Local Government Reform: Cambridgeshire

Steve Barclay Excerpts

Tuesday 8th July 2025 Westminster Hall

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

I beg to move,

That this House has considered local government reform in Cambridgeshire.

It is a pleasure to serve under your chairmanship, Mr Stuart. Following the publication of the English devolution White Paper in December 2024, on 5 February Cambridgeshire and Peterborough’s district councils were invited to develop proposals for the introduction of unitary authorities within the county, expected to come into effect in April 2028. A detailed collective proposal for what the future unitary authorities in Cambridgeshire should look like is to be submitted to the Government by 28 November.

I applied for this debate to outline the sizeable concerns in Huntingdonshire about local government reorganisation. These concerns are potentially echoed across other areas of Cambridgeshire, and I encourage other MPs to whom I have spoken about the proposals also to voice their concerns.

Cambridgeshire residents have been presented with just three options on which to give their opinions. Proposal A is referred to as the north-west, south-east option, with Peterborough, Huntingdonshire and Fenland in the north, and Cambridge, East Cambridgeshire and South Cambridgeshire in the south. Proposal B is the north-south option, with Cambridge and South Cambridgeshire together, and then Peterborough combined with everywhere else—Huntingdonshire, Fenland and East Cambridgeshire. Proposal C is east-west, with Peterborough, East Cambridgeshire and Fenland in the west, and Cambridge, Huntingdonshire and South Cambridgeshire in the east.

These proposals were apparently narrowed down from six options. However, these have not been published, and it is difficult to know, even as an MP, how they were decided and why the possibility of a breakdown by Westminster constituency, county division or district council ward was ruled out. My own Huntingdonshire district council stated that:

“We are taking an evidence-based approach. Inevitably, the different needs and local identities of our areas will have a significant impact on the preference of our own councils, and we must respect that”.

However, what evidence is there? The consultation by each of the district councils appears to be little more than a paper exercise. How are residents expected to feed back an informed decision regarding a once-in-a-generation opportunity to shape the future of local government without any actual information on what the impact of expressing their preference might mean? Martin Hassall, the independent councillor for Buckden, Diddington and Southoe, said:

“The proposals are complex, poorly communicated, and offer little reassurance that the end result will mean better services or genuine value for money.”

In a written answer, the Minister for Local Government and English Devolution, the hon. Member for Oldham West, Chadderton and Royton (Jim McMahon), said:

“We expect there to be wide engagement with local partners and stakeholders, residents, workforce and their representatives, and businesses on a proposal.”

But how can Cambridgeshire’s district councils credibly be expected to develop a robust proposal without realistically understanding the preferences of their residents? The only feedback prior to the final proposal being submitted is an engagement survey that bears little resemblance to the three options that have been put forward. They are in effect situating the estimate, having already decided one of three answers, and will tailor the results to fit.

How will the Government ensure that any decision reflects the wants and needs of local residents? Moreover, if the Government overrule the proposals submitted by the council, upon which evidence will they ensure that the voices of local people are considered?

The Huntingdonshire district council website says:

“All proposals will be assessed against all the criteria in the invitation. Decisions on the most appropriate option for each area will be judgements in the round, having regard to the statutory guidance and the available evidence. That evidence will include information provided by the councils as part of their proposals, representations received during the statutory consultation, and other relevant information available”.

A written answer to me on Friday said:

“a consultation could be launched in early 2026, likely closing at some point after the May local elections”.

Could the Minister clarify whether impacted residents across Cambridgeshire will have their say? If so, is the late May date the first opportunity they will have? If the statutory consultation is not until after next year’s local elections, can we assume that district council elections in Huntingdonshire will definitely go ahead?

The Government are in the process of botching this local government reorganisation with their hands-off approach. Every question to the Minister for Local Government and English Devolution has so far been met with a deflection to the relevant local authority, but this has left a situation where local authorities seem unsure of the detail, local residents have endless unanswered questions, and we are on the cusp of making enormous changes that will have a lasting impact on people’s lives, their prospects and their quality of life, all because nobody had bothered to think through the detail.

