Draft Buckinghamshire Council, Surrey County Council and Warwickshire County Council (Housing and Regeneration Functions) Regulations 2025

Jim McMahon Excerpts

Wednesday 9th July 2025 General Committees

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

I beg to move,

That the Committee has considered the draft Buckinghamshire Council, Surrey County Council and Warwickshire County Council (Housing and Regeneration Functions) Regulations 2025.

It is a pleasure to serve under your chairmanship, Sir Edward. The regulations were laid before Parliament on 9 June 2025. This Government have emphasised our commitment to transferring power out of Westminster into local communities, and this instrument provides for the implementation of the devolution agreement that was confirmed on 6 March 2024 between the previous Government and the three councils concerned. I am pleased to say that in May 2025 all three councils consented to the making of this instrument.

The regulations will be made, if Parliament approves, under the enabling provision in the Cities and Local Government Devolution Act 2016. The regulations will come into force the day after they are made and confer housing and regeneration functions on the respective local authorities, as agreed in the devolution agreements. Accompanying the regulations, we have laid a report, under section 17(6) of the 2016 Act, providing details about the public authority functions, including regeneration functions held concurrently with Homes England being devolved to the authorities.

Additional funding will be available for the areas through the adult skills fund, devolved to the councils from the 2026-27 academic year, as well as the education skills functions. The Department for Education will work with the councils to support their preparations and ensure that they meet the necessary readiness criteria. We will legislate in due course when the Secretary of State for Education is assured that they are operationally ready and is satisfied that the required statutory tests have been met in each of these areas.

In December 2024, the three councils submitted supporting information on their potential use of proposed functions, including feedback gathered through their engagement with local stakeholders. The outcome of that engagement demonstrated local support for the conferral of the new functions upon each of the councils, and in laying this instrument before Parliament, the Secretary of State is satisfied that the statutory tests in the 2016 Act are met, namely that making the regulations is likely to improve the economic, social and environmental wellbeing of some or all of the people who live or work in the relevant local authority areas.

[Lewis Cocking (Broxbourne) (Con)]

Can the Minister outline for the Committee, where these powers will sit, once councils have gone through devolution talks and appointed metro mayors? Will they still sit with the unitary councils, or will they go to the metro mayor? Can the Minister explain where the powers will sit when they get a new devolution agreement?

[Jim McMahon]

In a sense, these are legacy agreements made under the previous Government that we are keen to honour. We know that councils worked in good faith when preparing their devolution agreements with the previous Government, and we want to ensure that—notwithstanding the transition period following the English devolution and community empowerment Bill—we can honour those arrangements as much as possible. It is accepted that we are in a period of significant transition for local government in England, both in reorganisation and the creation of new combined authorities in these areas, but we do not think that is a reason in itself to hold back powers.

If the point comes when these areas receive a mayoral strategic authority, as it will be known under the new Bill—the Houses of Parliament need to go through the process of confirming that position—the powers will be conferred, alongside a range of other powers, which would be quite normal. I should say that nothing will be presented to Parliament in the English devolution Bill that cuts across what we now consider to be the foundational agreements that are in place. We would encourage willing local authorities to collaborate and come together, even if that is without a mayor being in place, so that further powers can be devolved to current local authorities.

[Lincoln Jopp (Spelthorne) (Con)]

I declare an interest as a Surrey Member of Parliament, and my constituency of Spelthorne is the northernmost borough of Surrey. Can I just confirm whether the changes that we are making today still require Spelthorne borough council to give permission for compulsory purchase, when we have handed those powers to Surrey county council?

[Jim McMahon]

I can check that particular point about the role of district councils in authorising. It may be that we follow up with officials on that point. I would also add that areas in Surrey are part of the accelerated timetable for local reorganisation, and we are now out to consult on the final proposals that have met the statutory test that we set out. We are in that statutory process and that will move to shadow elections for the new unitary authorities as early as May next year. At that point, there will be a transfer of power and responsibilities across to the new unitary councils, and at that point we will consider new SIs that transfer the powers from the existing council structures to the new unitary councils as they come into force. It may well be that, later, there is a devolution agreement set across that bigger geography that we then return to as part of a second SI. We are in a period of transition, and it will take time. We did not believe that it would be right not to fulfil the agreement of the previous Government with the councils that have acted in good faith, notwithstanding those transitional arrangements.

