Draft Surrey (Structural Changes) Order 2026

Alison McGovern Excerpts

Wednesday 25th February 2026 General Committees

[The Chair]

Good afternoon, ladies and gentlemen. The usual house rules apply: phones should be switched off, please; there should be no hot drinks in the Committee Room; and if anybody who feels that spring is arriving is bold enough to want to take their jacket off, they may do so.

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

I beg to move,

That the Committee has considered the draft Surrey (Structural Changes) Order 2026.

It is a pleasure, as ever, to serve under your chairship, Sir Roger. The draft order was laid before the House on 14 January and, if approved by this House and the other place, will implement a proposal submitted by Elmbridge borough council, Mole Valley district council and Surrey county council for two new unitary councils—East Surrey council and West Surrey council—on a geography covering the entirety of the county of Surrey.

As I have said in the House before, we need to set local authorities on a clear path to financial sustainability. Local government reorganisation is a vital part of that journey. Having layers of councils is both ineffective and inefficient. Reorganisation is not a bureaucratic exercise or tinkering with lines on a map. With one council in charge in each area, we will see quicker decisions to grow our towns and cities and reconnect people to opportunity. Residents will see more preventive care and will benefit from more financially stable councils, with combined services delivering for a larger population providing efficiencies and better value. That is why reorganisation—with stronger local councils equipped to generate economic growth, improve public services and empower communities—is a vital part of our change.

I thank colleagues in this place and councils across the country for working with the Government on this process. To this end, on 5 February 2025, councils in the 21 areas of England that still have two-tier local government, including Surrey, were invited to submit proposals for unitarisation. Two proposals for reorganisation in Surrey were taken to consultation: one for two unitary councils and one for three. Following the close of the consultation, on 28 October 2025 I announced the Secretary of State’s decision to implement, subject to parliamentary approval, the two-unitaries proposal.

In reaching that decision, we considered the proposals carefully against the criteria set out in the invitation letter, alongside the responses to the consultation, all representations and all 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 believed 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 residents rely on, as well as to investing in their futures.

If Parliament approves the draft order, there will be two unitary councils for Surrey from 1 April 2027. To deliver the new unitary councils, the order requires elections to be held in May 2026 for the new East Surrey and West Surrey councils, which will assume their full powers on 1 April 2027. These elections will replace the scheduled county council and some district council elections. The elections will be on the basis of East Surrey having 36 two-member wards and West Surrey having 45 two-member wards. Subsequent elections to the unitary councils will be in 2031 and every four years thereafter. We expect the Local Government Boundary Commission for England to review the wards in time for the 2031 elections. Implementing this proposal and establishing these new unitary authorities will help deliver our vision of having stronger local councils in charge of all local services and controlling local economic powers, to improve local public services and help grow economies.

Before I outline the content of the draft order, I want to bring attention to related issues in Surrey: the level of unsupported debt in Woking, and devolution for Surrey. 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 historical 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 ensure value for money for the national and local taxpayer. We are committed to providing the new unitary with interim financial support, such as capitalisation support, until this process is complete.

On devolution for Surrey, there is a plan that we are taking forward. On 12 February, we set out our intention to deliver a new wave of foundation strategic authorities across England as the next step forward in the Government’s devolution agenda. In Surrey, the Government are working with partners, which will include the new unitary authorities, to establish a foundation strategic authority for the area. This will ensure that relevant functions held at the county level, such as transport and adult skills, can continue to be delivered on that geographic footprint where possible.

We have also proposed that a spatial development strategy should be produced for the Surrey geography, which would be a function held by the foundation strategic authority. The establishment of a strategic authority will be subject to the relevant statutory tests being met, and to local consent. The Government will also ensure that fire and rescue functions continue to be governed on the same geography.

We prepared the draft order having considered the information in the proposals and the representations invited from all the councils concerned on specific matters. The order 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 will be abolished. The councils of those districts and county will be wound up and dissolved. In their place, the functions will be transferred to the two new unitary authorities, East Surrey council and West Surrey council.

The draft order also covers electoral matters, which I have set out, and provides for appropriate transitional arrangements. On transitional arrangements, it places a duty on the existing councils to co-operate with each other, the shadow authorities and the shadow executives, and to create joint committees for East Surrey and West Surrey, which will be dissolved after the first meeting of their respective shadow authorities.

[Mr Andrew Snowden (Fylde) (Con)]

The Minister referenced £500 million of debt repayment support off the back of Woking’s unsupported debt. That rings a bell with me; my neighbouring authority in Blackpool has £500 million of debt, while my Fylde borough council carries no debt. How much do the Government think they will pay in debt support as they look at the other councils going through this process, and have they budgeted an amount for that? Will the debt be paid off before the new authority is created, or will it be transferred to it?

[Alison McGovern]

I thank the hon. Gentleman for his question, which is very important. Dealing with the significant debt that local authorities have built up for a range of reasons is extremely important. He will be aware that we have dealt with the special educational needs and disabilities issue in recent days. He raises his point in the context of reorganisation, and those decisions will be taken on a case-by-case basis. It is very important that we get this issue right, and I look forward to discussing with him the details of the case he mentioned on many occasions, I am sure, as we move forward with Lancashire reorganisation.

I am pleased that Surrey leaders, members and officers have already commenced and implemented on a voluntary basis some of the transitional arrangements in the draft order to support delivery of the two new unitary councils. As such, the required joint committees have been set up and the implementation team agreed, and work is under way on the required implementation plan.

I would like to take this opportunity to thank all the Surrey councils and everyone involved in this process for their continued hard work and collaboration for local government reorganisation in Surrey. I know that this is not easy, and I reiterate my commitment to continue to support councils through the process. As part of that, we have confirmed £63 million in new funding for all 21 areas going through reorganisation, including Surrey, to help make the change.

In conclusion, through the draft 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 public services to residents. I commend the draft order to the Committee.

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[Alison McGovern]

I thank all Members who have contributed to this debate, and I also thank the Members, particularly those from Surrey, who have engaged with me on this subject in recent months—I really appreciate their time and effort. I will try my best to respond to the points that have been made but, as the hon. Member for Guildford rightly expressed, I may need to write to her and others with more detail, particularly where they have requested specific guidance or advice that has been given previously; I think it is easier for members of the Committee if I provide that to her directly.

I will turn to some of the questions asked by the hon. Member for Ruislip, Northwood and Pinner. He mentioned devolution, and I answered his question in my opening speech when I said that the next step is a foundation strategic authority. Today we are dealing with reorganisation, and the Government believe that it is right to ensure the firm foundations of the unitary authorities before we proceed, but we are determined none the less to move forward with devolution for England.

The hon. Gentleman also asked about the SEND deficit; I was interested in the specific figures he mentioned, as I do not believe that any firm numbers have been confirmed yet. I am in daily contact with DFE Ministers and others, so I am sure we can correspond on that matter.

[Anna Dixon (Shipley) (Lab)]

Will the Minister take a brief intervention?

[Alison McGovern]

I can, if my hon. Friend really wants to intervene. [Laughter.]

[Anna Dixon]

No—I withdraw.

[Alison McGovern]

I will happily correspond with any Members interested in that subject, but nothing has been confirmed yet. Let us try to make progress on that; it is very important for all local authorities.

The hon. Member for Ruislip, Northwood and Pinner asked whether this will be the sole reorganisation, and the answer is no. We are making progress on the next waves of reorganisation, and there will be more for the Government to say on that very shortly. He also asked for guidance on the new high-value council tax surcharge that we have introduced, as well as the £63 million extra in capability funding. We have been in consultation and collaboration with councils and the Local Government Association on both those matters, as we have been throughout all of reorganisation. I will happily provide the hon. Gentleman with more detail on that, if he wishes.

The hon. Member for Guildford asked about precedents from other reorganisations. Of course, we take into account what has happened previously, and the criteria against which decisions are judged are set out in the invitation letter. She asked about the county council leadership, and I can write to her with details of that process, if she would like. She also asked some detailed questions on risks and the technicalities of vacancies and by-elections, and I will again write to her with the precise details.