In March, a joint statement from council leaders across Cambridgeshire stated:

“We look forward to further discussions with each other and with government, and when the time is right, with residents, Members of Parliament and our partners”.

When will Members of Parliament be engaged on the initial proposal? I have not been engaged thus far, and I do not believe any of Cambridgeshire’s other MPs have been officially engaged either. What is the plan? I appreciate that is more of a rhetorical question than one for the Minister, but the point still stands. I am sure this debate will be watched by council leaders, and some of my questions are more for their benefit.

Last week, I wrote to each councillor in my Huntingdon constituency to seek their input on the potential impact of the changes, and hon. Members will hear a selection of quotes peppered throughout my speech. I was very pleased to receive a range of responses from across the political spectrum, with Conservative, Labour, Liberal Democrat and independent councillors highlighting their concerns. Councillor Nathan Hunt, Liberal Democrat, Huntingdon East ward, said:

“throughout the process, communication from central government seems to have lacked required detail and has generally been poor”.

It is highly notable that, despite our political differences, the responses highlighted the same broad concerns: a rushed process, short timelines, lack of rigour, unclear criteria, poor communication, inadequate information, analysis and evidence, and no clear identification of what is best for residents.

The engagement survey currently in flight, led by East Cambridgeshire district council as communications lead, is not clearly signposted or easy to locate. It will be interesting to see once it closes whether there has been significant uptake. There has been no indication from Huntingdonshire district council of whether there is a minimum viable response rate. If sufficient responses are not received, will they be considered at all? Will that extend to the whole of Cambridgeshire and to other district councils? Prior to the Cambridgeshire and Peterborough combined authority mayoral election in May, a booklet was sent to every household, so why has a similar effort not been made to engage residents with a posted survey? Most people have no idea that the local government reorganisation is happening, and that is as much the fault of the Government as of the local authority.

The engagement survey closes on Sunday 20 July, so in less than two weeks, residents in my constituency and across Cambridgeshire will have had what initially appears to be their only opportunity to influence the process, and it will have passed most of them by. The three shortlisted options were sadly published only as maps and with no additional information, and all local authorities published the same survey at the same time. To what extent will the Government take into account the results of the engagement survey from residents in each district council area? To what extent will the Government take into account the submission from the district councils regarding the preferred option? If the Government decide that they simply do not like the unitary structure proposed by the Cambridgeshire district councils, which criteria will they use to override them and impose their own solution?

It is inconceivable that residents are being asked to make a decision on the future structure of Cambridgeshire without any financial information. No information is publicly available that compares the finances of councils, and we have seen no information on council income, expenditure, debt or council tax.

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

My neighbour and hon. Friend is making an extremely effective case illustrating just how cosmetic the consultation is. His councillors’ concerns are shared by councillors in Fenland. Specifically, there is no detail on the different assets of local authorities, and no detail on key services that matter hugely. In Fenland, for example, we have free car parking. It is strongly valued by residents, but there is no indication of how that would be protected. There is no alignment across the strategies. The council tax relating to Fenland has been frozen for the last seven years, but the approach in Peterborough has been very different. This lack of detail makes the consultation deeply flawed, and my hon. Friend is right to set out his concerns.

[Ben Obese-Jecty]

I wholeheartedly agree with my right hon. Friend. I will come on to the division of assets. There is such a staggering lack of detail that I do not know how residents can possibly hope to make a good decision based on all the information.

To gain an insight into the current finances, I have had to turn to the House of Commons Library, a resource to which the vast majority of people do not have access. Huntingdonshire, which my Huntingdon seat sits completely within, is the second largest non-metropolitan district council in the country. Last year, it had a negligible notional overspend, with a £2.175 million contribution to general reserves. It also has £35 million in the earmarked general fund reserves. To our north, Fenland has a growing budget shortfall from an overspend of £350,000 last year to a projected £1.4 million this year, rising to over £4.5 million by 2029-30. Nearby Peterborough has a projected budget gap of £4.1 million next year and £7.3 million the following year.

