Jim McMahon
MP for Oldham West, Chadderton and Royton · Labour (Co-op) · United Kingdom
“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.”
“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.”
“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.”
“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.”
“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.”
“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.”
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“I will make some progress, but I will take more interventions later. Councils know that the current system is riddled with inefficiency and is poorly targeted at meeting need. It is vital that we get this right, and we want to hear from all parts of the sector to better understand the drivers of need, including deprivation, the ability to raise tax locally and the impact on service delivery in rural areas. The consultation on these reforms runs until 12 February, and we welcome representations from all who have a stake in this agenda. We are listening to the sector and, through this settlement, responding to the real drivers of cost, especially the spiralling demand in areas such as social care. Importantly, we are taking into account the ability of councils to raise funding locally.”
“We know that councils of all political stripes are struggling, and we want to work together, through the later reforms that we are looking at as part of the more structural review we are undertaking, to make sure that we genuinely address that. We hope that when Members across the House look at the rationale and the evidence base—whether they agree with the quantum is a separate issue—they can at least say that it holds. That is the work that we are undertaking today, and we encourage Members to contribute to the process.”
“Where we can agree is that we accept that the old perspective that there are inner-London pressures that do not feature in the outer-London boroughs might have held in the past but it does not address the complexity that there is today, because a number of pressures have moved outwards into those outer boroughs. I think that that is accepted and appreciated. I said that this might not be a perfect settlement, but it is a good settlement. The hon. Gentleman’s council has a 6.5% increase in its core spending power. So there is room there—this is not a flat cash settlement—and we hope that the local authority will make the necessary decisions. We are not interested in scoring party political points or pitting one council against another.”
“We are aware of the impact that dedicated schools grant deficits are having on council finances, which is why we are committed to working with councils, parents, teachers and schools to transform SEND provision and the life chances of the children who need it.”
“This is happening alongside the Education Secretary’s work to take forward the Children’s Wellbeing and Schools Bill, which will crack down on profiteering and improve child protection—something that the Tories failed to do, at a very dear cost to taxpayers, who were left to pick up the bill. Again, the severe pressures on SEND services came across loud and clear during the consultation. As we have announced, we are boosting SEND provision and alternative provision by an extra £1 billion to start to return the system to financial sustainability and to improve outcomes for young people.”
“We are responding to the pressures, which is why we are making £3.7 billion of extra funding available for social care authorities. That includes an uplift of £880 million in the social care grant, which includes an additional £20 million that I have confirmed today for the new children’s social care prevention grant, taking the total for that grant to £270 million. That paves the way for the national roll-out of transformed family help and child protection services. We have doubled settlement investment in preventive children’s social care to £500 million next year. If we do not reform the system and focus on prevention, we will continue to pay more and more, too often for worsening outcomes.”
“In a way, there is commonality across the House in recognising that particular problems really ought to be taken into account when it comes to local government funding, and if it is got right—our intention is to get it right—it will take into account up-to-date population and deprivation statistics. It should take into account the ability of a local authority to raise tax locally through council tax, or through business rates or fees and charges. It should take into account the cost of delivering services, whether that is about the rental costs of acquiring a space to operate from or even the cost of delivering services in areas such as rural or coastal communities, where there are particular issues. The formula should take that into account, so let’s work through that.”
“By doing that, we will ensure that most councils in most parts of the country find themselves in a much better position than they were before the work was undertaken. Because of the types of decisions that have been taken, there will always be outliers. Whatever system we design, we can accommodate most councils in most circumstances, but because of the decisions that have sometimes been taken, we cannot accommodate all councils in all circumstances. The Government have committed to working alongside councils to work through this. Of course, local government reorganisation will accelerate the need to do that in some areas, because we will have to reconcile the creation of unitaries with the inherited debt liabilities. We are fully sighted on that.”
“Very real pressures have built up, and I will not criticise any council from the Dispatch Box—the days of doing that have long gone. That is not to say that I agree with every decision made by individual councils, or that I would not have chosen a different course. In some cases, the decisions were plainly not in the interests of local taxpayers. However, we are where we are, and we need to stabilise the sector this year and reform the funding system over the multi-year settlement, so that we begin to build back the foundation of sustainability and long-term security. We need to invest in prevention and reform, so that we get ahead of the problem instead of paying at the back end for worse outcomes. In the end, we need a funding system that really holds.”