The hon. Member for Broxbourne asked about the name and our fellow Member’s campaign. Following oral questions, I will engage with the Member concerned, so he need have no fear—we will be listening to his points.

Finally, the hon. Member for Woking asked about the situation that he rightly described as incredibly serious—it is much more serious for any council to have got into that position than the attention that it is often given would suggest. I will write to him on the next steps with the commissioners, how it affects the whole best value process and the background of that. He also asked about the specifics of cancelling elections last year. I do not think that has any relevance, but I will write to him to confirm that, as I think he asked a specific point about advice.

I say to Surrey Members, through the Committee, that there are significant financial challenges here, and I do not underestimate how important it is to get this right to ensure that services can continue to be delivered for residents. I look forward to working together with Surrey Members to get those decisions right, so that we all get this process to the best place it can be.

The Government’s ambition is to simplify local government by ending the two-tier system and establishing new single-tier unitary councils. It is a once-in-a-generation reform to make stronger local councils that are empowered across local services and equipped to get economic growth going, improve services and empower communities. The draft order provides for two new unitary councils in Surrey, and it will help ensure that local government is financially sustainable and able to deliver for residents. These are the benefits that the draft order can bestow on the people and businesses of Surrey, and I therefore commend it to the Committee.

[The Chair]

Before I put the Question, I have been discussing with m’learned friend, the Clerk, the situation that arises. The Minister has, as ever, entirely courteously and properly indicated that she will respond in writing to some of the questions that have been asked, and it is not my place to interfere with the process at all. However, while the draft order relates to Surrey, it is clear that there are potentially wider implications that might be of interest. I gently suggest that, if she chose, at the very least, to copy the two Opposition Front Benchers into her letters, that would probably be hugely appreciated.

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[Alison McGovern]

As you might expect, Sir Roger, I entirely agree with your suggestion, and I would be very happy to do so.

[The Chair]

As ever, courteous—thank you very much indeed.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Surrey (Structural Changes) Order 2026.

Oral Answers to Questions

Alison McGovern Excerpts

Monday 23rd February 2026 Commons Chamber

[Sam Rushworth (Bishop Auckland) (Lab)]

I know that the people who elect us to this place believe that it is important for politicians to uphold standards, whether at a national or local level. There is growing concern about the public behaviour of the leader and deputy leader of the Reform-led council in Durham, but they have changed the regime for standards, so that a committee of only three, with two Reform members, looks at those issues. Will the Minister consider an independent commissioner for standards for local government to ensure that we can hold our representatives to account?

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

I thought I was going to get away without answering any questions, Mr Speaker. My hon. Friend raises an important issue. On 11 November last year, we published a Government response to a consultation and I am anxious to get on with taking more steps to address the kind of thing that he raises as quickly as we can.

[Sir Julian Smith (Skipton and Ripon) (Con)]

T7. Small businesses across North Yorkshire are under massive pressure from national insurance, the workers’ rights Bill, rates, energy costs—the list goes on. Now that the consultation on the tourist tax has closed, will the Minister put that tax on pause in the interests of job creation for young people? The stats today are truly appalling.

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[Valerie Vaz (Walsall and Bloxwich) (Lab)]

Will the Minister meet me to discuss the decisions of Walsall council, including the closure of the Walsall Leather Museum against the wishes of local people?

[Alison McGovern]

I will.

[Wendy Morton (Aldridge-Brownhills) (Con)]

I have another request from Walsall borough residents. Earlier today, the Secretary of State said that local people know best. I have sent him an invitation to a peaceful protest in Aldridge on Saturday; residents from right across the constituency are coming together to protect their precious green belt. Will he come and meet with them?

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[Alison McGovern]

Birmingham city council has strengthened its financial position, and its balanced budget proposal for ’26-27 is a significant milestone. That has been made possible by the Government’s funding reforms, which increase Birmingham’s core spending power by 45% from ’24-25 to ’28-29, because we recognise that councils should be funded in line with poverty and deprivation.

[Dr Al Pinkerton (Surrey Heath) (LD)]

The Minister has talked about the protections afforded by local plans, but in areas such as Surrey Heath and Guildford, which have experienced a near-doubling of housing targets, those protections have been stripped away according to the tilted balance approach. What protections will the Minister put in place as at least a temporary measure to protect our communities from speculative development?

[Luke Myer (Middlesbrough South and East Cleveland) (Lab)]

This Government have announced that they are awarding over £18 million to Redcar and Cleveland borough council to help it tackle the broken children’s social care market. While that is very welcome, it is a shame that it is necessary, so will Ministers meet my council leader to discuss what further support can be put in place to make sure this is not needed in future?

[Alison McGovern]

I thank my hon. Friend for raising this incredibly important issue; I am working closely with Department for Education Ministers on it. I had the pleasure of speaking to a representative of Redcar and Cleveland earlier today, but I will keep working closely with my hon. Friend as well.

[Alicia Kearns (Rutland and Stamford) (Con)]

I am afraid that this question may feel like groundhog day. This time last month, I asked for a meeting about local government reform, because my residents are so concerned. I was promised a meeting, yet despite having chased at least twice a week every single week for the past month, we have had zero response from the Department. When are we going to get the meetings on really important matters that we are promised in this Chamber?

[Alison McGovern]

I thank the hon. Lady for chasing that. I am sure we will meet before too long. [Laughter.]

[Alicia Kearns]

It is not funny.

[Alison McGovern]

I do not think it is funny either. We will meet before too long and get on with it, because local government reorganisation is very important.

[Euan Stainbank (Falkirk) (Lab)]

In Falkirk, an allocation from Labour’s impact fund has addressed the funding gap that would otherwise have risked the delivery of Scottish Canals’ national centre of excellence for canals and traditional skills. Will the Minister visit this regeneration project once it is completed to celebrate this Labour Government’s investment in supporting Falkirk?

Local Government Finance Reforms

Alison McGovern Excerpts

Monday 23rd February 2026 Written Statements

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

Earlier this month, this Government delivered the first multi-year local government finance settlement in a decade, coming good on our promise of reforming the system—which previous Governments failed to do.

After 14 years of austerity and decades of centralisation, councils around the country were on their knees. After being forced to cut libraries and youth clubs, there was nothing left—especially in the most deprived communities —as funding was not matched to need.

Our reforms tackled this head-on, delivering a fairer settlement which puts funding where it is needed most. As a result, by the end of the multi-year settlement period, the most deprived places will receive 45% more funding per head than the least deprived. Before our reforms, only around a third of councils were given the funding that broadly matched their assessed need. Our reforms bring that up to nine in 10 councils by 2028-29.

Getting funding to where it is needed is a critical step to support local government—but we are going further. For too long councils have been left footing the bill for expensive services that do not support residents quickly enough, and operating in a wider system that has not provided the right safeguards on financial risk. That is why, alongside our funding reforms, this Government are:

Resolving special educational needs and disabilities deficits by writing off 90% of councils dedicated schools grant (DSG) high needs deficits accrued to the end of 2025-26—projected to be worth over £5 billion.

Investing in prevention to end the cycle of councils footing the bill for expensive statutory services—with £2.4 billion into the Families First Partnership and £2.7 billion in homelessness, rough sleeping and domestic abuse.

Taking action to strengthen safeguards over local government borrowing—bringing forward a consultation on the use of powers to reduce capital risk.

Rebuilding the broken local audit system—including the local audit backstop programme and, through the English Devolution and Community Empowerment Bill, creating the Local Audit Office in autumn 2026.

Granting additional council tax flexibilities to seven councils with below average bills to help them reach financial sustainability.

These steps are helping to fix the foundations, but we know that recovering from the legacy of the broken local government finance system overseen by previous Governments will take time.

That is why today, I am confirming in principle support for councils in the most difficult positions. Unlike the reckless attitude of the previous Government, our approach will ensure that support is predicated on transforming services, so that councils in difficult situations move towards a sustainable recovery.

Failing system that exposed councils to increased risk

We know that the financial risk that councils have been carrying has increased in recent years, amid underfunding and the broken local government finance system.

And we also know that the most extreme financial failure in the sector was driven by a small number of councils who have amassed extreme levels of debt.