That brings me back to the statutory tests. It is our belief that the economic, the social and environmental wellbeing of some or all of the people who live or work in the relevant areas will be met. I thank local leaders and their councils for their hard work in the Government’s critical mission to widen and deepen devolution in their areas. I commend these regulations to the Committee.

--- Later in debate ---

[Jim McMahon]

I thank the shadow Minister for his usual approach, which is to be supportive of devolution, and for his recognition that when we make a commitment to a local area, it is important that we act in good faith, notwithstanding the changes we have seen. In a sense, that is how we have tried to approach the most recent elections, with some quite significant change in some parts of England, in the make-up of councils and in the priorities of the leadership of those councils. I can confirm, however, that in the cases we are discussing, consent was sought from the councils before the elections, but we received notification afterwards that they were content to proceed. On that basis, we confirmed the position.

On the district councils, it is important to say that the district councils in the areas under consideration are the planning authority. Their role as the planning authority does not change, notwithstanding the powers being granted for things like compulsory purchase. I confirm for the record, however, that those powers can only be used with the consent of the district council; they cannot be used if the district council does not agree. We expect—it is not an unreasonable expectation—that local authorities will work together with the new powers to ensure that local people feel the benefits. I hope that is helpful.

On the point about the transfer of existing powers, it is easiest for us to refer to them as a foundation agreement—the start of an agreement of devolution and the first rung of the ladder. We of course encourage all areas to come forward that expressed an interest in further devolution. We are in a period of transition and are about to table the English devolution and community empowerment Bill in Parliament. We will need to allow Parliament to run its course and to consider the Bill in the usual way, but notwithstanding that, we want to see a standardisation of devolution across England.

I will be careful not to be too critical about what we have had before, because I do not think that devolution would have grown the way it has were it not for the flexibility in reaching agreements. That was part of a necessary process to develop, to get people to support it, but it is also fair to say that as we build out devolution, there needs to be consistency in the type of powers, the duties and responsibilities, and the funding arrangements, and there needs to be transparency about how much is given to each area.

That will give clarity to areas that are trying to assess whether they believe that mayoral devolution is the right move for them. Some might well decide that it is not the right time and that they want to stay longer with a foundation agreement. From a Government point of view, we will support that, if it is the right thing for that area. Likewise, however, they might well see the powers in the new Bill and say that those are worth accepting a mayor for, even if at the moment there is not yet such agreement.

This is very much a Government who are open to listening and working with local areas. If there are any places that want to have conversations about further and deeper devolution, our door, here and everywhere, remains open for that. We will say more about the expansion of devolution in England over the coming days on that basis.

With your permission, Sir Edward, I think I have covered the points that have been made. I can confirm to hon. Members that this instrument delivers a commitment made in the devolution agreements with Buckinghamshire, Surrey and Warwickshire to confer housing and regeneration functions on each local authority.

Question put and agreed to.

Local Government Best Value

Jim McMahon Excerpts

Wednesday 9th July 2025 Written Statements

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

I have previously stated when updating the House, this Government are committed to resetting the relationship with local and regional government, and we will take the action necessary to fix the foundations of local government and to support the sector to build its strength. Today, I am updating the House on the steps that we are taking in partnership to support three councils to recover and reform: Warrington borough council, the London borough of Tower Hamlets and Slough borough council.

Warrington borough council

On 8 May, I informed the House that I was satisfied, having considered the best value inspection report, that Warrington borough council is not complying with its best value duty. I proposed an intervention package to secure the council’s compliance with that duty and asked the council and others to provide representations by 22 May.

I received 18 representations, which I considered carefully. I remain satisfied that the council is not complying with its best value duty in relation to continuous improvement, leadership, governance, culture and use of resources. I have concluded that it is both necessary and expedient for me to exercise powers in the Local Government Act 1999 as I proposed, with minor amendments.

I have today issued directions under sections 15(5) and 15(6) of the 1999 Act to implement the proposed intervention package. This package, to be in place until 31 July 2030, comprises specific actions that the council is required to take, alongside the appointment of four ministerial envoys, some of whom will have powers to exercise functions, which are treated by the envoys as held in reserve. I am confident that this package will address the issues identified and is necessary for the council to secure compliance with its best value duty.

The success of Warrington is important for both its own benefit and that of the region, with its critical role in devolution, which offers significant opportunities to drive up growth, improve transport connectivity and build new homes, as well as raising living standards for its population.

