Local Government Reorganisation

Jim McMahon Excerpts

Thursday 29th October 2026 Written Statements

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jim McMahon)]

This Government are committed to a fundamental rewiring of a system that for too long has seen power held in Westminster and Whitehall, rather than with people and the places where they live, work and invest. Strong and sustainable local government is the foundation of our rewiring the state agenda.

Reorganising 21 two-tier areas across England will impact nearly a third of the population of England and last for generations to come, so it is important that we consider our approach and decisions fully, and plan for the long term. On 7 September, the Secretary of State therefore announced that we were undertaking a review of the local government reorganisation programme to make sure that the process was robust, and that it meets the priorities of a new Administration and the new Prime Minister.

Since we made that announcement, I have listened closely to a wide range of voices from the local government sector and those that care about it—from local leaders and sector partners, to mayors and Members of Parliament. I recognise the strength of feeling about the decisions announced so far, both from those who raised concerns about them and from those who support them. While there remain different views about the right outcome for each area, I am grateful for the constructive way in which places have continued to engage with me and my officials.

I know the announcement has had a significant impact on local councils, councillors and staff across the country, and I am grateful for the patience they have shown throughout this process. I recognise that the review period has not been easy, and I do not take for granted their continued commitment to the long-term work needed to fix the foundations and put local government in the best possible position.

Above all, I have heard a clear message from colleagues: you want clarity about what happens next and what it means for your area. Today, I want to provide that clarity and set out the way forward for each area.

Review: phase 1

I am pleased to report that the first phase of the review is now complete.

Working with the Secretary of State and officials, I have interrogated the key pillars and framework underpinning the local government reorganisation programme, including whether the existing unweighted criteria set in February 2025 and its objectives continue to support the policy priorities of the new Government.

I have concluded that the basis of the programme is robust and that the existing criteria against which proposals have been submitted were both correct on their own terms and continue to support the Government’s policy agenda.

Single-tier local councils are a key enabler of the rewiring the state agenda. Stronger, more sustainable unitary councils will support more effective partnership working between local, regional and central Government and better outcomes for economic growth, building the houses local people need, helping reform public services, and empowering local communities. They will be strengthened further by new measures brought forward in the English Devolution and Community Empowerment Act 2026, for instance on neighbourhood governance and community ownership.

Following this initial phase of the review, I can therefore confirm that the Government remain committed to delivering local government reorganisation and that we will continue to move forward with the programme based on the existing criteria, which I hope gives confidence as we move ahead.

Throughout this phase of the review, Ministers and officials have heard from leaders and officers from all corners of the local government reorganisation programme, as well as key local government stakeholders. I know that consensus on the outcome in every area is not possible, but I have heard that more can, and must, be done to recognise the demands being placed on council leaders and senior leadership teams; to make sure councils feel supported to deliver such important changes including in relation to disaggregation; and to build consensus on how we deliver this programme and the timetable in each area.

I am clear that central and local government work best when we work in partnership and I am committed to doing all I can to ensure that this Government are an active partner that local government feels able to rely on.

Review: “minded to” decisions

I am now able to set out a timeline for concluding the final phase of the review across the 20 areas in the review other than Surrey and confirming the outcome for each.

I hope this will give local councils the certainty they need to plan ahead, while giving us the time necessary to complete our consideration of each individual area.

I have considered carefully whether outcomes should be announced together or as decisions are reached. I have concluded that councils should not be asked to wait unnecessarily once the consideration of their area is complete. We will therefore inform councils at the earliest practical opportunity, meaning that some areas will receive an outcome before others.

First, I am now able to give further clarity in respect of five of the 14 areas with decisions taken in July. In these areas, the proposals received, their merits, and all relevant evidence and views have been carefully considered against the existing criteria.

Following this consideration, we are minded to implement, subject to a representations process and parliamentary approval, the following proposals:

East Sussex and Brighton and Hove: Two unitary proposal submitted by East Sussex county council, Eastbourne borough council, Hastings borough council, Lewes district council and Rother district council—with the boundary change requested by Brighton and Hove city council, with the exception of Falmer parish.

Gloucestershire: One unitary proposal submitted by Cotswold district council, Gloucestershire county council, Stroud district council, and Tewkesbury borough council.

Oxfordshire: Three unitary proposal submitted by Oxford city council, including the adjoining area of West Berkshire council—with the boundary change Oxford city council requested alongside the proposal.

Warwickshire: Two unitary proposal submitted by North Warwickshire borough council, Nuneaton and Bedworth borough council, Stratford-on-Avon district council and Warwick district council.

Worcestershire: Two unitary proposal submitted by Bromsgrove district council, Malvern Hills district council, Redditch borough council, Worcester city council and Wychavon district council.

It should be noted that the Secretary of State has recused herself from local government reorganisation decisions in the East Sussex and Brighton and Hove invitation area, so I will take decisions there.

These five areas are receiving letters setting out the rationale for why we are minded to proceed with these proposals. Before we take our final decision, there will be a minimum period of three weeks, during which those interested may make further representations to me. I will shortly confirm the start and end date for this representations period and I will also set out how councils and interested parties can make representations. Any final implementation decision would also be subject to parliamentary approval. To be clear, the previous decisions in these five areas made in July 2026 are today withdrawn.

For the remaining nine areas where decisions were also announced in July 2026, we will consider these areas further in the next phase of the review, with more detail set out below. To give councils clarity on the status of the existing decisions while we do that, the Secretary of State and I today are also withdrawing the decisions announced in July 2026 for the following areas:

Derbyshire and Derby

Devon, Plymouth and Torbay

Hertfordshire

Kent and Medway

Lancashire, Blackburn with Darwen, and Blackpool

Leicestershire, Leicester and Rutland

Lincolnshire, North Lincolnshire and North East Lincolnshire

Nottinghamshire and Nottingham

Staffordshire and Stoke-on-Trent

For the avoidance of doubt, all options and proposals in these areas will remain under consideration as part of the review.

Review: next phases

I now turn to the next phases of the review and those 15 remaining areas due to have a “minded to” decision:

The nine areas listed above where decisions have now been withdrawn;

The four areas—Essex, Southend-on-Sea and Thurrock; Hampshire, Isle of Wight, Portsmouth and Southampton; Norfolk; and Suffolk—where decisions were withdrawn in September; and

The two areas—West Sussex and Cambridgeshire and Peterborough—where decisions have not yet been taken.

I believe it is right to take a structured approach to the review and give each area the serious and deep consideration it deserves given the significance of these decisions.

As I have set out above, we will seek to inform councils at the earliest practical opportunity, meaning that some of these 15 remaining areas will receive an outcome before others.

We commit to coming back to this House with updates on outcomes in another set of areas by Christmas—and I commit that we will work to ensure that every area will have an outcome by early next year.

Elections

In September, we set out that the review meant that elections scheduled to take place in May 2027 would go ahead to existing councils. This remains the position for all 20 areas covered above. In those areas, the timetable is for elections to new councils to happen in May 2028 followed by vesting day on 1 April 2029.

Capacity and transition funding

I recognise the impact and costs of ongoing uncertainty and delay, which I have also considered in the initial phase of the review.

I understand that areas will have incurred costs associated with local government reorganisation in good faith.

For areas where new unitaries were previously announced, we will pay 50% of the £900,000 of transition support per new unitary, based on the number of new unitaries in the initial announcement. This funding is guaranteed and will be paid in the coming weeks. It is not contingent on the outcome of the review. For Cambridgeshire and Peterborough and West Sussex, where no decisions have been previously announced, we will instead pay £500,000 to each area.

When final decisions are made, we will pay the balance of the £900,000 of transition support per each new unitary, taking account of funding already paid to its area, as well as £150,000 of supplementary funding per new unitary for leadership capacity and continuity in children’s services, adult social care and public health.

Committee system

The English Devolution and Community Empowerment Act 2026 sets out that all councils operating the committee system must transition to a leader and cabinet executive by 29 June 2027, except where they are “protected” or secondary legislation has been made under which they would be dissolved.

The Secretary of State has discretion to extend the deadline for transition by up to one year. She may do this if she considers it likely that secondary legislation to deliver local government reorganisation will be made in relation to a council during the one-year period between 29 June 2027 and 29 June 2028.

This would include where a “minded to” decision on local government reorganisation is made envisaging legislation to implement local government reorganisation in an area within the extension period.

The purpose of allowing extensions in legislation is to ensure that councils undergoing local government reorganisation would not have to move from the committee system to a leader and cabinet executive shortly before being dissolved. This remains the Government position.

City status and ceremonial matters

We recognise the pride, history and identity that sits behind our cities and counties which is why we will work with areas to make sure city status and any ceremonial rights are preserved following reorganisation. City status and ceremonial matters play a valuable role for pride of place in our local communities. These issues have been raised by local areas and Members of Parliament for some time, and we recognise that this is an important programme of work. Subject to any final decisions taken on reorganisation, we will work with places to protect their city status, by reviewing all available options and relevant precedents, including bringing new legislation to this House where it is necessary to do so, and likewise, for any ceremonial matters currently held by councils that would be abolished.

Next steps

I have committed to this being a full, considered review, and to giving colleagues in councils and local people clarity on their future as soon as possible. I recognise the tension between these two objectives but would like to reiterate my appreciation to colleagues across the House and within local government for their ongoing patience as we progress this review. I will keep the House updated on progress.

As before, this review and update does not impact Surrey, where the new West Surrey and East Surrey councils will go live in April 2027.

[HCWS432]

Local Government Reorganisation

Jim McMahon Excerpts

Thursday 29th October 2026 Commons Chamber

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jim McMahon)]

The Government are committed to shifting power from Westminster and Whitehall to the places where people live and work. Yesterday’s Budget shows that we are committed to giving local leaders, local councils and local communities the tools to shape their future. But our ambition to rewire the state and ensure that the country is ready for devolution depends on strong, sustainable local government, and it is only through reorganisation that we will create those strong foundations.

We know that reorganisation is difficult, but we also believe that it is worth it. The decisions we take now will be the building blocks for how the country is governed for generations to come. Our vision is clear: mayoral and strategic authorities, underpinned by strong unitary councils with real powers to take decisions in the interests of their communities.

On 7 September, the Secretary of State announced a review of the programme to ensure that it was robust and aligned with the Government’s priorities. Since then, we have listened to local leaders, sector partners, mayors, and Members of Parliament. I place on the record our thanks to them for their work and for engaging constructively. Consensus will not always be possible, but I know that all of us are putting forward arguments for what we believe is best for the different areas of England. I am committed to hearing all those views before coming to final decisions. I also want to take a moment to recognise the impact on councils, councillors and their staff. I appreciate their desire for clarity.

Today, I can provide some clarity on what comes next. I can announce to the House that the first phase of the review is now complete. I have tested the programme framework, including whether the criteria set out in February last year continue to support the Government’s priorities. I have concluded, on the basis of the programme, that it is robust and that the existing criteria are correct on their own terms and continue to support the Government’s policy agenda. We are content that we can take forward local government reorganisation in line with the existing criteria.

In concluding the review, I have also considered the best way to bring clarity quickly while making sure that each area receives the deep and thorough consideration that it deserves. We will inform councils of outcomes at the earliest possible opportunity—with some areas getting those outcomes more quickly than others.

Today, I am able to give further clarity on some of the 14 areas who had decisions in July. The Secretary of State and I have carefully considered all the proposals and the evidence for those 14 areas. Following that initial consideration, we are minded, subject to representations and parliamentary approval, to implement the following proposals in five areas: in East Sussex and Brighton and Hove, the two-unitary proposal, including the boundary changes requested by Brighton and Hove city council except for the parish of Falmer; the one-unitary proposal in Gloucestershire; the three-unitary proposal in Oxfordshire, including boundary changes; the two-unitary proposal in Warwickshire; and the two-unitary proposal in Worcestershire. Those decisions are for the same council structures that were previously announced in July, or they are new decisions following full and thorough consideration.

Before final decisions are taken, there will be a minimum three-week period during which those who are interested may make further representations to me. The start and end date for that period will be confirmed shortly, as well as further details on how councils and other interested parties can make representations. Any final implementation decisions will be subject to the normal parliamentary approval. We are going to take more time on the remaining nine areas announced in July, and we will use the coming months to consider further the proposals submitted before coming to a view.

To give councils clarity on the legal status of existing decisions we are withdrawing the decisions announced in July for the following areas: Derbyshire and Derby; Devon, Plymouth and Torbay; Hertfordshire; Kent and Medway; Lancashire, Blackburn with Darwen and Blackpool; Leicestershire, Leicester and Rutland; Lincolnshire, North Lincolnshire and North East Lincolnshire; Nottinghamshire and Nottingham; and Staffordshire and Stoke-on-Trent. I want to be clear that this is no reflection on the work underpinning those proposals.

I can now set out the plan for the final phases of the review. The review will now focus on the 15 areas that are due to have a “minded to” decision. Those are, in no particular order, the nine areas I have just mentioned, the four areas where decisions were withdrawn in September, Cambridgeshire and Peterborough, and West Sussex. All options and proposals for those areas will remain under consideration, and I will approach them all with an open mind. As such, it should not be assumed that the same proposal will automatically be selected. It is important to allow the process to run its course and to allow full and proper consideration. We will move faster where we can, and some remaining areas may receive an outcome decision before others. I commit to coming back to the House with updates for another set of areas by Christmas, and every area will have an outcome by early next year.

As we set out in September, the local elections scheduled for May 2027 will now go ahead to existing councils. That means that elections to new councils will be made in 2028, followed by a vesting day in April 2029. That is for all areas apart from Surrey. I have also heard concerns about cost uncertainty, and we appreciate that areas have incurred costs in good faith. All areas will receive half the transition funding that they were previously due, which equates to £450,000 per new unitary previously announced. Those guaranteed payments will be made in the coming weeks regardless of the outcome of the review. Cambridgeshire and Peterborough, and West Sussex, will also receive £500,000 per area. After final decisions, we will pay any remaining balance, depending on how many councils are chosen.

I have heard from Members across the House about the pride, history and identity sitting behind our cities and counties. City status and ceremonial matters play a valuable role for local pride, so we will work with areas to ensure that city status is preserved following reorganisation. Subject to final decisions, we will continue to work with places to protect their city status by working through all the options, including bringing forward legislation where necessary—[Interruption.] Apologies, Madam Deputy Speaker. I have been struggling with a cold for about a week. Usually when a Minister comes up in the morning with a croaky throat it is the result of a long night of karaoke, but I am afraid this is the result of back-to-back LGR conversations all morning, which does not carry quite the same sense of fun or rhythm.

I want to use this moment to build consensus and deliver a programme where central Government and local government work together. This programme must be a joint effort. It is the foundation of rewiring how our country works, and getting foundations in place to devolve new powers and functions in every area. This Government will be an active and reliable partner, and we stand ready to work with councils to support them to deliver these significant changes. I promise to keep the House updated, and I commend this statement to the House.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Regardless of the croaky voice, I was paying attention because the statement concerns my constituency in East Sussex. I call the shadow Secretary of State.

[Katie Lam (Weald of Kent) (Con)]

It gives me no pleasure whatsoever to say that from start to finish, this Government’s approach to local government reorganisation has been nothing short of a farce. The Government first promised to publish their English devolution White Paper in November 2024. It was delayed until December 2024, with affected councils given three weeks over Christmas to decide whether or not to delay local elections. Last year, after the right hon. Member for Ashton-under-Lyne (Angela Rayner) was forced to resign from the Cabinet, her successor—and, as it turns out, her predecessor—assured us that reorganisation was not taking, and would not take, any longer than planned, and that elections scheduled for May 2026 would go ahead. The Government confirmed that twice in November 2025, yet the very next month announced that elections in some parts of the country would be pushed back as far as 2028.

Two weeks later, again in the run-up to Christmas, the then local government Minister invited another wave of postponements. In January this year, despite having promised not to delay elections in November, the then Secretary of State announced legislation to postpone 29 elections. The next month, days before the Department was due to answer for its behaviour in court, those postponements were withdrawn. Naturally, the taxpayer was left to pick up the tab for all those delays—a bill that runs into the tens of millions of pounds. That U-turn was announced during recess, so that Members of Parliament had to wait to question Ministers.