It is unacceptable that my constituents should have to bail out the spiralling debts of other councils. This would see revenue raised in Huntingdonshire being largely spent elsewhere. Cambridgeshire residents should be aware of the projected budgetary overspend of these councils before they are asked to express a preference on how they would like the new unitary authority to be structured. It is frankly irresponsible for councils to gloss over the financial implications of this decision without full transparency.

From the look of the finances as they stand, Huntingdonshire could well find itself propping up financially unviable unitary authorities, meaning that the work we have done and are doing to make Huntingdonshire a fantastic place to live and work may be undone, with revenue raised here used to pay for services elsewhere. Councillor Ian Gardener, Conservative, Alconbury and Kimbolton division, said:

“The major concern for me is that HDC could lose control of its well managed financial reserves, which could be used to mitigate the losses of less well run councils in the newly formed unitary authorities. Which would be to the detriment of HDC residents.”

Councillor Simon Bywater, Conservative, Sawtry and Stilton division, said:

“There is a real risk that HDC’s reserves could be pooled and redirected…forcing them to subsidise areas that may not have shown the same level of financial responsibility.”

What steps do the Government plan to take to implement a pre-nup so that current districts are protected? If they choose not to do so, we are likely to see a spending splurge, lest we have to spend money elsewhere after the reorganisation. It is imperative that it is clearly explained to residents how the different combinations of district councils will look from a financial perspective. How will the assets and liabilities of Cambridgeshire county council be disaggregated? On the one hand, a lot of the assets are held in South Cambridgeshire and Cambridge city, including development opportunities; on the other hand, there is circa £450 million-worth of damage on Fenland’s roads. Are assets and liabilities to be shared equally or kept in their geographical location?

I am keen to hear from the Minister on whether the Government will write off any of the debt currently held by district councils or the county council. What work have the Government done to look at how that will be distributed? Can he address my concern that this is being hidden from the general public, and that it should be made statutory that finances, particularly inherited debt, be published? To that end, what transitional support will be available to new unitaries that inherit significant debt, or are projected to inherit significant debt, between the decision this year and the implementation in 2028 and beyond?

Furthermore, a new funding system will be implemented in the 2026-27 financial year, with fundamental changes in the needs distribution, council tax equalisation and, crucially, a business rates baseline reset. It is therefore essential to model the proposed options on these forthcoming changes in order to understand how they will impact each unitary in 2028. Initial independent modelling suggests that Cambridge city council may lose 25% of total resources and South Cambridgeshire district council 35%—combined losses of £18 million due to the baseline reset.

That illustrates just how important a published impact assessment will be. To date, no impact assessment has been published. Cambridgeshire residents have no idea how local services will be impacted, for better or worse. Given that the issue is regularly raised by constituents in my mailbag, it is difficult to see how councils could fail to engage with their MPs as key stakeholders. We have no idea how the differing combinations of district and county council wards and divisions will be affected.

How will the new unitary authority boundaries affect school places? Will parents suddenly find themselves outside the catchment areas for their desired schools? Will a school on the other side of the unitary boundary suddenly no longer be an option? How will special educational needs and disabilities provision work? Will the two new unitaries be resourced adequately to enable the timely provision of education, health and care plans? Cambridgeshire currently has a terrible reputation for meeting the statutory timeframe.

Social care is a key factor and consideration for any new unitary authority. Cambridgeshire as a whole is lucky in that it has lower social care needs than many other areas of the country. However, given how other formulae work against Cambridgeshire, owing to the area’s population growth outstripping the outdated modelling for these formulae—often by 10 to 20 years, when we look at the Carr-Hill formula, fire and rescue service funding formula or police allocation formula—the impact of social care costs on Cambridgeshire should not be underestimated, even if the relative needs formula looks more favourable. With regard to the proposed options, what consideration will district councils be obligated to give to service scale versus financial viability?

