How devolution is reshaping councils and changing local politics
No sooner had Angela Rayner sat back down on the green front bench than comms departments in county councils across England were hitting send and publish on their prepared press releases and statements welcoming the devolution announcements and extra funding for their areas.
This was a momentous announcement. Six areas or sub-regions have been accepted into the government’s Devolution Priority Programme. Elections for the new mayoral positions will be held in May 2026. As part of the deal, these areas will see local councils reorganised. The two-tier system will go, and new, larger unitary councils will be created to act, largely as delivery agencies for the mayor.
To facilitate this reorganisation, council elections that had been scheduled for May 2025 have been postponed. Contrary to the protestations of Nigel Farage, this is not unprecedented. Past reorganisations have involved delaying elections. The Deputy Prime Minister is right to conclude that going ahead with these costly elections (in which around two—thirds of the electorate don’t exercise their right to vote) to councils that will be abolished in the next two years would be a waste of taxpayer money. Where Mr Farage might have a smidgen of a point is in pointing to the likelihood of an implicit understanding between the Labour government and Conservative councillors who would have had to defend their seats in May. Had these elections gone ahead, the probability is that it would have been a ‘bad news night’ for both parties. Farage, his colleagues in Reform, the Liberal Democrat and Green parties would all have been relishing the opportunity to take some council seats in May. There will be plenty of Conservative and Labour incumbents letting out a sigh of relief.
What is unprecedented, at least in recent history, is the scale of the reorganisation and the fact that this round of devolution is being driven, much more explicitly than ever before, from Westminster. Previous deals did not require local government reorganisation. The East Midlands Combined Authority is the best example of a two-tier council system with a mayor.
Past rounds have been based on ‘deals’ with local areas. Those deals have contained detailed commitments to funding for infrastructure, skills and economic development. This round is far less specific. Some of the aforementioned press releases from county councils have been woollier than Gyles Brandreth’s wardrobe when it comes to welcoming the boost in investment.
And herein lies the rub. It was logical for the county councils to jump on the devo wagon when it was made clear that this was the direction the government was headed and that there could be penalties for areas that don’t join in. But there is a big question about where the additional funding will come from and what it can be spent on. When the first devolution deals were done it was clear that there was a first mover advantage, enjoyed most notably by Greater Manchester and the West Midlands. These areas, being the first to embrace the combined mayoral model, were able to take a larger slice of the national pie. If everyone is taking a slice, they can’t all take a larger share. Therefore, there will need to be a big boost in commitments to funding from the Treasury. If anything, the Treasury under Rachel Reeves is tilting in the opposite direction. Big, national infrastructure projects such as the third runway at Heathrow are being prioritised. Devolution deals are irrelevant to the announcements made by the Chancellor less than a week before Angela Rayner announced the areas that would be in the priority programme.
So local areas now wait to hear exactly what the government has in mind regarding the structure of the new councils and the nature of the investment. While there will be some concerted action around lobbying the government and the current councils will be consulted, the decisions about this will be made in Marsham Street by Labour ministers, not in county halls by council leaders.
Having identified the opportunity and been accepted into the priority programme, those council leaders will find, by and large, that they are no longer driving the car. Neither are they passengers on the bus who can disembark if they change their mind or riders on a rollercoaster who at least know exactly what route they’re taking and where they get off.
It could be the case that the councils in the programme are more like Indiana Jones leaping into the runaway mine-train. They know that they want to get away from where they are, and they have an idea of how fast the train will take them away and the general direction in which they’ll be headed. But they can’t get off, they can’t steer it and there will be twists and turns that are out of their control. Like Indiana Jones they will be looking out for opportunities along the way and holding on for a triumphant ending.
The structure of the new unitary councils and the way they are formed will be critically important. There is much that can be won and lost in this process. Political considerations will be at the top of the government’s list as they seek to ensure that as many councils as possible are winnable targets for the Labour Party. In merging services and taxes, the leadership teams entrusted with setting up and running the new authorities will have to agree on an equalisation programme.
Council tax levels will vary from council to council and will need to be reset – there will be inevitable hikes for some that will be unpopular and nigh on impossible to sell to local electorates. Issues as apparently simple as agreeing bin collection frequencies will consume time and energy. And what of the places with town and parish councils and those without? There will be an imbalance that many councillors and officers haven’t experienced before.
Over the next few months Cratus will be helping our clients to navigate the new world of local government that is emerging. Please get in touch if we can help you with understanding and engaging with local government and mayoral combined authorities.