Between 2016-17 and 2018-19, councils spent an estimated £6.6 billion on acquiring commercial property, a fourteenfold increase on the preceding three years. This rapid expansion of debt-financed commercialism took place against a backdrop of funding reductions and a failure to stop bad practices that has left some councils highly exposed to risk and led to severe financial failure in others—leaving some residents facing the consequences of hundreds of millions of pounds of unsupported debt. The previous Government’s failure to address fundamental problems with the Special Educational Needs and Disabilities system has left the sector billions of pounds in deficit, forcing councils to borrow to meet costs—adding to sector debt and soaking up capacity to invest in communities.

Sensible capital investment by councils is essential to support decent services, provide jobs and build much-needed homes. We need councils to have the capacity to play their part in delivering growth. But this needs to happen in a system with the right safeguards to ensure that councils invest prudently. Too often, this was not the case under the previous Government. Residents do not deserve to pay the price for bad decisions they never made.

We are already taking extraordinary action to provide debt repayment support for two councils: Woking and Thurrock. Debt repayment support is not a decision this Government are taking lightly, especially in the context of constrained public finances. But past failures left us with little other choice if we want to protect taxpayers from the spiralling cost of ever-increasing debt, and to protect services for residents in these areas. To safeguard against such failures arising in future, we will fully utilise the statutory capital powers available to Government to ensure the capital system is effective at supporting good, value-for-money investment while preventing reckless practices.

The steps this Government have taken to reform the local government finance system will reduce the unacceptable risk that built up in the sector throughout the previous Government.

But we know that the legacy of the previous system has left some councils struggling to set balanced budgets, with crisis spending leaving them unable to deliver long-term plans for service transformation.

We have been clear that we will continue to support councils in the most difficult positions and I have today agreed in principle exceptional financial support for councils where I have been assured that there is a need in 2026-27 or in relation to previous years. In some cases, these agreements reflect a reprofiling of existing support.

Under the previous Government, increasing numbers of councils seeking exceptional financial support became an accepted part of the finance system. This should clearly not be the case, and I am determined that we begin to break this cycle as part of our reforms to the system—but we cannot undo 14 years of damage overnight.

I am pleased to inform the House that several councils have told me that our reformed settlement has made it unnecessary for them to request support. Many of those who have requested support will go on to see significant increases in core spending power over the Parliament—demonstrating that we are getting money to where it is needed most.

Our reforms have allowed some councils to move away from a long-term reliance on Government support. The total figure is significantly lower than some of the extreme numbers speculated in the media.

The in-principle support agreed today is necessary to enable councils to get on with their budget processes, protecting services for residents in the context of the deep fragility left by the previous Government. But I am clear that this sort of flexibility is designed to be temporary.

Our package of reforms will directly help these councils. Most will also benefit from our 90% write-off of DSG high-needs deficits, which will free up capital budgets and reduce the amount spent on finance costs. That means more money available for services every year. And we will continue to reduce pressure on councils in receipt of exceptional financial support by removing the payday loan premium imposed by the previous Government, which made it more expensive for such councils to borrow to get out of crisis situations.

But the work does not stop there. We will continue to support these councils to transform their services to make them sustainable. As part of the exceptional financial support framework, we will ask these councils to develop robust plans for improving services, so they reach a stable position over the multi-year settlement.

We know that investment in prevention can deliver better outcomes for people and improve financial sustainability. That is why we will take a targeted approach to supporting and challenging these councils to deliver better, more efficient services.

While Government recognise the challenges all councils face, in a minority of cases, these have been exacerbated by poor decision making, excessive risk taking, and a lack of the capability and leadership needed to ensure councils are delivering modern and efficient services.

We will not hesitate to act where there is any evidence of failure. Residents deserve high-quality services, and responsible and prudent financial leadership from their councils. We are also clear that individuals should be held to account where the actions of councils have not been good enough. We are continuing to strengthen local safeguards and ensuring we have a fit-for-purpose framework for stepping in when councils are not delivering—including rebuilding the audit system and updating best value guidance.

[HCWS1346]

Local Government Finance

Alison McGovern Excerpts

Wednesday 11th February 2026 Commons Chamber

[Mr Brash]

I thank the hon. Member for his comments, and I endorse them wholeheartedly. I have heard stories of London boroughs and Birmingham city council putting families in taxis with the threat, “Get in the taxi, or you’re homeless.” They do not know where they will get out at the other end, and they discover that they are in Hartlepool only when they arrive. It is left for our council to deal with the pressure and the additional SEND needs, and for our council to deal with the children, who sometimes end up in care. It is a disgraceful practice that should rightly be cracked down on. I know that the Minister is alive to this problem, and it needs to be dealt with.

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

I thank both my hon. Friend and the hon. Member for Fylde (Mr Snowden) for their comments. My hon. Friend is rightly talking about the financial consequences. Does he think—as I do, and as I am sure the hon. Member for Fylde does—that the abysmal outcomes for children are what we should care about? I am sure he agrees with me that this issue ought to be a priority.

[Mr Brash]

I absolutely agree. Just this week, there have been stories in my local press about a family with children who have been moved to a place where they have no connections, no familial links and no understanding of the local community. The Minister is absolutely right: those children are suffering as a result of the behaviour of councils.

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

It is my pleasure to close this debate, despite the fact that I must apologise to the House. Many Members will know that I suffer from chronic migraine, and I have been having an attack over the past couple of days, so my contribution might not be as long as it might otherwise have been. In show business and in politics, the show must go on, albeit my speech might be slightly shorter than it would have otherwise been, but I think that will be a cause of joy for many Members—[Interruption.] Calm down.

The Secretary of State and I know what a difference the hard work of councillors, frontline staff and all our mayors makes, and we pay tribute to them for everything they do for their communities, as many Members across the House have done. But we also know the consequences of the unfairness of the funding system. The last decade and a half of austerity was felt by the most deprived local authorities, because the link between funding and deprivation was broken.

The shadow Minister seemed to imply in his remarks that he thought that the link ought to simply be with statutory duties, rather than any consideration at all being taken of the impact of deprivation. I would just say to him that those communities that suffered most, that were left out for far too long and that have struggled with the consequences of deprivation will wholeheartedly disagree with him. That is why today we are restoring the link with deprivation and ending the irrational inequality of the previous funding system. We are, as many have said, providing the first multi-year settlement in a decade, we are investing in changing our public services, and we are simplifying funding for local government.

[Graham Stuart]

Will the Minister give way?

[Alison McGovern]

The right hon. Gentleman has had ample time to contribute, and while I would normally give way with gusto and have a bit of political knockabout with him, today is not the day for that.

I would like to take this opportunity to thank the right hon. Gentleman and everybody else who has contributed today and also to thank those who contributed to the consultation on the provisional settlement and the Members who made representations to me directly. There could be no quick fixes. We cannot undo over a decade of damage overnight, but the settlement we are discussing today is our most significant move yet to make English local government more sustainable, and I am committed to going further in coming years to fix the pressures our councils are facing. The Secretary of State set out the various mechanisms that we are employing to do that in his opening speech. This Labour Government have backed local governments through action, and since coming to power we have made available a nearly 25% increase in core spending power in ’28-29, worth £16.6 billion.

I shall briefly turn to the points Members made. The hon. Member for Taunton and Wellington (Gideon Amos) relayed the situation with regard to flooding on the Somerset levels. I send my support to his constituents and will work with the Flooding Minister, my hon. Friend the Member for Kingston upon Hull West and Haltemprice (Emma Hardy), as required. The Chair of the Select Committee, my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi), and the former Chair, my hon. Friend the Member for Sheffield South East (Mr Betts), told me to be bold and I will try, but I look forward to their support in persuading all our colleagues in this place to vote for whatever bold solutions we come up with. Members including my hon. Friends the Members for Hartlepool (Mr Brash) and for Croydon East (Natasha Irons) and the hon. Member for Fylde (Mr Snowden) talked about failures in children’s care, and I feel sure that we will work together on that.

Many Members talked about their experiences of councils struggling yet often achieving, despite that struggle, to provide great innovative services on lean budgets, and we applaud them all for that.

[James Wild]

Will the Minister give way?

