On 15 June 2023, the House of Lords will debate the following motion, tabled by Lord Shipley (Liberal Democrat):

That this House takes note of the state of local government in England and the case for the reinvigoration of local democracy.

1. Background

1.1 Structure of local government: Local authorities

The structure of local government in England has developed gradually over time and varies across the country. There are currently 317 local authorities in England. Of these, 132 are ‘single tier’ authorities, made up of:

  • 62 unitary authorities, which provide all local government services in their areas.
  • 32 London boroughs, which provide most of the services in their area. London-wide services such as police, fire, strategic planning and transport are provided by the Greater London Authority.
  • 36 metropolitan districts, which cover Greater Manchester, Merseyside, South Yorkshire, Tyne and Wear, the West Midlands and West Yorkshire. These are also responsible for most local services, with the exception of those provided through combined authorities as described below.
  • Two further unitary authorities. These are the City of London, which provides services within the ‘Square Mile’ of London, and the Isles of Scilly. The Isles of Scilly is a unitary authority, although some local government services are provided in conjunction with Cornwall Council.

The remaining local authorities are made up of ‘two-tier’ county and district councils. There are 21 county councils, which provide services such as education, social services and waste disposal in their areas. County council areas are subdivided into districts run by district councils. There are a total of 164 district councils in England, which are responsible for local services such as rubbish collection, housing and planning applications.

In addition to these local authorities, some areas of England have a further tier of local government made up of parish and town councils. According to the Department for Levelling Up, Housing and Communities, there are approximately 9,000 town or parish councils in England. The government states that parish councils do not generally have statutory functions. They are often responsible for local services, such as allotments, parks and community centres, and may provide other services with the agreement of county or district councils.

1.2 Other locally elected office holders

Some local authorities in England also have directly elected mayors. There are currently 16 elected local authority mayors. Since 2000, London has also had its own elected mayor. As discussed below, some local areas also elect mayors for their combined authority.

In 2012, the coalition government created directly elected Police and Crime Commissioners (PCCs). PCCs are responsible for the efficiency and effectiveness of the police in their area. There is a PCC for each police force area of England, with the exception of London, Greater Manchester and West Yorkshire, where these powers are held by elected mayors. The City of London also has its own separate police force.

1.3 Changes to local government

Over the last two decades, there have been a series of changes to the way local government operates. These changes include the creation of combined authorities (CAs) under the Local Democracy, Economic Development and Construction Act 2009. CAs are new bodies created to enable two or more councils to collaborate and make collective decisions across local authority boundaries. Following the passing of the 2009 act, 10 CAs have been established. The first of these was the Greater Manchester CA, established in April 2011.

In 2014, the coalition government announced it had agreed the first of a series of ‘devolution deals’ with Greater Manchester CA. The government said the purpose of these deals was to devolve more powers from central government to local government and encourage economic growth. These deals would be agreed separately with each CA.

In 2016, the Conservative government passed the Cities and Local Government Devolution Act 2016, reforming the way in which CAs are organised and the powers that can be devolved to CAs from local authorities. The 2016 act also created mayoral combined authorities (MCAs), CAs with their own elected mayors. These mayors are sometimes referred to as ‘metro mayors’.

Of the existing 10 CAs, nine are MCAs. The most recent to be established was the West Yorkshire MCA. The North East CA is currently the one exception, being a CA without an elected mayor. However, in December 2022, the government announced as part of a new devolution deal that the North East CA and North of Tyne MCA would be merged to create a new North East MCA. In August 2021, the government announced a devolution deal with North Yorkshire Council and the City of York Council, which included plans to create a further new MCA.

Since 2014, multiple devolution deals have been agreed with the CAs and MCAs. For example, in 2023 the government agreed a new devolution deal with Greater Manchester CA. This included the devolution of further powers and the establishment of a single funding settlement for the next spending review period. Devolution deals have also been agreed with Norfolk, Suffolk and Cornwall local authorities. In addition to these, the government agreed a devolution deal with the combined county authority (CCA) for the East Midlands. Combined county authorities are a new type of agreement proposed in the Levelling Up and Regeneration Bill. The proposals in this bill are discussed in more detail below.

Further information on the various devolution deals agreed since 2014 is provided in the devolution register, maintained by the Local Government Association (LGA). This lists the powers and responsibilities devolved to different areas of England as part of these deals.

