested parties on the proposed intervention package by Wednesday 25 June.

I will carefully consider all representations before deciding how to proceed. The proposal to intervene is not taken lightly but is designed to strengthen and accelerate improvement to ensure that the council delivers for its residents. With council focus and support from the commissioners, I expect the council to demonstrate swift and sustained progress necessary to ensuring compliance with its best value duty.

Conclusion

I am committed to working in partnership with the London borough of Croydon to provide the necessary support to ensure its compliance with the best value duty and the high standards of governance that local residents and service users expect.

I will deposit in the Library of the House copies of the documents referred to, which are being published on gov.uk today. I will update the House in due course.

[HCWS697]

Oral Answers to Questions

Jim McMahon Excerpts

Monday 9th June 2025 Commons Chamber

[Terry Jermy (South West Norfolk) (Lab)]

21. What steps her Department is taking to ensure that councils in areas with higher levels of deprivation receive adequate funding.

[The Minister for Local Government and English Devolution (Jim McMahon)]

The Government have delivered a settlement that begins to fix the foundations and makes available over £69 billion in 2025-26. In 2026-27, an improved approach will direct funding where it is needed most and provide certainty through the first multi-year settlement in over a decade.

[Amanda Hack]

Leicestershire, alongside other authorities, has been campaigning for fair funding in recent years, following 14 years of poor funding settlements by the last Government, meaning cuts to vital services. A lack of fair funding also means that schools in North West Leicestershire have some of the lowest levels of funding per student in the country. How will the Minister approach a fair funding settlement that considers the unique challenges faced by rural communities?

[Jim McMahon]

I thank my hon. Friend for her work in championing those issues. We are fundamentally reforming how we assess councils’ relative needs and resources, to ensure that funding is distributed to where it is needed most. That includes accounting for councils’ ability to raise resources locally, which the previous Government promised to do but ultimately failed to do in balancing the numbers. Targeting funding in that way will enable councils that have had to scale back services the most to be able to catch up and to ensure that everybody, across the whole of England, is able to access decent public services.

[Natasha Irons]

Despite an increase in council tax of 27% since 2022, £136 million in exceptional financial support this year and brutal cuts to services, Croydon council’s finances remain broken. As an outer-London borough with inner-London problems, Croydon has historically not received the funding it needs to cover the costs for demand-led services like temporary accommodation, so even if Croydon’s debt was wiped out, it would still need exceptional financial support. Will the Minister outline how councils like Croydon will get the resources they need to meet the complex challenges they face and provide the frontline services that our communities deserve?

[Jim McMahon]

The questions that have been raised demonstrate why the fair funding review is needed, and why it has to take into account all the different factors that have an impact on whether councils can provide good public services or not. I appreciate, understand and accept that pressures that were previously felt in inner London are now felt in outer London, and in rural areas too. My hon. Friend will know that in February we provided £136 million in EFS support for Croydon council, and we will continue to work with it. We have met and talked about the issues a number of times, and I know that she understands that those are not small problems to deal with.

[Helen Hayes]

The statutory override to special educational needs and disabilities deficit comes to an end in just 10 months. Without a plan from the Government for the end of the statutory override, more than half of all local education authorities face effective bankruptcy. The need for a resolution to the issue is now long overdue. When does the Minister expect to be able to give local authorities the certainty they need?

[Jim McMahon]

We are laying the groundwork now, ahead of the provisional settlement, which will be the first multi-year settlement in over a decade and will deal with a lot of the structural issues. If it is any help, the Government understand and accept that it is not right or acceptable for councils that have done everything that has been asked of them and provided good public services, particularly for young people, to find themselves at the financial cliff edge as a result. We have an absolute commitment to work through those issues.

[Terry Jermy]

Pockets of deprivation in many rural communities, like my South West Norfolk constituency, are often masked by more affluent surroundings. Will the Minister reassure me that financial support from the Government for local councils in rural areas reflects those concerns about isolated deprivation?

[Jim McMahon]

This month, we are consulting on an updated assessment of need that we will implement from 2026-27. Importantly, that includes the indices of multiple deprivation, a designated national statistic, and it will drill down to deprivation levels of between 400 and 1,200 households in each of those units. Our intention is to address the issues found in the pockets of deprivation in every community, including rural and coastal communities where they are sometimes drowned out because of the sea of affluence around them. It is important that we get to deprivation wherever it exists.

