Debate: Local Government Re-organisation - 3rd Jun 2025

UK-Morocco Partnership and Regional Stability

Local Government Re-organisation

Jim McMahon Excerpts

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Tuesday 3rd June 2025

(3 days, 18 hours ago)

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

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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:

Area	Allocation
Cambridgeshire and Peterborough	£318,816
Derbyshire and Derby	£350,582
Devon, Plymouth and Torbay	£383,326
East Sussex and Brighton	£302,024
Essex, Southend-on-Sea and Thurrock	£514,318
Gloucestershire	£266,855
Hampshire, Isle of Wight, Portsmouth and Southampton	£542,174
Hertfordshire	£378,077
Kent and Medway	£514,410
Lancashire, Blackburn and Blackpool	£449,075
Leicestershire, Leicester and Rutland	£365,888
Lincolnshire, North Lincolnshire and North East Lincolnshire	£357,246
Norfolk	£321,389
Nottinghamshire and Nottingham	£369,754
Oxfordshire	£285,046
Staffordshire and Stoke-on-Trent	£367,336
Suffolk	£290,288
Surrey	£380,734
Warwickshire	£258,565
West Sussex	£315,172
Worcestershire	£257,837

Areas have been asked to agree on up to three councils to receive an equal share of the funding, which will contribute towards facilitating the development of a shared evidence base that will underpin the final proposals as well as contributing to the development of these. This includes areas sharing non-public data to ensure that all proposals are supported by the same robust evidence and analysis. This could include shared baseline data, which has been quality-assured, on key issues such as financial sustainability, service expenditure, impacts on outcomes, service delivery quality and potential changes in sources of income. This could be supported by a memorandum of understanding and a data-sharing agreement. The Local Government Association has published helpful data-sharing principles and a checklist that areas could utilise. The Department will be continuing to engage closely with areas as they develop proposals, to ensure that data is being shared as required. Shortly, the Chartered Institute of Public Finance and Accountancy and F3 Consulting will also release a template to support the presentation of financial information in proposals. This template, or any future templates, are not mandatory, but I expect all areas to agree on the consistent presentation of evidence for their area, recognising that it may still be used to support a range of alternative proposals.

Once areas have notified their Ministry of Housing, Communities and Local Government area lead of the authorities to receive the funding, we will make payments as soon as possible. If areas are unable to reach an agreement on up to three authorities to receive an equal portion of the fund to support the development of proposals across the area, or meet my expectations for a single submission and data sharing, we are ready to provide support.

Feedback and support

I know that areas are seeking further clarity on developing their full proposals. My officials have provided individual written feedback to each area and are in the process of meeting with areas to discuss that feedback. Areas have been encouraged to share that feedback with MPs. Today I am publishing a summary of the feedback to support all areas in progressing their proposals and in the interests of transparency; I will deposit a copy of that document in the Library of the House. Included in the feedback is a reiteration of the Government’s position that a population size of 500,000 or more is a guiding principle, not a strict target. We understand the need for flexibility, especially given our ambition to build out devolution and take account of housing growth alongside local government reorganisation. All proposals, whether they are at the guided level, above it or below it, should set out the rationale for the proposed approach clearly. The approach that we have taken from the outset encourages and allows for councils to determine the right fit for their area. What works in one area may not apply in the same way in another, and so it is right that the process allows for flexibility.

Local government reorganisation should facilitate better and sustained community engagement, and I welcome the steps that areas are taking to consider how to maintain strong community voice. A simplified and standardised system of local area-working and governance is needed, and neighbourhood area committees, led by frontline ward councillors, are the best route to achieve this. Neighbourhood area committees support local authorities to deliver their commitments to community partnership working at a neighbourhood level. There are also opportunities to bring other service providers into broader membership of neighbourhood area committees—for instance, town or parish councillors, where they exist, and co-opted members from other local community organisations. This allows for the benefit of structural efficiencies from local governance reorganisation while deepening localism and engagement across every community.

The priority for the next phase is supporting areas to establish a shared evidence base that will underpin the development of final proposals, and to co-produce solutions to challenges identified by areas in this first phase—whether it is improved service delivery, funding reform, maintaining a strong community voice, achieving sensible geographies or preparing for devolution in tandem.

We are committed to working with colleagues across Government, and with the LGA and its sector support group, to ensure that councils have the information, tools and expertise to develop the solutions that are right for their area, so that new authorities are set up for success. No proposal will be perfect, but nor should we let the perfect be the enemy of the good. Local government has proven its adaptability and resilience, so the most important thing is that we establish new authorities that can continue to evolve and develop with their communities.

Surrey

I am pleased to inform the House that we received proposals for unitary local government from councils in Surrey, and I will provide the House with a full update shortly.

Conclusion

I understand that developing proposals and preparing for local government reorganisation is demanding, and that for areas with new councillors and leaders this is a particularly busy time. I want to reiterate my commitment to working with every area to deliver on this ambitious programme. I am also aware that developing proposals could distract councils from their essential day-to-day activities. However, residents and businesses depend on councils to provide vital services and continue the work necessary for creating successful new unitary councils. This is especially true for progressing local plans, to allocate land for the new homes that we so desperately need. Accordingly, as stated in my invitation letters, I continue to expect local planning authorities to work towards the adoption of an up-to-date local plan as soon as possible. Local government reorganisation should not hinder this essential work; and neither should the introduction of the new legal framework for local plan-making later this year, or our strategic planning reforms. Significant financial assistance has already been provided to eligible authorities to support plan-making, and I urge authorities to make the most of other support available through the LGA’s planning advisory service. Together, we can ensure that our reorganisation efforts are successful and deliver the high-quality public services that our residents deserve.

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