From a healthcare perspective, we have already seen that Cambridge and Peterborough integrated care board is set to merge with Bedfordshire, Luton and Milton Keynes ICB and Hertfordshire ICB. The 10-year health plan, announced only last week, makes it clear on page 13 that, under the proposals for a new operating model, the Government

“will streamline how local government and the NHS work together and make ICBs coterminous with strategic authorities by the end of the plan”.

--- Later in debate ---

[The Minister for Local Government and English Devolution (Jim McMahon)]

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

I congratulate the hon. Member for Huntingdon (Ben Obese-Jecty) on securing this debate on local government reorganisation in Cambridgeshire. His speech was very thoughtful. He covered quite a lot of ground, including ICB boundaries, devolution and the fair funding review, so it might not be possible to get through all of it. However, I am sure that we will communicate further—maybe in writing—as a follow-up on matters that we cannot cover here today.

This debate is an opportunity to look ahead to what the future holds for the hon. Member’s constituency, and indeed for local government across England. The Government are committed to resetting the relationship with local government, empowering local leaders to make the right decisions for their communities. We will work together to grow an inclusive economy, to reform public services and to secure better outcomes for local people.

As the Deputy Prime Minister said in her speech at the Local Government Association conference last week, true reform of local government means taking a long, serious look at the plumbing of local government, and we will not shy away from shifting local government on to a stronger footing. It is clear that the two-tier system of local government just does not work. We have heard from many councils that unitarisation or council mergers can help to strengthen local leadership, improve local services, save taxpayers money and improve local accountability.

Our plans for reorganisation will create structures that are simpler, more efficient and clearer to the public that local government is there to serve. This means that residents can access good public services without paying, as they do today, the two-tier premium. We must take the brilliant leadership being shown by district and county councillors across the country, and move it into local government structures that are simpler and more sustainable.

Local government reorganisation is already well under way. In March, we received interim plans for the 21 counties in the two-tier system that will undergo reorganisation. We have provided feedback to all areas as they develop their own proposals. Councils in Cambridgeshire and neighbouring Peterborough have a deadline of 28 November for final proposals to be submitted to Government. After that date, the Government will consult on selected proposals, before making a final decision on which proposals to implement. The fastest possible timetable has elections to new authorities in May 2027 and the new authorities will then go live in April 2028.

I am sure the hon. Member will appreciate that it would be inappropriate for me to comment now on the specific boundaries that he mentioned or the proposals that have been developed at a local level, because that would run the risk of pre-empting decisions that are being made later in the statutory process. However, I can give clarity on some of the specific points that he raised.

First, the consultation that is taking place at local level by the councils as they develop their proposals ahead of submission to Government is important. Many councils are conducting such consultations. To be clear, such consultation does not replace the statutory consultation that the Government will conduct with the public in those areas that are affected, to ensure that we can gauge the public view on the range of proposals that are viable and meet the criteria.

On the question of whether elections will take place, which I know is an issue affecting many district councils, there is no intention, as things stand, to cancel or postpone any of the 26 programmed elections.

I suppose there is a challenge, and perhaps even a tension, about the degree to which Government here in Westminster should dictate to local areas across 21 counties—covering a third of the population of England—what is right for their area. However, we have said that we will reset the relationship, and that we trust local people to know their areas better. So, we want local councils and councillors to lead local government reorganisation in their area.

Of course we have a statutory role, and we will make sure that the criteria are adhered to and the consultation takes place. Surely, however, the hon. Member will agree that it is for local people, who know their area better than people outside it, to determine what type of councils, in terms of their size and coverage, are right for their area. That should not be determined centrally.

[Steve Barclay]

If it is the Minister’s argument, as he has just set out, that it is not for Government to dictate the territory that would be covered, why do two different Government Departments appear to be dictating two different things? On ICBs, there is one geography, and then from his Department there are three options that cover a different alignment.

I will just take the example of transport. In Cambridge, there is the Greater Cambridge Partnership, which covers transport. Also in Cambridge, there is the metro Mayor of Cambridgeshire and Peterborough, who covers transport, too. Cambridge city council and South Cambridgeshire district council also cover transport. The Oxford to Cambridge authority is looking at the rail link between the two. There are so many different bodies dealing with transport into Cambridge. We should avoid that situation for health, and make sure that health organisation aligns with local authorities.

