Key considerations

Sequencing

The white paper makes it clear that the Government’s main priority remains devolution. This was also re-emphasised in the letter to councils from John MacMahon on 16 December 2024. This is why the timetabling that we have been privy to so far indicates that consultation on new strategic authorities will begin in January 2025, whereas the majority of local government reorganisation proposals are not being sought until the autumn of 2025. However, the paper does also indicate that if local government reorganisation is needed to unlock devolution, then it may be prioritised where it is tied to devolution proposals. Accordingly, the majority of areas will be expected to bring forward devolution proposals first, with local government reorganisation to follow.

As the bulk of the areas of the country not yet covered by an existing combined authority, or combined county authority are in the south of England in shire county areas, we know the vast majority of these new strategic authorities will be combined county authorities. This means that the counties and/or unitaries included in the proposed devolution boundaries will need to consent to the laying of the regulations creating the CCA. The districts or boroughs sitting underneath the counties will not however have to consent to the creation of a new CCA. Whilst the governance model does give districts/boroughs a seat at the table in new CCAs, they do not have the same voting rights as constituent councils, and even where rights are extended, will be in the minority, meaning limited formal control (although the small number of CCAs already established have been keen to ensure that districts/boroughs have the opportunity to input/be involved/have influence).

The creation of unitary councils underneath the new CCAs can then proceed following the creation of the CCA for the area.

For the small number of areas where reorganisation will ‘unlock’ devolution – presumably because upper-tier councils which currently will not consent to be part of forming a CCA can be reorganised out of existence – the process of unitisation will come first. Following the local government reorganisation, the blocker to devolution will be removed and so the creation of a new strategic authority can be proceeded with. Whether the new strategic authority will be a CA or a CCA will depend on whether all of the councils joining together to form the new strategic authority are (following reorganisation) unitaries. If they are, a CA will be created.

We are aware that some areas are proposing twin tracking the two processes. We consider that this would be possible in practical and legal terms. Whether it will be sensible, however, will depend on what is proposed. If, for example, a single county area wanted to form two new unitaries and then create a new strategic authority on the same geography as the former county, it may make sense to run the processes alongside one another (though we suspect that there would be challenges based on size if such an approach was pursued). However, in most cases, it may well just involve too much work to run both processes alongside one another leading to significant capacity issues (bearing in mind that councils will need to continue to deliver services through this period). Our experience of advising on the creation of several CCAs is that it takes up very significant levels of officer time to create a new CCA; so significant that delivering on the project and the ‘business as usual’ activities of councils are challenged. If an area was also attempting to undertake local government reorganisation alongside the creation of a CCA this would be a very significant undertaking. We also do not know if MHCLG would be in a position to support delivery (their current plans appear to be to stagger creation of new strategic authorities and local government reorganisation).

Even if the two processes were to be pursued alongside one another, the order/s creating the new unitary authority will need to pre-date the order/regulations establishing the new strategic authority to ensure that the correct legal entities are participating in the strategic authority.

Size and geography

There is a clear policy view in the paper that larger local authorities have more chance of surviving and thriving. There is therefore a requirement that new unitary councils will be more than 500,000 people, and new strategic authorities more than 1.5 million (so essentially formed of at least three unitaries). We are aware of areas where proposals are being advanced which do not meet these size targets. Where this is the case, we would suggest that it will be very important to have other reasons related to functional economic geography, alignment with other public sector boundaries, or identity to persuade the Government that the smaller size is sustainable and sensible.

The question of geography is an interesting one. With parts of the country already covered by strategic authorities, there is a necessity to close the existing gaps, meaning that new proposals coming forwards have to 'fit' with one another with ‘no gaps and no overlaps’. It seems unlikely that this will be entirely achieved with a bottom-up approach, and hence the powers of compulsion anticipated may be used to forcibly close the remaining gaps. Arguably therefore it makes sense to be in the early wave of proposals where there may be greater scope for the Government to give what is asked for on geography (and essentially leave any gaps to be closed down the line).

There is also the option for existing strategic authorities to take in additional geographies and for some areas which are close to existing strategic authorities this may be attractive. We suspect that the Government will generally respect the wishes of existing strategic authorities on this issue however, so if an area does have aspirations to join existing strategic authorities, we would suggest that those authorities are approached early.

Equally in relation to local government reorganisation, most of the discussions we are aware of seem to contemplate creating one or more unitary authorities on the same boundaries as, or within the boundaries of, existing county councils. That does not need to be the case, and it is open for areas of bring forward proposals with other councils which currently fall outside of their county. Such proposals may however be regarded as more challenging by Government, particularly if they will pull against other public authority boundaries (although clearly the opposite can also be true with new boundaries improving contiguousness with other public authorities).

Consent and consensus

As stated above, the creation of a new CCA will require the consent of all of the upper-tier councils in the area that it covers. In contrast, local government reorganisation does not require the consent of all of the councils in the area (of whatever level), only that a proposal is made which the Secretary of State decides to implement.

The white paper makes it clear that areas where consensus has been achieved will be prioritised. Whilst there is an indication in the paper that powers of compulsion will be introduced through the English Devolution Bill for devolution, and to require proposals to be made for local government reorganisation, these will not be available imminently.

Accordingly, if areas cannot reach consensus on the creation of strategic authorities it would make sense for some of the councils in the area to propose local government reorganisation (where consensus is not required, but a proposal is). This could either be designed to ‘unlock’ devolution, or simply to progress whilst powers of compulsion in respect of devolution are awaited.

Government approach and priorities

Whilst we cannot predict with total accuracy how Government will approach prioritisation of proposals from areas, it seems to us that their main priority is continuing to drive for full coverage of strategic authorities. We also consider that they will wish to achieve some easy ‘wins’ so are likely to seek to start with ‘easier’ proposals where there is agreement between all (or the vast majority) of the parties. Accordingly, areas in agreement on creation of new strategic authorities or on local government reorganisation who are prepared to work at pace are likely to be prioritised and included in the Devolution Priority Programme.

Areas not in the Devolution Priority Programme would be best served by taking a little more time to work on proposals and seek consensus, or failing that, working on proposals which provide a compelling case for reorganisation or devolution on the geographies proposed.

Next steps

We are likely to know very soon which areas are in the Devolution Priority Programme, and the timetable they will be working to. Those areas will have to rapidly establish joint working protocols across councils, and secure sufficient resource (whether internal or external) to deliver the programme at pace.

Other areas should continue to talk to other councils in their area, to work out the best approach for their areas. A well thought through proposal which has a high degree of consensus is much more likely to be attractive to MHCLG than multiple competing proposals which they will need to sit in judgement on.

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