[Alison McGovern]

I am determined not to give way, if that is okay—I think we need to bring this debate to a close. [Interruption.] The hon. Member for North West Norfolk (James Wild) asks me about remoteness from a sedentary position. I have discussed this issue in detail with many Members on a one-to-one basis, and I repeat that there are other ways in which the settlement accounts for the actual costs of providing services, such as the area cost adjustment and other means. I do not agree with what has been said, but I do not want to detain the House any longer.

I had a wonderful January engaging with many Members across this House on the settlement; it was a fascinating opportunity to hear about the uniqueness of every area. I particularly thank my colleagues from Knowsley, St Helens, Gateshead and Banbury for the way in which they engaged on this settlement and contributed to how it looks today.

I thank all Members once again for their valuable contributions today. The Government are under no illusion about the scale of the challenge that local authorities face as they continue to deal with the legacy of the previous system, but our changes will make a big difference. They will get money to where it is needed most, creating a fairer and evidence-based funding system and—most importantly to me and many others—restoring the link between funding and poverty.

Question put.

Local Government Best Value: Bedford and Spelthorne Borough Councils

Alison McGovern Excerpts

Tuesday 10th February 2026 Written Statements

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

This Government are committed to taking the action necessary to fix the foundations of local government. Today, I am updating the House on the steps we are taking to support two councils to recover and reform: Bedford borough council and Spelthorne borough council.

Bedford borough council

Today I have exercised powers under section 10 of the Local Government Act 1999 to carry out a best value inspection of Bedford borough council’s compliance with the best value duty. Given the economic importance of Bedford, I am committed to ensuring strong oversight to safeguard investment and support regional growth.

I have appointed Paul Najsarek as the inspector and, on his request, Margaret Lee and Parveen Akhtar as assistant inspectors.

Given our concerns relate to broad decision making, and whether the standards expected for effective and convenient local government are being upheld, the inspection will consider decision making in relation to those functions, encompassing leadership, governance, organisational culture, use of resources, partnerships and community engagement, and impact on service delivery. It will also consider the authority’s capacity to address the recommendations made by the Local Government Association corporate peer challenge team and progress review, the Chartered Institute of Public Finance and Accountancy review and the external auditor’s (KPMG) update report to Bedford borough council’s audit committee meeting on 27 November 2025.

I look forward to receiving the inspector’s report in June and will carefully consider this before determining the next steps for Bedford borough council. If it shows that the council is in breach of its best value duty, we will then consider whether to exercise powers under section 15 of the 1999 Local Government Act.

Spelthorne borough council

Today, I am publishing the commissioners at Spelthorne borough council’s first report, received in December 2025, which sets out early progress, including the adoption of an improvement and recovery plan, restructuring of debt and the implementation of a new minimum revenue provision policy. These steps are critical to improving the council’s financial sustainability ahead of Surrey’s planned local government reorganisation in April 2027.

While I welcome the progress to date, significant challenges remain. Delivering these improvements will be essential to ensuring stability and readiness for the changes ahead, and I look forward to the council and commissioners working together to take forward the strategy they have outlined to address these issues.

To support continued progress at the council, the Secretary of State has confirmed the reappointments of Lesley Seary as lead commissioner and Deborah McLaughlin, Peter Robinson and Mervyn Greer as commissioners, until the expiry of the directions on 31 May 2030 as a backstop. In practice, their appointments will cease when Spelthorne borough council is dissolved as part of the planned local government reorganisation in Surrey.

I recognise that local government reorganisation in Surrey brings added urgency and complexity to Spelthorne’s improvement journey. I have therefore asked commissioners to include in their next report reflections on the reorganisation process, including how Government can best support new councils in meeting their best value duty from day one, and any urgent issues that fall outside their current remit. I look forward to receiving their progress report later this summer.

I am committed to working with these councils to ensure their compliance with the best value duty and the high standards of governance that local residents expect. My Department will take action to support improvement where needed.

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

[HCWS1323]

Inner-London Local Authorities: Funding

Alison McGovern Excerpts

Tuesday 10th February 2026 Westminster Hall

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

It is a pleasure to serve under your chairship, Dr Murrison. I thank my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) for securing the debate, in which hon. Members have raised some important issues. She posed some questions that I will come to in my response. She mentioned that I served on the London borough of Southwark just before she was first elected to the best borough in London. She is right that a bit of my heart will be forever in Camberwell.

I learned a lot during those years, but local government has changed in the 20 years since I was first elected. Poverty in London has also changed, along with the services that boroughs try to provide. In a moment of shock and surprise, I find myself in agreement with the shadow Minister, the hon. Member for Ruislip, Northwood and Pinner (David Simmonds). He rightly characterises a situation faced by councils where costs are spiking, often because of policy failure not of their making, whether those are the costs of homelessness, mentioned by my hon. Friend the Member for Dulwich and West Norwood, or the costs associated with SEND mentioned by many hon. Members, to which I would add adult and children’s care.

We have fundamental issues to tackle and many of the policy levers lie in this place, not in town halls. We all need to own our responsibilities on that front. We continually need to rethink how we approach this issue. It is a shame in many ways that I could not introduce some of my colleagues in other parts of the country to this discussion. Hon. Members will have seen in the press that I have been variously accused of robbing the north to send money to the south, and now robbing London to send money somewhere else—the north or the midlands, I do not know.

In fact, the consistent theme in the funding settlement is the Government’s attempt to reconnect council funding with deprivation. I will come to the detail of that, because we are committed to making long-overdue changes to council funding. This is the first multi-year local government finance settlement in a decade, which, as Members have mentioned, will make a huge difference.

[Joe Powell]

Will the Minister give way?

[Alison McGovern]

I will make some progress. Yesterday’s announcement keeps our promise of a multi-year settlement, because local communities in London and elsewhere deserved better than the out-of-date funding allocations not aligned with need, which meant poorer public services and slower growth, particularly for those dealing with the consequences of poverty.

We are making changes to how councils are funded. Many of these are changes that the public, local government partners and Parliament have long called for. We consulted four times on these changes, and we are grateful for the engagement from all corners, including from hon. Members in this debate. The engagement has informed our approach at every stage. The settlement confirms multi-year funding, our pledge to realign funding with need, and our commitment to end wasteful competitive bidding and to simplify funding.

The Government have an important role as an equaliser for local government income, and we are directing funding towards the places that are less able to meet their needs through locally raised income, which will enable all local authorities to provide similar levels of services to their residents. However, that is true notwithstanding the major differences in spiking demands around the country.

Following the provisional settlement consultation, the Government have announced an additional £740 million in grant funding as part of the final settlement, including a £440 million uplift to the recovery grant, bringing total investment over the multi-year settlement to £2.6 billion. Of that £2.6 billion, £400 million is supporting places in London that suffered the most from historical funding cuts, and there is an additional £272 million to bring the total investment in homelessness and rough sleeping services over the next three years to £3.5 billion—including over £800 million in London as part of our national plan to end homelessness.

That is a significant investment in the capital’s homelessness services, which is much needed, as has been mentioned by Members from across the House. It takes the total new grant funding delivered through the annual settlements for 2026-27 to 2028-29 to over £4 billion. Since coming to power, we have pledged a 24.2% increase in core spending power by 2028-29 when compared with 2024-25, worth over £16.6 billion. It is a significant uplift in the spending power of councils.

According to analysis by the Department, as a result of our reforms, nine in 10 councils will receive funding that broadly matches their assessed need by the end of the multi-year settlement, up from around one third before our reforms. In 2028-29, the most deprived places will receive 45% more funding per head than the least deprived.

[Peter Fortune]

Will the Minister give way?

[Alison McGovern]

I will give way to my hon. Friend the Member for Kensington and Bayswater (Joe Powell) first.

[Joe Powell]

As the Minister knows, where we have pockets of high deprivation in London, one concern is protecting those communities. When the settlement was announced, it was very clear that the Government’s expectation was that things like council tax support should not be the first thing that councils looked to. Does the Minister agree that the royal borough of Kensington and Chelsea cutting £441,000 of council tax support to our lowest income families as its first decision is not the right way to go about building a sustainable budget for the future?