“That is why we are marshalling our work around the Government’s missions, and our approach is anchored to the plan for change.”
“Absolutely. Deprivation is a key part of the funding settlement. This is the first settlement in a long time, and probably the first since the area-based grant in 2010-11, in which deprivation is a measure by which the Government allocate money to the sector. If we see this as only a local government problem, we will miss the prevention and reform agenda that we need. My hon. Friend and I often talk about this, but the Home Office is working on diversionary activities for young people. In many communities, gang activity, child criminal exploitation and knife crime are very real issues that draw too many young people into crime. We need those diversionary activities in the places where people live. We need to address that, and it should be a whole of Government agenda.”
“We all know that councillors, mayors, police and crime commissioners and councils will take into account the impact of increases on households, and it is right that they do so. For the vast majority of councils, those principles and the additional £5 billion in funding that we have announced will be sufficient to support them in setting their budgets. However, we know that some councils are in difficult positions, as we have heard today. For some, unique local decisions have had an impact on their financial stability. For others, over a decade of mounting pressures has finally caught up with them, and whatever they do, that is the reality. We are determined to work together to find a way through that, including by considering requests for additional council tax flexibility and requests from councils seeking exceptional financial support.”
“That work is demonstrated by the Department being able to remove the best value notice. We know that Middlesbrough is not at the end of the improvement journey, and the council itself would say that, but the characteristics of strong civic leadership are clearly on display. I appreciate that it is a lot easier to praise a council from the Dispatch Box. When we consider funding for councils to deliver vital services, we must also consider the taxpayer. We are committed to keeping taxes on working people as low as possible. At the same time, we understand the immense pressure that councils are under, which is why we will strike a balance in maintaining the previous Government’s policy of a 5% referendum principle threshold, which includes a 3% core principle and a 2% principle for the adult social care precept.”
“The settlement will provide more money for local government, especially in areas of greatest need, such as social care, and more investment in the things that matter to local communities, from support for our high streets and town centres to mending potholes and boosting local planning departments, adding up to public services that we can all begin to rely on once again. Stronger communities will support a stronger economy, with higher growth, delivering higher living standards for working people that will be felt in every part of the country. Driven by a devolution revolution, we will deliver the greatest transfer of power from Whitehall to our communities in a generation. Finally, we will put politics back into the service of working people. Our plan for change has local government at its heart and I commend it to the House.”
“However, we all know that there is no quick fix. The legacy that we have been left is nothing short of scandalous, but this settlement marks a turning point. It will back local government with the long-term funding and certainty that it needs to fix the foundations, based on a new partnership with central Government. Through reform, fairer funding and better stewardship, we will ensure that the sector is fit, legal and decent, so it can stand on its feet as a strong, functioning arm of the state.”
“At national level, even with those increases, the overall increase in council tax is not expected to exceed that of last year. Without the additional £5 billion provided in the Budget and the settlement, there is no doubt that that would not have been possible. In a way, that displays the new relationship, because, unlike the previous Government, we will not impoverish councils or parade them around to be shamed. Instead, we will work with them to put them back on their feet financially. We will fix the broken local audit system and the unacceptable backlog that we inherited; move from a failing, dispersed approach towards a focused, proportionate local audit office that offers value for money; and improve transparency, accountability and confidence in how hard-earned taxpayer money is being spent.”
“That means avoiding excessively high increases and agreeing to rises only where councils have comparatively low levels of existing council tax. Having carefully considered requests, we have agreed to modest increases in six local authorities: Windsor and Maidenhead, Birmingham, Bradford, Newham, Somerset and Trafford councils. However, our strict approach means that we have not been able to agree to all the requests that we have had and that not all requests have been met in full. Taxpayers in those areas are still expected to pay less than the average amount of council tax, compared with similar councils, because of the approach that we have taken. We have been clear that all councils should take whatever steps are necessary to protect their most vulnerable residents from the impact of additional increases.”
