A devolution revolution? Key proposals in the English Devolution White Paper

As part of its Plan for Change, one of the government’s closing acts of 2024 was the release of the English Devolution White Paper.
 
With a focus on creating an economically strong and united England, the White Paper proposes a “devolution revolution” by overhauling the current system and making devolution the default position. This will be supported by the creation of new Strategic Authorities, local government reorganisation, the expansion of mayoral powers, and integrated settlements to fund local priorities.

In this article, we look at some of the key proposals outlined in the White Paper, and the consequent effect on local authorities and communities of the proposed “devolution revolution”.

Devolution framework

The White Paper outlines the government’s devolution framework. The intention is that the framework will be clear and easy to follow, and will enable mayors to drive growth and the public to hold them to account. The government is keen to stress that it should be viewed as the “floor not the ceiling” of its ambitions, with it being subject to review and further change to achieve devolution at the right levels.

Strategic Authorities

The new devolution framework aims to deliver a permanent shift of power from Westminster. It's considered that the key to its success will be the creation of Strategic Authorities. These will be split into the following levels:

• Foundation Strategic Authorities which will automatically include non-mayoral combined authorities, combined county authorities, and any local authority designated as a Strategic Authority without a Mayor.
• Mayoral Strategic Authorities which will include the Greater London Authority, all Mayoral Combined Authorities and all Mayoral Combined County Authorities. If certain eligibility criteria are met, these may be designated as Established Mayoral Strategic Authorities.

The clear preference is for one local authority covering a larger geographical area, similar to the unitary councils that exist under the current regime. The government’s ultimate aim is for all parts of England to have a Mayoral (and eventually Established Mayoral) Strategic Authority on the basis that this will re-balance power and promote growth.  

Strategic Authorities will be subject to statutory functions and governance arrangements, and their defined list of areas of competencies will be set out in legislation. The extent of their legal powers is still to be determined, however the initial list includes transport, skills and employment, housing, economic development, environment, health and well-being and public safety.

Local Transport Plans, Local Skills Improvement Plans, Local Growth Plans and Spatial Development Strategies will form a key part of the Strategic Authorities responsibilities, with the aim being that these will deliver high quality transport and infrastructure, an upskilled workforce and greater housing delivery, with a focus on social and affordable housing.

Funding and integrated settlements

Funding is crucial to the success of the devolution framework, with the White Paper outlining the government’s plans for a simplified funding landscape for Mayoral and Foundation Strategic Authorities. These will include:

• Consolidated funding pots covering local growth, place, housing and regeneration, non-apprenticeship adult skills, and transport for Mayoral Strategic Authorities.
• Dedicated local growth allocations, decided by formulae, and with lighter-touch investment sign-off for Foundation Strategic Authorities.

Mayoral Strategic Authorities will also be eligible for integrated settlements. These will have a single systematised approach to spending controls and a single, streamlined, overarching assurance and accountability framework coordinated by the Ministry for Housing, Communities and Local Government.

Empowering communities and local government

A key theme of the White Paper is the “resetting” of the relationship between local and central government. This includes:

• The creation of a new '“Recovery Grant” worth £600 million to target money towards areas with greater need and demand for services, based on deprivation as a proxy.
• Multi-year funding settlements which aim to give local authorities certainty for the year ahead and the ability to plan routes to market and to commission long-term, cost effective contracts for vital services.
• A new model of business rate retention to consistently support Strategic Authorities to drive growth.
• Ending the 'parent-child' dynamic between local and central government to allow local areas to take local decisions without micromanagement from central government, including by:
  • Reforming the use of funding pots and reducing the number of restrictive grants.
  • Streamlining grant reporting requirements and evaluation.
  • Reviewing areas where Secretary of State consent is required and removing these unless absolutely necessary.
  • Giving councils stronger tools for improving their housing market.
• Facilitating a programme of local government reorganisation for two-tier areas and for those unitary councils, where there is evidence of failure or where their size or boundaries may be hindering their ability to deliver sustainable and high-quality services for their residents by:
  • Expecting all two tier areas and smaller or failing unitary councils to develop proposals for reorganisation.
  • Ensuring that new unitary councils are the right size to achieve efficiencies, improve capacity and withstand financial shocks - for most areas this will mean creating councils with a population of 500,000 or more.
  • Expecting new councils to take a proactive and innovative approach to neighbourhood involvement and community governance so that citizens are empowered.
  • Expecting all councils in an area to work together to develop unitary proposals that are in the best interests of the whole area, rather than developing competing proposals.
  • Expecting all councils in an area to work with the government to bring about these changes as swiftly as possible.
• Reforming the current local audit system to best meet the needs of the authorities and the communities they serve.

A new dawn for local government?

The White Paper proposes significant changes to local government at a time when authorities face increasing financial pressures and demand for services against a backdrop of limited resources and budgetary constraints. Whilst the removal of unnecessary secretary of state approvals will potentially enhance local decision making, and allow for more targeted and efficient decisions to be made on local spend and priorities, the proposals also run the risk of increasing the burden on already struggling authorities.

The appeal of greater devolved power and local autonomy is easy to see, especially when it promises to “relight the fire of our economy and ignite growth in every region” however the government must not lose sight of the day-to-day difficulties facing authorities in its quest for greater devolution. Strategic Authorities must not only be strategic in name, and the government must ensure that sufficient resources, guidance and financial backing is available to deliver the economic growth that it envisages in the White Paper. 

An often unavoidable consequence of re-organisation is redundancies, and whilst streamlining structures can generate efficiencies, reduction in the workforce not only limits resources, but can result in a loss of local knowledge and participation that may have existed in that area for many years. At a time when participation and engagement in local government is low, the government must ensure that suitable guidance and support is available for authorities when embarking on the re-organisation process so that authorities can juggle ongoing service demands and re-organisation considerations, and ensure local communities are not unintentionally hindered by the restructuring. 

The White Paper has the potential to deliver exciting new possibilities for central and local government in England, but only time will tell if the devolution revolution delivers the growth, clarity and autonomy that the government envisages.

For further information, please contact the public sector team.