[Jim McMahon]

I think we can agree on that, which is why the White Paper published in December said that we need to reconcile things now and have a much simpler system of regional government in this country. The truth is that because it has been so fluid—some might say ad hoc—it has been allowed to develop in different ways in different parts of the country where there are overlapping boundaries when it comes to transport, the economy, the health service and local government. It does not make sense and makes it difficult for local people to know who to hold to account politically for decisions made on their behalf.

The White Paper is clear that we want to see boundaries aligned with ICBs and other public services. There is a role for local government in reorganisation. New unitary authorities will be created where workforce transfers take place, but there is no reason why authorities cannot work in partnership. There is no reorganisation taking place in Greater Manchester, for example, but the local authorities in Greater Manchester are today working on building a better model for children’s residential care because they recognise that across the 10 councils they can provide a better service at a better cost with better outcomes. So we encourage partnerships to align across boundaries, and over time that will develop.

We recognise that a lot of boundaries across England have never quite made sense; they have always overlapped and been a bit disjointed, but we are starting from the founding principle that alignment makes sense. We should be careful, though, not to conflate. I find that quite a lot of conversations in Parliament conflate or amalgamate the conversations about mayoral devolution and local reorganisation. They have a relationship, of course, but they are quite separate processes.

On reorganisation, it is important that local people and local councillors are given the freedom and flexibility to do what is right for their area and put their best foot forward to make a submission to the Government. We will then consult on the proposals that meet the criteria in good faith. We will listen to what local people say, and that will be taken into account. There are a range of factors that we need to consider, which I will come on to shortly, but I think it is the right approach. This is not the Government letting go. We have defined the criteria in this round of local government reorganisation in far more detail than any other round of reorganisation in the last 20 years, because we know how significant it is to that reorganisation’s covering 21 counties. But within those criteria and that process we have to allow for local areas to determine what is right for their area in partnership with local people. That brings me to another point.

The hon. Member for Huntingdon mentioned how disconnected Members of Parliament feel from the process. In every consultation and communication that we have had in webinars, written confirmations and statements to Parliament, we have been absolutely clear—this is a minimum expectation—that when local authorities, particularly lead authorities, are developing proposals, going out to consultation, firming up their evidence base, and testing founding principles themselves, it is a minimum expectation that Members of Parliament will be part of that conversation. It is not acceptable, regardless of political affiliation at a local or national level, for MPs who have been democratically elected, and of course have an interest, not to be part of those conversations. I am happy to put that on the record, and to follow up with local authorities that Members of Parliament should be included. That does not mean that Members of Parliament will have the ability to prevent a submission. A local authority has to follow the statutory process. There could be points where there is disagreement, but at the very start they should at least be in good faith and discussions should take place. We extend that, by the way, to police and crime commissioners and other interested parties at a local level, too.

On the criteria that the hon. Member for Huntingdon mentioned, in the invitation that went out to local authorities on 5 February we set out the statutory guidance to support councils informing their submissions. The first was on population size. We said that as a founding principle 500,000 was where we wanted councils to start from, but it is clear that some have gone lower than that. If it is right for their area, they can make the best case in that context. Some have gone higher, and we want to allow that flexibility in the system.

On the point that the hon. Member mentioned about population size and population forecasts, it is for the local area to determine what their own housing growth forecasts are. If they want to take that into account as part of their submission, we would be open to that. I say that only because different areas are at different points in the process. Some have local plans, for instance, and some do not have local plans, but efficiency and financial sustainability, local public service delivery, community engagement and devolution should be supported, too. We are taking a partnership approach.

Of course we shall give guidance, and we have set that out clearly. We have been clear about what the Government’s role is and what the local authority’s role is. We believe that is the right thing to do. Ultimately it leads us to sustainable public services that are there to serve the public, who we are all here to serve.

Question put and agreed to.