[Julia Lopez (Hornchurch and Upminster) (Con)]

As an outer London borough, Havering has been hugely disadvantaged by a funding formula based on outdated population figures. We heard today that the Mayor of London himself is concerned that this Labour Government will level down London altogether. Will the Minister confirm that the fair funding review will report by this summer—I have been told that previously by a Minister—and will specifically address the disparities between inner and outer London?

[Jim McMahon]

I can absolutely assure the hon. Member that we are working through those issues, and we will consult the sector on them. Given all the variations that we will take into account, I hope Members accept that we have listened. We know that the funding formula is out of date and that for it to stand the test it must apply wherever Members represent, whether in coastal communities, rural communities, inner or outer London or anywhere else in between. I assure the hon. Member that we are getting on with that work.

[Helen Morgan (North Shropshire) (LD)]

Shropshire council’s finances have been left on the brink by 16 years of Conservative administration. It is the largest landlocked county in England, and it is struggling with about 85% of its budget being spent on social care. When the Minister does his fair funding review, will he look at the difficulty and costliness of delivering services over such a wide rural area and ensure that councils such as Shropshire, which has lost its rural services delivery grant, will be able to sustain themselves in the future?

[Jim McMahon]

We made available an additional £5 billion as part of the settlement, and £3.7 billion of that was for social care. We understand the pressures and we are directing money to address them, but we know that this issue will take more than one year to fix. We are on with the fair funding review—the third multi-year settlement in a decade—to begin to fix the foundations. We have definitely heard calls from rural communities and councils to take into account the additional cost for rurality and remoteness, and I assure the hon. Lady that those issues are being looked at.

[Mr Peter Bedford (Mid Leicestershire) (Con)]

One way of ensuring that new unitary authorities such as those for Leicestershire have adequate funding is to base that funding on robust business cases. Given that the Department was five weeks late in providing feedback to the local authorities, will the Minister commit to extending the deadline to ensure that those local authorities have the time that they need to build up those plans?

[Jim McMahon]

In all areas, there is more than adequate time to prepare final proposals. Councils in the devolution priority programme have until September, and all others—the majority—have until November. That is more than adequate time for councils to be able to marshal and get their plans together and make an assessment on that basis.

[Ayoub Khan (Birmingham Perry Barr) (Ind)]

It has been reported that the Birmingham bin strikes may last until December. How can this Government claim to support workers when they refuse to fund Birmingham city council properly? This dispute boils down to cash, yet the Government are failing Birmingham’s bin workers, residents and businesses. The Government backed our steelworkers. Will they back the bin workers with extra funding?

[Jim McMahon]

I hear what the hon. Gentleman says. On the calls that we have with MPs when we update them on these issues, his tone is quite different. We need to separate the rhetoric from the reality. The reality is that for the first time we had £600 million in the recovery grant, which was about those councils suffering high deprivation and historically low tax bases. Birmingham was the biggest beneficiary of that, receiving nearly £40 million.

[Mr Speaker]

I call the shadow Minister.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

The Minister knows from his time at the Local Government Association of the impact that asylum has on the budgets of local authorities. With the Home Office’s much-vaunted increase in the grant rate for asylum claims, the Government are pushing thousands of households on to council waiting lists and shunting millions in costs on to council tax payers. What additional funding and measures does he aim to secure to help to mitigate those costs, which are affecting so many of our local authorities?

[Jim McMahon]

Quite frankly, it is a bit rich for any shadow Minister to critique the current system when the Conservatives deliberately designed it in their 14 years in government. The question is how we go about repairing it. One thing must absolutely be put right; the disjointed system in which different Government Departments work in silos cannot carry on. One of the successes of the leaders’ council is that for, the first time ever, local government leaders are around the table with the Government, including in a meeting with the Home Office and our Department, to work through exactly those issues. That is the change: for the first time, those in local government are being treated as adults.

[Alice Macdonald (Norwich North) (Lab/Co-op)]

T1. If she will make a statement on her departmental responsibilities.