1.4 Local government finance

The total spending on services by local authorities for England during 2021/22 was £107.1bn. The largest area of spending on services was on education (32.5%) and the second largest was on adult social care (17.7%). Local government spending per head in England varies. In 2021–22, the highest per person spending was £3,576, in London. This compared to an average of £2,430 per head spending for England as a whole. The lowest per head spending was in the East Midlands at £1,950.

The amount of funding an area receives from central government varies. For example, analysis by the House of Commons Library of central government funding to local areas found metropolitan districts receive more settlement funding than other areas in England. Local authorities have access to funding through council tax receipts, a proportion of business rates raised within the authority area and funding from central government. Central government funding is made up of several grants, the majority of which are included in the annual local government financial settlement. In February 2023, the government announced local councils in England would receive £17.1bn in the annual local government financial settlement for the 2023/24 financial year. Local authorities also receive grants outside the local government financial settlement which have been ringfenced for specific purposes.

Some grants, such as the levelling up fund and the future high streets fund, are subject to competitive tendering. The competitive tendering process and the overall complexity of local government finance have been criticised by the National Audit Office (NAO) in its February 2022 report ‘Supporting local economic growth’. The NAO found:

[…] multiple funding pots and overlapping timescales, combined with competitive funding, create uncertainty for local leaders. Local authorities wishing to make broad-based investments across skills, infrastructure, business and innovation must submit winning bids across several funds or find alternative sources of funding.

Further information on local government finance is provided in the House of Commons Library briefing ‘Local government finances’ (6 June 2023).

1.5 Local democratic engagement

Local council members, elected mayors and PCCs are elected for four-year terms using the ‘first past the post’ voting system. In some councils, all councillors are elected at the same time. In other councils, councillors are voted ‘by thirds’ or ‘by halves’. Voting by thirds means a third of councillors are elected every year for the first three years of a four-year period. No elections are held in the fourth year. Voting by halves means half the councillors are elected every two years.

Prior to 2021, elected mayors and PCCs were elected using the supplementary vote system. However, this was changed to the first past the post system following the passing of the Elections Act 2022. This same act brought in new voter ID requirements for all local elections, including mayoral elections, and PCC elections in England.

Turnout in local council elections is typically lower than in national elections. According to figures collected by the House of Commons Library, turnout in the 2021 local elections in England was 35.9% compared to 67.4% in the 2019 general election in England. Although the 2021 local elections took place during the Covid-19 pandemic, the Electoral Commission noted turnout was similar to that in previous local elections. The exception to this was when local and general elections were held on the same day. For example, in 2015, turnout in England in the general election was 65.5%. The average figure for total turnout in unitary, metropolitan and district councils in 2015 was 63.5%.

Figures for turnout in the May 2023 local elections have yet to be published. The Electoral Commission has said it expects to publish an initial analysis of the implementation of voter ID requirements during the local elections in June 2023. It has also said it will publish its full report on the local elections in September 2023.

Turnout in elections for local authority mayors, metro mayors and PCCs tends to be lower than turnout in local council elections. For example, in May 2023, four metro mayors were elected in England. The average turnout in these elections was 31.5%. In the last PCC elections in England and Wales, which took place in 2021, the average turnout in England was 32.2%.

Although turnout in local elections is typically lower than in national elections, data suggests trust in local government is higher than in central government. According to the Office for National Statistics’ trust in government survey, in the UK, 42% of the population said they trusted local government. The same survey found 35% said they trusted the national government. Although an England only break-down of these figures is not available, 84% of respondents to this survey said they usually lived in England.

2. Government policy

The government has committed to reducing regional inequality in England and supporting economic growth as part of its ‘levelling up’ agenda. The government has also said it wants to increase the devolution of power to local authorities and reform the way local government operates.

2.1 Levelling up white paper

The government’s 2022 white paper ‘Levelling up the United Kingdom’ set out 12 “missions” to be achieved by 2030. These missions were listed under four overall objectives. The fourth of these objectives was to “empower local leaders and communities, especially in those places lacking local agency”. The mission associated with this objective was to increase devolution of powers from central government to local authorities. The government committed to offering a devolution deal to every part of England that wanted one. It said these deals would include “powers at or approaching the highest level of devolution”. As part of these new deals the government said local authorities would be offered a “simplified, long-term funding settlement”.