--- Later in debate ---

[Alison McGovern]

I agree, and my hon. Friend makes that case very well. I imagine that his local authority could have made other choices than that one.

[Peter Fortune]

I thank the Minister for the objective way that she is tackling this debate, but the reality for the London borough of Bromley is a £22 million cut over the next three-year period. Thinking about the deprivation and the challenges that we have, including the second-highest number of education, health and care plans in London, the cut will have a significant impact on our residents, despite pushing council tax as high as we can.

[Alison McGovern]

I take the hon. Gentleman’s point. Our challenge is to understand how we can best use our resources to support all our children. We could try to increase funding again and again, without any changes to the system, but we would not necessarily get better outcomes, and costs would keep going up, not least because councils have issues with how they are able to provide some of the support that children need. We need to get to a more stable financial position and take responsibility in this place to change the policy failures that caused the cost spikes that the hon. Gentleman mentioned.

Compared with 2024-25, by 2028-29 London will see an increase in core spending power of more than £3 billion. The vast majority of councils in London will see a real-terms increase between 2024-25 and 2028-29 and a fairer system that addresses issues that matter in London—and across England—including recognising the additional strain that commuters and tourists can place on service provision, taking into account need in specific high-demand service areas such as temporary accommodation and crucially, using the most up-to-date data, including the 2025 indices of multiple deprivation. That has been the subject of some feedback to the Department. It is a statement of the obvious that we would use the most up-to-date data, and it so happens that that data can better account for the impact of housing costs on poverty. That was always the intention, and we would always have done that, whatever noise I have picked up on this topic.

[Munira Wilson (Twickenham) (LD)]

rose—

[Munira Wilson]

I apologise, Dr Murrison. The debate moved more quickly than I had anticipated. I thank the Minister for giving way despite my late arrival. I have a lot of sympathy with the Government’s aims; we all want to tackle deprivation and poverty. In my borough, the London borough of Richmond, we are going to see £29 million of cuts over the next three years, which will stretch to £46 million by year 4. That means a huge cliff edge, and at the moment the Government are refusing to provide any transitional protection. I recognise that Richmond is largely a wealthy borough, but we have significant pockets of deprivation and very needy residents, particularly young and older vulnerable residents. Despite a maximum council tax hike and efficiency savings, we will see cuts to the most vulnerable.

Will the Minister finally agree to meet with me, my hon. Friend the Member for Richmond Park (Sarah Olney) and the leader of our council to talk about how we can put transitional provisions in place? She has refused to do that so far. [Interruption.] She seems perplexed, but her latest letter refused a meeting with us, so I am asking her again, in the spirit of cross-party working, if she will meet us to discuss this.

[Alison McGovern]

The reason for my perplexed state is that during the period of consultation with Members of this House, I met 140 Members of Parliament on the settlement. I am sorry if the hon. Member has had the message that I will not meet her, because my office door has literally been open to Members over the recent period. We can discuss this at any point. The fact is that the London borough of Richmond is in the least deprived decile. While she rightly stands up for her borough, when I look at some parts of the country that have been forgotten for far too long, I feel that it is right that we have taken the decision through the settlement to reconnect funding with deprivation. But I can discuss that with her in detail in the future.

I want to make some points about cost. Local governments are still under pressure, and despite the increase of nearly 25% that I mentioned, that pressure will remain because of the costs that they are facing. That is why we are taking action now to support local authorities as we move towards a reformed special educational needs and disabilities system. The first phase of support will address historic deficits accrued, as was mentioned by the shadow Minister. All local authorities will receive a grant covering 90% of their high needs dedicated schools grant deficit, subject to the approval of a local change plan.

We are also fixing social care services, on which many people, including in London, rely. We are changing children’s social care in a generation by rolling out the Families First Partnership programme, backed by more than £2.4 billion of investment across this multi-year settlement. We are providing about £4.6 billion of additional funding, available for adult social care, by 2028-29, compared with ’25-26. When it comes to children’s care, the issue is not only that the costs are unsustainable, but that we are failing in our duty to so many children, and that is why we must change.

It is important to recognise that some places, including some inner-London boroughs, benefited disproportionately from the old system. However, we are supporting those places to plan for changes with transitional arrangements, including by protecting their income and providing additional flexibilities. For London, we are providing more than £550 million for income protection over the multi-year settlement.

[Luke Taylor]

The Minister mentions additional flexibility. Within that does she include allowing what I think are five inner-London boroughs, including Wandsworth, to increase their council tax by up to 10% without a referendum? Is that the additional flexibility that she mentions?

[Alison McGovern]

We set out that flexibility when we made the provisional statement, and there will be more details of that in the Chamber tomorrow. I am at the slight disadvantage of speaking between the publication of the settlement and the full debate in the House of Commons tomorrow. There will be more detail tomorrow for the hon. Gentleman.

The council tax bill for a house worth £5 million in central London can be less than the bill for an ordinary family home in places such as Blackpool and Darlington. It is not fair that properties worth so much more pay less council tax and receive comparatively better services than elsewhere, because of Government subsidy. Removing referendum principles for the six councils, as we have said, will allocate more than £250 million more funding for places with higher need, instead of subsidising very low bills for 500,000 households under those councils.

I want to turn to the direct questions from my hon. Friend the Member for Dulwich and West Norwood, who led the debate. She raised the issue of the costs of temporary accommodation, and she was absolutely correct to do so. I refer her to the homelessness strategy, which I published just before Christmas. The problems in temporary accommodation are very geographically concentrated. I am anxious to work with London councils, including her councils, to get children and families out of poor-quality, expensive temporary accommodation and into better-quality temporary accommodation that will be more reasonably priced for local authorities—even if it is still temporary, because some of what we are paying for is very poor value.

My hon. Friend mentioned LHA rates and asked whether I will work with the DWP and Treasury. I can tell her that I am doing so. The Housing, Communities and Local Government Committee Chair, my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi), also raised that with me in another setting. I will happily update the House as we go. My hon. Friend the Member for Dulwich and West Norwood mentioned a stalled site in her borough, which sounds like a dreadful waste. I will alert the Housing Minister and the Secretary of State to that. They were anxious to bring forward their plan for London with the Mayor of London for this very reason, but I will refer them to this debate. She asked about a visitor levy, which other Members mentioned too. I will take those comments as input to the consultation on a visitor levy.

My hon. Friend and the shadow Minister mentioned EFS. Again, shockingly, I found myself agreeing with the shadow Minister: that system should have been used sparingly and for exceptional circumstances. It is becoming less exceptional, and we have to get to the heart of why councils are in this position. Some of that is about costs, as we have said, but there are also other things, like reintroducing local audit, that I believe will help to defend the system and make it more sustainable as we go. My hon. Friend also asked about SEND deficits, which I have mentioned.

We are making changes that we believe are necessary to change public services and get local government back on its feet. By realigning funding with need and reforming services that put pressure on local government, we will empower local leaders to deliver for communities in London and across the country. Unlike many people, I firmly believe that it does not matter whether someone lives in a northern town or city, in the midlands, the south-west, Scotland, Wales or London—poverty is poverty, and we should respond to it all.

Written Statement: Correction

Alison McGovern Excerpts

Monday 9th February 2026 Written Statements

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

On 5 February I made a written statement on local government reorganisation. There was a minor error in the statement. In outlining the proposals received from the invitation area of Kent and Medway, it said:

“Dartford Borough Council and Gravesham Borough Council submitted a proposal for four unitary councils…

Dover District Council, Swale Borough Council and Thanet District Council submitted a proposal for five unitary councils.”

[Official Report, 5 February 2026; Vol. 780, c. 25WS.]

It should have said:



“Dover District Council, Swale Borough Council and Thanet District Council submitted a proposal for four unitary councils…

Dartford Borough Council and Gravesham Borough Council submitted a proposal for five unitary councils.”

Local Supported Housing Strategies

Alison McGovern Excerpts

Monday 9th February 2026 Written Statements

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

Today I am pleased to publish statutory guidance under Section 2 of the Supported Housing (Regulatory Oversight) Act 2023, which sets out the framework for local housing authorities in England to formulate and publish local supported housing strategies.