In March, there was another set of announcements and another set of legal challenges. In June, it was revealed in a pre-action letter issued by the Department that Ministers had ignored official advice over reorganisation plans. In July, just days before the right hon. Member for Makerfield (Andy Burnham) became Prime Minister, the previous Secretary of State announced a whole new set of reorganisation plans, with many Members given essentially no time to scrutinise the sweeping changes that were set to be imposed on their areas. We still have not seen the advice that informed those decisions, so will the Minister confirm today, in the interests of transparency, that that advice will be published?

In September, following updated and privileged legal advice, the current Secretary of State withdrew decisions for Essex, Hampshire, Norfolk and Suffolk, and paused plans in most of the rest of the country. What a complete joke! Today the Minister talks of giving councils clarity, yet goes on immediately to say that all options and proposals remain under consideration, and that he approaches all decisions with an open mind. He cannot be serious. We are two and a half years into this process, and the Government had years in opposition to plan it. Why have these decisions not yet been made? How can we still be at the stage of keeping an open mind, and what clarity exactly have we gained from the statement?

The vast majority of councils are none the wiser after what we have heard today. The Minister talks of allowing the process to “run its course” and of giving “full and proper consideration” to each decision, but can he set out what will be taken into consideration? What role have party political objectives played in determining new local government boundaries? Have the Government received, at any point during the process, legal advice that indicates that political considerations were given undue weight in deciding new council boundaries? When can councils that have been left in the dark by today’s announcement expect some kind of verdict from the Government? Which areas will hear by Christmas, and what does “early next year” actually mean?

Given the Government’s record on meeting their own deadlines, I am sure that the Minister will forgive me for my scepticism. The real-world results of this endless delay are plain to see. People across the country are left without any sense of which council will be providing services in the year and years to come, while councillors and council officials have spent millions of pounds of taxpayers’ money planning and preparing for new authorities that might never materialise.

Notwithstanding the announcement that the Minister has made on funding, will he provide an estimate today of the total cost of this Government’s shambolic local government reorganisation? How much of that cost is being eaten by legal fees? The money spent on this farcical reorganisation process should have been spent instead on resurfacing roads, collecting bins and maintaining parks—core local government functions that people care about. For all the Prime Minister’s talk about local government, this whole approach to devolution has shown nothing but contempt for local democracy. Local voices have been ignored in the drawing of new council boundaries, and have been overridden by party political considerations. Again and again, the Labour Government’s approach to local government has been about imposing more government, pushing up tax, and stacking the deck in a cynical effort to gain political advantage. They should be ashamed.

[Jim McMahon]

First, let me say that we do not take for granted concerns about the implications of the delay on the councils, councillors and officials who have been working on these schemes. We know that the pause was disruptive, and that people put a lot of work into their proposals and the transitional work in preparation for the new unitary councils. Equally, it would have been wrong had the Government not taken into account the legal status of those that were in court and not used that as an opportunity to review the programme overall, which was the decision that we announced in September. That was the right thing to do to give clarity to the programme and move forward with confidence; to ensure we were reviewing the criteria, the process, the decision making and the evidence base; and to allow us to come to fresh decisions, where needed.

From my perspective, I am playing this with an absolutely straight bat—I want to do this with integrity. It is important to say that there are no Government proposals on the table because the only proposals that a Minister can consider are those that councils themselves have submitted during the process. Our job is to ensure that we take into account local opinion and test the evidence base, the assumptions, the alignment with public service boundaries and the financial modelling. Through that work, we then make a balanced determination. By the way, there is no perfect solution for quite large parts of England that I have seen, but that does not mean we cannot reach a solution that is the best that it can be.

Our job is to make a decision in an objective way and with an open mind, which is why I cannot understand the shadow Minister criticising what is objectively the right thing to do. It would be entirely wrong, in a legal process, to predetermine the outcome we most desire and railroad that through. All the vulnerabilities with LGR that she speaks about were features of previous rounds of LGR, which the Conservative Government undertook on a fairly regular basis.

No Government decision is not open to legal challenge if somebody wants to make that challenge. On LGR, the Government found themselves in court defending previous decisions. Cumbria is a good example: the Government were taken to court, the case was heard by a judge and the Government had to explain why they came to their view. We should not pretend that a legal challenge somehow represents a fault in the system, but it does bring a pause for thought, and we have used that pause to ensure that the reorganisation is right going forward.

On the question of how we will proceed, the approach I am setting out does not have the tranching up of areas that we had previously, so quite deliberately, we do not have tranches 1, 2 and 3. However, we are going to work through authorities as quickly as possible. The commitment that we have made is that, rather than waiting for an artificial date—a particular point in time—if we can come forward with a few earlier, we will do that, so we do not have to wait for the whole programme to be confirmed later in the process.

Finally, on the point about costs and how much has been incurred, there are different ways of looking at that. There are the costs of producing the proposals, but they are not abortive because those proposals are real today and they will be considered as part of the new process. Those are not wasted costs at all; they are the normal costs that are incurred in reorganisation. Then there are the costs of transfers and, once the decision is made, preparing the ground to move to the new shadow unitary authorities, but those costs are required whatever decision is made in whatever county, so that is not abortive work either.

However, we accept that the decision to pause and to ask staff in particular areas to stop working on the proposals has led to a cost being incurred by those authorities that would not have been incurred had we not decided to pause the programme. On that basis, we have decided to release the money that I have set out today, and I think that is the right thing to do. We believe strongly in central and local government working in partnership together and being respectful to each other. If councils say that they have incurred costs that they would not otherwise have incurred, it is right for the Government to say that we are willing to meet them halfway.

[Cat Smith (Lancaster and Wyre) (Lab)]

I thank the Minister for his statement, but there remains some confusion in Lancashire, so I hope he is able to clarify a few things. Moving away from the different tranches suggests that there is now no timetable for what might happen in Lancashire. Councillors are asking me for clarity on a timetable for Lancashire. I also seek reassurance that the decision means that Lancaster will not lose its city status in any part of the reorganisation, and that the building blocks with which we are making the reorganisation do not have to be strictly borough councils. For example, Wyre borough council, which was already an amalgamation of other councils, might want to look in different directions.

[Jim McMahon]

I thank my hon. Friend for the representations on Lancashire’s reorganisation and on devolution that she has made over a long period of time. I accept that we have not set out a list-by-list, county-by-county timetable showing exactly when reorganisation will come, but we have said that we will conclude the considerations in the new year. Wherever the counties find themselves in the programme, when it is eventually developed, they will know one way or the other in that February to March period, and we will work through them as and when. My point was that if we are in a position to announce them earlier, we should do that rather than keeping areas waiting unnecessarily—that is the idea of the approach that we are taking.

My hon. Friend correctly makes a point about Lancaster’s city status, and that applies to cities across the counties that are in scope. It would be absolutely wrong if a city risked losing its status just because its city status is aligned to a local authority that is being abolished rather than to a geographical area. I can give an absolute assurance that even if we have to introduce new legislation to preserve that status, we will do whatever we have to do to ensure that no city loses its city status through reorganisation.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

[Pippa Heylings (South Cambridgeshire) (LD)]

Liberal Democrats support genuine devolution and shifting power out of Westminster, but we have been shocked by the Government’s botched handling of this process. Ministers promised that MPs and local leaders would be properly involved in decisions affecting their areas, yet many have been left in the dark until announcements were effectively made for them. Will the Minister explain why MPs representing affected areas were not briefed before today’s announcement?

Even now, after months of confusion over local government reorganisation, delayed elections and significant abortive costs, councils and communities are still waiting for certainty. Local authorities, many in dire financial positions following years of under-investment, have spent time and money in good faith preparing these proposals according to the Government’s criteria and timetable, only for that timetable to shift repeatedly.

In my constituency of South Cambridgeshire, one of the fastest growing areas in the country, businesses need certainty to invest and plan. Councils need certainty to set budgets and deliver services, and council staff deserve clarity about their future. Yet today’s statement leaves Cambridgeshire and Peterborough yet again awaiting a decision, while other areas move ahead. When will the Minister finally provide a clear and stable timetable for Cambridgeshire and Peterborough, and for other areas that are still awaiting decisions?

Finally, following the chaos of decisions being withdrawn, reorganisation being paused and the programme being reviewed following updated legal advice, can the Secretary of State even guarantee that what is being announced today is legally sound? Will she now publish the legal advice to demonstrate that?

[Jim McMahon]

Working backwards, the reason we carried out the review was to ensure that we, as the Ministers who were making the decisions, were satisfied that the decisions were being made in a rational way, with the evidence base secured, and that where there were outstanding questions, we tested them in the process. Obviously, we were not the Ministers who made the decisions in July, so on coming back in, we needed to be absolutely sure that what we were putting our names to was correct. That is what we are doing.

That may mean that the same conclusion is reached in many areas, but importantly that conclusion will be reached as a fresh decision. We are going to go through that process, which is why it is taking time, but if we had come here and said, “Do you know what? We have completed the whole programme review and the financial review, and we have done every single outstanding county in England in a few weeks,” hon. Members would have cast doubt on just how much time we had given to each of the counties and their proposals. We are determined to make this decision robust, for it to be right and to put in the time needed to ensure that we fully go through the proposals, the consultation and the financial assessment.

Where local areas have put forward an argument in support of their proposal, we are testing that line by line. For example, if a local authority is requesting a boundary change or to grow its boundaries, and that is predicated on matters like housing numbers, economic growth or travel-to-work areas, I want to see those things. I want to see the travel-to-work map, the form that the urban development takes and so on, so we are testing those proposals to ensure that we are satisfied. To return to my previous point, I have not seen a single proposal that I consider to be the perfect proposal, but our job is to ensure that we get the best possible proposal using the information that we have received, and we are undertaking that work.

On the hon. Lady’s point about Cambridgeshire and Peterborough—obviously, the point applies to West Sussex as well, as they essentially go into the same pool—I would not necessarily assume that because those authorities were at the end of the decision-making process in the previous round, they will be at the end of the process in the current round. We will make a decision on which ones we are going to bring forward shortly.

On the hon. Lady’s point about legal advice, which was also mentioned by the shadow Minister, it is long-standing Government policy that we do not publish that legal advice.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I need Members to ask much shorter questions, and I need the Minister’s answers to be on point as well.

[David Williams (Stoke-on-Trent North) (Lab)]

When I am out listening to residents in Kidsgrove and its surrounds, they tell me that they want good public services delivered efficiently and to a high quality, but a two-tier system causes constant confusion. If a resident wants to raise issues about their local park, they can go and speak to the borough council. If they have a question about their local library, they can go and speak to the county council. If they need a pothole fixed, they can go and speak to their county council, not their borough council. The list goes on. At the same time, we are paying for managers and directors at two councils, rather than one, which is a waste of taxpayers’ money. Does the Minister agree that what matters most to the residents of Kidsgrove and its surrounds is having good, high-quality services that work for them? That also offers greater accountability; at the moment, my residents are passed from pillar to post. Equally, residents in Stoke-on-Trent North and Kidsgrove want clarity from the Government, so can I please press them to offer that clarity?

[Jim McMahon]

My hon. Friend makes the case for reorganisation well. It is less important how we perceive the structures of government in this place; in my view, it is more important that local people know who to hold to account for decisions made in their name and with their taxes. The truth is that in two-tier areas, there is confusion about which council to hold to account for the delivery of services, and there is a duplication of services. The fact that we have multiple chief executives, multiple finance directors, multiples HR directors and so on means that—in a period with there are all the pressures on adult social care, children’s services and temporary accommodation, and when we desire to start rebuilding neighbourhood services so that people can see improvement in their area—we have to do absolutely everything that we can to direct money to the frontline and to the local services that people can see.

[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

I do not think that the Minister mentioned Essex in his statement, but he made a point about funding which I think is much appreciated—that areas have incurred costs in good faith. Does that apply to Essex? On the basis of £450,000 per new unitary previously announced, we would be due £2.25 million for the inconvenience and disruption to local government in Essex.

[Jim McMahon]

All the local authorities that were engaged in LGR, whether they were part of the four subject to the court challenges or the one that we are withdrawing today, will receive a payment for the work that they have done. The reorganisation programme is going ahead, so we are going to return to Hampshire, Essex, Norfolk and Suffolk to complete that work.

[Nadia Whittome (Nottingham East) (Lab)]

Councils have spent considerable time and resources building the case for local government reorganisation, including by producing robust financial analysis, housing data, work on the social care impact and work on the impact on travel-to-work areas. Today’s announcement raises serious questions for any future timetable. Will the Minister confirm if councils are expected to go back to the drawing board and negotiate with surrounding councils on new boundaries? If so, how can they be expected to do that by January while meaningfully consulting their residents?

[Jim McMahon]

As it stands, we are satisfied that there is not a requirement for areas to develop new proposals. We will consider the proposals already submitted and the evidence base, as well as the consultation that went alongside. However, there have to be fresh ministerial decisions that are objective and that we approach with an open mind.

There is no further requirement on councils to do that front work. However, we are going to introduce a “minded to” process. When decisions are made, they will be “minded to” decisions. The idea is that we need to rebuild good faith in local government. If areas have concerns about a proposal that we believe is a “minded to” decision—if that proposal is not quite right for an area, or there are concerns about its potential implementation or what it means for local communities—there has to be something in the process that ensures that the Government are open to listen. We believe that is best done through the “minded to” process.

[Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)]

May I warmly welcome the Minister’s statement and his announcement that Gloucestershire will be one unitary authority? That will produce better administration and better value for money. However, will he explain to my constituents why we are having an election next May on the existing councils, which will gradually lose power as we move toward the following election the next year? Why can we not simply have an election next May on the shadow unitary authority?

[Jim McMahon]

It is important that we have a programme that is consistent across the country. We cannot say, “Well, because there seems to be a bit more local consensus in one place than another, and maybe the legal risk is a bit less, we can suddenly kind of shortcut the process.” That means that Gloucestershire, like everywhere else, will go through the “minded to” process. The letters going to councils today will give interested parties around three weeks to make representations. We then need to consider our response and do any more development coming from that. That will mean that the 2027 election for the shadow unitary just will not be possible.

Another thing to have in mind is that, even though we are doing our best to tie this work down and make it robust, any decision of Government can be challenged in court, including the one in Gloucestershire. The worst outcome is that we pretend that May ’27 is an option. We are going to get to the end of the “minded to” decision in January, and it will take a couple of months to look at it; there will be no time at all for returning officers and political parties to find candidates for the new shadow unitary. There is a chance that a decision could be judicially reviewed in that process, and that would probably be the worst outcome. It is a fact that this work will take a bit longer, but that gives more certainty to councils so that they can prepare.

[Chris Webb (Blackpool South) (Lab)]

The Minister knows about my frustration with LGR and the original outcome. I know that my hon. Friend the Member for Blackpool North and Fleetwood (Lorraine Beavers) and the hon. Member for Fylde (Mr Snowden) agree that the outcome that came for Blackpool, Fylde and Wyre to merge as one authority was the worst outcome possible, given the challenges that we face in an authority like Blackpool. Will the Minister look at the “minded to” decisions to ensure that if local areas object, they are able to feed in other proposals that were originally on the table and may work better—not just for our area but across Lancashire? On top of that, if local areas want to go back to authorities of 500,000 people, will he look at that?

[Jim McMahon]

We have confirmed multiple times that the 500,000 population size was a guiding figure, and we were very mindful during the course of reorganisation that some councils went above that, with Gloucestershire being one example—I think the population was in the mid-600,000s. Other councils did not believe that was the way forward for their local population, for different reasons; sometimes it was because of a spread of different identities between a coastal community, an urban city or a rural shire surrounding it. In those councils, the view was, that the council should better represent the identity of the area, rather than being a single unit. That figure was always a guide.

There is not a window in this process for new proposals, but there will be a “minded to” process. When we confirm our preferred option, if there are proposals for tweaks that would make it better, we will be open to receiving them during that process.

[Steve Darling (Torbay) (LD)]

On 7 September, the Secretary of State made a commitment that Devon MPs would be able to hold a meeting with the appropriate Minister to discuss local government reorganisation in Devon. Sadly, that meeting has not occurred to date. What timescale can the Minister give for such a meeting occurring?

