Devolution: the opportunities and the challenges

The Government’s proposals for reorganisation of local authorities in England are broadly welcome, writes Simon Goacher.

The Government ended 2024 with the publication of its English Devolution Whitepaper. Rightly identifying that decisions concerning regional economic growth shouldn’t solely be made in Westminster the whitepaper unveiled plans to, as Deputy Prime Minister Angela Rayner put it, “devolve power and money from central government to those with skin in the game.”

This proposed rewiring is broadly welcome and long overdue. The last fundamental review of local government in England happened in the early 1970s and it’s positive to see the Labour administration answering a call that has been nearly half a century in the making.

As part of this overhaul, the Government has identified that, in order to shift power away from Westminster, we need new administrative structures. This takes the form of new strategic authorities across the UK and the introduction of a devolution framework that will detail the statutory functions and governance arrangements for each of them.  

These changes are promising but they’re ambitious and come with just as many challenges as they do opportunities. As with any major overhaul, the devil is in the detail so it’s important that we remain cautiously optimistic about the changes on the horizon.

Here’s what we know so far.

New Strategic Authorities

The paper sets out to rationalise and standardise the patchwork of local government arrangements across the UK by recasting counties as ‘strategic authorities’ that will be directly responsible for their new devolved powers.

These new strategic authorities will be expected to service populations of at least 1.5 million and will belong to one of the following categories: the Foundation Strategic Authorities level or the Mayoral Strategic Authorities level. The Foundation Strategic Authorities will include non-mayoral Combined Authorities, Combined County Authorities and any Local Authority designated as a Strategic Authority without a Mayor.

Mayoral Strategic Authorities will include the Greater London Authority, all Mayoral Combined Authorities and all Mayoral Combined County Authorities. The Government intends to create more Mayoral authorities believing they will offer deeper powers including integrated funding settlements and broader responsibilities across public services for local areas.

These strategic authorities will work to bolster other public bodies including NHS England, Jobcentre Plus and the Environmental Agency. They will also have the mandate to act strategically to drive growth as well as support the shaping of public services, including transport and local infrastructure; skills and employment support; housing and strategic planning; economic development and regeneration; environment and climate change; health, wellbeing and public service reform and public safety.

The overall vision of these new Strategic Authorities is positive. The current patchwork of local government arrangements is messy with a mix of different types of authorities present across the UK. By standardising this patchwork, the Government will be able to deliver the most effective and efficient services to the country’s local governments.

That said, this change also opens the floodgates to a raft of challenges. The first being delivery.

It’s an ambitious task and this isn’t the first time it has attempted it. As long ago as 1991, the relevant secretary of state said that the intention was to create unitary authorities to replace the two-tier system. This led to the creation of a number of unitary authorities in the 1990s but, apart from in Wales, this has not been adopted universally, leaving a patchwork of unitary and two-tier areas. While there has been some specific local reorganisations since then to deal with specific local issues, no wholescale reform has been pursued.

Then comes the challenge of whether unitaries, as set out in the whitepaper with an expected population of at least 500,000, can be achieved in a way that is geographically and culturally appropriate. The UK has been operating as a patchwork of different-sized authorities for decades and it’ll take time to change that.

These changes may also come at the expense of some district councils if they don’t fit into either category. Some counties may end up with a geography that doesn’t make sense or suit local communities. There are also some smaller unitaries that don’t fit into the Government’s half a million figure so would need to be merged to form larger councils to meet that criterion, but it will be difficult to determine how this will impact public services like healthcare and policing that are already struggling with capacity.

Discussions are already taking place in two tier areas about what the new structure should look like. In some areas a consensus on the proposals is emerging but in others any form of agreed structure seems more challenging.

Then there’s the Government’s preferred mayoral model which, while working well in some areas, is not without controversy. Though in some areas it seems to have worked well, in others there has been some controversy. At the local authority, rather than Combined Authority level in Liverpool and Bristol, the office of elected mayor has been abolished.  

The potential issue, in some cases, is that the model relies heavily on investing a lot of power and political credibility into one individual – if there are issues with the way that person operates then it can undermine the credibility of the office and the authority itself. Some people simply believe that a more collaborative approach requires decision making to be spread to more people.

The Devolution Framework

A new ‘devolution framework’ will be passed into law that explains the governance and statutory functions for each level of Strategic Authority. It will set out the enhanced powers mayors and strategic authorities have over funding, planning, and public services in their region.

The Government has called the framework “a floor rather than a ceiling” to its ambition so we can expect the role and powers of strategic authorities to expand in time.

There will be also opportunities for authorities to propose additional powers or pilot new functions beyond the statutory framework ahead of fiscal events. Proposals will be reviewed through the Mayoral Council, after which formal submissions can be made, and the Government will be obligated to respond.  

A uniform framework could remove a lot of the complexity in regional and local government. But it is not without question marks. For example, implementation relies on the adoption of a mayoral model. If some areas decide they don’t want a mayor, does this mean that they won’t have the same level of devolution? This is one area that the Government will need to clarify.

This new devolution framework is broadly welcome, but it all comes down to what powers are actually going to be devolved and whether these powers will be the right ones to enable authorities to deliver economic growth on a local scale.

Many have been calling for a local government overhaul for some time. A refreshed, empowered and more uniform regional political infrastructure sounds good in principle, but other governments have tried and failed to make it unilaterally successful. Does Sir Keir Starmer have the political will to go one step further than his predecessors?

Simon Goacher is a partner at Weightmans.