Draft Local Government (Structural and Boundary Changes) (Control of Disposals etc.) (Amendment) Order 2026

David Simmonds Excerpts

Wednesday 24th June 2026 General Committees

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It is a pleasure to serve under your chairmanship, Mr Vickers.

As the Minister set out, the order makes a relatively straightforward technical change, but I have a couple of questions arising from it that relate to the specific circumstances in which the legislation is coming forward. Historically, the policy has been that local government reorganisation would take place where there was unambiguous local consent for that to happen. We are all conscious that, as part of the devolution priority programme, some disputes are already arising—which I think the legislation is designed to address—between the new authorities that are coming into being and the prior authorities that are being abolished.

Local authorities operate to a specific financial process that is quite tightly controlled in legislation, and that is where my questions for the Minister arise from. First, the provisions in this legislation set out that the Secretary of State will designate a person who will be required to give consent, or will have the opportunity to give or withhold consent, when transactions covered by the legislation are envisaged. It would be helpful to understand what process will be followed when there is a dispute. My hon. Friend the Member for Spelthorne gave an example of where the disposal of an asset might be seen by one authority as hugely beneficial because of a capital receipt, and by another as hugely controversial because it pledged to protect it from excessive development. We need, then, clarity about how disputes of that nature will be resolved.

The process is significant because many of the capital sales that will be caught by the provisions are also determined by other processes. Will the Minister set it out for the Committee, in particular regrading authorities that are subject to exceptional financial support rules? If a local authority in Surrey—such as Spelthorne or Woking, which have very significant capital debts—has entered into an agreement with the Government to undertake a programme of disposal of assets, and the disposal of those assets is opposed by the successor authority, how will a decision come to be made, given that the outgoing authority is effectively obliged to undertake those asset sales but the new authority may not wish to do that?

A good example of where the nature of the assets may be material to the dispute is car parks, which are an asset to the parking-revenue account of a local authority, so are ringfenced from its general fund. One authority may see a car park as an opportunity to raise revenue, whereas another authority may see it as a capital asset to be disposed of to secure a capital receipt. Especially where there is a capital programme over many years with, in some cases, the capital expenditure having already taken place, to be funded from future asset disposals, there will need to be a process to ensure that the budgets can be balanced. We will all be aware of local authorities in our own areas that have borrowed to build new leisure centres or new schools, or to invest in public transport hubs, parking or whatever it may be—important public assets to be funded from the future sale of those sites for disposal. We therefore need that sense of clarity.

Can the Minister tell the Committee how the provisions will be dealt with when the assets in question arise within an arm’s length management organisation for housing that is owned by a local authority trading company—such as Brick by Brick, the housing development company in Croydon, of which there are a number of alike organisations across the country—to which assets have been transferred for development or disposal? There is no explicit clarity, certainly not within this legislation, about how that will be managed.

What about asset disposals within a programme relevant to the Department for Education? These may be school sites or non-school sites whose asset value is designed to support the development of school sites and which sit within the dedicated schools grant. Would the decision to determine who gives consent to that process be a matter for the Department for Education, rather than the Ministry of Housing, Communities and Local Government? I think especially of situations in which a school has been transferred under the standard 99-year academy lease. Who will be the decision maker if the academy trust wishes to dispose of all or part of that site?

I would like to put the question about how overage clauses, which will exist in many of these agreements, will be treated. Clearly, the upside of some of these disposals, which are often controlled both through the planning process and through the original transaction, will say that, in the event that the acquirer of the site returns to gain planning permission for a higher-density development, or something that yields a higher amount, they have to pay a proportion of the increase in the value of the site to the local authority that disposed of it. That is designed to avoid a situation in which a site is sold for 20 houses and ends up with 150 flats on it, and the developer basically cleans up. That is a common clause contained within site disposals by local authorities. To whom would the benefit of that overage clause accrue? Especially in circumstances where the benefit was intended to be taken into account as part of that prior capital programme, what provisions will there be to resolve those disputes in the event that they arise?