[Jim McMahon]

We said that the meeting would take place after the review, as we wanted the review to take its course. It has obviously now concluded, and I have made a statement today. We have a list of about 40 to 50 MPs who have requested meetings in debates and in writing, so we will have a Monday evening surgery every two weeks from 7 pm to 9 pm. We will make sure that MPs are given a slot at the earliest possible opportunity.

[Alex McIntyre (Gloucester) (Lab)]

The prize on offer for Gloucester residents from local government reorganisation is the promise of devolution so that we can share in the powers and investment that the Prime Minister and the Chancellor have announced over the last few months. Will the Minister meet me to discuss how we can ensure that local government reorganisation and the model proposed for Gloucestershire will unlock devolution opportunities, rather than block them? The only credible option for Gloucestershire is a foundation strategic authority in the short term and joining the West of England combined authority in the long term. That is backed by six of our seven local councils and all four constituent councils of the WECA.

[Jim McMahon]

My hon. Friend makes an important point. One of the criteria for reorganisation is that it has to be compatible with devolution going forward. I hope that Members saw the announcement yesterday for 10 new devolution agreements across England—that is significant investment coming our way. When we look at the map of England, there is that belt around the midlands where economies and communities say that they look in different directions. We need to work through what a good settlement for those areas looks like in practice, but I absolutely take on board my hon. Friend’s points. I thank him for all the work that he does on this issue, and I am very happy to meet him.

[Dame Karen Bradley (Staffordshire Moorlands) (Con)]

The Government are very good at imposing on people things that they do not want. In Staffordshire Moorlands, the Government want to impose the end of Staffordshire Moorlands district and the end of Staffordshire police—reorganisations that will have different timeframes and will lead to great confusion. Will the Minister consider my proposal for local government reorganisation—this has been my proposal all along—which is to leave our councils and local authorities in the state they are in? The Government can give us a mayor, if that is what they want, but we really do not need any more distractions for our local government officials, who need to get on and deliver services.

[Jim McMahon]

I just do not agree with the analysis that we can stay as we are. I do not think we can stay as we are from a public service delivery perspective, a devolution perspective, or a financial sustainability perspective. The world has changed, and the demands for people-led services—in adults’ and children’s social care and in temporary accommodation—are overwhelming councils. We have to make sure that we free up the money from the system that is currently used for executive pay and back-office support and direct it straight to neighbourhoods and people-led services. That is not at all to decry the good work that district councils do. I respect those councils, but we have to take this in the context of the 50-year period of reorganisation.

[Linsey Farnsworth (Amber Valley) (Lab)]

As the Minister knows, I support local government reorganisation, and I welcomed the original pause of the decision to split Amber Valley in two. I know that the Minister is taking the time to carefully review the situation, and I thank him for the thorough and thoughtful manner in which he is doing so. However, delays bring uncertainty about council officers’ futures, planning services, and delivery of projects for the people of Amber Valley. Given that splitting Amber Valley is the only point of contention between the boroughs and districts of Derbyshire, can I urge the Minister to commit to a swift and firm timetable for Derbyshire? This can be sorted out quickly.

[Jim McMahon]

I thank my hon. Friend for all her representations on this issue over a long period of time. I can definitely commit to moving as quickly as possible. All the points she has raised—about identity, good public services and so on—are in our mind when we consider the proposals.

--- Later in debate ---

[Madam Deputy Speaker]

Order. Before the Minister responds, let me say that I am not at the Dispatch Box. It is “the Minister”, not “you” and “your”. Back-Bench MPs should be speaking through the Chair.

[Jim McMahon]

I am delighted that the hon. Member has managed to find his seat today—he looks quite comfortable there, and there is not a prayer card in sight, as far as I can see. Actually, he makes the important point that local politics matters. What we do not want to do through reorganisation is take away the local, so the English Devolution and Community Empowerment Act 2026 requires us to bring forward neighbourhood governance arrangements before Christmas. We want to try to have a unit of government within a council—to hardwire it and mainstream it, so that local councillors are given the respect that comes with being frontline councillors with the powers and resources to get things done in their area. We can do that at a bigger level and in a different way.

To be clear—although I know the hon. Member did not mean it—the Reform party is not taking the Government to court; local authorities have decided to issue claims. We need to make sure that we are not using local authorities for party political reasons.

[Amanda Hack (North West Leicestershire) (Lab)]

I thank the Minister for his statement. As he knows, I have been calling for a devolution settlement for Leicester, Leicestershire and Rutland, which I was pleased was confirmed in yesterday’s Budget. However, we know that local government reorganisation is going to be key to long-term strategic growth in our communities, so it is disappointing to hear about this withdrawal now. I have more concerns, though, about how this uncertainty will impact our communities and our hard-working colleagues across local councils. In the light of this change, how will local authorities in Leicester, Leicestershire and Rutland be supported to make sure it does not disrupt their long-term aim of providing excellent services to my residents?

[Jim McMahon]

My hon. Friend makes a very fair point about the impact of the delay. That has impacted a lot of council staff who have been working on this; it has definitely impacted chief officers, legal officers and councillors, which is why we committed to return as soon as possible. I think we have honoured that through the work we have done so far, but we will move at pace to make sure we can act as quickly as possible. Obviously, securing devolution and investment for the counties of Leicestershire and Rutland could be transformational for their communities and their economy.

[Steve Barclay (North East Cambridgeshire) (Con)]

After more than two years, the Minister has come to the Chamber today to say that all options are still on the table. He cannot say what the timeline is for Cambridgeshire, yet he also said from the Dispatch Box that his priority is getting resources to the frontline. I am not surprised that the Secretary of State, who is in her place, has decided to duck making this statement and has passed it to the Minister, but will he answer the question asked by my hon. Friend the Member for Weald of Kent (Katie Lam)? What has been the total cost to local authorities and the Government of this process so far, given that we have arrived at a situation today where all options are on the table?

[Jim McMahon]

The cost of transitioning from the two-tier system to new unitaries is covered by councils in their proposals. They tell us how they will finance the transitional arrangements that they are asking the Government to consider. For the first time—Government have not done this before—we have introduced a multimillion-pound budget, £900,000 per new unitary, to support the transitional arrangements on top of that, so I do not believe that the way in which the right hon. Gentleman has framed his question reflects the reality. The Government are meeting the councils halfway.

[Adam Jogee (Newcastle-under-Lyme) (Lab)]

I welcome the announcement in this statement that the Minister has scrapped the disgraceful and discourteous announcement made in July 2026. He is right to throw it out, but my constituents in Newcastle-under-Lyme want and deserve certainty and clarity, and I did not hear much of that in the statement, so may I ask the Minister three very quick questions? Will he confirm how Staffordshire and Stoke-on-Trent MPs will feed into the review? How much money will our local authorities get to redress what they have spent so far? And may I urge him to focus on the new mayoral authority announced yesterday, because that has the support needed to achieve a change of this scale?

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I appreciate how local this is for everybody, but I ask Members to please ask only one question each, because we need to get through this statement quickly.

[Jim McMahon]

Obviously, we were delighted to announce the devolution agreement yesterday. That will definitely bring new resources and powers to my hon. Friend’s area, but it has to be built on a strong foundation of local government that can be sustained. As for how MPs can engage, the “minded to” process for when decisions are issued gives us a window in which MPs and other interested parties can make representations.

[Mr Will Forster (Woking) (LD)]

The two local authorities that serve my constituency are due to be abolished next year as part of the first phase of local government reorganisation, and now we hear that Surrey is likely to have a mayor. Will the Minister confirm that the Government will let Surrey choose whether or not to have a mayor via a public consultation and a vote of councillors?

[Jim McMahon]

As with LGR, devolution is locally led, so it is for local areas to come to Government to say, “We have a broad agreement that we want to be in talks about devolution.” We then bring that into a programme and speak to the Treasury about financing that programme, which is where we got to yesterday, so this is great news for the 10 areas that are in scope. The next stage is a consultation, probably around December, and then local authorities will be taking local decisions to form the strategic authority, probably in February and March. Once they have done that, we will move the statutory instruments—the legislation—here in the House.

[Sam Carling (North West Cambridgeshire) (Lab)]

Councils across Cambridgeshire and Peterborough have worked collaboratively throughout the whole local government reorganisation process, even when they have disagreed. I have long advocated for our region to have three unitary councils, not just two, and I hope the Government will agree, but there are of course questions about where boundaries should lie. What avenues will be available, or are available, for councils to submit modifications to proposals if consensus can be built on improvements?

[Jim McMahon]

At the moment, we will be going on the proposals that we already have. If those proposals generally contain the type of outcome that my hon. Friend wants and we are minded to go with them, there is an opportunity during the “minded to” window to make representations: “Actually, those proposals could be improved if this modification were made.” If we accept that as an argument and want to make a modification order, we will then need to go through a separate consultation process. That will probably take a bit longer, but if it is the right thing to do, we should be open-minded about doing it.

[Nigel Huddleston (Droitwich and Evesham) (Con)]

The Minister cannot stand at the Dispatch Box and say that the Government are not imposing local government reorganisation, and then say that the status quo is not an option. Is he fully aware of the chaos, cost and uncertainty that this indecision is causing in Worcestershire? If I understand correctly, we have local district council elections next year, a unitary election the year after, and maybe—for what mayoralty we do not know—a mayoral election. Does that make sense to him?

[Jim McMahon]

The pace of change is quick—we know that—but the economic and social requirements for that pace are vital. If we do not move quickly, we will have no chance of ensuring growth can reach every postcode in the country, which is our promise, and no ability to ensure the funding required for those who need social care, care in their local communities and vital neighbourhood services. It is, therefore, the right thing to do.

On the hon. Member’s point about whether we are imposing this, to be clear, the English devolution White Paper that was published in December 2024 invited councils to be part of the voluntary programme, and every one of the 21 outstanding counties applied.

[Chris Ward (Brighton Kemptown and Peacehaven) (Lab)]

The Minister will know, because of the many times I have raised it with him and the Secretary of State, that there is still real concern in Peacehaven, Telscombe and East Saltdean, in my constituency, about the proposed merger into Brighton and Hove. Given today’s announcement and the “minded to” decision, can he explain a little more clearly how my constituents can feed in, during the three or four-week period, and how I can ensure their views continue to be heard?

[Jim McMahon]

At the moment, the proposal regarding the “minded to” decision is to expand the boundary of Brighton and Hove city council to include the communities of Saltdean and Peacehaven further down the coast. However, that is a “minded to” decision, so there is an opportunity for communities to make representations, alongside MPs. I give my hon. Friend credit for the representations he has already made on this over quite a long period.

[Ben Maguire (North Cornwall) (LD)]

I commend the Government on granting Cornwall, by exception, a single-authority FSA—foundation strategic authority—devolution deal. I have been proud to work with all of Cornwall’s MPs and the council leader on this, and Cornwall is very much relieved that it will not be merged with any other region. Will the Minister now meet all of Cornwall’s MPs to discuss how we can move to that mayoral suite of powers and funding, without a mayor, as new legislation comes before this House?

[Jim McMahon]

I understand that all MPs were invited to the meeting at No. 10 North about devolution, which is good news. That shows just how importantly we are taking this; it is a Government-wide priority and we are working across our different teams to ensure that it lands.

I hope the hon. Gentleman also recognises that, for Cornwall, we are working as hard as we can to recognise that different places are in different positions on devolution, but, ultimately, we want to complete the map, either through a foundation authority or through an MSA.

[Steve Race (Exeter) (Lab)]

I welcome yesterday’s announcement of a mayoral strategic authority for the geography of Devon. However, as the Minister is aware, cities that currently have district councils are the drivers of economic growth, jobs growth, house building and much else in their areas, but are currently locked out of sitting as full constituent members of mayoral strategic authorities. As we are looking at potential legislation regarding cities, can the Minister give some commitment to looking at whether cities, in advance of local government reorganisation, could sit as full constituent members of MSAs?

[Jim McMahon]

First, I thank my hon. Friend for the representations he has made on behalf of Exeter over a long period of time on this, both regarding reorganisation and devolution. He raises a very fair point, which is that we were trying to align reorganisation to be in place before devolution, but the fact is that those are now going to run to slightly different timetables. It raises a question: if this is about an economic project—which it is—the city economic drivers and the travel-to-work areas ought to have a voice in that. I cannot make commitments today, other than to say that I acknowledge the point my hon. Friend makes and will take it away.

[Sir Desmond Swayne (New Forest West) (Con)]

Were he to consult a map, the Minister would understand that the Creator’s purpose in placing the estuary of the Test was to prevent, for government purposes, the eastern part of the New Forest from being treated as a suburb of Southampton.

[Jim McMahon]

I will certainly make a note of that.

[Andrew Pakes (Peterborough) (Lab/Co-op)]

Peterborough is ambitious for growth and to improve life for our residents, so anything that extends this process risks knocking back some of that ambitious growth. I ask the Minister, can we do this as quickly as possible?

I think Peterborough is also unique in this process, in that we are already a unitary council and are being brought into a bigger process. We are consistently told that a decision has not been taken, but in July a review had already started. Can the Minister confirm whether any review has actually happened since the last one was started in July? Will it take a “minded to” decision for MPs, councillors and communities in Cambridgeshire to have a say on the options being considered?

[Jim McMahon]

With Cambridgeshire and Peterborough, and also with West Sussex, we are still earlier in the process, so we will confirm in writing what that will be. However, all decisions will be “minded to”. My hon. Friend makes a very strong case about the economic benefits of Cambridgeshire and Peterborough, and that being built on strong foundations. Also, I congratulate him on his appointment as the Government’s co-operatives champion; he has always been my co-operatives champion, but it is nice that he has been recognised.

[Richard Tice (Boston and Skegness) (Reform)]

The reason this local government reorganisation has been so appalling shambolic is that the Government made political decisions, as opposed to the right decisions. Reform in Lincolnshire welcomes the decision to pause there, but does the Minister understand that Reform in Warwickshire is concerned that the two-unitary proposal he is minded to accept will lead to the bankruptcy of both unitaries within a matter of years?

[Jim McMahon]

The “minded to” process will allow anyone in the area to make those points in representations. If there is new information that we have not considered, I would be happy to receive it.

[Luke Murphy (Basingstoke) (Lab)]

I thank the Minister for his statement. I urge him to make a “minded to” decision as quickly as possible for Hampshire, and for that to include the creation of a north Hampshire unitary authority. It is right economically and for the delivery of public services, and has a coalition of charities and businesses behind it. I also join my hon. Friend the Member for Exeter (Steve Race) in urging representation for districts—not just cities, but large towns such as Basingstoke—on the Hampshire and the Solent combined county authority.

[Jim McMahon]

Hampshire was one of the areas where decisions were withdrawn earlier in September, so we will be reviewing that process. As I think I said before, it should not be assumed that, just because areas were in previous batches, that will be the order in which we will take them. We will confirm how we will batch those up, or not, in the coming weeks.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

I did not think that the Minister could make things for people in Worcestershire even more confusing than they were. They just want their bins taken out, their roads maintained, enough school places, adult social care provision and a say in planning. But now I understand that we will have to get councillors elected to district councils again next May, that we will have to get councillors elected to a new shadow authority the following May, and that this new entity in the south of Worcestershire will now not be created until 2029. I just cannot see how that is going to benefit my residents.

[Jim McMahon]

The hon. Member makes the case as to why the district elections are important. We cannot have a situation in which there is a democratic deficit, where one part of the partnership in the reorganisation—the transfer of assets, workforce and liabilities, and the rest of it—does not have a say. As she says, the vesting day on this timetable will be April 2029. I am afraid that the idea that there should not be a democratic-mandate reset to negotiate that transfer just does not hold.

[Josh Newbury (Cannock Chase) (Lab)]

I will start by thanking the Minister for the part he played in getting the announcement of a strategic mayoral authority for Staffordshire over the line in time for yesterday’s Budget. However, despite the potential efficiency and simplicity gains of local government reorganisation, the shifting goalposts and the stop-start process have caused deep frustration in our county. Can the Minister confirm what the coming months will bring in terms of consultation with MPs, councillors and, most importantly, our constituents, so that they are clear on how they can again have their say over the future of our councils?

