Local Government Outcomes Framework
Jim McMahon Excerpts(3 days, 4 hours ago)
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The Minister for Local Government and English Devolution (Jim McMahon)
Local government delivers over 800 essential services that we all rely on, including to the most vulnerable in society. From shaping local places to supporting community wellbeing, councils directly impact the daily lives of local people, whether they feel safe, feel they belong, and whether they are satisfied with their local area and the facilities and services on their doorstep.
A strong and empowered local government is central to delivery of the national priorities we set out in the plan for change—building 1.5 million homes to supply safe and high-quality housing which is accessible and affordable to all, partnering with the NHS to deliver a stable social care system, and breaking down barriers to opportunity.
Councils are responsible for spending billions of public money. This year the Government made available over £69 billion of funding through the settlement to support delivery. As the demand for local services and the complexity of need has grown, the Government have introduced hundreds of ringfenced spending pots with burdensome reporting requirements to micromanage local areas from Whitehall. This must end. Instead, central Government collectively should support and assess councils on what really matters—the most important outcomes focused on people and the places they call home.
I am therefore announcing today a new local government outcomes framework, which forms an integral part of this Government’s reforms to ensure we have a sector which is fit, legal and decent. The framework sets 15 outcomes that the Government have collectively agreed we will work with local authorities to deliver, ranging from preventing homelessness and rough sleeping to community safety and satisfaction. The framework will measure progress towards outcome delivery, so we know that funding is achieving impact. This approach will help to put the right checks and balances in place to ensure value for the taxpayer and results for citizens to whom councils are ultimately responsible.
We will otherwise give local authorities the flexibility and certainty they need to make the right decisions for their local areas, and support public service reform and the move to prevention and early intervention. This represents a decisive move away from the needless red tape and micromanagement of previous Governments, which wasted taxpayers’ resources, while failing to support service improvements and outcomes for residents.
We are today launching a period of engagement with the local government sector and interested parties on how best to measure delivery of each priority outcome and how the framework can complement existing systems of accountability and support. We welcome views during this process and expect to publish a final framework alongside the provisional local government finance settlement before using the framework to support outcome delivery from April 2026.
The framework, alongside our wider raft of reforms, will combine freedom and flexibility with accountability, creating the right conditions for local authorities to make their own decisions and best deliver for their local citizens.
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Local Leadership Structure
Jim McMahon Excerpts(1 week, 5 days ago)
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The Minister for Local Government and English Devolution (Jim McMahon)
Today, I will update Parliament on the Government’s ambitious plans to introduce legislation which will simplify governance arrangements for local authorities in England and to ensure local communities have the right mechanisms to engage with their council.
In the English Devolution White Paper, the Government committed to bring in consistent and accountable structures across local government by considering which governance models available to local authorities will best support their decision making.
At present there is a complex and opaque system which allows councils to operate one of three governance models: cabinet arrangements with a directly elected council mayor, leader and cabinet, or the committee system. As a result, councils are left with a complicated governance system. This can be confusing to the taxpayer, particularly in the case of the committee system, which can be unclear, duplicative, and wasteful, leading to slower, less efficient decision making.
The Government plan to legislate to abolish the committee system, requiring those councils currently operating this model to transition to the leader and cabinet model (which the vast majority of councils in England already operate). This will simplify the governance system and ensure all councils operate an executive form of governance, providing clarity on responsibility and accountability, and improving efficiency in decision making. This change will provide clearer, more easily understood structures at a local level, improving efficiency and preventing authorities from wasting taxpayer funds on needless changes to systems of governance. The law already allows for and requires overview and scrutiny arrangements to be in place.
The Government recognise there are several directly elected local council mayors currently in place, and we propose to accept the continuation of these 13 legacy directly elected council mayors, while introducing measures to ensure a more consistent approach by not facilitating the creation of new ones. This would also include any councils undergoing local government reorganisation now or the future, where any new unitary would be required to operate on the leader and cabinet model of governance, regardless of whether any constituent part currently has a legacy directly elected council mayor.
There are pre-existing routes for those councils with legacy directly elected local mayors to adopt the leader and cabinet model, depending on the individual circumstances in each area, where they wish to do so.
This will avoid the potential confusion caused by the establishment of new regional mayors for strategic authorities and for councils. Directly elected regional mayors continue to be a prerequisite for significant devolution of powers and funding: it is at this strategic level that the single focal point of leadership for the area and direct electoral accountability is considered to work best. Our ambitious plans for local government reorganisation will build the foundations of better local governance, enabling decisions to be taken more easily at the most effective level of government. Strategic regional mayors will be empowered to drive local growth in the long term, with local authorities tackling big challenges in service delivery lead by a leader and their cabinet.
Taken with our commitment to support frontline councillors to lead positive change in their communities we believe this delivers the right powers in the right places.
Ahead of introducing primary legislation, I intend to make regulations to pause any change processes between governance models, in order to allow time for Parliament to consider the Government’s proposed measures. These regulations will extend the period in which a council must call a referendum to determine if the electorate want to change their council’s governance structure following receipt of a petition.
The regulations will also move the date on which an inaugural election is held following a council resolution or a referendum in favour of a directly elected mayor from May 2026 to May 2027. These changes will prevent taxpayers’ money from being unduly wasted on administrative processes which will ultimately bring no benefit or change, while the future of governance options is being considered by Parliament. We will therefore freeze any changes to local governance structures, allowing Parliament time to consider the measures outlined above and prevent the needless waste of valuable taxpayers’ pounds.