The government also said future devolution deals would be based on a new ‘devolution framework’. As part of this framework, each deal offered would match different ‘levels’, with level one deals offering the lowest degree of devolution and level three deals offering the highest degree of devolution. According to this framework, level three deals would require the adoption of a mayor. The government also said it planned to simplify the way local government is funded, including reducing the number of individual competitive funding pots.

The 12 missions also included other measures intended to improve the provision of local services. For example, the government said:

By 2030, pride in place, such as people’s satisfaction with their town centre and engagement in local culture and community, will have risen in every area of the UK, with the gap between top performing and other areas closing.

In the white paper, the government also said it would establish a new body called the Levelling Up Advisory Council. It stated this new council would advise ministers on the “design, delivery and impact of levelling up policy”. The government subsequently confirmed this council has been appointed and is chaired by Andy Haldane, the chief executive officer of the Royal Society of Arts, Manufactures and Commerce. Members of this council are directly appointed by the secretary of state for levelling up, housing and communities.

2.2 Levelling-up and Regeneration Bill

On 19 December 2022, the government’s Levelling-up and Regeneration Bill received first reading in the House of Lords, having completed its passage through the House of Commons. The bill would establish a new statutory requirement for ministers to set, report on progress against and review the levelling up missions. The bill included provisions creating new CCAs which would have similar powers and responsibilities to CAs and MCAs. These could be formed by upper-tier local authorities. For example, these CCAs would be able to establish directly elected mayors in a similar way to MCAs.

In addition to the proposals concerning local devolution, the bill includes provisions enabling central government to make direct interventions where it believes authorities are exposed to financial risk as a result of capital finance. The bill would enable the government to intervene in English local authorities to limit their borrowing and direct them to sell assets in certain circumstances. Further information on the Levelling-up and Regeneration Bill is provided in the House of Lords Library’s briefing published prior to second reading of the bill in the House of Lords, ‘Levelling-up and Regeneration Bill: HL Bill 84 of 2022–23’ (10 January 2023).

2.3 Other announcements

In a speech to the LGA’s annual conference in June 2022, the secretary of state for levelling up, housing and communities, Michael Gove, announced the government intended to create a new body called the Office for Local Government (Oflog). Mr Gove said the purpose of this new body would be to monitor the performance of local government in England. Mr Gove subsequently said Oflog would also support “local leaders to innovate and drive self-improvement”. In January 2023, Mr Gove announced that Lord Morse (Crossbench) would be appointed as the interim chair of Oflog. In May 2023, the government confirmed in response to a parliamentary question that Oflog was still in the process of being established.

The chancellor of the exchequer, Jeremy Hunt, announced in his 2023 spring budget that the government would consult on proposals to transfer local economic development from local enterprise partnerships (LEPs) to local authorities from April 2024. LEPs are voluntary bodies established in 2010–11 which work with local authorities, MCAs and CAs to coordinate economic development policy in local areas. There are currently 36 LEPs in England.

In March 2023, the government published its ‘English devolution accountability framework’. This followed a commitment in the levelling up white paper to establish “appropriate accountability” for local leaders and institutions and establish common standards across different MCAs and the Greater London Authority. The framework stated these bodies should be subject to three forms of accountability:

  • local scrutiny and checks and balances
  • accountability to the public
  • accountability to the UK government

3. Levelling up, local government and local democracy

Following the publication of the government’s levelling up white paper, several organisations have argued the government should do more to devolve power to local authorities.

In February 2023, the LGA published a report on the progress of the government’s levelling up policy, the ‘Levelling up locally inquiry report’. The LGA argued that, in order to properly address regional and demographic inequality in England, the government should enable local authorities to retain more of the proceeds from local economic growth. It also recommended the government should replace the existing system of competitive funds with a single pot of capital funding to be used by councils, MCAs and CAs to invest in local infrastructure.

In its March 2022 report ‘Democracy made in England: Where next for English local government?’, the Electoral Reform Society characterised the process by which devolution had been implemented in England as “ad hoc, piecemeal, top-down”. It argued the government lacked “a clear vision” for devolution in England. It also said the government had not adequately addressed the need to improve local democracy as part of these reforms. Specifically, it argued many parts of England lacked agreed subnational borders and many local areas lacked a strong sense of identity. As a result, the Electoral Reform Society argued that many of the decisions on English devolution had resulted in the creation of arbitrary and overlapping borders.

