Local government reform in England cannot wait any longer. The impact of the Covid-19 pandemic and the Government’s commitment to ‘levelling up’ mean it is an idea whose time has come.
This report’s proposals are designed to show how the Government should use its forthcoming devolution white paper to end nearly half a century of underpowered and weakening local government in England.
If the Government’s plans to level up the country are to stand any chance of succeeding, this report sets out how it must reorganise and simplify local government around the country to align the shape of local government to the shape of local economies.
This will create accountable, capable institutions to be led by directly-elected leaders with the full set of economic powers available to local government at present. To that end, the report recommends a New Deal for Local Government to level up responsibilities so that everywhere has the same powers as the devolved government in London.
The report sets out how to go about these reforms, proposing a framework of rules to be followed by central and local government to ensure timely reorganisation in a way that means they will be economically powerful and politically feasible.
Reorganising local government in England
The report recommends the following rules so that there is a clear and transparent process for central and local government to follow:
- Everywhere will reform — all two-tier systems will be reformed to become single tier, while economic powers held in the lower tier of Mayoral Combined Authorities will move up
- Everywhere will have a directly-elected leader — voters will have a clear choice about who will be in charge and they will have clear four-year mandate to act
- Local government boundaries will match local economic boundaries — they will always be blurry, but the aim should be to contain as much of the local economy within the local authority area as possible — that is the area over which most people locally work and live their lives
- Local government will have the capacity to govern effectively while remaining local — economic powers should be held by local governments covering at least 300,000 people and no more than 800,000. This is to strike a balance between covering the local economy and maintaining a connection with local people and businesses. Lower-tier authorities in Greater London and where there is a Mayoral Combined Authority will focus on personal services and may be smaller than 300,000 people.
The report sets out a process for local authorities to come forward with proposals and for how government should respond.
A New Deal for Local Government
- Level up to London — every single one of the new authorities and the metro mayors should have the same powers as the Mayor of London
- Protected powers for local government — a commitment from central government not to remove powers from local authorities without their consent, similar to the safeguards in Scottish devolution
- Greater control over council tax and business rates
- Remove restrictions on how revenue from sales, fees and charges can be used
- A clear transition to self-funded local government — so that central government begins to withdraw from the process
- Fiscal flexibility — changing the way local authorities have to balance their budgets and account for spending
- Reforming the centre — replacing the Ministry of Housing, Communities and Local Government with an ‘England Office’ and switching staff and resources from central to local
Only with these reforms will local government be able to play its full part in the challenge of levelling up and, more importantly, to improve the opportunities available to people who live and work in the cities and large towns all around the country.