It is important that the Government set out the intended direction clearly. The regulations are of particular relevance to the Plymouth referendum due to be held on 17 July to determine whether to adopt mayoral governance for the council. Should the vote favour introducing a mayor, the inaugural mayoral election would move from May 2026 to May 2027. The extension of this period will allow Parliament time to consider the legislation. If Parliament agrees to the proposed measures being brought forward in primary legislation, the inaugural mayoral election would not take place and the council would continue to operate leader and cabinet governance as the common standard for all councils going forward, with the exception of the legacy directly elected council mayors referred to earlier.
We acknowledge that the path to reform is not without its challenges which some local authorities will need to navigate to ensure successful implementation. Transition management will be crucial, requiring careful planning and execution to ensure a smooth shift from the committee system to the new governance structures, including managing changes in leadership dynamics and administrative processes.
By introducing streamlined, consistent and accountable governance structures, we are paving the way for a more efficient, transparent, and responsive local government system. This will empower local leaders to make the right decisions for their communities, and work with Government to grow an inclusive economy, reform public services, and secure better outcomes for working people.
Every place will benefit from our agenda to push power out of Whitehall and into the hands of local leaders. People will see it in more regular bus services, more affordable housing, or the simple fact of having a local champion with regional influence or a frontline councillor championing their neighbourhoods with the tools they need to get the job done. Taken together these measures will simplify local government and support democratic accountability for local people.
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Ministry of Housing, Communities and Local Government
Jim McMahon Excerpts(1 week, 5 days ago)
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The Minister for Local Government and English Devolution (Jim McMahon)
I begin by thanking my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi), the Chair of the Select Committee, for opening the debate with her usual diligence and, rightfully, her challenge. I also pay tribute to all the other members of the Committee who were in the Chamber today for the work that they do throughout the year. It is often unseen, and maybe even unsung, but it is appreciated and it makes a huge difference to the functioning of a good Government.
The wide range of contributions today demonstrates the significant interest in the vital work that the Department does in driving positive change to the lives of many working people. On behalf of the Deputy Prime Minister and my fellow Ministers, I also thank departmental officials for their tireless work and dedication over the last year. They are working solidly to ensure that we get these reforms through, that we sort out the funding foundation and that we deliver the ambitious plan that we set out for this Government.
Turning to this debate, the Chancellor took decisive steps to stabilise the country’s financing, to back growth and to rebuild every region across the country, repairing the damage felt by working people, communities and businesses after a decade and a half of stagnation. The Government must now use every tool at their disposal to ensure that we turn that tide. The new investment rule is a bold but important tool, a move that has freed up an extra £113 billion of investment over the next five years, including for schools, hospitals, roads, green energy and, of course, housing. This will deliver good jobs, as highlighted by my hon. Friend the Member for Loughborough (Dr Sandher), because housing is at the very heart of this Government’s commitment.
I am delighted that we have increased the budget for the affordable homes programme by £400 million this year. Indeed, 2025-26 has the biggest annual budget for affordable housing in over a decade. This shows what can be achieved, but our efforts will not stop there. The spending review announced a new 10-year affordable homes programme with £39 billion of new investment, alongside a 10-year rent settlement and £2.5 billion in low-interest loans for social housing providers. This will address many of the concerns raised by my hon. Friend the Member for North East Hertfordshire (Chris Hinchliff). This is a generational intervention, but do not just take my word for it. The National Housing Federation was clear that this is
“a transformational package for social housing and will deliver the right conditions for a decade of renewal and growth.”
We have heard from many friends across the Chamber, including my hon. Friend the Member for Milton Keynes North (Chris Curtis). He echoed the Deputy Prime Minister, who has long argued that social and affordable housing is a bedrock of opportunity. The homes that we build now will house families for many generations to come, giving them a safe, decent and affordable place to call home, keeping communities together and investing in the most fundamental right that the people of Britain rightly expect. That is why this is so central to the Government’s work and one of our defining missions.
Alongside building new homes that are safe and decent, this Government are taking real steps to ensure that all existing homes are safe, too. In response to the final report of the Grenfell Tower inquiry, we made firm commitments to accelerate the pace of building remediation and we are backing our words with action. We have increased funding for building remediation by £553 million in 2025-26, and we are taking our annual funding to over £1 billion for the first time. We are also making over £1 billion available for new remediation funding. Over the coming years, social housing landlords will see the benefit and this will bring to an end the unfair two-tier system that has treated social housing tenants as second-class citizens for far too long, as highlighted by my hon. Friend the Member for Kensington and Bayswater (Joe Powell).
Supporting the most vulnerable in our society is at the heart of our Department’s work, so we are pleased that we are making record investments into our homelessness system this year, including a £233 million uplift that will take homelessness funding to over £1 billion in 2025-26. Alongside this, we have increased funding for the local authority housing fund by £100 million this year, allowing councils to invest in the long term by increasing their stock of temporary accommodation. This will allow us to begin to bring to an end the use of unsuitable and expensive bed and breakfasts to house families.
It is a matter of national shame that over 165,000 children live in temporary accommodation. Many of those kids are away from school and their friends and are often in accommodation that none of us would choose for our own families, as my hon. Friend the Member for Welwyn Hatfield (Andrew Lewin) rightly said. I say to the House that if it is not good enough for our own children, it is not good enough for any child, and we will address this scandal head on.
I assure the House that the Government are under no illusions of the scale of the financial challenge that our councils face. I know the difference that councils can make, having had the honour of serving as a councillor over many years. That is why we are absolutely committed to working in partnership with the sector to rebuild local government from the ground up so that it is fit, legal and decent, getting ahead of the crisis management and delivering better outcomes for the people we were all sent here to represent.