I have appointed Sir Stephen Houghton as ministerial envoy and Harry Catherall, Carolyn Williamson and Phil Brookes as ministerial envoys with powers to exercise functions. I am confident that their extensive knowledge and experience will help deliver the necessary improvements for Warrington.

I have issued directions that, in summary, require the council to:

Prepare and agree an improvement and recovery plan within six months, with progress reports to the ministerial envoys after the first three months and ongoing reporting thereafter;

Undertake recruitment for a permanent appointment to lead the improvement work in the authority and progress against the directions;

Review, in the first 24 months, the roles and case for continuing with each subsidiary company and investment of the authority;

Work with the Local Government Association to agree a suitable time for a follow-up review to their 2024 corporate peer challenge; and

Fully co-operate with the ministerial envoys and take any reasonable action within the authority’s functions to prevent further failure, as reasonably determined by the ministerial envoys.

I expect the council to drive its own improvement, with the support, challenge and advice from the ministerial envoys. To safeguard the process, some ministerial envoys will have power to exercise the following functions, to be treated as held in reserve and intended to be used only as a last resort to ensure compliance with the best value duty:

To ensure that the council has the leadership, structures and systems in place to drive and sustain improvement, including governance and scrutiny of strategic decision making, oversight of financial management, and the appointment, dismissal and performance management of senior and statutory officer positions;

To address the root causes of Warrington’s challenges by strengthening the authority’s approach to commercial decision making, property management, procurement and the management of commercial projects;

To support financial sustainability by closing short and long-term budget gaps, reducing reliance on high-risk commercial income, and strictly limiting further borrowing and capital spending; and

To enable transformation of the authority’s operating model and services to deliver value for money and long-term financial resilience;

The ministerial envoys’ appointments and directions take effect from today. The ministerial envoys will provide their first report in six months, with further reports every six months or as agreed with the envoys.

I will review at the appropriate time the directions and the ministerial envoys’ roles, to ensure that Warrington has the support required to accelerate recovery and protect the public purse. Subject to clear and sustained evidence of improvement, certain functions may be returned to the council ahead of the expiration of the directions.

As with other statutory interventions led by my Department, the council will meet the costs of the ministerial envoys and provide reasonable amenities and services and administrative support. The envoys’ fees are published on gov.uk. I am assured that this provides value for money given the expertise being brought and the scale of the challenge.

Tower Hamlets

Statutory intervention in the London borough of Tower Hamlets began on 22 January and is centred on a team of ministerial envoys working in partnership with the council to oversee and support the required improvement work. Today I am publishing the ministerial envoys’ first report, received in May, which identifies progress in a number of key areas. These include reconfiguration of the council’s transformation and assurance board, which is already drawing on the external expertise and challenge of its members, the creation of outline plans for continuous improvement and programmes for cultural change and political mentoring, and recruitment of a permanent strategic director of change who will lead the council’s improvement work going forward.

Although I welcome this early progress at the council, I share the ministerial envoys’ concerns that wholesale political and staff buy-in and involvement in the council’s improvement journey is not yet in place. This report clearly sets out the ministerial envoys’ expectations for further progress and I expect to see the council’s improvement work being embedded into “business as usual” council practices in the coming months, along with clear evidence that the political and officer leadership are gripping and proactively driving change.

When I met the council and ministerial envoys, I set out that the ministerial envoy model is a new approach to statutory intervention that reflects the Government’s genuine desire to work in partnership with the sector; that the council should treat the ministerial envoys as they would Ministers, and though we hope and expect improvements to be made, if this is not secured the option of escalating intervention to commissioners remained.

I look forward to receiving its progress report later this summer.

Slough

Slough has been in intervention since December 2021, and I extended the intervention in November 2024 for a further two years. I am today publishing the commissioners’ latest report, received in April. It highlights progress in a number of areas, including the appointment of a permanent corporate leadership team, improvements in audit and scrutiny functions.

However, with the intervention three and a half years in, a clearer articulation of the future vision is still required and a substantial transformation programme still needs to be designed and delivered, including a target operating model to evidence that the council can live within its means. It is clear that the council must now accelerate its development and it is vital that officers and members continue to work together to deliver the full range of reforms required to meet the best value duty. I look forward to receiving the commissioners’ update in September.

Conclusion

I am committed to working in partnership with these councils to provide the necessary support to ensure their compliance with the best value duty and the high standards of governance that local residents 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.