[Jim McMahon]

Now that the review has concluded, the individual meetings requested by a list of MPs will take place, and we will contact MPs in the usual way for those Monday sessions. Notwithstanding that, the “minded to” process will allow formal representations even beyond that.

[Alison Bennett (Mid Sussex) (LD)]

Still West Sussex waits, and we badly need certainty on the geography of the new authorities for my county. I cannot overstate how cash-strapped and fragile our public services are. The £500,000 to offset the cost of further delay is welcome, but it is only the tip of the iceberg of the amount of money that the Department has spent in the past two years on LGR. May I press the Minister again: how much has that cost?

[Jim McMahon]

As I say, all the localised costs of reorganisation are included in the financial profiles that councils send to the Government; councils themselves determine what type or form of arrangement they want to put forward for their area. Alongside the boundary proposal, they have to do a financial assessment of the transitional arrangements and the cash implications, and that is all set out in the proposals.

[Oliver Ryan (Burnley) (Lab/Co-op)]

I welcome today’s statement, the new transitional funding and the Minister’s work on this issue so far. My understanding is that Lancashire’s case for reorganisation is stronger and more robust than it was just a few months ago, if a little delayed. Can the Minister confirm today that this new window of engagement is an opportunity for Lancashire to remake its case for our future—we have had the very welcome announcement of a new mayor—and an opportunity for me to keep lobbying him for a smaller east Lancs unitary, and perhaps new electoral boundaries, rather than the existing county divisions?

[Jim McMahon]

I congratulate my hon. Friend on his representations. It is probably fair to say that I cannot get through the voting Lobby without him making those representations, but he does so for the right reasons. He cares about the place that he represents, and he wants devolution in Lancashire to be a success. In that, we are entirely as one.

[Mr Gagan Mohindra (South West Hertfordshire) (Con)]

Like others in this House, I think it is fair to say that this whole process has been a shambles. Like many in the House, I come from a local government background, and I feel sorry for my councillors, my council and my residents for what they are having to go through. Having said that, the previous decision for Hertfordshire was wrong, so I appreciate that the Minister has taken the opportunity to reassess what Hertfordshire will do. Given that my community is a collection of small towns and villages, and we do not have a mayoralty, how will he ensure that my community is properly represented, whatever the outcome for Hertfordshire?

[Jim McMahon]

I will review not only the proposals that came forward, but the consultation that was carried out at the time, and I will test the assumptions. On one side, there is the idea that big is beautiful, and that having a single unitary will save money and all the rest of it; on the other side, there is the idea that local is better. In today’s debate, we have heard that there are very different views on that, and I tend to find that the truth is somewhere in the middle. I am trying to get a compromise that people accept, but clearly we cannot pre-empt the findings; we are coming at this with an open mind.

[James Naish (Rushcliffe) (Lab)]

It is right that all options proposed by Nottinghamshire authorities be looked at fairly and properly, so I welcome the Minister’s confirmation, but today’s update makes it clear that LGR is extremely complicated, should never have been a term-one priority, and has destabilised the very organisations on which we rely to deliver so many services. Having led a local authority, I cannot emphasise enough how big an impact this is having on our councillors and council officers, so I hope the Minister can clarify the situation. Are there scenarios in which “minded to” may mean that LGR does not go ahead? Are councils able to make representations to that effect, and who is being held accountable for the announcements on 16 July, which should never have happened?

[Jim McMahon]

To be clear, the invitation for areas to make submissions to the LGR process was entirely voluntary; there was no mandation. When councils submit a proposal, that initiates LGR. This is a Government-wide programme, but it is taking place because we have received proposals from local councils that we are now required to review. However, I take on board my hon. Friend’s point about being mindful of the impact of the process on council officials and councillors.

[Sir Julian Lewis (New Forest East) (Con)]

The Minister is a genial sort of fellow, and I want to believe him when he says that he wants to proceed by consensus. Will he accept that there is no consensus at all on splitting the New Forest and putting the Waterside under the control of Labour-dominated Southampton? Well over 30,000 people signed the petition to keep the forest together, and it was handed in at Downing Street on the very day that the Government rightly withdrew the plan for Hampshire.

[Jim McMahon]

Hampshire is an area that we will look at afresh, just as we will look afresh at other decisions. I have not predetermined what might happen, but the right hon. Gentleman makes a fair point. This is an imperfect process, but ensuring that the decision reflects community identity is definitely at the back of my mind.

[Dr Al Pinkerton (Surrey Heath) (LD)]

As the Minister said, LGR and devolution are intrinsically linked, so it came as a bit of a surprise to read on page 66 of the Red Book that Surrey is apparently in advanced talks with the Government over a new strategic mayoralty, because those talks have not involved any of the local MPs and have apparently entailed only a 10-minute phone call with the new unitary authorities for Surrey on Monday evening. In the spirit of consensus and correspondence, can we make sure that before this goes any further, those unitary authorities and the local MPs are fully consulted?

[Jim McMahon]

The hon. Gentleman makes a fair point about consultation. The Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Doncaster Central (Sally Jameson), and I have done a lot to engage with local government, and many of our drop-in sessions have been about devolution, so I push back on the idea that we have not done that, but we could always do more. Further talks might be required, but let us not detract from the benefit of this multibillion-pound investment to our communities. As local MPs, surely the reason we come here is to make sure that our areas get their fair share.

[Mark Garnier (Wyre Forest) (Con)]

Like my hon. Friend the Member for North Cotswolds (Sir Geoffrey Clifton-Brown), I agree that merging six district councils and one county council into one unitary authority for 650,000 people is a good idea—it has a lot of efficiency. In Worcestershire, we have 630,000 people, six district councils and one county council. How on earth did the Minister come to the conclusion that it was a good idea to split the county council in two and have a north-south divide in a county smaller than Gloucestershire?

[Jim McMahon]

We do not align the decision on one county with the entirely separate legal decision on the county next door; all we can do is act on the basis of the proposals we receive. These are not always easy decisions, and they are always a matter of balancing competing interests. As I said, I have not yet seen a perfect proposal, but we are trying to get to the best possible solution in Gloucestershire, Worcestershire and all the other places that we have mentioned today. We are in the middle of the “minded to” process, and if the hon. Gentleman wants to make representations, I would be very happy to receive them.

[Andrew Rosindell (Romford) (Reform)]

The Minister knows, because we have discussed this many times, that the boundaries of historical counties and cities are very different from local government boundaries, and I am pleased that he has said today that city status is preserved, as are ceremonial matters. Will he finally allow historical and ceremonial counties to be as one, in order to avoid confusion, and so that we in Romford can have our Essex identity, regardless of local government boundaries? Will he give a cast-iron guarantee that there is no plan to merge the London borough of Havering with other east London boroughs to create some sort of super east London council?

[Jim McMahon]

I think I have enough on my plate without taking that on.

[Ben Obese-Jecty (Huntingdon) (Con)]

There seems to be some confusion on both sides of the House about the next steps for Cambridgeshire and Peterborough; perhaps the Minister can clarify. He said that the process was in its early stages, so Cambridgeshire will still receive written confirmation of what the options are. He also appeared to confirm that despite the fact that the four options tabled will be selected, they could later be modified by councils, if they saw fit, and taken forward. Could he clarify that that is the process, and clarify the criteria under which that decision will be taken?

[Jim McMahon]

We published the criteria at the start of the process, and those criteria stand. They are unweighted; the idea is that they give us the freedom to take into account that England is very diverse, and what is right for one county might not be right for another. In the end, decisions have to be as sustainable as possible. They have to balance efficiency and identity, and these are not easy decisions.

On the hon. Gentleman’s point about the opportunity for a modification proposal, we are now receiving proposals, and there is no additional window to do that. Also, consultations have already been carried out. However, there will be a “minded to” process for all these decisions, so that he and others can make representations. In the case of Cambridgeshire and Peterborough, and also West Sussex, I am very happy to confirm the details by writing to Members shortly.

[Charlotte Cane (Ely and East Cambridgeshire) (LD)]

As many Members have said, this process has been a shambles, but I welcome the “minded to” approach, and the fact that people have time to give their views. Although I want this process sorted quickly, the timetable has to be long enough for a real consultation. Bear in mind that all local government has to give proper due notice of its meetings, and of what will be on the agenda, so that the public can come and have their say. I am not at all sure that three weeks is long enough. Will the Minister please look at having a timetable that makes it practical for local authorities and local people to properly make their representations?

[Jim McMahon]

The way we approach “minded to” decisions is not to assume that the council will be the conduit for every view in an area. In a single area, there may be very different views from different political groups, local charity organisations and other public service providers. The deliberate intention is for councils, local residents, the business community and whoever has an interest to make representations, and our view is that three weeks ought to be enough time to do so.

[Sir John Whittingdale (Maldon) (Con)]

Six weeks ago, the Government announced that they were scrapping the local government reform proposals for Essex and going back to the drawing board. That announcement created yet more uncertainty and further paralysed decision making, yet the Minister has not even mentioned Essex, and he has provided no additional clarity whatsoever. How can he expect elections to go ahead in 2028, when we will not even know what authorities the candidates will be elected to until next year?

[Jim McMahon]

I definitely accept the right hon. Member’s point that having an itinerary of areas, with a clear date alongside them, would do what he has asked, but that is not where we are. We have decided that we ought to confirm the decision for an area as soon as possible, rather than waiting for this to be patched up, in the way that may have happened previously. On whether elections should go ahead, I have made the point that these district councils will be in place until the vesting days of the new local authorities. We cannot have elections being cancelled, creating a democratic deficit. Councils must have representatives around the table, with a mandate given to them by the public.

[Martin Vickers (Brigg and Immingham) (Con)]

North Lincolnshire and North East Lincolnshire, the two unitaries serving my constituency, are unanimous in wanting to maintain the status quo, as are the four MPs across the area. The Minister’s predecessor announced that that would be the case. Could he enlighten us as to why he is further delaying and continuing the uncertainty?

[Jim McMahon]

The hon. Member is almost suggesting that the further delay is for the sake of delay, but new decisions have to be taken. When I review previous decisions, I am not just saying, “Well, we’ll just allow them to go through.” We are withdrawing decisions entirely for areas, and we will make new decisions from the point of proposal, with a consultation and based on fresh evidence. He says that his is a compelling proposal, and asks why we would think otherwise, and what he proposes may well be the outcome, but it would be wrong to predetermine it.

Council Housing

Jim McMahon Excerpts

Tuesday 27th October 2026 Westminster Hall

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jim McMahon)]

It is a pleasure to serve under your chairmanship, Sir Jeremy. I congratulate the hon. Member for North East Hertfordshire (Chris Hinchliff) on securing this important debate on the delivery of council housing. I appreciate his passion for the subject following the debate that he brought forward last September on the provision of council housing. I also thank all Members for their rich contributions. They really reflect the challenges that exist across the country.

Nearly 180,000 children are in temporary accommodation in this country, and over 1.3 million households are on local authority housing registers. Members across the House will agree that we cannot allow that to continue, because behind every one of those statistics is a person, a family and a child. The Secretary of State for Housing, Communities and Local Government, the Housing Minister and the whole Government are clear on our resolve and intention to tackle the issue. We are also clear that councils have a leading role to play.

Under the leadership of the Prime Minister, the Government are committed to delivering the biggest council house building programme since the post-war period. That level of ambition is necessary because of the scale of the challenge that we are facing. This Government are removing barriers and backing councils to use all the levers at their disposal to deliver safe and decent homes at a scale not seen for decades.

We have taken decisive steps to improve councils’ financial resources, capacity and capability to invest in new and existing homes, and the social and affordable homes programme funding is putting councils at the heart of that delivery. It is the biggest long-term investment in social and affordable homes in recent memory. Initial allocations under the programme were announced in August and, for the first time, three councils outside of London—Newcastle, Eastleigh and Cambridge—were awarded strategic partnership status. The Greater London Authority has also offered allocations of at least £6 billion to providers of social and affordable housing, with 60% going to local councils.

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

Leeds is one of the biggest local authorities in England. We have 27,000 households on the waiting list for council housing, 5,000 of which are in priority need. So many constituents come to me saying that they just cannot afford private rented homes. The main issue is that there is just not enough council housing. I welcome the Government saying that they are building more houses, but there needs to be specific help for Leeds, including both more funding for land remediation and the purchasing of city centre developments that are unoccupied or under-occupied. What additional support can the Government provide for that type of housing?

[Jim McMahon]

Leeds city council is ambitious for its city and is a key member of the West Yorkshire combined authority. It is doing a lot of work, not just on housing but on bringing forward brownfield sites through growth and infrastructure funding to make sure that, as many Members have said, housing goes alongside that wider community infrastructure.

In addition to the funding that I have just mentioned, over £21 billion is still to allocate, which will be prioritised for social homes, particularly council homes. That reflects our commitment to increasing council house delivery. To further improve financial capacity, deliver new supply and invest in existing homes, we have committed to a 10-year social housing rent policy with a convergence mechanism. That gives councils much needed certainty on their income to enable them to increase and manage their housing portfolios efficiently and effectively.

[Jim Shannon]

We also need to remember that the Government are committed to building a million-plus social homes over the next period of time. Over the last 12 months, house prices in Northern Ireland have consistently risen by a greater rate than anywhere else in the United Kingdom. Housing rents are also going up. Will the Minister share the Government’s strategy to address the social housing need with the relevant Minister in Northern Ireland to ensure that we can learn something from the process that the Government are putting forward?

[Jim McMahon]

The hon. Gentleman makes a very good point about the different approaches across the UK and how we can all learn from each other on what works, as well as learn from the areas where it perhaps did not go quite as planned. I will make sure that I pass his comments on to the Housing Minister to have conversations across Governments. 

We have also provided greater certainty on future costs associated with the decent homes standard and the minimum energy efficiency standards. We have allocated more than £1 billion through the warm homes social housing fund to improve the energy efficiency of social homes. Quality matters, as rightly outlined by my hon. Friends the Members for Norwich North (Alice Macdonald) and for Cannock Chase (Josh Newbury).

In addition to revenue, we know how important borrowing and the capacity to borrow are for councils’ delivery plans. Since 2023, a preferential borrowing rate has been available from the Public Works Loan Board for council house building. This rate will be extended and we will be announcing more details in due course.

We continue to work closely with councils and the wider sector to understand the remaining barriers to council house building and investment, including the impact of the housing revenue account debt and borrowing rates. We have also increased the threshold at which councils must open a housing revenue account from 200 homes to 1,000 homes. That is enabling small councils to deliver more homes without incurring additional operating costs.

We have also heard from councils that workforce shortages, skills gaps and capacity pressures will constrain their abilities to build. That is why we are investing a further £46 million over the next three years through capacity to build funding, on top of the £17 million already invested since 2025. That will help councils develop an ambitious pipeline, strengthen specialist housing capacity and make the most of the Government’s wider investment in council house building. These gaps have been identified by Members in the debate today, including the hon. Member for Camborne and Redruth (Perran Moon) and my hon. Friends the Members for Hexham (Joe Morris), for Portsmouth North (Amanda Martin) and for Truro and Falmouth (Jayne Kirkham).

Finally, we are taking decisive action to reform the right-to-buy scheme, which has acted as a break on council confidence to invest in new social housing for too long. We are reforming the scheme to ensure that more homes are built than lost, while maintaining an important route for social housing tenants to own their own homes, which was mentioned earlier by my hon. Friend the Member for Amber Valley (Linsey Farnsworth).

My right hon. Friend the Housing Minister is at this very moment in the Bill Committee, debating the detail of our reforms. The Social Housing Bill builds on the reforms to cash discounts that we implemented in 2024 to ensure that more social homes are protected, while removing powerful disincentives to build. Notably, we are tightening the eligibility requirements and exempting newly built social housing from the scheme for 35 years to ensure that homes are not sold before councils have recovered their investment.

[Ayoub Khan]

The Minister will have heard me talk about the £400 million being invested through the regional authority for 3,000 homes. I contrast that with the more than £700 million invested of taxpayer money in the Perry Barr athletes’ village, which was then sold at a loss to the taxpayer of £350 million. Can the Minister assure me that that matter will be investigated?