The recent spending review provides an extra £5 billion of new grant funding in the next three years, including £3.4 billion of new grant funding to be delivered through the local government finance settlement. We are going even further by fundamentally reforming the local government finance system. The current system is an outdated model that means some places face neighbourhood decline. It hits at the heart of what it means to live a decent life in a good place. To add to that, the escalating cost crisis in adult social care, children’s services and temporary accommodation makes matters even worse. It is not fair for outcomes or for councils either. Although the previous Government said they understood this, they failed to take the action needed to address it—we will not make the same mistake.
The fair funding review 2.0 consultation, launched last week, sets out the heart of the matter. We will take into account the real cost pressures being felt in key areas, as highlighted by my hon. Friend the Member for Bexleyheath and Crayford (Daniel Francis). We will also take into account remoteness, as rightly identified by my hon. Friend the Member for Shrewsbury (Julia Buckley), as well as deprivation, the ability to raise council tax locally, daytime visitor numbers, temporary accommodation cost pressures, and much more. Coming to the point rightly made by the Liberal Democrat spokesperson, the hon. Member for Mid Dorset and North Poole (Vikki Slade), the cost of labour in areas will also be taken into account. When Members see the fair funding review, I hope they will see that we have taken into account those cost pressures being felt in every local authority, and that we have done this with integrity, because it means a lot to ensure that we finally get a system right that for too long has, frankly, been broken.
All these measures are being supported by the first multi-year settlement in a decade. The importance of that was set out by many Members, but in particular by the hon. Member for Bicester and Woodstock (Calum Miller), who spoke about the stability needed and ensuring that councils have that firm foundation. A fair funding formula needs to do just that, and this is a promise delivered.
This Government have made choices, and we are open about those choices because they have allowed us to make the record investments that I set out earlier. One of those choices was to reform the inefficient, ineffective and outdated local growth funding landscape. As such, we are continuing the UK shared prosperity fund at a reduced level of £900 million for one financial year for transition, before we move to a model of targeted long-term local growth funding, as confirmed at the spending review. Deprived communities and mayoral regions will see the benefit. The north and the midlands will also benefit—their potential has been untapped for too long. Overall investment in Scotland, Wales and Northern Ireland will be protected, and communities will have genuine control of where funding goes for their areas for the first time in a long time.
We are making significant investments in the things that matter to local people—in social and affordable housing, in building safety, in homelessness and in local government. For far too long, we have seen the erosion of the things that make places safe, clean and decent and that give pride of place, because the previous Government did not take on the challenge in the way that was needed. We are not willing to do that. We are not willing to stand by idly while the system falls over, outcomes get worse and, in the end, costs escalate to the point of crisis. We are fixing the foundations, getting on with the job and finally giving our councils and communities the justice that they deserve.
Local Authority Governance
Jim McMahon Excerpts(1 week, 6 days ago)
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The Minister for Local Government and English Devolution (Jim McMahon)
Today, I am updating Parliament on the Government’s plans to review governance arrangements for local authorities in England. Our goal is to ensure that local communities have the right mechanisms to engage effectively with their councils.
In the English Devolution White Paper, the Government committed to establishing consistent and accountable structures across local government. We are considering which governance models available to local authorities will best support their decision-making processes and will provide more detail on this shortly.
The English Devolution White Paper also committed to creating new opportunities for communities to have a say in the future of their area and to play a part in improving it. To support this, we will review how local authorities can integrate community engagement into their core functions. We are keen to work with the sector to co-design an approach which balances the need for consistent structures with local flexibility.
This programme of reform will create fewer but more empowered councils, frontline councillors and partners working hand in glove with the communities they serve, and support preventative and early intervention approaches, which are critical to the sustainability of local government and in driving better outcomes in the neighbourhoods where local people are invested. Local people will know exactly where to take local problems and solutions, and can work with their frontline councillors to drive visible improvements in the places they are invested in.
When these reforms are implemented, alongside devolution to new regional mayors and strategic authorities, and local government reorganisation, they will ensure that the right powers are in the right places. Locally, they will mean that people across England, regardless of where they live, will be able to take issues or concerns to empowered frontline local councillors. These councillors will have a clear and accountable route to act on them, either through neighbourhood structures or by taking them to the cabinet member responsible for the issue.
Every place will benefit from our agenda to decentralise power from Whitehall to local leaders. People will see the impact in more regular bus services, more affordable housing, and the presence of local champions with regional influence or frontline councillors championing their neighbourhoods.
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Fair Funding Review 2.0 and Administration of Council Tax
Jim McMahon Excerpts(2 weeks, 2 days ago)
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The Minister for Local Government and English Devolution (Jim McMahon)
This Government were elected on a manifesto to fix the foundations local government so that taxpayers can once again rely on strong and reliable local services. After 14 years of service cuts and managed decline by the previous Government, councils across the country were on their knees. We are committed to delivering ambitious funding reform for local government based on need, alongside a renewed focus on prevention to get ahead of overwhelming pressures in adult social care, children’s services and temporary accommodation. We will work closely with the sector to reset local government so that it is fit, legal and decent and can once again reliably deliver for our communities. Today, we take the next step in our plan to ensure that local leaders have the systems and resources they need to deliver for their residents.
Too many areas have felt the combined impact of reducing Government support and low historical tax bases from which to raise income, coupled with high levels of need driving up demand for services. It is not fair that people in these places too often see hikes in council tax bills while neighbourhood services, which make areas clean, safe and decent, have felt the brunt of reductions. The current funding system is a decade old and reinforces the divide between deprived places and the rest of the country, and that is why we are taking action where previous Government failed. But this is not just about making the overall funding system fairer, this is also about making everyday life fairer for taxpayers too. This is a new settlement for councils and council taxpayers alike.