--- Later in debate ---

[Jack Rankin (Windsor) (Con)]

I broadly support unitarisation on a strategic scale, but I am concerned about how historic debts will be treated in Surrey, especially those of Woking and Spelthorne councils. How will those debts be handled as our councils come together, and will the Minister assure my constituents in Virginia Water and Englefield Green, in the well-run borough of Runnymede, that they will not foot the bill for this as part of the reorganisation?

[The Minister for Local Government and English Devolution (Jim McMahon)]

That is one of the reasons why the Surrey arrangement was accelerated. We recognised the lack of balance between the debt liability and the assets and incomes. We also recognised that the unitaries would have to be financially viable, and we are well on track to delivering that, in partnership with the local councils.

[Mr Speaker]

I call the Chair of the Select Committee.

Remote Attendance and Proxy Voting

Jim McMahon Excerpts

Thursday 5th June 2025 Written Statements

[The Minister for Local Government and English Devolution (Jim McMahon)]

Today we have published the Government’s response to our recent consultation on remote attendance and proxy voting in local authorities. The Government have previously set out our intention to reset the relationship between central and local government, and to establish a partnership that delivers better outcomes for the communities we represent. Key to this partnership is providing the sector with support and tools to modernise democratic engagement and make elected roles more accessible for more people.

In-person debate, discussion and the opportunity for residents to engage with their representatives are core aspects of local democracy. At the same time, we know that it is not always possible for elected members to attend local authority meetings in person. The Government response sets out our intention to permit local authorities to meet remotely, and to require them to develop their own remote attendance policies if they do. Local authorities vary in size, location, responsibility and make-up, and we want to ensure that they can develop appropriately responsive policies.

On proxy voting, we plan to require all principal—unitary, upper and second-tier—councils in England to implement proxy voting schemes to provide consistency for members who are absent when they become a new parent, or for serious or long-term illness. We plan for this requirement to apply to meetings of full council. For all other meetings, proxy voting may be used but will not be required, and substitute or pairing schemes may be more appropriate. We plan for other local authorities not listed above to be enabled, but not required, to implement proxy voting schemes for any of their meetings, in the context of member absences for serious or long-term illness or becoming a new parent.

We are keen to reflect feedback from the current make-up of councils, and the demands and requirements we have heard in that process, and to lead the way in opening up elected office for a broader range of candidates, including those of working age, those with caring responsibilities, and those with disabilities or other personal circumstances who would benefit from modernised democratic practices.

We plan to collaboratively develop guidance with the sector on both policies to ensure that they are supportive of members and officers.

We believe that these reforms will improve the experience of elected members serving their communities and encourage more people to consider locally-elected office.

[HCWS684]

Local Government Re-organisation

Jim McMahon Excerpts

Tuesday 3rd June 2025 Written Statements

[The Minister for Local Government and English Devolution (Jim McMahon)]

On 24 March I updated the House on the latest steps on local government reorganisation. This set out the commitment that all areas had shown to reorganising local government in order to achieve sustainable, efficient and streamlined local government for taxpayers. We are shifting power out of Whitehall and delivering strong, sustainable, unitary councils, capable of leading their communities, shaping neighbourhoods and convening local public service providers to improve outcomes for local residents. This is part of the wider project to fix the foundations of local government, and to create a system that is fit, legal and decent, with improvements to audit, finance, standards and structures, complemented by devolution, fair funding and a resetting of the relationship with central Government to gives councils the power they need to get things done.

All 21 two-tier areas produced interim plans with this Government’s commitment to support them, including by giving feedback on interim plans, providing £7.6 million to support the development of final proposals and practical advice and support. I am now updating the House with a summary of the feedback provided to areas, and the proposed allocation and payment of proposal development contributions.

Proposal development contributions

In the statutory guidance I outline my expectation for all local leaders to work collaboratively and proactively by sharing information and data to develop robust and sustainable unitary proposals that benefit the entire area. Ideally, I would like areas to submit their final proposals as a single submission, underpinned by a shared evidence base, that includes all options being put forward by councils.