The Institute for Government (IfG) has also argued that there should be further devolution of responsibility to local councils, MCAs and CAs. In its May 2023 report ‘How can devolution deliver regional growth in England?’, it argued MCAs and CAs should have greater responsibility for transport, skills and planning in order to better support economic growth in their areas. It also argued that the government should simplify the funding system. However, it warned that, while there may be a political consensus that increasing devolution in England would encourage economic growth, devolution did not offer a “silver bullet”. The IfG argued control of some areas such as basic research and development funding and regulation should be retained by central government.

3.1 House of Commons Public Administration and Constitutional Affairs Committee: ‘Governing England’ report

In September 2020, the House of Commons Public Administration and Constitutional Affairs Committee (PACAC) launched an inquiry into the various initiatives introduced by government since 2014 to devolve power locally in England. PACAC published its report ‘Governing England’ on 13 October 2022. It concluded there needed to be “urgent” and “significant” reform of the way in which England is governed. It identified six areas of concern, concluding:

  • Current local governance structures were too complex, creating a system PACAC described as “confusing and opaque”. It argued, as a result, it was difficult for local people to understand where responsibility and accountability lay, undermining public trust in local democracy.
  • England and the UK as a whole were overly centralised when compared to other democratic countries around the world. It argued this was the result of a “prevalent culture in Whitehall that [was] unwilling to let go of its existing levers of power”.
  • The current funding arrangements for local government and CAs were ineffective. It argued the current system by which local authorities bid for funding from different “pots” of money led to a waste of local resources. It recommended the government should make a commitment to end the current system.
  • The government should do more to address geographical inequality in England, arguing it needed to shift its focus away from metropolitan areas towards rural and coastal areas.
  • People in England increasingly felt political and social change was not possible. It said people were being dissuaded from participating in politics because they doubted the effectiveness of democratic politics to enact change. It described this as a “warning sign for the health of democracy”.

The committee did not recommend how the structure of local government should be reformed. However, it recommended the government, the opposition and the other parties in the House of Commons should agree to create a statutory cross-party commission on the future governance of England. It said this commission’s remit should include drawing up proposals for reforming the governance arrangements for England.

The government’s response to this report was published in March 2023. The government agreed with the committee that the structure of local government remained complex. However, it said it had set out measures in its levelling up white paper and its devolution accountability framework to reduce this complexity and improve accountability. It also said these reforms would be supported by the newly created Oflog. On the issue of funding, the government said it had recently agreed to provide simplified and longer-term funding for local government through the UK shared prosperity fund. It also said it would set out further plans to simplify the local growth funding landscape “shortly”. The government said it did not intend to establish a cross-party commission. Instead, the government said it supported “locally led” changes to local government, proposed by local authorities. For example, it cited the decision by Cumbria, North Yorkshire and Somerset to become unitary councils in 2022.

In its follow up, published alongside the government’s response, PACAC criticised the government, describing its response as “very disappointing”. It argued the government had failed to properly engage with its report. The committee also said it was disappointed in the official opposition and other parties in Westminster, saying they had not engaged with the committee’s report either.

3.2 Labour Party

In December 2022, the Labour Party published the final report of its Commission on the UK’s Future, chaired by former prime minister Gordon Brown. The report, entitled ‘A new Britain: Renewing our democracy and rebuilding our economy’, set out a series of reforms to the UK constitution. The report argued the UK was more centralised than any comparable country and that local government was often “sidelined” by central government. It also described central government as remaining “remote and unaccountable” to most citizens. It recommended it should be a constitutional requirement for central government to respect the “political, administrative and financial autonomy of local government” and decisions should be taken “as close as meaningfully and practicably possible to the people affected by them”. It also recommended that local government should be given new fiscal powers to generate its own revenue. Speaking at the launch of the report, the leader of the opposition, Keir Starmer, welcomed the commission’s recommendations and said the party would hold a consultation on these proposals.

In a speech in January 2023, Mr Starmer said a Labour government would introduce legislation in its first King’s Speech to devolve powers from central to local government. He said this would include new powers “over employment support, transport, energy, climate change, housing, culture, childcare provision and how councils run their finances”. During a debate in the House of Commons on devolution and the future of the UK constitution on 8 March 2023, the shadow minister for levelling up, housing, communities and local government, Alex Norris, said Labour committed to go further than the government in its levelling up white paper in devolving power from central government. He also said he believed local authorities should all have access to the same powers, regardless of how they chose to organise themselves.

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Cover image from Wikimedia Commons.