We took our first steps to reform local government funding through the local government finance settlement 2025-26, and today we are publishing a consultation on the next stage of our plans. As part of this, the formulae used to assess local authorities’ current needs, which are a decade out of date, will be updated to target money where it needs to go and ensure those places that have been overlooked get their fair share.
We will simplify the system and give security with multi-year settlements, reduce the vast range of small grants into simplified larger consolidated pots—scrapping bureaucracy and unnecessary reporting—and radically scale back wasteful competitive bidding. This will make funding more efficient, deliver better value for money for taxpayers and provide certainty to councils, turning the tide on micro-management from the centre, so that councils can spend their time and resources on services for local people, not filling out forms to satisfy central Government.
We will take decisive action to modernise the council tax system. This Government recognise that the administration of council tax has been left largely unchanged since 1993. This is why we are, in parallel, launching a consultation seeking views on changes to the administration of council tax which will support taxpayers with their bills and improve taxpayer experiences of the system—particularly for vulnerable groups.
We know we are facing huge financial challenges as a country. There is no magic wand, and fixing the foundations of local government requires tough decisions, on all sides. But with this bold action we can stem the tide of councils in financial crisis and allow the most disadvantaged places to reinvest in visible neighbourhood services and support for the vulnerable. It will take time and dedication to achieve this, and I urge everyone, inside and outside the sector, to share their thoughts on these proposals.
Fair funding review 2.0
Today’s consultation on fairer funding reform follows the fair funding review launched in 2016 by the previous Administration but abandoned in 2022. We are finally following through where previous Governments failed. We launched a consultation in December, which sought views on the principles and objectives underpinning funding reform. Respondents were clear that reform is needed.
We will work with councils to fix what is broken, moving around £2 billion of funding to the places and communities that need it most and modernising council tax administration. We have made a start, beginning with the £600 million recovery grant in the 2025-26 settlement which started to correct the unfairness in the system by targeting money to areas with greater need and demand for services and less ability to raise income locally, and beginning the process of consolidating grants into the settlement. In this year’s spending review, we have taken decisive action to allow councils to reliably deliver for their residents by confirming an additional £3.4 billion of grant funding for local authorities over the spending review period. This is above and beyond additional funding for services provided outside of the settlement.
The last time that funding was allocated to local authorities using an updated set of funding formulae that sought to account for local authority differences in demand, costs and council tax raising ability was in 2013-14. This failure to update since then and the subsequent mismatch between funding and need has manifested in unequal outcomes for people and places.
Our up-to-date system will use the best available evidence to take account of the different needs and costs faced by councils in urban and rural areas, and the ability of individual local authorities to raise council tax. This means no one will suffer from deteriorating services just because they live in an area with low house prices or high demand for social care, or in a rural part of the country. We are also inviting views on resetting the business rates retention system to restore the balance between rewarding business rates growth and aligning funding with need. After the consultation and once finalised, the changes will be implemented over three years, beginning in 2026-27 through the first multi-year settlement in a decade.
As part of this, we are inviting views on a package of transitional arrangements to enable councils to deliver service transformation and efficiencies. We recognise that there is a balance to strike between directing funding where it is most needed and allowing authorities time to plan for changes.
We are also moving away from wasteful competitive bidding pots and restrictive reporting requirements to give local leaders the flexibility they need to deliver. We intend to deliver at least four consolidated grants through the settlement which bring together funding to support prevention and service reform, including a homelessness and rough sleeping grant, a public health grant, a crisis and resilience grant and a children, families and youth grant. We want to update the new burdens doctrine, allowing local authorities to plan more effectively. Building 1.5 million homes is a cornerstone of our plan for change, but we also have heard clearly that the new homes bonus is an ineffective incentive for new house building. We are therefore proposing to end the new homes bonus, and return the funding to the core settlement, to be allocated where it is needed most.
The consultation brings together opportunities and interactions across funding reform and devolution, local government reorganisation, and reforming local government burdens. We invite views on the role the settlement could play in funding strategic authorities, the treatment of reorganised authorities and reducing unnecessary burdens on local government. Additionally, we are inviting views on where it might be appropriate to update some sales, fees and charges, to support the financial sustainability of key services without placing an unreasonable burden on service users.
Consultation on modernising and improving the administration of council tax
Today’s council tax consultation explores opportunities to modernise and improve the administration of council tax to deliver a fairer and more efficient system for taxpayers and local authorities.
Council tax is vital in ensuring councils have the funding they need to deliver essential public services. It is therefore right that council tax avoidance is not tolerated, and councils have reasonable powers to recover unpaid council tax. However, it is also right that households are not subject to disproportionate enforcement action and that they can access support they are eligible for. While many councils have shown strong leadership in this area, we know that this balance has not always been struck, and there are too many cases of vulnerable taxpayers bearing the brunt of heavy-handed collection by councils and their contractors.
We believe we can be both firm on deliberate tax avoidance, and fair to those needing support. Therefore, this consultation explores proposals to end unacceptable, aggressive collection practices that have seen vulnerable people who miss payments subjected to unmanageable lump sum payments and liability orders, which can lead to bailiffs being sent in, without the offer of a payment plan or a welfare check. These practices do not benefit councils, who can incur costs seeking punitive measures without recovering the tax in question, nor residents, who do not see improved services as a result of attempts at this sort of recovery. Put simply it is self-defeating and lacks common sense.