Consequently, I expect proposal development contributions to support this effort. Each of the 21 areas will receive a flat rate of £135,000, plus an additional 20p per person based on the latest Office for National Statistics population estimates. The allocation is as follows:

Local Government Pension Scheme: Member Benefits Reform

Jim McMahon Excerpts

Thursday 15th May 2025 Written Statements

[The Minister for Local Government and English Devolution (Jim McMahon)]

The local government pension scheme in England and Wales gives 7 million dedicated public servants security in their later years. The majority of its members are women on low-paid roles and often working part-time, with average pensions in retirement of £5,000 a year. These members are at the frontline of public service, working to deliver for the public in our councils, schools, charities, police and fire authorities, and more. This Government are committed to making work pay and ensuring that those who keep our country running are properly rewarded in retirement. That is why we have today launched a consultation that would benefit around 15,000 members, and enhance the benefits open to the women who make up almost three quarters of members, by making maternity leave up to one year automatically pensionable. These proposals all align with the overall aim of ensuring the scheme continues to deliver for members, employers and taxpayers, and invests in their communities.

The Government are proposing the changes to member benefits alongside the significant reforms to investment and pooling, which are also vital. Those reforms aim to improve the long-term sustainability of the local government pension scheme, ensuring that pension promises stretching into the next century are fully funded. The Government propose to do that by strengthening asset pooling in the scheme, improving scheme governance and driving investment in local growth—all those measures ensure that the scheme, in delivering for its members, also delivers for communities.

The members of the local government pension scheme deserve a scheme that rewards their hard work and commitment to public service, and the consultation touches on a wide range of areas of the scheme. There are four proposals I would like to highlight to the House.

First, the proposals would end historical discrimination in the scheme, ensuring that when survivor benefits are calculated when a member dies, there is no discrimination on the basis of the sex of their partner. This would be backdated, correcting the historical underpayment of benefits.

Secondly, the proposals would ensure that there is a better understanding of why individuals opt out of making pension payments. The Government want a secure old age for everyone and, although automatic enrolment in the scheme has increased participation, too many people still opt out and lose the vital benefits the local government pension scheme offers in retirement. This would lay the groundwork for future support of those who feel they cannot afford their pension payments.

Thirdly, the proposals would close loopholes in current rules relating to pension forfeiture, strengthening the framework ensuring that pensions can be removed for serious offences by public servants.

Finally, and most significantly, the proposals would make concrete progress in addressing the gender pension gap. We know that there is still much to understand about the gender pension gap, but it is not fair that, across the scheme, women will on average end their working lives with less generous pension benefits than men. These proposals would see the Government make gender pension gap data reporting statutory and make the last 13 weeks of maternity and shared parental leave automatically pensionable. This would make a real difference in the pension accruals of a significant proportion of the women in the local government pension scheme, and better support them in retirement. The 13-week proposal would be the first time that a public service pension scheme makes this step towards closing the gender pension gap. It reflects that many local government pension scheme members are women in comparatively lower-paid roles, and that the overall package available to the workforce, including pension entitlement, is vital to recruitment and retention of key roles in local public services.

Although these proposals carry costs, those costs are relatively small in the context of overall local government pension scheme liabilities and are significantly outweighed by the difference the proposals will make for members. Further, the Government are mindful that, with the current scheme valuation period, now is the right time for funds and their actuaries to factor these costs into their calculations of future employer contribution rates.

The proposals in the consultation have been tested with stakeholders and address their feedback on how to make the local government pension scheme an exemplar scheme for the public sector and beyond. I want to thank the Local Government Association, the scheme advisory board, local government pension scheme funds and others for their continued support of the Government in our role as steward of the local government pension scheme, and I emphasise the Government’s commitment to the local government pension scheme being locally run.

This first consultation on member benefits in the local government pension scheme will be followed by another consultation this year, on further issues of fairness, equality, integrity and efficacy in the scheme.

[HCWS636]

Churches and Religious Buildings: Communities

Jim McMahon Excerpts

Tuesday 13th May 2025 Westminster Hall

[The Minister for Local Government and English Devolution (Jim McMahon)]

It is a pleasure to serve under your chairmanship, Sir Jeremy. Good morning to everybody in the Chamber. I thank the right hon. Member for Salisbury (John Glen) for securing the debate and the Second Church Estates Commissioner, my hon. Friend the Member for Battersea (Marsha De Cordova), for the significant work that she does.