[HCWS796]

Local Government Reform: Cambridgeshire

Jim McMahon Excerpts

Tuesday 8th July 2025 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Stuart.

I congratulate the hon. Member for Huntingdon (Ben Obese-Jecty) on securing this debate on local government reorganisation in Cambridgeshire. His speech was very thoughtful. He covered quite a lot of ground, including ICB boundaries, devolution and the fair funding review, so it might not be possible to get through all of it. However, I am sure that we will communicate further—maybe in writing—as a follow-up on matters that we cannot cover here today.

This debate is an opportunity to look ahead to what the future holds for the hon. Member’s constituency, and indeed for local government across England. The Government are committed to resetting the relationship with local government, empowering local leaders to make the right decisions for their communities. We will work together to grow an inclusive economy, to reform public services and to secure better outcomes for local people.

As the Deputy Prime Minister said in her speech at the Local Government Association conference last week, true reform of local government means taking a long, serious look at the plumbing of local government, and we will not shy away from shifting local government on to a stronger footing. It is clear that the two-tier system of local government just does not work. We have heard from many councils that unitarisation or council mergers can help to strengthen local leadership, improve local services, save taxpayers money and improve local accountability.

Our plans for reorganisation will create structures that are simpler, more efficient and clearer to the public that local government is there to serve. This means that residents can access good public services without paying, as they do today, the two-tier premium. We must take the brilliant leadership being shown by district and county councillors across the country, and move it into local government structures that are simpler and more sustainable.

Local government reorganisation is already well under way. In March, we received interim plans for the 21 counties in the two-tier system that will undergo reorganisation. We have provided feedback to all areas as they develop their own proposals. Councils in Cambridgeshire and neighbouring Peterborough have a deadline of 28 November for final proposals to be submitted to Government. After that date, the Government will consult on selected proposals, before making a final decision on which proposals to implement. The fastest possible timetable has elections to new authorities in May 2027 and the new authorities will then go live in April 2028.

I am sure the hon. Member will appreciate that it would be inappropriate for me to comment now on the specific boundaries that he mentioned or the proposals that have been developed at a local level, because that would run the risk of pre-empting decisions that are being made later in the statutory process. However, I can give clarity on some of the specific points that he raised.

First, the consultation that is taking place at local level by the councils as they develop their proposals ahead of submission to Government is important. Many councils are conducting such consultations. To be clear, such consultation does not replace the statutory consultation that the Government will conduct with the public in those areas that are affected, to ensure that we can gauge the public view on the range of proposals that are viable and meet the criteria.

On the question of whether elections will take place, which I know is an issue affecting many district councils, there is no intention, as things stand, to cancel or postpone any of the 26 programmed elections.

I suppose there is a challenge, and perhaps even a tension, about the degree to which Government here in Westminster should dictate to local areas across 21 counties—covering a third of the population of England—what is right for their area. However, we have said that we will reset the relationship, and that we trust local people to know their areas better. So, we want local councils and councillors to lead local government reorganisation in their area.

Of course we have a statutory role, and we will make sure that the criteria are adhered to and the consultation takes place. Surely, however, the hon. Member will agree that it is for local people, who know their area better than people outside it, to determine what type of councils, in terms of their size and coverage, are right for their area. That should not be determined centrally.

[Steve Barclay]

If it is the Minister’s argument, as he has just set out, that it is not for Government to dictate the territory that would be covered, why do two different Government Departments appear to be dictating two different things? On ICBs, there is one geography, and then from his Department there are three options that cover a different alignment.

I will just take the example of transport. In Cambridge, there is the Greater Cambridge Partnership, which covers transport. Also in Cambridge, there is the metro Mayor of Cambridgeshire and Peterborough, who covers transport, too. Cambridge city council and South Cambridgeshire district council also cover transport. The Oxford to Cambridge authority is looking at the rail link between the two. There are so many different bodies dealing with transport into Cambridge. We should avoid that situation for health, and make sure that health organisation aligns with local authorities.

[Jim McMahon]

I think we can agree on that, which is why the White Paper published in December said that we need to reconcile things now and have a much simpler system of regional government in this country. The truth is that because it has been so fluid—some might say ad hoc—it has been allowed to develop in different ways in different parts of the country where there are overlapping boundaries when it comes to transport, the economy, the health service and local government. It does not make sense and makes it difficult for local people to know who to hold to account politically for decisions made on their behalf.