[Jim McMahon]

Today is not about getting into the rights and wrongs of individual programmes at local authority level. The hon. Member and I have had many conversations about Birmingham city council in the past and I am sure that will continue. The matter here today is how central Government ensure that we have the framework, the incentives and the funding to get councils building council homes and social homes in their area.

In addition, we have enabled councils to retain 100% of receipts from right-to-buy sales and provided greater flexibility on how those receipts can be used. That includes permitting councils to combine receipts with grant funding to unlock capacity for house building.

These measures are already bearing fruit. Councils delivered around 10,600 homes in 2024-25, which is the highest level since current records began in 1991-92. Our package of right-to-buy reforms is estimated to deliver a net gain of around 18,000 social homes over the next 10 years, compared with a pre-reform baseline of a loss of 26,000 homes.

My hon. Friend the Member for Doncaster East and the Isle of Axholme (Lee Pitcher) mentioned empty homes. We are strengthening powers to bring empty homes back into use by reforming empty dwelling management orders. We are reducing the period for which a property must be empty before it becomes eligible from two years to six months under that programme.

We know that we must go further and faster to deliver the good-quality, affordable homes that people need. We also know that councils share that ambition. The Government are committed to backing councils to build at a scale not seen for decades, and to build the right homes in the right places. We will continue to work with all levels of local and regional government to turn that ambition into homes and better outcomes for local people, so that everyone across the country has access to a home that is decent, secure and affordable.

“Good Growth in Every Postcode” Programme

Jim McMahon Excerpts

Monday 26th October 2026 Written Statements

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jim McMahon)]

Good growth in every part of the country depends on local leaders being able to invest in their own places with certainty and over the long term. In the “Rewiring the State” Cabinet statement published on 31 July, the Government committed to support mayors to establish good growth funds across England, putting investment decisions in the hands of leaders who know their areas and answer to the people who live there. I am today informing the House of the first steps to deliver that commitment. The Chancellor will confirm these plans at the Budget.

Mayors and local leaders have long relied on a patchwork of fragmented funding pots held in central Government, each with their own bidding processes and conditions. That makes it harder to plan for the long term, to assemble the finance that complex schemes need, and to attract private investment alongside public money. Good growth funds will give local leaders across England the flexibility and authority to invest in the priorities that they judge will do most for growth in their area, without seeking permission from siloed Government Departments for individual investment decisions. That could mean new housing developments, the regeneration of town centres, new places for people to work, or the infrastructure that connects communities to one another and to jobs.

This approach has proved successful in Greater Manchester, using public investment to crowd in private finance behind housing, employment space and major infrastructure, and we will support local leaders to deliver a good growth fund that works for their region. As set out in the Cabinet statement, good growth funds will be backed by national public financial institutions and supported by the local government pension scheme as a key local investor, so that local leaders can invest for the long term in their local economies.

The fiscal devolution roadmap, to be published alongside the Budget, will set out how mayoral strategic authorities will benefit from much greater financial freedom in the years ahead, particularly once a share of income tax is assigned in 2028-29. The Government are, however, determined to help local leaders deliver good growth immediately and today we are confirming £285 million in 2027-28, comprising of mayoral funding for good growth funds and incubator capital funding for other areas transitioning towards mayoral devolution.



The Government will also work with mayors to design a new £1.5 billion borrowing facility available from 2028, giving them access to the financing they need to back the local priorities that will drive growth in their areas. That work will consider how the facility sits alongside the other sources of finance on which good growth funds will draw.

The Government will back this up and strengthen delivery by providing strategic authorities with an additional £150 million in 2027-28 to strengthen their capacity and capability as their range of powers and responsibilities grow. This funding will support mayors and strategic authorities in building the resource, expertise and institutional strength that these new functions and fiscal responsibilities require. It sits alongside the commitments in the Cabinet statement to a smaller and more strategic civil service, focused on the challenges that can best be dealt with at a national level. The Government will work with strategic authorities to undertake a fuller assessment of their capacity and capability, including new responsibilities, to inform funding baselines at the next spending review.

These measures are a first step. The fiscal devolution roadmap and the “Rewiring the State” delivery plan will further set out how good growth funds fit within our wider plans to give back control to local leaders, beginning with the retention of a share of business rates from April 2027 and income tax assignment for mayors from April 2028. I will update the House as this work progresses.

[HCWS420]

Local Government Best Value: Slough and Bedford Borough Councils

Jim McMahon Excerpts

Thursday 15th October 2026 Written Statements

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jim McMahon)]

The Government are committed to rewiring the relationship between central, local and regional government, returning power to people and places so that councils and communities can improve public services, drive growth and deliver better outcomes. Local institutions must be strong, with the right accountability, capacity and capability, and this Government are taking the action necessary to support the local government sector in building that strength and driving improvement.

Today, I am updating the House on the steps we are taking in partnership with Slough borough council and Bedford borough council to support their recovery and reform.

Slough borough council

Slough borough council has been in intervention since December 2021, and extended in November 2024, with directions due to end on 30 November 2026. On 5 March 2026 the then Minister of State for Local Government and Homelessness commissioned, due to ongoing concerns of the pace of improvement at the authority, an external review, led by Dame Mary Ney with support from Will Godfrey. The review was to assess Slough borough council’s improvement trajectory under intervention and identify what, if any, further support is required to drive immediate progress and to put the council on a long-term sustainable footing.

I would like to put on record my thanks to Dame Mary Ney and Will Godfrey. The report, which I am publishing today, makes a series of recommendations for the intervention. These include:

Embedding a sustainable senior leadership team to drive the council’s improvement and provide stability, to transition it to a more sustainable operating model.

A reset of the Ministry of Housing, Communities and Local Government commissioner team to an oversight role; adoption of a single commissioner team with Department for Education.

A new, shared approach to political leadership and development, underpinned by the appointment of a political adviser.

A decision to move ahead with convergence of Slough Children First with the council.

Government support for Slough growth potential, to accelerate housing delivery and realise the opportunity of Heathrow expansion.

Subsequently the Slough commissioners have submitted their eighth report, outlining progress at the council. While progress has been made in some areas, it remains fragmented, and recovery remains slow, uneven and fragile. The council remains in a vulnerable financial position, with a forecast £20 million overspend, continued reliance on exceptional financial support and the need to closely review its debt repayment strategy to ensure it is managing down its high level of debt effectively. Governance remains underdeveloped, and serious weaknesses persist in key services, including children’s services, SEND and housing. Commissioners do not have confidence the council can sustain improvement without ongoing external support.

I have carefully considered the commissioners’ report, the external-led review and other relevant material. I am satisfied that Slough borough council is failing to comply with its best value duty. I am therefore minded to exercise powers of direction under section 15(5) and (6) of the Local Government Act 1999 to implement an intervention package that ensures the council’s compliance with its best value duty.

Proposed package

Having considered the external review recommendations and commissioners’ report, I believe that ongoing commissioner involvement is required to support the council into a place of sustainability and that stepping commissioners back too quickly would carry significant risk at this stage.

A key lesson we must learn from the last decade of intervention is that progress in one area is too often undermined by weakness in another and our intervention approach across the two Departments has been too fragmented to date. Children’s services will not be able to secure and sustain improvement while wider weaknesses in leadership, governance, and financial management persist across the organisation. I am therefore minded to refresh the commissioner team, working to shared DFE and MHCLG objectives, comprising of a lead commissioner, managing director commissioner, finance commissioner, and a SEND and children’s services commissioner—appointed jointly by DFE and MHCLG—alongside a political adviser to support the council ahead of, and following, the all-out elections in May 2027. It is my belief that this will provide the council with the continuity necessary to embed outstanding improvement activity, drive transformation and take forward the external review recommendations.

I envisage the appointment of commissioners until 30 November 2029, with a review of the progress of the intervention after 12 months.

Slough is a town of significant economic potential, and my Department will continue to work with commissioners and the council to harness that potential for the long-term benefit of its residents.

Bedford borough council

Best value inspection report

On 10 February 2026, the then Secretary of State commissioned a statutory inspection of Bedford borough council and its compliance with its best value duty. Paul Najsarek, Margaret Lee OBE and Tasnim Shawkat were appointed as inspectors and reported their findings to the Department in June 2026. I am publishing this report today, and extend my thanks to the inspectors for their diligent work and to the council and all participants for their co-operation.

The report identifies some strengths within the council, including within partnership working and in supporting the Universal project. It also notes the steps taken in response to external challenge, including an improvement plan and independent improvement and assurance panel, but concludes these are not yet sufficient to drive the urgent improvement required.

Overall, the report documents serious concerns across a number of areas:

On continuous improvement: the report notes that, despite extensive external support and challenge since 2023, the council has made limited progress in delivering the scale of transformation and change required. The inspectors “have no confidence that the necessary improvement will be secured without external intervention”.

On leadership: the report identifies challenges “in all parts of the organisation—politically and managerially”. Weak leadership and cross-party working has meant it has been unable to “confront its growing financial problems”.

On governance: the council’s governance arrangements lack the “clarity, grip or discipline needed to support timely and effective decision-making”. Inspectors assess they are not adequate for a council with a directly elected mayoral model operating without overall political control.

On culture: the report highlights a “negative culture” characterised by low trust, blame, defensiveness, silo working and weak accountability. Inspectors describe poor member-officer relationships, reports of bullying and misogynistic behaviour that had not been systematically addressed, low staff morale, and blurred boundaries between member and officer roles.

On use of resources: the report identifies “limited and insufficient evidence of action to improve” the council’s financial position, which remains unsustainable, with persistent overspends, significant shortfalls in its medium-term financial strategy, limited reserves and growing borrowing pressures. The council required exceptional financial support to set a balanced budget for 2025-26 and 2026-27.

Compliance with the best value duty

I have carefully considered the report and other relevant material, including the Chartered Institute of Public Finance and Accountancy’s review of 2025, the progress made since the Local Government Association’s corporate peer challenge of 2023 and updates since the inspection concluded, and I am satisfied that Bedford borough council is failing to comply with its best value duty in relation to continuous improvement, governance, leadership, culture, and use of resources.

The council must now work collaboratively and at pace to address the recommendations received to date and deliver sustained improvement.

I consider that the council needs intensive support to achieve this. I am minded to exercise my powers under the Local Government Act 1999 to issue statutory directions to the council and nominate commissioners with expertise in political and corporate leadership, transformation, governance and finance, and some with powers to exercise specified functions of the council. My proposal to appoint commissioners is not taken lightly, and recognises that, as the inspectors say, the council has a “limited track record of delivering transformation and change, despite the extensive external support already available”.

The council would be directed to prepare and agree a comprehensive improvement and recovery plan to the satisfaction of the commissioners, bringing together the full range of activity required to ensure compliance with its best value duty. Progress against this plan must be demonstrable, with commissioners reporting to the Secretary of State on progress at six-monthly intervals. The intervention will also strengthen the council’s capacity to work effectively with partners on major strategic projects, including Universal, helping maximise the benefits they bring to the borough.

My clear expectation is that the council should continue to lead and deliver its own improvement wherever possible, with the appointed commissioners providing oversight, challenge and support and exercising their powers to secure improvement. The proposed intervention will be in place for three years but should there be sufficient evidence of progress, powers over functions will be handed back to the council.

Representations

I am now inviting representations from the council and any interested parties, including residents, on the inspection report and the proposed intervention package by 28 October 2026.

I will carefully consider all representations and any other evidence received, before deciding how to proceed.

Conclusion

I remain committed to supporting both councils to secure the sustained improvement needed and deliver better outcomes for local residents.

I will deposit in the House Library a copy of the documents referred to, which are being published on gov.uk today. I will update the House in due course.

[HCWS383]

Combined Authority Best Value

Jim McMahon Excerpts

Thursday 15th October 2026 Written Statements

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jim McMahon)]

The Government are committed to a radical shift in where power and resources lie, empowering local leaders to drive growth and improve outcomes for their communities. But stronger local leadership must be matched by strong local institutions. As powers and investment increase, so too does the responsibility to demonstrate strong governance, sound financial management, transparent decision making and effective stewardship of public resources.

It is a matter of public record that, following the publication of the independent Tees Valley review in January 2024 and the mayor’s response, Ministers required further assurance of improvement. On 3 April 2025, the Department therefore issued Tees Valley combined authority with a non-statutory best value notice, which set expectations for improvement around governance, culture, partnerships and continuous improvement, including action to address recommendations from the 2024 independent review. That notice was due to be formally reviewed after 12 months.

The Department has engaged closely with the authority and its independent improvement and advisory board to scrutinise progress against the notice and the authority’s organisational improvement plan. I commend the commitment of officers and the engagement across the Cabinet and constituent authorities to support the authority’s improvement work. I recognise the complexity of unpicking historic governance and accounting issues, and that, as improvement work has progressed, further matters requiring attention have been identified. However, despite sustained improvement efforts, I am not yet assured that the authority has the capacity, capability or appropriate arrangements in place to respond with sufficient pace, transparency or consistency to the level of remaining risk.

In particular, I have material concerns about the authority’s long-term financial sustainability, given its high levels of debt, increasing borrowing and interest costs, and declining revenue reserves in recent years. I welcome the authority’s recent agreement of formal loan repayment arrangements with South Tees Development Corporation, including changes to strengthen Cabinet oversight. However, those steps do not in themselves provide assurance on the assumptions underpinning the repayment arrangements or the management of associated financial risks, on which I would like direct, independent assurance. More fundamentally, the effectiveness of these arrangements ultimately depends on strong leadership, governance and financial management, where broader concerns remain.

I note the external auditor’s indication in its 2024-25 audit update report that it is considering further exercise of its statutory powers in response to concerns about the authority’s governance and control environment and the delays in completing and signing off financial statements for 2023-24 and 2024-25.

Although governance and assurance improvements are in train, including through the development of the single assurance framework, I remain concerned about the scale of work outstanding to deliver and embed those improvements, and evidence their impact.

Having considered all available evidence to date, including from the authority, its independent advisory board and the external auditor, I consider there are signs of potential best value failure. 1 am therefore informing the House that the Secretary of State has today exercised powers under section 10 of the Local Government Act 1999 to appoint Laura Shoaf CBE as lead inspector, and, on Laura’s recommendation, will shortly appoint three assistant inspectors to carry out an inspection of the authority’s compliance with its best value duty.

The inspection will provide an evidence-based assessment of the authority’s compliance with its best value duty, focusing on, but not limited to: governance and decision making across the authority; use of resources and audit and accounting arrangements; capacity and capability at leadership level and across the organisation; the adequacy of the authority’s plans and capacity to deliver its organisational excellence strategy; and how these functions and arrangements are impacting organisational culture, partnerships and community engagement, and service delivery.

Given the scale and complexity of the authority’s commercial and regeneration activities, I would welcome expert assurance that appropriate arrangements are in place to oversee and mitigate the associated risks.

Our new model of Government rests on strong and capable strategic and local authorities and I am committed to taking the action necessary to secure this. The best value framework is an established and proportionate accountability backstop. It supports improvement where concerns arise and enables intervention where necessary, acting to ensure that strategic authorities have the right accountability, capacity and capability that protects residents and public money, reinforces public confidence and provides a secure foundation for devolution’s resilience.

Further devolution will be rolled out as quickly as possible, and additional powers and control, as set out in the Cabinet statement, will be available to Tees Valley combined authority as with all mayoral strategic authorities, benefiting the people of the Tees Valley. Further detail on the approach, including any phasing, will be set out in the delivery plan this autumn.

My Department will continue to engage with and support the authority throughout this process. I will update the House once the inspection has concluded.

[HCWS384]

High Streets: Amber Valley

Jim McMahon Excerpts

Monday 12th October 2026 Commons Chamber

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jim McMahon)]

I am grateful to my hon. Friend the Member for Amber Valley (Linsey Farnsworth) for securing this important debate and for the passionate way that she continues to champion the community that she represents. I believe that she was a fantastic champion on the Denby issue, and all of us who care about our heritage and about good, skilled working-class jobs mourn its loss. The way that she continues to fight, to say that it is not the end of the community and to secure investment in the future, is really important.