“The hon. Gentleman has my commitment that we will review the submission that we have had in good faith and in the spirit of partnership. We recognise that the councils that have made exceptional financial support applications have done so at the end of a process, not at the start, and that they need the Government to work with them. We will confirm exact allocations later, local authority by local authority, but I take on board what the hon. Gentleman says. The financial legacy left by the last Government has led to a record number of councils asking for additional council tax increases. The ability to request additional increases already existed, but there is a need to balance them with the impact on local taxpayers. On that basis, we have taken a stricter approach than the previous Government.”
“Just to be clear, even rural councils will receive a near 6% increase in their core spending power. It is correct that £600 million through the recovery grant is targeted at deprived communities, but we have followed an assessment of need right through the system, including that of rural authorities. The hon. Member must welcome that.”
“The hon. Member must accept that part of the difficulty we have in a two-tier system is the inability to move money around that system. It is correct to say that rural councils, mainly in two-tier areas, have had an increase of nearly 6%, but we have a huge inability to move that money around. There is around £2 billion in the two-tier system that could be freed up through reorganisation of local government, so will he stop looking both ways on reorganisation, and give a commitment on behalf of his party that the Liberal Democrats will support it?”
“I am only intervening given the hon. Gentleman’s position as Chair of the Public Accounts Committee. I think that this is a common interest for the PAC, Parliament and the Government. I do not want to labour the points about the past; the question now is how we move forward. From our perspective, it is not acceptable at all that the whole of Government accounts cannot be reconciled because of local government audit backlogs, so we want to address that. More importantly—this is definitely where there is a common interest—we must rebuild the early warning system, because what we cannot pick up effectively enough is whether there are systemic problems, which are more than just one council beginning to wobble, that we should be aware of and take action on.”
“On the timetable point, all councils in the 21 two-tier areas for reorganisation will receive their statutory elections. Individual councils will need to decide whether to apply for the process or not. If they choose to apply, we would expect their proposals to be submitted to the Government by November. That is quite a short period for them to work up the proposals, but there will be support in terms of capacity along the route. As for how that unlocks devolution a bit further down the line, we are obviously concentrating on the devolution priority programme at the moment and getting the mayors in place, but the door is always open to areas that want to talk about mayoral devolution.”
“Councils promoted the consultations using social media, communications campaigns, dedicated websites, and online and in-person events with the public. The councils also undertook targeted stakeholder engagement with businesses, the voluntary sector and key institutions in their areas. Responses could be made online via their website or email, on paper via the post or at dedicated events or collection points such as local libraries. I can report that the necessary statutory requirements under the 2023 and 2009 Acts have been considered, and that the authorities preparing the proposals have provided the Secretary of State with a summary of the consultation responses when submitting their proposals to the Government in spring 2024.”
“Additional funding will be available to the areas through the adult skills fund, which will be devolved to the combined authorities from the ’26-’27 academic year, as well as education and skills functions. The Department for Education will work with the combined authorities to support their preparations and ensure that they meet the necessary readiness criteria, and we will legislate in due course when the Secretary of State for Education is assured that they are operationally ready and is satisfied that the required statutory tests have been met in each area. As provided for in the enabling Acts, the constituent councils consulted on the proposals to establish the combined authorities based on their devolution agreements. Those consultations took place between December 2023 and March 2024 for periods of either six or eight weeks.”
“The instruments confer public authority and local authority functions on the respective combined authorities, as agreed in their devolution agreements and set out in each area’s proposals. To accompany the order, we have laid before Parliament a section 105B report, as required by the 2009 Act; and we have laid before the House a section 20(6) report for the regulations, as required by the 2023 Act. The reports provide details about the public authority functions that are being devolved to these authorities. They include powers over transport and Homes England concurrent regeneration functions, as well as mayoral development corporation functions for the mayoral combined authorities.”
“The statutory instruments make provision for the Government’s arrangements for combined authorities. Each authority has specific arrangements, enabled by either the 2023 Act or the 2009 Act and set out in these establishing instruments. In each case, the constituent councils nominate one or more of their members to form the combined authority, sitting alongside the mayor where one is being adopted. District council representation and input into the combined county authorities is determined locally within the framework provide by the 2023 Act. I know from conversations with local leaders, and through commitments they have made, that district councils will play a key role in ensuring the success of devolution in those areas.”