The consultation also looks more broadly at wider opportunities to make improvements to local government efficiency in the collection and administration. It also looks to make changes to support taxpayers with their bills and enhance their experience with the system. This includes proposals to spread council tax payments over 12 monthly instalments by default, saving the average band D household £38 a month by spreading the total cost across more instalments. Councils will still have the flexibility to offer taxpayers, on request, the option of retaining the current default of 10 monthly instalments. We will also make changes to help taxpayers better hold councils accountable for how their taxes are spent. It also considers the outdated nature of the “severely mentally impaired” council tax disregard, seeking to bring its name and definition in line with modern parlance to reduce the stigma around accessing the support it offers. We are issuing a call for evidence on people’s wider experiences with existing support in the system, including views on the effectiveness of council tax disregards for carers and apprentices, wider support with council tax bills Government might consider, and potential future changes to the process of appealing a home’s council tax band.
We know these issues are complex, and we are ready to make difficult decisions where they are the right decisions. We therefore particularly urge residents as well as the local government sector to share their views on this consultation on the administration of council tax.
Conclusion
The consultation on the fair funding review 2.0 will be open for eight weeks, closing on 15 August 2025. The consultation on council tax modernisation is open for twelve weeks, closing on 12 September 2025. We encourage views from the sector and beyond on each of these consultations.
This written ministerial statement covers England only.
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Local Government Best Value: Thurrock Council
Jim McMahon Excerpts(2 weeks, 3 days ago)
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The Minister for Local Government and English Devolution (Jim McMahon)
As I have previously stated when updating the House, this Government are committed to resetting the relationship with local and regional government, and to establishing partnerships built on mutual respect, collaboration and meaningful engagement. Local councils must be fit, legal and decent, and this Government are taking the action necessary to fix the foundations of local government. I am today updating the House on the steps that we are taking to support Thurrock council to recover and reform.
I am today publishing the commissioners’ most recent report, which I received in May. It is clear that the council is in a very different place from where it was when the previous Government first appointed commissioners to it in September 2022. I want to commend the council’s members and officers and the commissioners for the improvements that they, together, have made; and I am pleased that the commissioners consider that the council
“continues to own the recovery agenda”.
However, the issues that the council faced at the start were both broad and deep, and the commissioners’ fifth report makes it clear that the recovery remains fragile, as the improvements still need to be embedded across the organisation.
While progress has been made to address its historical financial accounts and governance, the council still relies on Government support to set a balanced budget and there remains an annual structural deficit. The council’s general fund debt position is estimated at £800 million by the end of 2025-26. The Government have indicated that we will provide an initial tranche of financial support for debt repayment for Thurrock council in 2026-27, ahead of local government reorganisation. We will continue to work with the council to ensure that any support represents value for money for local and national taxpayers.
The council still needs to evidence deliverable plans to make corporate transformational savings to secure sustainable services, and there remains a need for it to strengthen its internal controls, especially across internal audit and risk management. A robust transformation plan is needed to deliver the council’s proposed operating model and meet savings targets. Organisational capacity challenges remain and the commissioners consider that the council has not yet
“demonstrated that it has the capacity and capability to sustain its own journey of continuous improvement”.
Having considered the report carefully, I am satisfied that the council is not yet meeting its best value duty.
While proposals for local government reorganisation and devolution present the council and its residents with real opportunities, it is vital to ensure that the council has the capacity and capability to continue to drive its own recovery and reform alongside the implementation of either or both of these substantial change programmes.
Proposed package
I am minded to exercise powers of direction, under sections 15(5) and 15(6) of the Local Government Act 1999, to issue new directions to Thurrock council extending the intervention at the council until 30 April 2028. These would require the council to take actions to address the outstanding issues and priorities, as well as continuing to engage with commissioners who would be able to exercise specific council functions. The commissioner team, if appointed, would continue to consist of a lead commissioner, a finance commissioner and a managing director commissioner.
This extension to April 2028 would give the council time to deliver further improvements and embed the necessary changes across the organisation, but it would also ensure that the intervention timetable reflects the broader context for the area and aligns it to the proposed timelines for local government reorganisation. This seeks to ensure that there is external oversight and assurance of the council’s improvement journey as it prepares for any future arrangements and provides flexibility to review the model of intervention throughout this period. It will be important that there are clear measurable milestones over the next phase of the intervention, and I would intend to review the proposed arrangements, if implemented, by summer 2026, when I would expect there to be further clarity on broader plans for devolution and local government reorganisation across greater Essex.
Representations
I am now inviting representatives from Thurrock council and any other interested parties on the proposed intervention package by 2 July. All representations will be carefully considered and any other evidence received, before I take a final decision about how to proceed.
Conclusion
I am committed to working in partnership to provide the necessary support to ensure Thurrock council’s compliance with the best value duty and the high standards of governance that local residents and service users expect.
I will deposit in the Library of the House copies of the documents referred to, which are being published on gov.uk today. I will update the House in due course.
[HCWS714]
Local Government Reorganisation
Jim McMahon Excerpts(2 weeks, 5 days ago)
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The Minister for Local Government and English Devolution (Jim McMahon)
As I told the House on 5 February, I have issued invitations under the Local Government and Public Involvement in Health Act 2007 to all councils in two-tier areas and their small neighbouring unitary authorities to work together to develop proposals for unitary local government. This reform will mean more accountable structures, making it much clearer who residents should look to on local issues. It will also mean fewer, but more empowered, local political leaders, who can focus on delivering for residents. I told the House on 3 June that I had received proposals from Surrey councils by the deadline specified in their invitation of 9 May. I will now provide an update on local government reorganisation in Surrey.