I welcome this opportunity to set out the Government’s approach to supporting high streets, both in Amber Valley and across the country. High streets matter because they are far more than just places to shop. They are where people meet friends, visit local businesses, access services and spend time together. When a high street succeeds, it can lift confidence in a place and support local economic growth, but when it struggles, the impact is felt across the whole community. That is why the Government have made this a priority.

I know that Amber Valley’s towns and communities have felt many of the same pressures seen across the country. Changes in shopping habits, vacant premises, crime and antisocial behaviour and the increasing challenge of attracting investment have all had an impact on our town centres, yet there are also real strengths to build on, including proud local businesses, active communities and a strong sense of local identity.

Amber Valley has been a recipient of regeneration funding, and the Heanor area received £8.59 million through the future high streets fund. That supported the improvements that my hon. Friend referenced in her speech, including to the marketplace, the restoration of the former grammar school and plans for new town centre housing. Those investments demonstrate the role that regeneration can play in preserving heritage, improving places and encouraging future growth, but it is quite clear that her ambition goes even further, into Alfreton and beyond. She mentioned the Somercotes theatre, which is a fantastic example. Hopefully I can give her some routes to which she might be able to apply.

The Government are making high streets a priority. On 27 September, we announced £210 million to bring derelict buildings back into use, to tackle vacancy and to support community ownership and control. We are introducing reforms that will benefit high streets across the country, and we are tackling long-term vacancies through the high street rental auctions. These powers enable councils to bring persistently vacant properties back into use and to make town centre premises more accessible to businesses and the community. More than 40 authorities are already using these new powers and have brought over 80 properties back into use. To accelerate delivery, we have announced a further £10 million to support councils, and we are reviewing new burdens funding payments to ensure that councils have the resources they need to implement these powers quickly.

We are also empowering communities to take a greater role in shaping their local high streets. Through the English Devolution and Community Empowerment Act 2026, we have introduced a new community right to buy, helping local people take ownership of valued community assets such as pubs, shops and community buildings when they are at risk of being lost. We are also acting to tackle the issues that too often undermine confidence in our town centres. Through a £30 million crackdown on high street organised crime, stronger closure powers and the creation of a dedicated high street organised crime unit, we are supporting legitimate businesses and helping communities take back control of their high streets.

Retail crime remains a significant concern for local businesses. That is why, in addition to other measures, through the Crime and Policing Act 2026 we introduced a new offence of assaulting a retail worker and we have removed the £200 threshold for shop theft, making it clear that all shop theft is unacceptable and will be treated seriously.

We are also supporting businesses directly and have introduced permanently lower business rates multipliers for eligible retail, hospitality and leisure properties alongside additional support for pubs and live music venues. We have also legislated to ban upwards-only rent reviews in commercial leases, helping to create a fairer and more flexible commercial property market that supports investment and reduces the risk of properties being empty long term.

Alongside that, the business growth service is helping small and medium-sized businesses to access advice and finance and support to start, grow and invest, ensuring that local businesses can continue to play their vital role at the heart of our town centres.

We recognise that communities want attractive high streets that reflect local character. That is why we are giving councils stronger powers to address the clustering of vape shops and gambling premises and supporting better standards for shopfronts and public open spaces.

However, we know that there is more to do. Later this year we will publish a new high streets strategy, setting out our longer-term plan for supporting businesses, bringing life back into our town centres and helping communities to shape the future of their high streets. The strategy is being developed in partnership with businesses, civic leaders and local communities, because we know that thriving high streets cannot be delivered by central Government alone.

Our ambition is clear: we want high streets that are safe, vibrant and economically successful, that are places where people want to invest, and, importantly, that are places that local people can be proud of. I know that my hon. Friend will continue to make the case for Amber Valley as that work progresses. I welcome her contribution to this conversation and all her hard work. I hope that we can meet soon to discuss the future success of the projects that she has mentioned.

Question put and agreed to.

Exceptional Financial Support: Transformation Funding

Jim McMahon Excerpts

Tuesday 15th September 2026 Written Statements

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jim McMahon)]

After a decade and a half of austerity, over-centralisation and rising demand for targeted services, we have inherited a system in which too many councils have been left struggling to manage financial pressures.

Over the past two years, the Government have taken steps to fix the foundations for a more sustainable funding system for local government in England. In February, the Government delivered the first multi-year local government finance settlement in a decade, with a fairer and simpler approach to allocating funding for day-to-day services. This was alongside major reforms to high-cost services, including children’s services, homelessness and rough sleeping, and action to resolve special educational needs and disabilities deficits by writing off 90% of councils’ dedicated schools grant high needs deficits accrued to the end of 2025-26.

This has been part of a wider commitment to support councils differently and work in partnership to deal with the causes that are contributing to system strain, rather than short-term measures that focus only on the symptoms.

Following requests from 37 areas, in February the Government agreed to provide exceptional financial support of £1.5 billion to enable all of them to set a balanced budget—while being clear that we would continue to work with them to provide the support and challenge necessary to break the damaging cycle of councils having to borrow or sell assets to manage financial pressures.

Today I am updating the House on a further step that we are taking, by providing £91 million of targeted funding that will support some of those councils in the most challenging financial positions to invest in prevention and modern, effective services that will underpin long-term sustainability.

As the Government set out when confirming exceptional financial support, the most important first step has been to fix the underlying drivers of financial failure by delivering a fairer local government settlement that puts funding where it is needed most. Most councils in receipt of exceptional financial support see significant increases in core spending power over this Parliament, which demonstrates that we are getting money to where it is needed most.

However, we know that the challenges facing councils are complex, and there is no single solution. The Government are working to support and challenge councils in a range of ways, tailored to their circumstances.

In a small number of councils where there is clear evidence that councils’ challenges are rooted in or exacerbated by weak financial management or governance arrangements, the Government are taking the appropriate action under the best value framework. Depending on the severity of issues, this can mean commissioning an inspection, appointing commissioners or envoys, or issuing a best value notice to set clear expectations for local improvement where a council is at clear risk of not meeting their best value duty. In July this year, my Department confirmed that new or renewed best value notices would be issued to four of the councils that received EFS in February, and, reflecting more significant concerns, we commissioned a best value inspection in Bedford borough council, which we expect to report in due course.

Aside from those already subject to statutory intervention, for each of the councils that received exceptional financial support, MHCLG has also commissioned the Chartered Institute of Public Finance and Accountancy to work with each of the councils to identify the steps needed to support its financial recovery. This support is funded by MHCLG, and the first set of 15 reviews have now been published on gov.uk—providing councils with a clear diagnosis and road map for improvement. To support that improvement, in a number of places the Department and the Local Government Association are also working with councils to provide targeted support, for example to improve capacity.

We have also today written to 14 of the councils to confirm some additional funding to accelerate their plans for service reform and transformation. These councils are: Bradford, Brighton and Hove, Haringey, Havering, Isle of Wight, Isles of Scilly, Lambeth, Redbridge, Redcar and Cleveland, Sefton, Stoke-on-Trent, Trafford, Waltham Forest and West Berkshire.

My officials have worked with those councils as they have developed robust plans for showing how targeted additional investment could transform high-cost services and put the council on a more sustainable long-term footing. The councils will be supported to implement their plans with a share of £91 million in further support across 2026-27 and 2027-28.

This investment marks a turning point in how the Government intend to support councils to manage their financial position, with greater emphasis on long-term prevention rather than short-term fixes.

Through this approach, the Government aim to demonstrate that with co-ordinated, purposeful investment and effective support and expertise across Government, councils can move towards more sustainable models of service delivery over the long term. Stoke-on-Trent, for example, will use this funding to accelerate the roll-out of the Families First Partnership programme locally. These reforms will help children get the best start in life, break down barriers to opportunity, and reduce the long-term pressure on local authority budgets.

Changing the way we work with councils in financial difficulty is a key part of our mission to rewire the state and raise living standards. We will draw lessons from these projects and encourage councils to share their learning widely.

This written ministerial statement applies to England only.

[HCWS347]

Tourism: Overnight Visitor Levy

Jim McMahon Excerpts

Tuesday 15th September 2026 Commons Chamber

[Rebecca Paul (Reigate) (Con)]

(Urgent Question): To ask the Minister for Housing, Communities and Local Government if he will make a statement on the impact of the Government’s proposed overnight visitor levy on the tourism and hospitality sectors in England.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jim McMahon)]

Last Thursday, the Government published their response to the consultation on the overnight visitor levy. The “rewiring the state” Cabinet announcement committed to

“delivering good growth in every part of the United Kingdom”.

The visitor levy supports that ambition by empowering local leaders to deliver transformational investment, building the reputation of areas across England as world-leading destinations. Local leaders will be able to choose to introduce the levy as a way to raise money to support growth in their region, including in the visitor economy.

Visitor levies are common in Europe and the rest of the world. All over the G7, countries already have some form of tourism or overnight accommodation levy in place. The Government have decided that both foundation strategic authorities and mayoral strategic authorities will be empowered to raise a levy to support growth in their areas. This approach means that places without a mayor will also be able to invest in their region, making them better places for residents and businesses, as well as for the people who visit and enjoy those areas. The levy will be set as a percentage of accommodation costs. That means that low-cost stays remain low cost, while those who can afford it will be able to contribute more to the places that they visit.

Strategic authorities will be required to consult before introducing a visitor levy. This will inform their decision on whether to introduce the levy, how much it would cost and how revenues would then be spent. We expect that local leaders will be able to set out plans for how revenues will be invested by early 2028, and to introduce a levy before the end of this Parliament.

The Government have engaged with the tourism and hospitality sectors throughout the consultation, and we will continue to do so as the legislation is developed. The changes that the Labour Government are introducing will mean that more money will be invested in our high streets and public transport systems, and England’s tourism hotspots will directly benefit from visitor footfall to improve the area for people living there too.

[Rebecca Paul]

Let us call this what it is—Labour’s holiday tax. Although we knew it was coming, we never expected it to be uncapped. This Government have already hammered hospitality with higher employment costs and business rates. Almost 89,000 hospitality jobs have gone, and now what is Labour’s answer? Hit them again. If we tax something, we get less of it, so if we tax tourism, we will get less tourism—it is not complicated. Fewer tourists mean fewer jobs. UKHospitality estimates that up to 33,000 jobs will go, along with over £2 billion wiped from the economy. These job losses will hit young people hardest, when they are already struggling to secure those all-important first roles.

We should not make the mistake of thinking that this is just a tax on foreign visitors. Tax Policy Associates estimates that trips by British tourists will generate 63% of the revenue from this levy. This is a tax on hard-working British families. A weekend away, a family holiday or a few nights by the seaside will all cost more. Every pound taken in this tax is a pound that families do not spend in the local pub, restaurant, café, shop or attraction. It is not just Brits on a staycation who will be impacted—it will be anyone staying overnight for any reason, such as visiting a sick relative, going away on business or travelling for medical treatment. Why on earth should those people be taxed simply for going about their daily lives? It is not fair.

The Prime Minister has repeatedly promised to give breathing space to households struggling with the cost of living, yet this tax does the exact opposite. British hospitality does not need another tax. Hard-working families do not need another tax. Young people looking for work do not need another tax. The Government must scrap the holiday tax.

[Jim McMahon]

Where do I start? We are not starting from year zero. The idea that the time under the previous Conservative Government was somehow “the good days” for our pubs, our hospitality industry and our tourism economy. Just think about the thousands of pubs that closed on their watch, and the bars, the restaurants and the live music venues that were left standing by themselves because they were ignored by the Government of the day. Well, now they have a Government on their side, which is why we have already introduced measures to give pubs and live music venues a 20% business rates cut, and we have targeted investment at our town centres and our high streets.

At the end of the day, it is not possible to go to a corner of England and not see somewhere that was impacted by all those years of austerity and the lack of investment that went alongside it. The question is: do we just accept that decline is inevitable and that the rot that the Conservatives allowed to set in across large parts of this country is a permanent fixture of our national character? Or do we decide that a different route can be taken, in which we invest in our economy and growth?

Importantly, we must see this measure through the prism of the new spirit of devolution, because there is no mandation—areas are not being made to introduce a levy. It is down to local leaders to make the right call for their area, to consult on those decisions and, importantly, to present back to their community where the investment will go. That will not just benefit people who are visiting. Investment in tourism hotspots in particular—in our great cities and countryside—and our rural economies will benefit the people who live there, because they will have better neighbourhood services provided. In the end, everyone will win.

[Emma Lewell (South Shields) (Lab)]

South Shields tourism is largely made up of families from neighbouring regions who have saved hard all year round to spend a few days at the seaside, and even if the increase from this measure is marginal, they will not come. My constituents, family-run B&Bs, caravan parks, hotels and wider hospitality industry have been unequivocal with me that they do not want this measure. It is the wrong tax at the worst time. The extra burden on their business will tip my local industry over. Devolution works only when it reflects what communities want, so will my hon. Friend confirm that MPs, who are voices and local leaders in their communities, will be at the forefront of these proposals?

[Jim McMahon]

I appreciate the question, and I recognise that my hon. Friend has been a champion over a long period of time for jobs in her community. I do not take her representations at all lightly, but there is not a part of the country where investment is not desperately needed to improve the visitor experience and the experience of people who live there. If we get this right—it will be down to our local mayors and local leaders to implement the investment—the truth is that everyone will benefit from the improved visitor experience.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Zöe Franklin (Guildford) (LD)]

Liberal Democrats have long championed our high streets, tourism and hospitality sectors. While we strongly support devolving economic powers, businesses are already struggling under mounting costs, a VAT rate higher than that of our international peers and the Government’s national insurance contributions hike. Without support, an overnight levy risks looking less like genuine devolution and more like another short-term tax grab. If Ministers hand local mayors and foundation strategic authorities the power to introduce levies, they must bring forward vital sector relief—an emergency 5p VAT cut, relief from NICs and so forth—and must not reduce local government funding as a result. Can the Minister confirm when this House will see full details of the levy? Specifically, will Ministers implement a cap and sector support to protect local tourism and hospitality?

[Jim McMahon]

There is no expectation that councils will see a cut in the way that the hon. Lady explains—I am not quite sure what the rationale is for that. This is a new levy that local areas can choose to bring in, but it is down to local leaders in both our mayoral strategic authorities and our foundation strategic authorities, working with their local councils, to determine if they want to do that, how they want to approach it, if they want to carry out a proper consultation and to set out where the spending and investment will follow. That is not central Government telling places what to do. It is time that we stop pretending that England is somehow one place and that one size can fit all. Devolution, if it matters, must mean that local leaders can make the right choice for their area.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

As a Cornish MP, I welcome this measure. It is important that local leaders, particularly those in non-mayoral areas, will get the opportunity to make this decision in consultation with businesses in their areas. Will the Minister confirm that emergency and temporary accommodation, as well as low-cost holiday options such as tents and caravans, could be excluded from the levy?

[Jim McMahon]

We will certainly set out more detail on the list of exemptions as the legislation is developed. Holiday hotspots such as Cornwall, the Lake district and many other parts of the country benefit hugely from tourism and support a huge range of jobs, but it is true to say that the impact of tourism comes with a cost, and it is right that that cost is met by a fair and proportionate levy on the people who benefit. With that, local areas will see the benefit and the investment that will follow.

[Dame Caroline Dinenage (Gosport) (Con)]

I must admit that I am really puzzled by the Minister’s statement. The visitor levy is not going to be ringfenced for tourism, so how does he know that it will go to its intended destination? The levy will not be capped. We normally tax things to stop people doing them, not to encourage them to do more of them. What evidence can he offer to demonstrate that this measure will bring growth, as he says? What work have the Government actually done to prepare for this measure? How will they know whether hospitality businesses—let us face it, they are already collapsing in their droves following decisions that the Government have already taken—will survive yet another tax being imposed on them?

[Jim McMahon]

As I have set out, it is for local areas to decide whether this is right for their place. Importantly, on whether this is a new tax, every tax is of course a tax, but the question is: where is the accountability and where does that money go? Our mayors and foundation authorities will be required to set out in consultation how much they want to raise and for that to be proportionate to their local area, and to do an impact assessment of the proposed levy and, importantly, set out where the money will be invested.