I will respond to some of the points that hon. Members raised and set out the Government’s position on this topic. Given the subject of the debate, it seems fitting to begin by reflecting on some religious terminology. I understand that among Christian communities it is common to remind one another that, biblically, “church” refers not only to a physical building but to a gathering of people assembled, united by their Christian faith. Nevertheless, for most the word “church” invites images of Christian places of worship, be they the Gothic cathedrals in the shire counties or the churches of all denominations in towns and cities across the country, which were built not just as places of worship but as anchors of the communities they serve. They serve not only the community’s spiritual needs, but its social needs, and many stand in support of the local school, the community hall and more. Many churches, including in my town of Oldham, are buildings of note whose status and heritage have stood for generations.

There are many modern parish churches on estates around the country. Town planners would often draw up the ideal community, with local schools, shops, pubs and, alongside them, places of worship, which were always seen as integral to a thriving community.

We also know that church buildings often welcome through their doors not just Christians, but those of all faiths and none, because they are a wider anchor of the community. That can equally be said of places of worship belonging to other faiths and belief communities, including mosques, synagogues, gurdwaras and temples. The public service and care for their neighbour enacted by faith and belief groups are not just words; they are seen in actions that are often very practical and grounded in the place they live in and represent.

That brings us to the focus of this debate: the importance and impact of religious buildings in communities. There are an estimated 40,300 churches in the UK, according to the National Churches Trust, plus many places of worship belonging to other faiths and beliefs. The invaluable contribution of religious buildings to the built landscape of our nation cannot be overstated. My noble Friend Lord Khan, the Minister for Faith, has made more than 120 visits since last July, including to places of worship, and seen at first hand how they serve their communities.

Only last week, the Minister for Faith spoke at the Shah Jahan mosque in Woking, marking VE Day and the sacrifice of Muslim soldiers in defence of our country. The mosque, built in 1889, is the oldest purpose-built mosque in the country. The Guru Nanak Nishkam Sewak Jatha gurdwara in Birmingham, which the Minister for Faith visited in December, was built in the 1970s, following the arrival of Sikhs from India and East Africa. The Nishkam campus includes not only a place of worship, but a school, a health centre and a social enterprise that serves all members of the local community, regardless of faith.

We have heard numerous examples of how religious buildings are being used to build more compassionate and resilient communities. I can think of a number of churches, mosques and temples in my area that reach out and offer support to the homeless, provide food banks and do an amazing amount of charity work. We have heard about services based in those buildings for older people, younger people and marginalised groups, from food banks and community kitchens to vaccination centres and now modern family hubs. I will add the work that my Department funds through the near neighbours cohesion programme, which often operates out of places of worship, bringing together people from diverse background to collaborate on initiatives that improve their local community.

Sadly, because these buildings matter, they can become the focus of hate for those who seek to sow division in our communities. We saw that in the wake of the tragedies in Southport last summer, when the local mosque became the target of thugs participating in violent disorder. What those criminals did not anticipate was the response of local people, Muslims and many non-Muslims alike, to protect and rebuild that mosque. But protecting religious buildings from violence cannot be just the responsibility of local citizens. The Government are committed to protecting the right of individuals to freely practise their religion at their chosen place of worship, and to ensuring that our streets and communities are safe.

That is particularly important at a time when attacks on synagogues and mosques in the UK, and worldwide, have risen. In 2025-26, up to £50.9 million is available to protect faith communities and their places of worship. That includes £18 million for the Jewish community protective security grant, £29.4 million for the protective security for mosques scheme and for security at Muslim faith schools and £3.5 million for the places of worship and associated faith community centres of all faiths.

We know that those measures, though vital, do not necessarily address the deep-seated issues that lead to the need for such protections in the first place. I am sure we all wish they were not needed at all. That is why my Department is leading the cross-Government effort to develop a longer-term, more strategic approach to community cohesion, working in partnership with communities and local stakeholders, including faith and belief groups, to rebuild, to renew and to address those deep-seated issues.

As part of that ambition, the Government recently announced a plan for neighbourhoods: £1.5 billion to invest in 75 areas over the next decade, highlighting the Government’s commitment to repairing fractured communities, bringing people back together and ensuring that people see a visible difference and improvement in their communities. Local neighbourhood boards will provide a space for community representations, which could include those from faith and belief communities, to help shape how the funding is delivered through their local neighbourhood. That could include discussions on the role of places of worship in serving their local communities.