The local supported housing strategies are a crucial step forward in increasing the Government’s and local councils’ understanding of the supply and need for this vital accommodation for people with care and support needs. The Act places a duty on all local housing authorities in England to assess the current provision of supported housing, and to estimate current unmet and future need. Delivery of the strategies will ensure that councils can plan new supply of supported housing effectively, and will enable better commissioning, oversight and safeguarding for vulnerable residents.

The guidance includes:

A framework for local supported housing strategies: including the statutory requirements under the Supported Housing (Regulatory Oversight) Act 2023, covering strategic priorities, partnership arrangements, needs assessment, and delivery plans, with the first strategy due by 31 March 2027 and updates every five years.

Process and components: Providing detailed steps for developing strategies, including designating strategic leads, engaging partners, conducting a needs assessment, and creating a delivery plan covering funding, development pipeline, referrals, void management, and move-on pathways.

Governance, reporting, and monitoring: Requirements for formal governance structures, annual reporting to MHCLG and ongoing review of progress, ensuring alignment with wider housing, health, and social care strategies and compliance with data-sharing and quality standards.

To support implementation the Government are allocating a total of £39 million in new burdens funding to local authorities. This will ensure that councils can develop robust local supported housing strategies and prepare for the introduction of full licensing and oversight functions.

This is an important first step in implementing measures that will enable local areas to properly understand who is delivering supported housing in the area, and will help ensure that in the future there is the right kind of supported housing to meet the needs of those who require it.

Local Government Finance Settlement 2026-27 to 2028-29

Alison McGovern Excerpts

Monday 9th February 2026 Written Statements

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

This time last year, this Government committed to delivering long-overdue reforms to local government funding, through the first multi-year local government finance settlement in a decade. Today we have delivered on that promise.

The previous Government’s funding system was not fit for purpose. It meant that cuts hit our most deprived communities hardest—the places that could least afford them. Those councils were left on their knees, with services cut to the bone. Youth clubs and libraries were sold off. Bins went uncollected and streets were left dirty. Wherever you lived, whether you got essential funding depended on 10-year-old data and out-of-date formulas. This settlement delivers transformational changes that the public, our local government partners and Parliament have long called for.

We are reconnecting funding with need. Only around a third of councils were given the funding to broadly match their assessed need before our reforms. By the end of the multi-year settlement, that will be nine in 10 councils. As a result of these changes, the most deprived places will receive 45% more funding per head than the least deprived in 2028-29.

We have consulted four times on these changes, most recently on the provisional settlement, and we are grateful for the engagement from all corners. At each stage we have listened to views to ensure we are putting funding where it is most needed. We said a year ago that fixing the broken system that we inherited would require tough decisions, and we have made them in close partnership with all who have given their time, energy and expertise. Communities across the country are lucky to have such passionate representatives committed to fighting their corner.

This settlement is about fairness. It delivers our manifesto commitment to give councils multi-year funding settlements; our pledge to realign funding with need and deprivation; our commitment to simplifying funding and ending wasteful competitive bidding; and our promise finally to reset the business rates retention system. We are also delivering a transformation in children’s social care, backed by £2.4 billion.

Today we are going even further by announcing an additional £740 million in grant funding as part of the settlement. As part of this we are confirming a £440 million funding boost to support the areas most impacted by historical funding cuts, as well as additional funding for homelessness and rough sleeping, and for mayors.

I am also pleased to announce a plan to resolve SEND—special educational needs and disabilities—deficits, which have threatened councils’ sustainability and diverted funding from essential day-to-day services. We will resolve 90% of local authorities’ dedicated schools grant high needs deficits accrued to the end of 2025-26, projected to be worth over £5 billion. All local authorities with a SEND deficit will be eligible to receive grant funding, subject to submitting and securing the Department for Education’s approval of a local SEND reform plan.

The local outcomes framework, published alongside the settlement, is an essential component of these reforms. The framework outlines national priority outcomes delivered at a local level and driven by councils as local leaders of place. Rather than micromanaging how councils decide to deliver their services, it will prioritise the outcomes that people care about the most, focusing on progress, not process. It will strengthen the way the Government support and hold councils to account for improving outcomes for their areas. As ever, I am grateful to our colleagues working in local government for their constructive support in its development.

The work does not stop here. We know that the challenges still facing local government are real and complex. Having fixed the foundations, we are ready to take the next steps to transform public services and put local government back on its feet.

The Government’s response to the consultation on the provisional settlement for 2026-27 has been published, as have details of the final settlement.

The final settlement

I have laid before the House the “Local Government Finance Report (England) 2026 to 2027” and the “Referendums Relating to Council Tax Increases (Principles) (England) Report 2026 to 2027”. Together, these reports represent the final local government finance settlement for 2026 to 2027.

The Government will provide over £5.6 billion of new grant funding towards local government services over the next three years. This includes announcing today an additional £740 million in grant funding as part of the final settlement for 2026-27. This takes the total new grant funding delivered through the annual settlements for 2026-27 to 2028-29 to over £4 billion.

With this new funding and other available funding in the settlement, we are today setting out:

A £440 million additional uplift to the recovery grant, aimed at the councils most impacted by cuts during austerity, bringing the total to £2.6 billion through the multi-year settlement;

A £272 million in additional allocations within the homelessness, rough sleeping and domestic abuse grant, bringing the total through the grant to £2.7 billion;

An additional £39.6 million for mayors to build their capacity, bringing the total to £138.6 million through the multi-year settlement; and

An additional £15 million over the multi-year settlement to support stand-alone fire and rescue authorities.

By the end of the multi-year settlement, we will have provided a 15.5% increase in core spending power, worth over £11.4 billion, compared to 2025-26. Since coming into power, we will have made available a 24.3% increase in 2028-29 compared to 2024-25, worth £16.6 billion.

We have listened to feedback and, as a result, have made technical changes to ensure that we more accurately reflect councils’ current income from local business rates pooling arrangements—a way that councils share risk in the business rates system. The Institute for Fiscal Studies noted that the method we used to do this assumed many districts and the City of London started with significantly more funding from pooling than they do in practice. We are committed to changing this, while providing protection for councils for the first year of this change, giving them time to adapt.

To achieve this, the Government will provide a one-off adjustment support grant in 2026-27 to authorities that would otherwise see their core spending power reduce in 2026-27, compared to indicative allocations set out at the provisional settlement. Allocations for this grant are set out within the final settlement. The pooling assumption for 2027-28 and 2028-29 will be subject to consultation at the next settlement, and we will provide an update to councils in due course.

The recovery grant

We have heard many calls for further support to repair the damage done by the previous Government. We previously confirmed that the Government will maintain 2025-26 recovery grant allocations for all authorities across this multi-year settlement. The recovery grant was targeted at deprived places, which suffered the most from historical funding cuts. We have heard clearly through consultation feedback that more support for these areas is needed. The Government are therefore confirming today a £440 million uplift to the recovery grant, targeted towards upper-tier authorities with a funding increase of less than 17% over the period. This brings the total funding through the recovery grant, including the recovery grant guarantee, to £2.6 billion. This Government make no apologies for their commitment to reversing the effects of austerity, starting with the places that have been left behind and disrespected for too long.

We recognise that the current SEND system is not working for children or families, and nor is it working for local authorities, which continue to face significant financial pressures. The Department for Education has set out the principles for a reformed SEND system that meets needs earlier, before challenges escalate, and will set out details of these plans in the upcoming schools White Paper.

Ahead of this, we are introducing support to address local authorities’ dedicated schools grant deficits. All local authorities with SEND deficits will be eligible in 2026-27 to receive a grant covering 90% of their high needs-related DSG deficit accrued up to the end of 2025-26. This grant will be paid in autumn 2026, subject to each local authority submitting and securing the Department for Education’s approval of a local SEND reform plan.

We know that SEND reform will take time to fully embed and local authorities will need further support. For deficits that arise in 2026-27 and 2027-28, local authorities can expect that we will continue to take an appropriate and proportionate approach, although it will not be unlimited. From 2028-29, SEND spending will be covered within the Government’s DEL budget, so local authorities will not be expected to fund future SEND costs from general funds.