I received two proposals—one from Elmbridge borough council, Mole Valley district council and Surrey county council for two unitary councils, and one from the borough councils of Epsom and Ewell, Guildford, Reigate and Banstead, Runnymede, Spelthorne, Surrey Heath, and Waverley and Woking, and Tandridge district council, for three unitary councils. I also received a joint submission from the borough councils of Reigate and Banstead and Crawley, in West Sussex, which I have decided does not meet the statutory requirements for a proposal, or the terms of the invitation, and is accompanied by insufficient information to enable a decision to be taken to implement it.
Today I have launched a consultation on the two proposals from Surrey councils. This is available at https://www.gov.uk/government/collections/surrey-local-government-reorganisation and I will deposit a copy of the consultation in the Library of the House. I would welcome views from any interested people, including residents, and I am consulting the councils that made the proposals, other councils affected by the proposals, and councils in neighbouring areas. I am also consulting public service providers, including health providers, the police and fire services, and certain other business and voluntary sector bodies.
The consultation period will run for seven weeks until Tuesday 5 August. The consultation document is available, and those responding may do so on the Department’s online platform, “Citizen Space”, or by email or post. The consultation will provide information to help my assessment of the merits of each proposal, and I will carefully consider all the representations I receive, along with all other relevant information available to me.
The context of this consultation is that the 2007 Act provides that before any proposal is implemented, I must consult any council affected by the proposal that did not make it, and any other persons I consider appropriate. Once the consultation is concluded, I will decide, subject to parliamentary approval, which, if any, proposals are to be implemented, with or without modification. In taking these decisions, I will have regard to all the representations I have received, including those from the consultation, and all other relevant information available to me, and will reach a judgement in the round, assessing the proposals against the criteria in the invitation—whether they achieve for the whole area concerned the establishment of a single tier of local government; whether the councils are the right size to achieve efficiencies, improve capacity and withstand financial shocks; whether the unitary structures prioritise the delivery of high-quality and sustainable public services to citizens; whether councils in the area have sought to work together to come to a view that meets local needs and is informed by local views; whether new unitary structures support devolution arrangements; and whether new unitary structures enable stronger community engagement and deliver genuine opportunity for neighbourhood empowerment.
With regard to the submission from the borough councils of Reigate and Banstead and Crawley, my view is that it does not meet the statutory requirements, as the 2007 Act specifies that a council can only make one proposal, and that a proposal must specify the area that it covers. For the same reasons, and because the submission does not cover the whole of the invitation area, the submission does not meet the terms of the invitation. Further, it does not provide enough information for an assessment to be made as to whether all criteria would be met, and it would require significant work to enable it to be resubmitted, causing delay in what was intended to be an accelerated process. It would mean essentially drafting a new timetable, which would have the potential to see elections to the new unitary authorities delayed.
As I have received two proposals that meet the statutory requirements and the terms of the invitation, I have decided to take these to consultation. It is of course open to the borough councils of Reigate and Banstead and Crawley to respond to the consultation. With reference to their desire for the Gatwick Diamond economic area to be within the area of one strategic authority so as to best provide for economic growth, I would like to provide reassurance that local government reorganisation in Surrey does not mean that this is not an option to be considered in the future, and I encourage councils in Surrey to continue to engage with their neighbours as they consider options in the short and medium term to secure devolution and the advantages it brings.
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Local Government Best Value: Croydon Council
Jim McMahon Excerpts(3 weeks, 3 days ago)
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The Minister for Local Government and English Devolution (Jim McMahon)
As I have previously stated when updating the House, this Government are committed to resetting the relationship between central and regional government, and to establishing partnerships built on mutual respect, genuine collaboration and meaningful engagement. Local councils must be fit, legal and decent, and this Government are taking the action necessary to fix the foundations of local government. I am today updating the House on the steps that we are taking to support the London borough of Croydon to recover and reform.
London borough of Croydon
I am today publishing the latest report of the London borough of Croydon improvement and assurance panel, which I received in April. The report acknowledges and welcomes the hard work of the council’s members and staff and notes that there has been some progress over the course of the intervention, which is due to end on 20 July this year. However, the council’s financial position is deteriorating rapidly and the report documents serious concerns, particularly on the council’s ability to improve, on some aspects of leadership and on the use of resources.
Croydon remains one of the most financially distressed councils in the country. The council’s general fund debt sits at around £1.4 billion and it relies on the allocation of exceptional financial support through in-principle capitalisation directions to balance its budget. The dramatic increase in the council’s £136 million EFS for 2025-26, from £38 million granted for 2024-25, is highly concerning. The council has received approximately £553 million in total EFS since March 2021. This is simply not sustainable.
Failing to change course would condemn Croydon’s residents to a worsening position without an exit strategy. The report sets out that there has been a lack of pace throughout the intervention, but the deteriorating financial position, which is not being gripped and tackled adequately by the council, is reaching a “financial crisis”. The stabilisation plan has been in development since late January, but this does not yet provide a concrete plan to achieve the efficiencies and transformation that the council has committed to. Poor financial information and forecasting and a lack of controls have contributed to the deterioration of the financial position. There is an increasing reliance on Government support to balance the budget, operating costs continue to be “unreasonably high” and the medium-term financial strategy projects the general fund debt to rise to over £1.9 billion by 2029.
The panel documents the council’s ambition to deliver transformation but is concerned that the council will find it “enormously challenging” to deliver the necessary transformation and reduce spending while maintaining day-to-day delivery. The report notes that, based on benchmarking data, the council’s operating costs can be improved to be more in line with other authorities. I have carefully considered the report and other relevant material, including the Local Government Association’s corporate peer challenge. I am satisfied that the London borough of Croydon is failing to comply with its best value duty. I am therefore minded to exercise powers of direction under section 15(5) and 15(6) of the Local Government Act 1999 to implement an intervention package that ensures the council’s compliance with its best value duty.