The White Paper is clear that we want to see boundaries aligned with ICBs and other public services. There is a role for local government in reorganisation. New unitary authorities will be created where workforce transfers take place, but there is no reason why authorities cannot work in partnership. There is no reorganisation taking place in Greater Manchester, for example, but the local authorities in Greater Manchester are today working on building a better model for children’s residential care because they recognise that across the 10 councils they can provide a better service at a better cost with better outcomes. So we encourage partnerships to align across boundaries, and over time that will develop.

We recognise that a lot of boundaries across England have never quite made sense; they have always overlapped and been a bit disjointed, but we are starting from the founding principle that alignment makes sense. We should be careful, though, not to conflate. I find that quite a lot of conversations in Parliament conflate or amalgamate the conversations about mayoral devolution and local reorganisation. They have a relationship, of course, but they are quite separate processes.

On reorganisation, it is important that local people and local councillors are given the freedom and flexibility to do what is right for their area and put their best foot forward to make a submission to the Government. We will then consult on the proposals that meet the criteria in good faith. We will listen to what local people say, and that will be taken into account. There are a range of factors that we need to consider, which I will come on to shortly, but I think it is the right approach. This is not the Government letting go. We have defined the criteria in this round of local government reorganisation in far more detail than any other round of reorganisation in the last 20 years, because we know how significant it is to that reorganisation’s covering 21 counties. But within those criteria and that process we have to allow for local areas to determine what is right for their area in partnership with local people. That brings me to another point.

The hon. Member for Huntingdon mentioned how disconnected Members of Parliament feel from the process. In every consultation and communication that we have had in webinars, written confirmations and statements to Parliament, we have been absolutely clear—this is a minimum expectation—that when local authorities, particularly lead authorities, are developing proposals, going out to consultation, firming up their evidence base, and testing founding principles themselves, it is a minimum expectation that Members of Parliament will be part of that conversation. It is not acceptable, regardless of political affiliation at a local or national level, for MPs who have been democratically elected, and of course have an interest, not to be part of those conversations. I am happy to put that on the record, and to follow up with local authorities that Members of Parliament should be included. That does not mean that Members of Parliament will have the ability to prevent a submission. A local authority has to follow the statutory process. There could be points where there is disagreement, but at the very start they should at least be in good faith and discussions should take place. We extend that, by the way, to police and crime commissioners and other interested parties at a local level, too.

On the criteria that the hon. Member for Huntingdon mentioned, in the invitation that went out to local authorities on 5 February we set out the statutory guidance to support councils informing their submissions. The first was on population size. We said that as a founding principle 500,000 was where we wanted councils to start from, but it is clear that some have gone lower than that. If it is right for their area, they can make the best case in that context. Some have gone higher, and we want to allow that flexibility in the system.

On the point that the hon. Member mentioned about population size and population forecasts, it is for the local area to determine what their own housing growth forecasts are. If they want to take that into account as part of their submission, we would be open to that. I say that only because different areas are at different points in the process. Some have local plans, for instance, and some do not have local plans, but efficiency and financial sustainability, local public service delivery, community engagement and devolution should be supported, too. We are taking a partnership approach.

Of course we shall give guidance, and we have set that out clearly. We have been clear about what the Government’s role is and what the local authority’s role is. We believe that is the right thing to do. Ultimately it leads us to sustainable public services that are there to serve the public, who we are all here to serve.

Question put and agreed to.

Local Audit Backlog

Jim McMahon Excerpts

Monday 7th July 2025 Written Statements

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

Local audit is the bedrock of local accountability and transparency, and of trust and confidence in councils to spend taxpayer money wisely. But 14 years of neglect took the system to breaking point and damaged a key part of our early warning system over local government finances at the time we need it the most. We are determined to rebuild the foundations of local government so that it is fit, legal and decent. The Government have taken swift and decisive action to clear the backlog of unaudited local authority accounts in England and put the local audit system on a more sustainable footing. This has included setting a series of statutory backstop deadlines for the publication of audited accounts. These proposals were enacted via legislation in autumn 2024, and two backstop deadlines have now passed. This failure of the system has resulted in poor value for money and additional costs, with some £49 million of grant committed to support bodies with the cost of building back assurance in 2024-25 and 2025-26. https://www.gov.uk/government/news/overhaul-of-local-audit-will-restore-trust-in-broken-system

This statement updates on the outcomes of the second backstop on 28 February 2025, confirms publication of the non-compliance list on gov.uk, gives details of the support available to bodies affected by the backstop measures, and updates on the Government’s longer-term plans for reform of the local audit system.