In relation to places without a levy, just think about who pays for the impact of tourism, who puts on the events and performances that bring people into the local area, and what is the wider experience? I went away to North Yorkshire in the summer, and my experience was not just the accommodation we stayed in, but visiting the local village and the local town, and driving around the local area. We need to think about the visitor experience, which is wider than just the accommodation where people stay, because it is the place where they go.

[Jessica Toale (Bournemouth West) (Lab)]

I represent a seaside constituency in Bournemouth West, and the vast majority of my hoteliers are supportive of an overnight levy, in part because Bournemouth, Christchurch and Poole council has axed its stand-alone tourism department, and because we get 10 million visitors every summer and no increase in resources to deal with that. In his opening remarks, the Minister mentioned that most other G7 and European nations have some sort of overnight levy, and people who have travelled in Europe are really used to that. Can he tell us what lessons the Government have taken from such experiences overseas?

[Jim McMahon]

I congratulate my hon. Friend on being the champion she is for Bournemouth. I would reflect on how the experience there, with the cuts to local government over many years, has impacted the services on the ground that would have been provided—both the neighbourhood’s quality of place and the economic focus on tourism. We need to start rebuilding them, and this may be one way of doing so.

On the lessons learned, places may approach this with a flat rate, so no matter where people go, everyone will pay £5, or whatever. However, we believe that at its core this has to be fair and proportionate, so we ask ourselves, “Why should somebody visiting a guest house in Blackpool pay a flat fee in the way somebody visiting the Ritz here in London would?” That is not fair or proportionate, but a percentage rate is.

[Mr Speaker]

Let us try Andrew Snowden, who represents a nearby constituency.

[Mr Andrew Snowden (Fylde) (Con)]

Thank you very much, Mr Speaker. First we had a jobs tax that reduced the number of jobs in the economy, then we had a schools tax that reduced the number of children in independent schools, and then we had a farm tax that reduced the number of family farms. Given that correlation, have the Minister and the Government learned anything from this socialist tax-addicted way in which they are governing the country, and will the tourism tax do anything other than reduce tourism?

[Jim McMahon]

Taxes were high at almost every turn under the previous Government, but people could not see the benefits of where that tax was going. People desperately want the country to turn a corner, with the investment we collectively make through the taxes we pay—at national level, regional level or local level through our councils—ultimately meaning that the places we care about are improved as a result, and this is one way to do that.

[Chris Ward (Brighton Kemptown and Peacehaven) (Lab)]

It is absolutely right that local communities get to decide whether to introduce this levy—that is a key part of devolution—but I am concerned about the pressures already on the hospitality and tourism sector, which is a very important part of my Brighton Kemptown constituency. We have already seen the closure of two iconic LGBTQ bars—the Charles Street Tap and the R-Bar on the seafront—and, frankly, I am worried that more face closure. Will the Minister reassure me about the action the Government are taking to support the sector? Would he also consider taking a trip to the seaside with the Secretary of State to meet local businesses and people in the local hospitality sector and to hear what more this Government can do?

[Jim McMahon]

This is definitely the benefit of a wider ministerial brief: I do not just get to go to bus councils; I also get invited to seaside towns, which is good news.

On the pressure issues, I do not think anybody underestimates just how difficult it is for those in hospitality and leisure at the moment—these are not good times—but surely the way to grow is to invest in that experience so that more people want to come to our towns, our cities and our seaside communities. We believe that growing that base and creating demand through collectively improving such experiences will create a more sustainable visitor experience.

[Steve Darling (Torbay) (LD)]

Tourists visiting Torbay already pay double the rate of VAT compared with those visiting Italy, France or Spain. The reality is that a cost of living crisis is just the wrong time to implement a tourism tax. Can the Minister please share what investigations he has made of the impact of the tourism tax, but also assure us that Airbnb operators will also pay their fair share?

--- Later in debate ---

[Jim McMahon]

The hon. Member raises two important points. On the first, the local impact assessment, this will be a devolved power, so it will be down to the mayoral or foundation authorities, as part of the consultation, to undertake an impact assessment at a local level, which will of course weigh up both the concerns and the benefits of this new levy. On the second point about levelling the playing field, which he makes very fairly, we could not have allowed a situation in which our guest houses and hotels are undercut by Airbnbs that are not included in the scheme. So this will apply right across the board, including to temporary or short-term lets, such as Airbnb and others.

[Fleur Anderson (Putney) (Lab)]

I welcome the visitor levy and the investment it will bring to London’s visitor economy. Has the Minister been listening to London Councils, which wants 50% of the money raised in each borough to return to that borough, so that businesses know it is going back to the things that they want, such as cleaning Putney High Street?

[Mr Speaker]

Order. Can I just help Members who have been here a long time? Looking at the Minister is not how we do it; questions to the Minister must go through the Chair, because that is how we try to keep a balance. Some Members have only been here a few years, I know, but please try to make this work.

[Jim McMahon]

We have designed the policy to allow as much local flexibility as possible. That recognises that the approach in different places will require flexibility to take into account local circumstances. In practice, that means it will be for local areas, including London, to decide how they invest the money that comes through the system. However, our expectation is that there will be partnership and collaboration between local government and our regional mayors, where they exist, and with councils that are members of foundation authorities in other places.

[Sir Desmond Swayne (New Forest West) (Con)]

If the hoteliers of Bournemouth are gagging to pay this tax, I can assure the Minister that those in hospitality in the New Forest are not. The Minister said that everybody will be a winner, but how can he possibly know when he cannot tell us how much the tax will be or where it will be levied?

[Jim McMahon]

Because here I am setting out the principle and the framework. Instinctively, the framework is that if we grow and invest in greater footfall, in a better visitor experience and in putting on events and activities that draw people in, accommodation operators benefit from increased footfall and overnight stays. If we stay as we are, some areas will really struggle to see the investment to enable growth to take place, so some places in the country may say they want to go further with the levy, and I think it is right that the Government, as part of our devolution ambitions, allow local places to make that call for their areas.

[Rachael Maskell (York Central) (Lab/Co-op)]

I recognise the pressure that people in the hospitality sector in York are under, but they are very clear that the levies raised in York must stay in York—not move into wider North Yorkshire. Will the Minister ensure that the levy is hypothecated to the place where it is raised, so it can be invested in the tourism industry and ensure that wider services are there to support hospitality and tourism, as opposed to in other locations?

[Jim McMahon]

It will entirely depend on how local leaders decide to design the scheme, which will require conversations at a local level and, I would say, give and take. The only reflection I would make—this is a personal view, because another area may approach it very differently—is that when we think about the tourism economy in Greater Manchester, where I am from, everyone thinks about how successful the city centre of Manchester is or about the rolling hills of Saddleworth and our villages and how beautiful the Pennine belt is. A visitor will pass Oldham in going to those two areas, and I think we should ask what we are doing to invest in the whole, so the whole experience right across our region sees the benefits. Again, however, these are local decisions.

[Richard Tice (Boston and Skegness) (Reform)]

Great news, Mr Speaker: the Reform Mayors of Hull and East Yorkshire and of Greater Lincolnshire have confirmed that there will be no dreadful tourist tax in their respective areas. Therefore, holidaymakers should come to these great areas to save money. Given that many areas will refuse to impose this ludicrous tax, can the Minister guarantee that he and the Government will not be tempted to impose a tourist tax nationally?

[Jim McMahon]

In a way, the hon. Gentleman embraces devolution. It is for local leaders to make the call for their areas and to present their record to the public, and it works both ways. If mayors and foundation authorities want to introduce the levy, they will need to make the case for it, and the success of that will need to be presented to the public when they come to vote. That is direct accountability. Equally, if authorities decide not to introduce the levy but tourism stagnates and they are unable to improve the visitor experience, they will be accountable. It works both ways.

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

Oxford is a great place to visit, and I hope that many Members will enjoy coming to my great city. Many tourists agree with me, and £1 in every £6 spent in the city centre is spent by a visitor. However, many local residents and businesses, while they welcome tourism, do recognise that it causes additional costs. They have told me that they want to see a levy, which would improve the local environment for tourists and local people. Will the Minister move ahead and persuade Oxfordshire county council to back a mayoral strategic authority, so that we can get on with it?

[Jim McMahon]

Our devolution programme is ambitious, and we want to see devolution do two things: widen across the country—I welcome my right hon. Friend’s championing of a mayor for her region—and deepen, to make sure that when mayors are in place, they have the tools and levers to get the job done. We are absolutely up for having local conversations to progress devolution.

[Charlie Dewhirst (Bridlington and The Wolds) (Con)]

As you are well aware, Mr Speaker, 5 million people visit the beautiful East Yorkshire coastline every year, so any tourism tax would have a devastating effect on the local economy. The Minister says that he has developed a framework and that there is more work to do. Where there are larger mayoral areas—for example, my area of Hull and East Yorkshire—can he guarantee that any money raised in towns such as Bridlington or Hornsea will be spent there, rather than in a larger conurbation such as the city of Hull, and will he ensure that is the national framework for any mayor who wishes to introduce a tourist tax?

[Jim McMahon]

It sounds like there is no intention to introduce an overnight visitor levy in that area for the foreseeable future. [Interruption.] Well, who knows? There may well be a change of heart in the future.

In the spirit of devolution, I do not think it is right for a Government to impose terms and conditions in a way that prevents local authorities from doing what they instinctively believe is right for their area. But equally, they will have to present their plans through the consultation, they will have to do the impact assessment, and they will need to get local agreement. Surely the best democratic accountability framework is holding elections, and the thing about mayors is that they are directly elected and accountable to the voting public.

[Perran Moon (Camborne and Redruth) (Lab)]

Meur ras, Mr Speaker. As a Cornish MP, I am incredibly proud that this Government were elected on a platform of devolution. That means trusting the decisions of local authorities to raise an overnight levy or not. I appreciate that the Opposition parties do not trust their local authorities, but no one is forcing local authorities to raise the levy. Does the Minister agree that fiscal devolution is an essential aspect of moving powers and funding out of this place and directly into the hands of local people?

[Jim McMahon]

I think those are really important points. My hon. Friend is a fantastic champion for Cornwall and its economy, and he also recognises that the local partnerships that are developing are marshalling around devolution in quite an interesting way. Because of the representations that he and others have made, we have included foundation strategic authorities, so a mayor is not needed to introduce the levy. I think the wider growing-out of fiscal devolution is really exciting. We cannot have devolution if local authorities do not have the resources to get things done in their areas. Business rates retention, income tax retention and the overnight visitor levy are the first steps in that package of fiscal devolution that we have been waiting quite a long time for.

[Manuela Perteghella (Stratford-on-Avon) (LD)]

Stratford-upon-Avon is one of the country’s most important visitor destinations. It attracts millions of visitors each year, supporting local businesses, theatres, heritage attractions and jobs across my constituency. The all-party parliamentary group for hospitality and tourism, of which I am a member, heard evidence that a 5% visitor levy could reduce tourism spending and employment. Will the Minister commit to ensuring that any future levy is subject to meaningful consultation with the sector and local residents, and to the transparent ringfencing of revenues for investment in our local area?

[Jim McMahon]

The hon. Member makes a really important point. The APPG has spent time diligently going through the arguments for and against the levy, and examining what the benefits might be. Many local authorities see the levy as a big prize, because they will be able to invest back into the local economy. I would be pleased to receive any evidence that has been gathered through the APPG.

[Alison Hume (Scarborough and Whitby) (Lab)]

I welcome this step towards devolution, but York and North Yorkshire is a huge mayoral authority. In order for my constituents to feel the difference, we must ensure that money generated in Scarborough and Whitby is spent locally, not in the city of York. Will the Minister consider what he can do to ensure that locally generated revenue benefits the communities that produce it?

[Jim McMahon]

Mr Speaker, you know full well that it takes a brave Lancashire soul to interfere in Yorkshire politics, but surely it is in the spirit of devolution that it will be for local areas to decide. As I said, I spent the summer near Richmond, in north Yorkshire, and had a fantastic experience. Thinking about access to public transport and the wider visitor experience, there is no part of the country that would not benefit from more investment.

[Joe Robertson (Isle of Wight East) (Con)]

I think the Government’s plans for a tourist tax will be terrible for the visitor economy, terrible for jobs and terrible for spend on the high street. The Minister thinks it will be great. We can clear this up if the Minister will include in his visitor economy growth strategy a full analysis of his plans and publish it before he brings in his detrimental tourist tax.

[Jim McMahon]

The hon. Gentleman seems to be getting ahead of the review that he has just asked for and predetermining that the levy is somehow not a positive measure. Because this is a framework and is about devolved powers, clearly the impact assessment has to be done in areas where the levy has been introduced. Until we know where it has been introduced, we cannot do a national assessment of the impact.

[Chris Murray (Edinburgh East and Musselburgh) (Lab)]

The Edinburgh festival fringe in my constituency is a world-class tourist attraction—I know that the House understands this, because I bumped into about half of my fellow Members in August. Edinburgh is the third biggest ticketed event in the world after the FIFA world cup and the Olympics. This summer, Edinburgh became the first place in the UK to implement a city-wide visitor levy of 5%, which will raise £50 million to invest in the local economy, benefiting tourists and locals. Despite its implementation, we saw ticket sales increase by 8% this year. It is still a work in progress, but will the Minister meet me and officials from Edinburgh to understand our learning from the visitor levy? We are happy to invite any sceptics as well.

[Jim McMahon]

I would be pleased to do that. In a sense, what my hon. Friend says stands in stark contrast to what we have heard from the Opposition. In Manchester, where there is a voluntary scheme through the business improvement district, there is agreement that if we have money to invest in the visitor experience and in putting on events that draw in even greater footfall, everyone benefits in the end. I would be very happy to receive the evidence base that he talks about.

[Adam Dance (Yeovil) (LD)]

Those working in hospitality across Yeovil have told me that a tourism tax will impact jobs, growth and our high streets. We want to encourage tourism in our area, not decrease it. What steps is the Minister taking to strengthen support for rural hospitality, and will he meet me and representatives of the sector to talk about how we can boost tourism in rural Somerset? We need a commitment that local residents and businesses will be consulted before any decision is made.

[Jim McMahon]

The hon. Gentleman says that this measure will impact on jobs, growth and high streets. We believe it will do so in a positive way, because if we create more demand by increasing footfall through better investment and an improved visitor experience, that will create more jobs and more growth. If we have money to invest in our places, particularly our town centres and high streets, that will be better not just for visitors but for the people who live there. This policy cannot be seen in isolation; think about the millions of pounds that has been spent on Pride in Place and our future high streets fund, and there is more investment to come. We are reinvesting back into many parts of the country that have been neglected.

[Several hon. Members rose—]

[Chris Vince (Harlow) (Lab/Co-op)]

I was going to start by making a joke about always being picked last, Madam Deputy Speaker, but you have ruined it by picking me early on—thank you for that. I will try it anyway.

I am used to getting picked last in this place, but I was picked first when the new Prime Minister visited Harlow and my local pub. There, he had the opportunity to talk to Mr McMullen, the head of McMullen’s breweries, who said that this Government are doing more to support the pub trade than the previous one did. To change the subject, though, may I ask the Minister about how this tourist levy has been put in place in other G7 countries—where it has been very successful—and what he has learned from other countries?

[Jim McMahon]

As Members will know from their summer holidays in America, Europe or almost anywhere else in the world, some form of local sales tax or visitor overnight accommodation levy is generally accepted as part and parcel of going away. The difference here, I suppose, is that we did not believe that a flat rate would be fair or proportionate, for the reasons I have set out. A visitor levy has to be in line with the overnight rate that people are paying, to ensure low-cost family accommodation remains as such.

[Several hon. Members rose—]

[Sir Julian Lewis (New Forest East) (Con)]

If the New Forest and the Waterside were forced into a unitary authority dominated by Southampton and Eastleigh, what chance would there be of local authorities looking after the interests of rural areas?

[Jim McMahon]

In the right hon. Gentleman’s case, this will be led by the mayoral strategic authority. It will be for that authority to do the consultations, carry out the impact assessment and, importantly, decide on the investment plan.