Proposed package
I am satisfied that the scale of the financial difficulties facing Croydon, the failure of the council to adequately respond to these difficulties and the assurance required moving forward means that a short and sharp reset, with fast action, is required to shift the dial on the council’s recovery. On balance, I believe this is best achieved by escalating the statutory intervention to a commissioner-led model, to ensure that the council can achieve sustained change at the pace needed.
The finalisation and implementation of the council’s stabilisation plan, and in time a recovery plan, will be fundamental to Croydon’s transformation, reform and recovery. Commissioners will have greater scope to challenge and support the council to finalise and implement its stabilisation plan and deliver realistic transformation and savings, in line with what the council has committed to. I envisage the appointment of commissioners until 20 July 2027, with a review of the progress of the intervention after 12 months.
Representations
I am inviting representations from the London borough of Croydon and any other interested parties on the proposed intervention package by Wednesday 25 June.
I will carefully consider all representations before deciding how to proceed. The proposal to intervene is not taken lightly but is designed to strengthen and accelerate improvement to ensure that the council delivers for its residents. With council focus and support from the commissioners, I expect the council to demonstrate swift and sustained progress necessary to ensuring compliance with its best value duty.
Conclusion
I am committed to working in partnership with the London borough of Croydon to provide the necessary support to ensure its compliance with the best value duty and the high standards of governance that local residents and service users expect.
I will deposit in the Library of the House copies of the documents referred to, which are being published on gov.uk today. I will update the House in due course.
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Oral Answers to Questions
Jim McMahon Excerpts(3 weeks, 6 days ago)
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Terry Jermy (South West Norfolk) (Lab)
The Minister for Local Government and English Devolution (Jim McMahon)
The Government have delivered a settlement that begins to fix the foundations and makes available over £69 billion in 2025-26. In 2026-27, an improved approach will direct funding where it is needed most and provide certainty through the first multi-year settlement in over a decade.
Amanda Hack
Leicestershire, alongside other authorities, has been campaigning for fair funding in recent years, following 14 years of poor funding settlements by the last Government, meaning cuts to vital services. A lack of fair funding also means that schools in North West Leicestershire have some of the lowest levels of funding per student in the country. How will the Minister approach a fair funding settlement that considers the unique challenges faced by rural communities?
Jim McMahon
I thank my hon. Friend for her work in championing those issues. We are fundamentally reforming how we assess councils’ relative needs and resources, to ensure that funding is distributed to where it is needed most. That includes accounting for councils’ ability to raise resources locally, which the previous Government promised to do but ultimately failed to do in balancing the numbers. Targeting funding in that way will enable councils that have had to scale back services the most to be able to catch up and to ensure that everybody, across the whole of England, is able to access decent public services.
Natasha Irons
Despite an increase in council tax of 27% since 2022, £136 million in exceptional financial support this year and brutal cuts to services, Croydon council’s finances remain broken. As an outer-London borough with inner-London problems, Croydon has historically not received the funding it needs to cover the costs for demand-led services like temporary accommodation, so even if Croydon’s debt was wiped out, it would still need exceptional financial support. Will the Minister outline how councils like Croydon will get the resources they need to meet the complex challenges they face and provide the frontline services that our communities deserve?
Jim McMahon
The questions that have been raised demonstrate why the fair funding review is needed, and why it has to take into account all the different factors that have an impact on whether councils can provide good public services or not. I appreciate, understand and accept that pressures that were previously felt in inner London are now felt in outer London, and in rural areas too. My hon. Friend will know that in February we provided £136 million in EFS support for Croydon council, and we will continue to work with it. We have met and talked about the issues a number of times, and I know that she understands that those are not small problems to deal with.
Helen Hayes
The statutory override to special educational needs and disabilities deficit comes to an end in just 10 months. Without a plan from the Government for the end of the statutory override, more than half of all local education authorities face effective bankruptcy. The need for a resolution to the issue is now long overdue. When does the Minister expect to be able to give local authorities the certainty they need?
Jim McMahon
We are laying the groundwork now, ahead of the provisional settlement, which will be the first multi-year settlement in over a decade and will deal with a lot of the structural issues. If it is any help, the Government understand and accept that it is not right or acceptable for councils that have done everything that has been asked of them and provided good public services, particularly for young people, to find themselves at the financial cliff edge as a result. We have an absolute commitment to work through those issues.
Terry Jermy
Pockets of deprivation in many rural communities, like my South West Norfolk constituency, are often masked by more affluent surroundings. Will the Minister reassure me that financial support from the Government for local councils in rural areas reflects those concerns about isolated deprivation?
Jim McMahon
This month, we are consulting on an updated assessment of need that we will implement from 2026-27. Importantly, that includes the indices of multiple deprivation, a designated national statistic, and it will drill down to deprivation levels of between 400 and 1,200 households in each of those units. Our intention is to address the issues found in the pockets of deprivation in every community, including rural and coastal communities where they are sometimes drowned out because of the sea of affluence around them. It is important that we get to deprivation wherever it exists.
Julia Lopez (Hornchurch and Upminster) (Con)
As an outer London borough, Havering has been hugely disadvantaged by a funding formula based on outdated population figures. We heard today that the Mayor of London himself is concerned that this Labour Government will level down London altogether. Will the Minister confirm that the fair funding review will report by this summer—I have been told that previously by a Minister—and will specifically address the disparities between inner and outer London?
Jim McMahon
I can absolutely assure the hon. Member that we are working through those issues, and we will consult the sector on them. Given all the variations that we will take into account, I hope Members accept that we have listened. We know that the funding formula is out of date and that for it to stand the test it must apply wherever Members represent, whether in coastal communities, rural communities, inner or outer London or anywhere else in between. I assure the hon. Member that we are getting on with that work.