28 February 2025 backstop—for financial year 2023-24

Local bodies, unless exempt, were required to publish their audited accounts for financial year 2023-24 by 28 February 2025. Over 92% of bodies have published audited accounts for financial year 2023-24. Just under 50% of bodies published a disclaimed opinion due to the backstop, while 41% published unmodified—clean—opinions. The 13 bodies were exempt from the publication requirements; however, exemptions no longer apply for three of these bodies, and they have now published their audited accounts. Taken together, the publication figures continue to demonstrate a significant improvement in the overall publication of audited accounts, despite the proximity between the two.

Non-compliance list

I can confirm that the Government have today published a list of bodies that failed to meet the publication requirements at this backstop. The list indicates whether bodies published their draft accounts by 16 January 2025—the latest date on which the 30 working day inspection period could commence for it to conclude by the backstop; whether the audit opinion was delivered by the backstop; the date on which it was delivered; and whether bodies published subsequently audited accounts by 20 May 2025.

All bodies and their auditors included on the list have been contacted, and the Government will continue to engage to ensure that outstanding audited accounts for all outstanding financial years are published as soon as practicable. This includes further engagement with a small number of bodies to better understand their reasons for failing to publish draft accounts sufficiently ahead of February’s backstop and the actions that they are taking to publish audited accounts as soon as practicable to be in a position to comply with future backstops. The release of funds to councils to support bodies with the cost of building back assurance will be contingent on the publication of audited accounts and audit fees being paid.

27 February 2026 backstop—for financial year 2024-25

The deadline for publication of audited accounts for financial year 2024-25 is 27 February 2026. In line with amendments made to the Accounts and Audit Regulations 2015, bodies are required to publish their draft accounts by 30 June 2025. The Government will monitor compliance with this deadline with a view to ensuring improvements to the overall system of compliance and timeliness. The Government continue to consider the appropriate incentives and sanctions for the overhauled local audit system and have already set out that the local audit office, once established, will take on oversight in relation to the quality and timeliness of accounts preparation and publication of audited accounts.

Systemic reform

In December 2024, the Government published their ambitious strategy to overhaul the broken local audit system. This strategy set out a clear purpose for local audit and its users, proposals for simplified and proportionate financial reporting, improvements to the market’s capacity and capability, and ways to build strong relationships between local bodies and auditors. The establishment of a new single body, the local audit office, to oversee local audit will radically simplify and streamline the currently fragmented system. The LAO will be proportionate and focused on local audit matters, ensuring efficiency, transparency and value for money. The Government also published in early April a response to their consultation, which included 16 further commitments to reform the system.

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Internal Drainage Board Levy Support Grant

Jim McMahon Excerpts

Monday 7th July 2025 Written Statements

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

Following the local government finance settlement on 3 February 2025, the Government confirmed a £5 million grant to support local authorities facing significant increases in special levies from internal drainage boards. This represents a £2 million uplift from the originally announced £3 million, reflecting the Government’s recognition of the continued financial pressures on local authorities affected by these special levies. Services provided by internal drainage boards are energy-intensive and have been particularly impacted by rising energy costs and adverse weather conditions over the past three years.

Today I am confirming the allocation of this funding to the 18 local authorities most severely affected. Councils and internal drainage boards are encouraged to continue to work together to deliver services efficiently and to ensure good value for money for the public.

Local Government Outcomes Framework

Jim McMahon Excerpts

Thursday 3rd July 2025 Written Statements

[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.

[HCWS773]

Ministry of Housing, Communities and Local Government

Jim McMahon Excerpts

Tuesday 24th June 2025 Commons Chamber

[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 Leadership Structure

Jim McMahon Excerpts

Tuesday 24th June 2025 Written Statements

[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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Local Authority Governance

Jim McMahon Excerpts

Monday 23rd June 2025 Written Statements

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

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

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

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

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

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

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

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Fair Funding Review 2.0 and Administration of Council Tax

Jim McMahon Excerpts

Friday 20th June 2025 Written Statements

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

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

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

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

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

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

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

Fair funding review 2.0

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

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

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

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

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

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

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

Consultation on modernising and improving the administration of council tax

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

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

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

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

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

Conclusion

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

This written ministerial statement covers England only.

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