[Deirdre Costigan (Ealing Southall) (Lab)]

Southall Broadway attracts wedding shoppers from across the globe, so local businesses welcome the overnight visitor levy as a great opportunity to get investment in the town centre. However, unlike other mayoral areas, London is not a combined authority. What can the Minister do to ensure that is reflected in the design of the levy in London, so that the mayor and London boroughs can jointly shape how it operates, and places such as Southall do not lose out because they are in London?

[Jim McMahon]

We accept that the London devolution settlement is different from the settlement elsewhere in England, because of the relationship between the mayor with executive powers and the Greater London Authority as a directly elected body. However, there is an expectation that all partners—including local authorities, the GLA and the mayor—will work together in partnership on this and other measures.

[John Glen (Salisbury) (Con)]

Nine years ago, when I was the tourism Minister, I resisted the English holiday tax. What concerns me now for Salisbury—where people like Brian Currie are investing millions of pounds in the Cathedral hotel—is the impact that tax will have on domestic tourists. People in this country who cannot afford to go abroad will now be burdened with additional costs to have a few days away in England. Has the Minister understood the distribution of the burden of this tax and the impact it will have on people in this country?

[Jim McMahon]

The right hon. Member is making the case for the importance of the percentage rate approach. It is fair to say that large parts of our tourism economy provide a low-cost but good-quality family experience, and with a percentage rate those businesses will pay proportionately less than hotels in the capital, which is right and proper. It will also be a requirement that all areas carry out an impact assessment to understand the impact on their local economies and present where the investment will go afterwards.

[Noah Law (St Austell and Newquay) (Lab)]

Any devolution of powers, investment or fiscal policy down to Cornwall is welcome. That is why I am pleased our Government are progressing to give us the power to raise a visitor levy, whether or not Cornwall council chooses to utilise it. As the Minister might expect, however, from a Member who represents an area with a significant visitor economy, my expectation is that that money should be invested not only well but to support the common goods on which businesses in that sector and the communities they operate in rely. Can the Minister assure me that the manner in which the levy will be raised will be flexible, so that local leaders can use it in a way that is appropriate to the area and the money does not recycle back into Cornwall council’s pot?

[Jim McMahon]

I think that is the key. Some of the tensions in the Chamber are the result of parliamentarians wanting to know the full detail as it will apply across the country, but that is not devolution. Devolution means allowing local flexibility and allowing local leaders to make choices in the way that my hon. Friend has set out.

[Freddie van Mierlo (Henley and Thame) (LD)]

Several times, the Minister has referenced other European countries having a tourist tax, but as my hon. Friend the Member for Torbay (Steve Darling) highlighted, those countries have much lower tax rates for hospitality overall. Will the Minister commit to reducing VAT on hospitality? Secondly, on the tourist tax, will he clarify whether the levy will be listed separately to the price of the room, so that those who use those facilities have clarity and transparency?

[Jim McMahon]

We are still working through the detail of the collection and reporting processes. Part of that consideration will be the presentation on bills, although let us not forget the 20% business rates support we are introducing for pubs and live music venues, which is the first step in supporting hospitality in the round.

[Josh Newbury (Cannock Chase) (Lab)]

I recently had the pleasure of visiting the Beaudesert outdoor activity centre in Cannock Wood, which welcomes 50,000 young people a year—including scouts, guides and school groups—and gives them memories to last a lifetime. It is a charity; it keeps charges low, and it worries about anything that could make its offer cost-prohibitive to cash-strapped groups. Given this Government’s commitment to expanding life chances and experiences for young people, will the Minister consider exempting groups of under-18s, to ensure that those valuable experiences do not become less affordable for them?

[Jim McMahon]

My hon. Friend raises a fair point, and one that I will take away.

[Greg Smith (Mid Buckinghamshire) (Con)]

I am sure that many of my constituents considering a UK break will look to Cambridgeshire, where the always fiscally sound Conservative mayor Paul Bristow has made it clear that now is not the time for such a tax. However, hospitality businesses across the rest of the country will be frightened by this measure—we already have two pubs closing a day, and businesses are struggling to get by under this Government’s tax burden. How low does tourism in this country have to dip, or how many businesses have to go bust, before the Treasury tells this Minister that this tourist levy must go?

[Jim McMahon]

In the spirit of devolution, if a mayor believes that not introducing a visitor levy is the right decision for their area, the Government will support that. To be clear, though, the last Conservative Government was not a good period for our pubs and hospitality businesses—pubs in our communities, town centres and city centres closed at a rate of knots. We are trying to say that that decline is not inevitable, and that Government working in partnership with our regions and councils can begin to turn that around.

[Danny Beales (Uxbridge and South Ruislip) (Lab)]

Every year, millions of people travel through Hillingdon, to visit the country or the city of London or go to Heathrow, and stay at hotels near the airport. That creates real costs for local communities—policing, street cleaning and transport impacts—and addressing those threats to the tourist economy requires funding. As such, I support this measure, but can the Minister assure me that those issues that are often locally driven and funded will also get support in a mayoral-led system?

[Jim McMahon]

It will be for local areas to determine how they frame both the levy and the investment. In the case of London, the mayor will be working with the GLA. There is an expectation that councils will be collaborated with and that there will be some agreement on how that might work in practice, but as I say, it is for local areas to work through that detail.

[Mark Pritchard (The Wrekin) (Con)]

We now have a Minister for euphemism. Let us be clear: this is not a visitor levy, but a tax on tourism. It is a tax on the staycation, a tax on hospitality, a tax on the family holiday, a tax on hospitality jobs, a tax on mobility, and—the worst sin of all—a tax on Shropshire. Shropshire tourism rejects this tax whenever it might come, directly or indirectly. Is this not another example of this Government being addicted to raising taxes?

[Jim McMahon]

The only things we are determined to do are to ensure that devolution means something—that local leaders must be given the tools they need to do the job at a local level—and not to accept that the decline of our towns, cities and rural communities is inevitable after our experience under the previous Government. We think there is a different way.

[Jonathan Davies (Mid Derbyshire) (Lab)]

Many people visit Derbyshire because it has beautiful scenery and a fascinating history, but those visitors do place a strain on our infrastructure, which is why I think it is reasonable that we explore whether we continue to ask local people to foot the bill for that. However, I recently visited Drum Hill scout camp in my constituency, which welcomes many thousands of young people from quite far afield to learn fantastic life skills, and I have also engaged with organisations that provide respite holidays for disabled people. I know that local leaders can decide how to implement the legislation locally, but can we put an exception for those kinds of groups on the face of the Bill?

[Jim McMahon]

As I said in response to a similar question, my hon. Friend makes a fair point about that type of accommodation, and I reflect on the work of Claire Ward as the Mayor of the East Midlands. There is a lot of focus now on creating good jobs, and for that to be in a spirit of devolution, with mayors wanting more control of what happens in their areas. This measure, alongside business rate retention and income tax retention, is beginning to address that balance.

[Ben Obese-Jecty (Huntingdon) (Con)]

In Cambridgeshire, the Conservative Mayor Paul Bristow, decided not to implement this tourism tax. That is incredibly important, because we have recently adopted the local visitor economy partnership as we seek to make gains from the creation of Universal Studios just down the road. My hon. Friend the Member for Mid Bedfordshire (Blake Stephenson) is looking to bring in an LVEP in Bedfordshire, too. Why does the Minister think that a tax like this would benefit somewhere like Cambridge, when we clearly do not think that it will? What else is he doing to support communities such as mine in Huntingdon, where we are looking to build a visitor economy to take advantage of the opportunities that Universal Studios can bring?

[Jim McMahon]

This Government have given support to Universal Studios, because of the economic benefit that will bring. It will also be a nice thing for visitors from across the country to be able to go there and enjoy that. It will have a wider impact on the local economy that will benefit hospitality, leisure and accommodation providers. In response to the point that the hon. Gentleman makes about place-based investment, this Government have an ambition to ensure that every town centre and every high street realises its full potential. That needs investment, too, and he will see that not just in his place, but right across the country.

[Mrs Elsie Blundell (Heywood and Middleton North) (Lab)]

As the proud Member of Parliament for Heywood and Middleton North in Greater Manchester, I, too, want to see the prosperity of the centre flow out into towns like mine, which are just as deserving of economic development and cultural regeneration. Does the Minister agree that extending further revenue-raising powers to our mayors will accelerate the regeneration that we need to see in our constituencies, just as much as in the city centre?

[Jim McMahon]

My hon. Friend is a fantastic champion for her place, and she also recognises that within our city regions, as much as everywhere else, every community has a role to play. She will know the work done by the fantastic Middleton Arena. With more investment and more footfall, all our places—whether Middleton, Oldham or Greater Manchester more widely—can do even more.

[Caroline Voaden (South Devon) (LD)]

As vice-chair of the all-party parliamentary group for hospitality and tourism, I have sat through several evidence sessions on this visitor levy, and I have yet to hear any operator in the sector say that they support it, so I do not understand to whom the Minister has been talking. A caravan park operator said that if numbers go down in the off-season, they will only be able to be open in the high season, which has a knock-on effect on jobs, the local pub and the local café. It has a ripple effect across the local economy. The Minister talks about growth, and we need growth in the sector, because young people primarily are employed in hospitality. Such jobs are vital for young people. Can he tell me in what world he sees the tourism and hospitality industry growing under this visitor levy?

[Jim McMahon]

For the reasons I have stated many times before, if we invest in and grow our tourism and hospitality economy, that will generate more footfall, people will enjoy their stay more, and that will create more jobs, including for young people.

[Alicia Kearns (Rutland and Stamford) (Con)]

Whether it is parents requiring a hotel stay while their four-month-old daughter has neurosurgery, or a new mother requiring a hotel stay to recover from a pulmonary embolism, in both those cases a tax would be incurred for a stay they wish they did not have to do. Those are not hypothetical examples; I was both. Will the Minister please mandate from the Dispatch Box that anyone seeking medical treatment for themselves or their children—sometimes that can be months at a time at Great Ormond Street—will not have such a tax imposed on them and their families?

[Jim McMahon]

I can certainly commit to look into it and to respond to the hon. Member in writing.

[Richard Foord (Honiton and Sidmouth) (LD)]

Businesses in Devon have told me of their concern about this proposed visitor levy, including Littlecourt Cottages in Sidmouth. They point out that the tourist footfall might decrease, not just for the cottages, but for the restaurants, the attractions and the shops in the local area. This tax has been dreamed up on the basis of what it will do for cities that see a higher proportion of wealthy overseas visitors, has it not?

[Jim McMahon]

Of course it has not. First, devolution will be rolled out across the whole country, and significant rural areas are already covered by mayoral strategic authorities. That roll-out will include foundation strategic authorities, which covers places such as Cornwall. As part of the next stage of devolution, we are seeing a grow-out across the south of England and the east of England that will see more coverage. Fundamentally, it is for local leaders and local mayors to get together and work out what is right for their area.

[Matt Vickers (Stockton West) (Con)]

At the weekend, I had the pleasure of joining Cleveland scouts and seeing at first hand the fantastic work that scouting does to give young people confidence, practical skills, friendships and opportunities they might not otherwise have. Can the Minister reassure those young people and their families that this Government are not seriously proposing to tax a scout for pitching a tent? Can he confirm that scout camps and other charitable youth residentials will be exempt from his holiday tax?

[Jim McMahon]

That question is in line with a number of other questions that have been asked about youth experience accommodation. I have committed to go away and look at that.

[Jim Shannon (Strangford) (DUP)]

Many of my constituents in Strangford and people across Northern Ireland travel to the United Kingdom for a home-based holiday. The weather is almost as good as it is in the Mediterranean. They pay for their flights or they take their vehicles on the ferry, already paying a high fee to support tourism in the United Kingdom. Why should my constituents—British constituents—be penalised twice for supporting and buying into a British holiday? What steps will the Minister take to ensure that those in Northern Ireland are not discouraged from contributing to having a home-based holiday in England?

[Jim McMahon]

Everybody will pay the levy, and they will benefit from the improved experience, not only in the immediate area, but in the types of events and activities that might draw in people. Where local leaders decide that the levy is right for their places, we believe that people will enjoy the wider benefits.

Fiscal Devolution in England

Jim McMahon Excerpts

Thursday 10th September 2026 Written Statements

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jim McMahon)]

England is an international outlier in the extent to which decisions are taken centrally, and at the same time has experienced some of the highest levels of regional inequality in the developed world. We believe the two are linked. Too many decisions have been made in Whitehall, far away from the reality of life across the country, and disconnected from the impact of those decisions. These have often not reflected the needs of places and communities across the country.

To change this, the Government have embarked on an ambitious agenda of devolving powers to local leaders with a new assumption of devolution by default. The Government devolution agenda will shift power closer to local communities, with decisions taken by democratically elected mayors and local leaders who understand their areas best.

The landmark English Devolution and Community Empowerment Act 2026 introduced reforms to give local leaders clearer powers, greater responsibility and stronger accountability so that decisions affecting places can be taken closer to the communities they affect. These reforms support the Government's wider rewiring the state programme, which seeks to shift power, funding and accountability away from Whitehall and into the hands of local leaders. The Act’s aim is to reverse the centralisation of decision-making which has held our country back for too long and to boost economic growth, strengthen public services, and restore public trust in politics.

For mayors and other local leaders to take greater responsibility for driving growth and improving life in their areas, they must also have greater control over local investment. Giving mayors and other local leaders greater power over tax revenue is a vital step in helping them drive investment and good growth in their areas.

That is why today, MHCLG and HMT have published the Government response to the overnight visitor levy in England consultation. The consultation closed earlier this year, and since then we have continued to engage with mayors, local leaders and stakeholders from the visitor economy to strike the balance between a simple deliverable levy for industry and one which empowers mayors and local leaders to raise revenue for investment in their area.

England is home to some of the world's most iconic visitor destinations, from its vibrant cities, breathtaking countryside and national parks, to historic seaside towns along its spectacular coastline. The visitor economy supports millions of jobs, enriches communities, and enhances the quality of life for millions of people. Yet there are few local levers available to help destinations invest in and sustain this vital industry.

A visitor levy will enable mayors and other local leaders in England to choose to use a proportionate contribution from visitors to the region to reinvest in the local area. It is a major step in giving local leaders greater control over the decisions and funding that affect their areas, putting new powers over locally raised revenue into their hands for the first time in decades. Mayors and other local leaders are best placed to identify the projects and infrastructure that drive growth and make a place attractive for visitors and residents. Local leaders know their local history, local culture, the unique attributes of their places that draw visitors in, and what challenges local areas face. Along with our plans to devolve a portion of income tax and enable mayors to retain some of the business rates generated in their areas, the visitor levy represents our commitment to creating a more accountable state, responsible to local people. This is about giving places the tools they need to drive good growth, in every part of the country.

Giving local leaders in England the power to introduce a visitor levy in their area will bring them in line with Scotland and Wales, as well as local authorities across France and international cities like New York and Amsterdam. We want to provide mayors and other local leaders with a fiscal tool that they can choose to use. We understand that a visitor levy on overnight stays will not necessarily be right for every place, and so the choice of whether to introduce it will be for mayors and other local leaders to take. That ultimately is at the heart of this devolution programme.

To develop the details of the visitor levy we have engaged extensively with the public, accommodation providers, charities and local leaders. In our consultation we tested views on the levy supporting local economic growth, including through strengthening the visitor economy. Our decisions reflect this wide-ranging engagement.

The visitor levy will be set as a percentage of the accommodation cost, ensuring that charges are proportionate to the price of the stay. A percentage rate model helps ensure that the levy is affordable and will mean a stay at a budget friendly hotel or guest house would attract a lower visitor levy than a luxury five-star hotel in London.

All mayoral strategic authorities and foundation strategic authorities will have overnight visitor levy powers. This recognises their role in driving local growth and ensures this fiscal power is available across England, to be used for unlocking stalled investment, improving infrastructure and delivering good growth across the country. The levy will enable mayors and other local leaders to invest revenues in support of the visitor economy, experience and important local priorities.

It will be for mayors and other local leaders to decide if the visitor levy is the right decision for their areas, following a consultation. The Government will provide non-statutory guidance to support those leaders who are considering introducing a visitor levy. Mayors will be able to set out their spending plans by March 2028.

[HCWS330]