Helen Morgan (North Shropshire) (LD)
Shropshire council’s finances have been left on the brink by 16 years of Conservative administration. It is the largest landlocked county in England, and it is struggling with about 85% of its budget being spent on social care. When the Minister does his fair funding review, will he look at the difficulty and costliness of delivering services over such a wide rural area and ensure that councils such as Shropshire, which has lost its rural services delivery grant, will be able to sustain themselves in the future?
Jim McMahon
We made available an additional £5 billion as part of the settlement, and £3.7 billion of that was for social care. We understand the pressures and we are directing money to address them, but we know that this issue will take more than one year to fix. We are on with the fair funding review—the third multi-year settlement in a decade—to begin to fix the foundations. We have definitely heard calls from rural communities and councils to take into account the additional cost for rurality and remoteness, and I assure the hon. Lady that those issues are being looked at.
Mr Peter Bedford (Mid Leicestershire) (Con)
One way of ensuring that new unitary authorities such as those for Leicestershire have adequate funding is to base that funding on robust business cases. Given that the Department was five weeks late in providing feedback to the local authorities, will the Minister commit to extending the deadline to ensure that those local authorities have the time that they need to build up those plans?
Jim McMahon
In all areas, there is more than adequate time to prepare final proposals. Councils in the devolution priority programme have until September, and all others—the majority—have until November. That is more than adequate time for councils to be able to marshal and get their plans together and make an assessment on that basis.
Ayoub Khan (Birmingham Perry Barr) (Ind)
It has been reported that the Birmingham bin strikes may last until December. How can this Government claim to support workers when they refuse to fund Birmingham city council properly? This dispute boils down to cash, yet the Government are failing Birmingham’s bin workers, residents and businesses. The Government backed our steelworkers. Will they back the bin workers with extra funding?
Jim McMahon
I hear what the hon. Gentleman says. On the calls that we have with MPs when we update them on these issues, his tone is quite different. We need to separate the rhetoric from the reality. The reality is that for the first time we had £600 million in the recovery grant, which was about those councils suffering high deprivation and historically low tax bases. Birmingham was the biggest beneficiary of that, receiving nearly £40 million.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
The Minister knows from his time at the Local Government Association of the impact that asylum has on the budgets of local authorities. With the Home Office’s much-vaunted increase in the grant rate for asylum claims, the Government are pushing thousands of households on to council waiting lists and shunting millions in costs on to council tax payers. What additional funding and measures does he aim to secure to help to mitigate those costs, which are affecting so many of our local authorities?
Jim McMahon
Quite frankly, it is a bit rich for any shadow Minister to critique the current system when the Conservatives deliberately designed it in their 14 years in government. The question is how we go about repairing it. One thing must absolutely be put right; the disjointed system in which different Government Departments work in silos cannot carry on. One of the successes of the leaders’ council is that for, the first time ever, local government leaders are around the table with the Government, including in a meeting with the Home Office and our Department, to work through exactly those issues. That is the change: for the first time, those in local government are being treated as adults.
Alice Macdonald (Norwich North) (Lab/Co-op)
Jack Rankin (Windsor) (Con)
I broadly support unitarisation on a strategic scale, but I am concerned about how historic debts will be treated in Surrey, especially those of Woking and Spelthorne councils. How will those debts be handled as our councils come together, and will the Minister assure my constituents in Virginia Water and Englefield Green, in the well-run borough of Runnymede, that they will not foot the bill for this as part of the reorganisation?
The Minister for Local Government and English Devolution (Jim McMahon)
That is one of the reasons why the Surrey arrangement was accelerated. We recognised the lack of balance between the debt liability and the assets and incomes. We also recognised that the unitaries would have to be financially viable, and we are well on track to delivering that, in partnership with the local councils.
Remote Attendance and Proxy Voting
Jim McMahon Excerpts(1 month ago)
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The Minister for Local Government and English Devolution (Jim McMahon)
Today we have published the Government’s response to our recent consultation on remote attendance and proxy voting in local authorities. The Government have previously set out our intention to reset the relationship between central and local government, and to establish a partnership that delivers better outcomes for the communities we represent. Key to this partnership is providing the sector with support and tools to modernise democratic engagement and make elected roles more accessible for more people.
In-person debate, discussion and the opportunity for residents to engage with their representatives are core aspects of local democracy. At the same time, we know that it is not always possible for elected members to attend local authority meetings in person. The Government response sets out our intention to permit local authorities to meet remotely, and to require them to develop their own remote attendance policies if they do. Local authorities vary in size, location, responsibility and make-up, and we want to ensure that they can develop appropriately responsive policies.
On proxy voting, we plan to require all principal—unitary, upper and second-tier—councils in England to implement proxy voting schemes to provide consistency for members who are absent when they become a new parent, or for serious or long-term illness. We plan for this requirement to apply to meetings of full council. For all other meetings, proxy voting may be used but will not be required, and substitute or pairing schemes may be more appropriate. We plan for other local authorities not listed above to be enabled, but not required, to implement proxy voting schemes for any of their meetings, in the context of member absences for serious or long-term illness or becoming a new parent.
We are keen to reflect feedback from the current make-up of councils, and the demands and requirements we have heard in that process, and to lead the way in opening up elected office for a broader range of candidates, including those of working age, those with caring responsibilities, and those with disabilities or other personal circumstances who would benefit from modernised democratic practices.
We plan to collaboratively develop guidance with the sector on both policies to ensure that they are supportive of members and officers.
We believe that these reforms will improve the experience of elected members serving their communities and encourage more people to consider locally-elected office.
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