Homelessness and rough sleeping

I am also confirming a total uplift of £272 million for the homelessness, rough sleeping and domestic abuse grant, bringing the total value to over £2.7 billion through the settlement, and £3.7 billion including funding outside the settlement. The £159 million of the uplift is funding for supported housing services, announced in the national plan to end homelessness, which we have uplifted by a further £35 million, and with which we are targeting 40 local areas with the greatest single homelessness and rough sleeping need. This additional funding will help local authorities prevent homelessness before it occurs and ensure that vulnerable people are given homes that meet their needs.

Council tax and exceptional financial support

Fairness for taxpayers is at the heart of this Government’s decision making. For the vast majority of councils, the Government will maintain a core referendum threshold of 3%, with a 2% adult social care precept over the multi-year settlement. When taking decisions on council tax levels, the Government expects all authorities to carefully consider the impact on households.

Our local government finance reforms get money to where it is needed, but we recognise that some councils remain in a challenging financial position as they continue to deal with the legacy of the previous system. Some have requested additional flexibility to increase their council tax without holding a referendum next year. We have carefully considered requests from these councils and agreed to small additional flexibilities in only seven councils—less than the councils requested in all but one area. We will provide additional flexibilities so that councils can decide whether to set their council tax above 5% core referendum principles in Bournemouth, Christchurch and Poole (1.75%), Warrington (2.5%), Trafford (2.5%), Worcestershire (4%), Shropshire (4%), North Somerset (4%), and Windsor and Maidenhead (2.5%) next year. These additional flexibilities are a limit, not a target. Decisions on council tax levels are for local authorities. One fire authority will also receive an additional flexibility of £5.

In recognition of financial pressures in some police forces and the importance of public safety, the Secretary of State for Housing, Communities and Local Government and the Home Secretary have also agreed an additional £3.50 council tax flexibility for six police and crime commissioners in 2026-27, where this flexibility was critical to financial sustainability.

These are difficult decisions that are not taken lightly. In line with the approach taken last year, we have not agreed to any requests that could lead to households in those areas paying above the average council tax level.

As set out at the provisional settlement, in order to increase fairness for taxpayers and provide better value for money, we do not intend to set referendum principles in 2027-28 and 2028-29 for six unique authorities with the lowest council tax levels. Band D taxpayers in these areas are paying between £450 and £1,280 less than the average in England—the council tax bill for a house worth £5 million in parts of central London can be less than the bill for an ordinary family home in places such as Blackpool and Darlington. Removing referendum principles in these areas will enable the Government to allocate over £250 million more funding for public services in places with higher need instead of subsidising very low bills for households in these councils.

We have been clear that all authorities should take steps to protect their most vulnerable residents.

In addition, the Government have been clear that we expect local authorities seeking additional support to have robust plans to deliver the improvements and service transformation required to help them to return to financial stability over the multi-year settlement. Alongside upcoming decisions on exceptional financial support requests, we will therefore confirm arrangements for supporting councils in the most difficult positions, including targeted approaches to support invest to save in services that are more effective and more sustainable.

Social care

We know that the pressures on local government are growing. We are committed to transforming the adult social care sector. This settlement allows for around £4.6 billion additional funding available for adult social care in 2028-29, compared to 2025-26, including £500 million for the sector’s first ever fair pay agreement, which will support progress towards a national care service. That means more carers, receiving better pay, with the time to provide the high-quality, compassionate care that they want to give.

This Government are transforming children’s social care through the Families First Partnership programme, backed by £2.4 billion investment in this multi-year settlement. This will enable local services to provide families with the right support at the right time, shifting the system from expensive, statutory provision towards early-intervention and preventive support.

We have further to go: the children’s social care residential market is fundamentally broken. Our aim is to move towards a system rooted in family environments through fostering. The Government set out a plan to expand fostering for 10,000 more children by the end of this Parliament. And using the new powers in the Children’s Wellbeing and Schools Bill, we will explore how we might implement a profit cap in the residential market to ensure that public money delivers care, not profiteering.

Local outcomes framework

In July last year, we announced a draft local government outcomes framework and sought feedback on how we could make outcome-based performance management as effective as possible. Today’s publication is the culmination of extensive engagement with the local government sector since then.

Following feedback, and in recognition of the contribution made by other local partners to the delivery of the outcomes, I am announcing that we have renamed the local government outcomes framework as the “local outcomes framework”. This change acknowledges, and indeed encourages, that partnership working is essential to breaking down silos in delivery and improving outcomes for citizens. But it is right that local authorities, as leaders of place, remain at the heart of driving local delivery and improvement.

The framework will be operational for the spending review period. Alongside funding consolidation and a reduction in individual grant conditions, the framework will shift the focus of central Government away from micromanaging individual activities towards a focus on the outcomes we all care about for local people. By publishing outcomes data in one place, the framework ensures transparency for residents and that central and local government measure progress through the same lens. Where outcomes are poor, we will act, but action will begin by talking to local leaders to support self-improvement and reduce barriers getting in the way of good services.

Mayoral Strategic Authorities

This Government are committed to giving locally elected leaders the powers and funding they need to drive growth and to deliver jobs, new homes and new transport. We are confirming almost £435 million total funding for strategic authorities through the multi-year settlement, through the mayoral capacity fund and the homelessness, rough sleeping and domestic abuse grant, to create greater alignment of the funding at a local level, avoiding needless duplication and waste. This includes an additional £39.6 million of capacity funding from the provisional settlement and an additional £98.7 million for selected mayoral strategic authorities to deliver supported housing services.

We have also taken steps into a new era of fiscal devolution in England, giving mayors the power to raise and invest money into projects that improve their local areas, raising living standards and driving growth through a new overnight visitor levy power for mayors of strategic authorities and, subject to consultation, foundation strategic authorities.

As set out in the autumn Budget and the fair funding review 2.0, the Government are improving the business rates retention system to more consistently support mayoral strategic authorities in driving growth. Options being considered include allocating MSAs a direct share of business rates, building on local growth plans, allowing more tax to be spent where it is raised and providing mayors with a share of regional growth. We will begin engagement with MSAs over the coming weeks to co-develop an offer, including considering how this could work in place of existing grant. No changes will be made to grants without local consent.

Conclusion

We promised that we would fix the foundations of local government by reforming funding, ensuring that local powers were at the right level, mending the broken local audit system and focusing on ambitious public service reforms.

This settlement is a landmark in the story of local government. It represents our progress reforming the services that have grown to dominate local budgets—in adult social care, children’s social care, SEND, and homelessness. Today’s announcement on SEND deficits directly responds to the pressures we have heard about from local partners. Funding for social care and homelessness will shift the system towards early intervention and prevention. We are making progress at pace on our commitment to devolve the right powers to the right levels, and to end the two-tier local government system by establishing new single-tier unitary councils. We have published a strategy to overhaul the local audit system, and the English Devolution and Community Empowerment Bill includes a range of audit measures including the establishment of the Local Audit Office in the autumn. When we are finished, councils will no longer be asked to act as caretakers; they will be asked to act as agents of renewal in building a new, better country.

This written ministerial statement covers England only.

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Local Government Reorganisation and Local Election Postponements

Alison McGovern Excerpts

Thursday 5th February 2026 Written Statements

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

This Government are undertaking one of the biggest reforms to local government in a generation; not only have we overhauled how we fund local government, but we are ending the current two-tier system and replacing it with new single-tier unitary councils.

These reforms are not about funding formulas or lines on a map; they are about better outcomes for the people we serve.

We want to see our country grow economically and socially, but we inherited a local government system that did not put funding where it was needed and that left residents dealing with the disjointed two-tier council system and paying a two-tier premium.

That is why we have put deprivation at the heart of how we fund local government. The top 10% of the most deprived councils will see an average 24% increase in what they have to spend per person—those places, whether in the north or south, east or west, will finally see their areas turn a corner.

Today I can announce the next step in our vital reforms to reorganise local government. We will finally put an end to a two-tier system that slows down local decisions, sees local economies fragmented with different councils responsible for different priorities, and means that outdated boundaries stop our towns and cities from growing.