Religious buildings help to make up not just the physical, but the social fabric of our nation. They are a record of our history, a resource for our present and an asset for the future. That is why this Government have continued to fund the listed places of worship scheme. It was due to the difficult fiscal circumstances that we inherited that the scheme’s budget was reduced to £23 million from April 2025. Despite that, the evidence of previous years suggests that that sum should meet the demand, with 94% applying to the scheme for less than £25,000 and more than 70% applying for less than £5,000.

It is worth noting that there is also a range of support for listed places of worship via DCMS and the Department’s arm’s length bodies. For instance, the National Lottery Heritage Fund has committed to investing around £100 million between 2023 and 2026 to support places of worship. In exceptional circumstances, listed places of worship may also be eligible for Historic England’s heritage at risk funding, and in February DCMS announced an additional £15 million for 2025-26 for this sector.

The Churches Conservation Trust also funds repairs to and maintenance of more than 350 churches in its portfolio. Moreover, town and parish councils are civil local authorities, and in that capacity may choose to support the upkeep of religious buildings, which support the development of other community assets.

In addition to the critical day-to-day work of providing spaces that help to meet the needs of local people, churches and religious buildings also often host events of national commemoration and celebration. Examples include the funeral of Her Late Majesty Queen Elizabeth II, His Majesty the King’s coronation and services of remembrance in every community across the country—moments when religious buildings become sites of history and stir the nation’s collective soul. That has also been movingly evident in the images of St Peter’s basilica in Rome over the last few days and weeks, with great crowds gathering to pay their respects to the late Pope Francis, and scenes of jubilant celebration to mark the election of Pope Leo XIV.

I thank the Members who secured this debate, the right hon. Member for Salisbury and the Second Church Estates Commissioner, my hon. Friend the Member for Battersea, and those who participated in it for providing the opportunity to demonstrate—

[Marsha De Cordova]

I thank the Minister for giving way. He is making a good speech responding to the debate, but I raised three points at the start: making the scheme permanent, prioritising support for those projects that are already under way and looking at a capital fund. Will he respond to those specific points?

[Jim McMahon]

I did my best to outline the range of different funding available to local churches and places of worship; this fund is just one of a number. On my hon. Friend’s particular point about the continuation of the fund, Members will appreciate that any matter of future funding is a matter for the spending review, and every Department across Government will make a submission to that.

[John Glen]

Of course the Minister is absolutely right in what he has just said. However, he will also be very aware that within the budgets he is responsible for, there will be capital underspends in-year, so there will be an opportunity for him to make the case to his Secretary of State and to the Treasury, to say, “Should some of that underspend be allocated to these works in progress—the 260 projects that anticipated a VAT return that they do not have?” I urge him to consider taking that opportunity. It would be a very savvy and politically sensible way of proceeding, and would earn him a lot of credit.

[Jim McMahon]

What I can say is that the passion, enthusiasm and commitment shown by all Members here today in talking about the importance of these places of worship—not only the historical status they give to a place in terms of belonging and sense of pride, but how they act as a community anchor for the future—is absolutely appreciated. Our wider work in terms of the plan for neighbourhoods, with the £1.5 billion that we have announced, and the wider work that we are doing, for example on community ownership, is all part of this process.

In my own constituency, the Holy Rosary Catholic Church, which was built in 1955, has now unfortunately closed. Members might think that a 1955 church would be quite mundane in its feel and architecture, but there is a significant grade II listed memorial in that church, designed by George Mayer-Marton, which is a significant focal point for that community. We are working locally to see how we can marshal funds from different places. I give that as an example of how—as everyone in the Chamber will know from their own communities—there is never just one fund that provides answer to the question; we must blend different funding streams together to make these schemes add up. The importance that Members have given to these local schemes is appreciated and supported by this Government.

To directly address the question from the right hon. Member for Salisbury about capital underspends, we will look at that in the round and across the whole range of interventions that the Government take to support local communities. However, I will certainly take the enthusiasm of this debate back to other Ministers in DCMS and make the point to the Minister for Faith, who I am sure is following today.

In a way, we finish where we started: recognising, through the contributions that Members have made, just how important these buildings are as both places of worship—something that has an important role to play in our society—and as places to convene. They are places for people of all faiths and no faith to get the support they need to live a decent and fulfilled life in their community.