Devolution – what’s happening to our local authorities and why?

Just over four years later, in December 2024, the long awaited white paper was indeed published. So what does it say about the stable and reliable legal framework for communities, services, funding and local democracy?

In brief, some promising things. The Government’s self-proclaimed goal is to be ‘simple’: “Universal coverage in England of Strategic Authorities – which should be a number of councils working together, covering areas that people recognise and work in. Many places already have Combined Authorities that serve this role. The Government will continue to develop new Strategic Authorities collaboratively and in partnership with places… we will legislate for a ministerial directive. This will allow the creation of those Strategic Authorities where local leaders have, after due time has been allowed, not been able to make progress. This, combined with our plans to support local government reorganisation, will help align public service boundaries with Strategic Authorities and will ultimately lead to fewer politicians and a more efficient state.”

Longer term plan

In summary, the longer term plan is for there to be more locally voted and accountable Mayors heading up Mayoral Strategic Authorities. In the short to medium term, two tier and small local authorities are to become larger authorities with a population of over 500K citizens, with County Councils collaborating with their District Counties to achieve this. Until then, combined county authorities will be established and districts will need to be involved through effective levels of collaboration. This will be key. For example, it would be foolish for Oxfordshire County Council, which I referenced in my original article, to ignore the power house District Council of Oxford City Council. Then building upon the findings of the NAO audit office report on PFI and on the plan for the 10 year infrastructure strategy, which I reported on in these articles, for local and central government to join up through various fora and requirements, on strategic thinking, policy, growth plans and a pipeline of projects for delivery.

Some Established Mayoral Strategic Authorities will receive an Integrated Settlement (see below). Until then, there will be Foundation Strategic Authorities (generally speaking, the combined authorities without mayors).

The aim is also to improve where boundaries for Strategic Authorities fall, and the governance for Mayoral Strategic Authorities e.g. to permit simple majority voting where possible.

There will be six Established Mayoral Strategic Authorities that will receive an Integrated Settlement to fund local priorities: Greater Manchester, Liverpool City Region, North East, South Yorkshire, West Midlands and West Yorkshire Combined Authorities are to receive a consolidated budget across housing, regeneration, local growth, local transport skills, retrofit and employment support. This encourages movement away from silo thinking and negotiating deals with independent departments, so that more strategic joining up of projects, outcomes and funding can be achieved.  The early signs of success or failure for this policy will depend upon how these authorities take their new powers and funding forward. The White Paper also states it will explore how an Integrated Settlement could be applied to London from 2026 – 2027 “taking into account it’s unique circumstances“. In the interim period, until the English Devolution Bill is passed, the Mayoral Strategic Authorities listed will receive elements of the framework ahead of designation “where practicable“.

There will be an improvement of appropriate fora and contact between Strategic Authorities and key agencies such as housing/ transport/skills and the doors of Whitehall with access to the Prime Minister the Deputy Prime Minister.

Whilst the carrot of improved funding and powers should be enough to galvanise authorities to act, the Government will legislate for a Ministerial Directive to force the creation of Strategic Authorities in the limited circumstances where other routes have been exhausted; this would occur where there is majority support or the formation is essential to complete the rollout of Strategic Authorities in England. In my experience, some County Councils have already directly approached Government to be considered for early reorganisation, whilst other Councils have been concerned that despite their population falling below 500K people, they would prefer not to be reorganised (see Local Gov article about Portsmouth CC).

The Government plans to set out clear criteria for the different types of Strategic Authority status and also the powers available to Mayors and Strategic Authorities.

Local growth plans

Importantly, the Government will create a statutory requirement for all Mayoral Strategic Authorities to produce a Local Growth Plan, setting out the long-term vision for growth in each region over the next 10 years with a roadmap for how this can be achieved. This will enable Central Government to work with such Mayoral Strategic Authorities to agree shared strategic priorities and help align policy levers. Also, importantly, this will help galvanise projects and investment, including through setting out a pipeline of investment opportunities. You will have seen from our article on the plan for the 10 year infrastructure strategy and NAO audit office report on PFI that a pipeline of investment opportunities is a key factor for  private sector funding to aid growth. The White Paper states that “the Government is currently consulting on a duty for Local Government Pension Scheme Administering Authorities (LGPSAA) to work with Strategic Authorities and other stakeholders to identify suitable investment opportunities, and to have regard for Local Growth Plans and local economic priorities when setting their high-level investment strategies.” The English Devolution Bill will also introduce a reciprocal requirement on Strategic Authorities to work with LGPSAA and their asset pools (who would be required to have the capability to conduct due diligence on such proposals before taking investment decisions) to develop investment opportunities appropriate for pension investment. Foundation Strategic Authorities will need to set out a vision for growth in their areas as well.

The fora to be established will be:

• the Council of the Nations and Regions, chaired by the Prime Minister, to bring together First Ministers of Devolved Governments and the deputy First Minister of Northern Ireland as well as the Mayors of Strategic Authorities to collaborate across the national missions.
• the Mayoral Council, chaired by the Deputy Prime Minister, to bring together all of England’s Mayors. This will enable engagement between Central Government and Mayors on Local Growth Plans, identifying how best to deliver on the ground and identify opportunities to better coordinate national and local policy.
• the Leaders Council will bring together a representative group of local authority leaders with the Deputy Prime Minister and other ministers so the local leaders have a seat at the table in government and policy so solutions can be co-designed with local government.

The Government’s long-term aim is to realign public authority boundaries to be delivered over the same area as Strategic Authority boundaries so that police, probation, fire and health services and those of Strategic Authorities align. In the interim, practical solutions need to be found for Mayors to deliver where service boundaries are not so aligned.

The Government will ensure Non Departmental Public Bodies and Arms Length Bodies such as Homes England, Network Rail and National Highways have appropriate regard to  the local growth plans.

In our article on the infrastructure plan, we reference the National Wealth Fund. This is referenced in the White Paper as needing to work closely in partnership with Mayors to support investable propositions in their Local Growth Plans as well as with Devolved Governments and other local leaders to support investment plans. The Fund is to be appropriately resourced to identify project pipeline and structure innovative transactions with project sponsors, industry, local authorities and government departments. It will need to work collaboratively focusing on additionality and not supplant private investment.

Alongside this, there is provision in the White Paper for better data and better use of data as well as a need for systems to evaluate policy. The White Paper goes on to talk about upgrading systems and delivery of Government’s plans.

So this is what local authorities are busily preparing for as I write this. As an Oxfordshire resident and business owner, I recently received a letter from our County Council Leader Cllr Liz Leffman advocating for a large single Combined Authority and Strategic Authority and for views to be shared on options in relation to such ambitions. She stated that the Government had written to all Oxfordshire councils in February seeking high level proposals by the 21st of March and final proposals by the 28th of November.

A key point of interest for us and our clients is what might this mean for Oxfordshire? On 28th January 2025 Rachel Reeves announced new plans to deliver the Oxford-Cambridge Growth Corridor to boost the UK economy by up to £78billion by 2035.  Alongside this a Growth Commission for Oxford, inspired by the Cambridge model, is planned to review how to unlock and accelerate nationally significant growth of the city and surrounds.

So whilst we secure more information and consult on such matters within the business and our clients, the information so far on what the White Paper plans to deliver and why sounds promising. Less politicians, less bureaucracy, more power and funding at local level, better strategic planning and policy alignment and a pipeline of projects with private sector and National Wealth Fund investment; what’s not to like?