Instead, we will see one council in charge for each area, fully responsible for taking the quicker decisions to build homes and grow our towns and cities, as well as creating the right conditions for businesses to invest, grow, and create jobs. Reorganisation is a vital element in our vision for reform—stronger local councils equipped to drive economic growth, improve local public services and empower their communities.

Consultation

On 28 November, my Department received final proposals from councils in the final 14 invitation areas for reorganisation. I thank all councils in those areas for their work in bringing these 52 proposals forward. As set out in the invitation, these proposals include the areas of existing neighbouring small unitary councils. Some proposals were accompanied by requests for boundary change, where existing districts would be split. These will require careful consideration.

Today I am launching consultations on all the below proposals, available on gov.uk, and I will deposit a copy of each in the Library of the House.

Four proposals from councils in Cambridgeshire and Peterborough:

Cambridgeshire county council submitted a proposal for two unitary councils.

Cambridge city council, East Cambridgeshire district council and South Cambridgeshire district council submitted a proposal for two unitary councils.

Fenland district council and Peterborough city council submitted a proposal for three unitary councils.

Huntingdonshire district council submitted a proposal for three unitary councils.

Five proposals from councils in Derby and Derbyshire:

Derbyshire county council submitted a proposal for a single unitary council.

Amber Valley borough council submitted a proposal for two unitary councils.

South Derbyshire district council submitted a proposal for two unitary councils.

Bolsover district council and North East Derbyshire district council submitted a proposal for two unitary councils.

Chesterfield borough council, Derby city council, Erewash borough council and High Peak borough council submitted a proposal for two unitary councils.

Derbyshire Dales district council did not submit a proposal.

Five proposals from councils in Devon, Plymouth and Torbay:

Devon county council submitted a proposal for three unitary councils.

South Hams district council, Teignbridge borough council and West Devon borough council submitted a proposal for three unitary councils.

Mid Devon district council, East Devon district council, North Devon council and Torridge district council submitted a proposal for three unitary councils.

Plymouth city council and Exeter city council submitted a proposal for four unitary councils.

Torbay council submitted a proposal for four unitary councils.

Three proposals from councils in Gloucestershire:

Cotswold district council, Gloucestershire county council, Stroud district council and Tewkesbury borough council submitted a proposal for a single unitary council.

Cheltenham borough council submitted a proposal for two unitary councils.

Gloucester city council submitted a proposal for two unitary councils.

Forest of Dean district council did not submit a proposal.

Three proposals from councils in Hertfordshire:

Hertfordshire county council and St Albans City and district council submitted a proposal for two unitary councils.

Watford borough council, East Herts district council and Three Rivers district council submitted a proposal for three unitary councils.

Stevenage borough council, Broxbourne borough council, Dacorum borough council, Hertsmere borough council, North Hertfordshire district council and Welwyn Hatfield borough council submitted a proposal for four unitary councils.

Five proposals from councils in Kent and Medway:

Kent county council submitted a proposal for one unitary council.

Folkestone and Hythe district council, Maidstone borough council, Sevenoaks district council, Tonbridge and Malling borough council and Tunbridge Wells borough council submitted a proposal for three unitary councils.

Dartford borough council and Gravesham borough council submitted a proposal for four unitary councils.

Medway council, Ashford borough council and Canterbury city council submitted a proposal for four unitary councils.

Dover district council, Swale borough council and Thanet district council submitted a proposal for five unitary councils.

Five proposals from councils in Lancashire, Blackburn with Darwen and Blackpool:

Lancashire county council submitted a proposal for two unitary councils.

Blackburn with Darwen council, Fylde borough council, Hyndburn borough council, Rossendale borough council and Wyre borough council submitted a proposal for three unitary councils.

Chorley borough council, Lancaster city council, Preston city council, Ribble Valley borough council, South Ribble borough council and West Lancashire borough council submitted a proposal for four unitary councils.

Blackpool council submitted a proposal for four unitary councils.

Burnley borough council and Pendle borough council submitted a proposal for five unitary councils.

Three proposals from councils in Leicester, Leicestershire and Rutland:

Leicestershire county council submitted a proposal for two unitary councils.

Leicester city council submitted a proposal for two unitary councils.

Blaby district council, Charnwood borough council, Harborough district council, Hinckley and Bosworth borough council, Melton borough council, North West Leicestershire district council, Oadby and Wigston borough council and Rutland county council submitted a proposal for three unitary councils.

Four proposals from Lincolnshire, North Lincolnshire and North East Lincolnshire:

Boston borough council, East Lindsey district council and South Holland district council submitted a proposal for two unitary councils.

Lincoln city council submitted a proposal for four unitary councils.

Lincolnshire county council submitted a proposal for three unitary councils (supported by North East Lincolnshire council and North Lincolnshire council).

North Kesteven council and South Kesteven council submitted a proposal for four unitary councils.

West Lindsey district council did not submit a proposal.

Three proposals from councils in Nottingham and Nottinghamshire:

Nottinghamshire county council and Rushcliffe borough council submitted a proposal for two unitary councils.

Bassetlaw district council, Gedling borough council, Mansfield district council and Newark and Sherwood district council submitted a proposal for two unitary councils.

Nottingham city council submitted a proposal for two unitary councils.

Ashfield district council and Broxtowe borough council did not submit a proposal.

Three proposals from councils in Oxfordshire:

Oxfordshire county council submitted a proposal for a single unitary council.

Cherwell district council, South Oxfordshire district council, Vale of White Horse district council, West Oxfordshire district council and West Berkshire council submitted a proposal for two unitary councils.

Oxford city council submitted a proposal for three unitary councils.

Five proposals from councils in Staffordshire and Stoke-on-Trent:

Staffordshire county council submitted a proposal for two unitary councils.

Stoke-on-Trent city council, East Staffordshire borough council, Stafford borough council and Cannock Chase district council submitted a proposal for two unitary councils.

Staffordshire Moorlands district council submitted a proposal for two unitary councils.

Lichfield district council, Tamworth borough council and South Staffordshire council submitted a proposal for three unitary councils.

Newcastle-under-Lyme borough council submitted a proposal for four unitary councils.

Two proposals from councils in Warwickshire:

Warwickshire county council and Rugby borough council submitted a proposal for a single unitary council.

North Warwickshire borough council, Nuneaton and Bedworth borough council, Stratford-on-Avon district council and Warwick district council submitted a proposal for two unitary councils.

Two proposals from councils in Worcestershire:

Worcestershire county council and Wyre Forest district council submitted a proposal for a single unitary council.

Bromsgrove district council, Malvern Hills district council, Redditch borough council, Worcester city council and Wychavon district council submitted a proposal for two unitary councils.

The consultations will run for seven weeks until 26 March 2026. The consultation documents are available on the Department’s online platform “Citizen Space”, and those responding to the consultations can use that online platform, email or post to submit their views.

I welcome views from all councils in these areas as well as neighbouring councils, and specified public service providers, including health providers and the police, and other business, voluntary and community sector and educational bodies. As before, where boundary changes are requested, we consider it appropriate to consult the Local Government Boundary Commission for England.

I would also welcome responses from any other persons or organisations interested in these proposals, including residents, town and parish councils, businesses and the voluntary and community sector.

Once the consultations have concluded, the Government will assess the proposals against the criteria in the invitation and decide, subject to parliamentary approval, which, if any, proposals are to be implemented, with or without modification. In taking these decisions, we will have regard to all the representations received, including those from the consultation, and all other relevant information available.

I will continue to update the House as further milestones are reached in the delivery of this landmark reform.

Local Elections

I can also inform the House that I have today introduced an order to postpone 30 local elections in councils undertaking local government reorganisation. This includes the 29 previously announced by the Secretary of State, and one additional council—Pendle—following further representations from Pendle borough council’s leadership. These representations, received after the initial decision of 22 January, set out more clearly how capacity and resources would be redirected from election planning and delivery in Pendle towards supporting local government reorganisation, safeguarding the programme’s delivery.

The Secretary of State considered these representations carefully and concluded that postponement is in the best interests of ensuring effective and orderly reorganisation. A copy of his letter to the leader of Pendle borough council notifying them of this decision has been deposited in the House of Commons Library.

I will keep the House informed of any further developments.

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