“The combined authority order will be made, if Parliament approves, under the enabling provision in the Local Democracy, Economic Development and Construction Act 2009. The three sets of combined county authority regulations will be made, if they are approved, under the enabling provision in the Levelling-up and Regeneration Act 2023. All four authorities will be established on the day after these statutory instruments are made. The Greater Lincolnshire combined county authority and the Hull and East Yorkshire combined authority have chosen to adopt a mayor for their authorities, with the inaugural elections taking place on 1 May this year. The elected mayors will take up office on 6 May, with a four-year term, and will take up their seats on the Council of Nations and Regions.”
“To deliver on our manifesto commitment, in December 2024 the Government published the “English Devolution” White Paper, which sets out how the Government will widen and deepen devolution across England as part of our central mission to drive economic growth and improve living standards. These instruments are part of fulfilling the mission to move power out of Westminster and back to those who know their areas best. They are significant milestones in the devolution journeys of these four areas. The instruments provide for the implementation of the devolution agreements confirmed on 19 September 2024 between the Government and upper-tier councils in each of the areas concerned. On 18 November 2024, all the respective constituent councils consented to the making of these instruments.”
“It is a pleasure to serve under your chairmanship this morning, Mr Mundell. Regulations were laid before Parliament on 26 November 2024 for Lancashire and for Devon and Torbay. The Hull and East Yorkshire Combined Authority Order 2025 was laid before Parliament on 4 December 2024, and the Greater Lincolnshire regulations on 11 December 2024. Although I recognise that combined authorities and combined county authorities are distinct legal bodies with different enabling statutory instruments, I hope Members will be content for me simply to use the term “the combined authorities” hereafter, unless there is a specific reason to separate them out.”
“The making of the draft instruments will shift money from central Government to our regions, as set out in their devolution agreements. That includes capital funding for each area and mayoral investment funds for the areas that choose to adopt a mayor. I personally thank the local leaders and their councils for their hard work and the vital role they play in making the Government’s critical mission to widen and deepen devolution a reality in their areas. I commend the draft instruments to the Committee.”
“In laying the draft instruments before Parliament, the Secretary of State is satisfied that the statutory tests under the 2009 and 2023 Acts are met, namely that the constituent councils have consented to the establishment of the combined authorities, that no further consultation is necessary and that making the instruments would be likely to improve the economic, social and environmental wellbeing of some or all of the people who live or work in the area; would be appropriate, in having regard to the need to reflect the identities of local communities and to secure effective and convenient local government; and, in establishing the combined authorities, will achieve the purposes specified in the constituent councils’ proposals.”
“Ultimately, by the time the devolution programme has finished, we expect that in most areas, if not all, the two-tier system will come to an end, with unitary councils forming that combined arrangement.”
“The hon. Gentleman makes a good point about how we manage the transition from where we are today to the situation under the English devolution Bill when it eventually becomes law. We have broad ambitions to widen and deepen devolution, which means that we do not wish to wait for the English devolution Bill to be in place. The expressions of interest that we had had by the deadline last week showed that there is significant interest among local areas that want both reorganisation and devolution. There will be a streamlining of the process between devolution and reorganisation, in which a two-tier area could apply to become a combined county authority today and go through reorganisation, and convert to a combined authority in a single-tier system when that reorganisation has taken place. Those arrangements are transitional.”
“The English devolution Bill puts a duty on mayors and their combined authorities, and on pension schemes, to work together to create a pipeline of investable products.”
“Ultimately, the loan will be paid off, but we will always have a tram system that people will use and buy tickets for, and that will generate revenue, create jobs and be good for the economy. Providing that the HMT cap is in place, Members should be assured that it will not be excessive. The measure is not being introduced in isolation. We are doing a huge amount on the reform of the local government pension scheme, which I and many Members believe has untapped potential for growth in this country. It is the largest pension scheme in the UK, with £400 billion, and the sixth largest in the world. I do not think we realise the benefit of it in our towns and cities for local investment as we should. If we can unlock even a small percentage of additional investment, that could be transformational.”
“Combined authorities will agree with His Majesty’s Treasury what their borrowing cap will be, and they will only be able to borrow within that cap, providing they have the revenue to support that borrowing liability. I have been a councillor in Greater Manchester, and I now represent it as Member of Parliament. We were able to align locally directed money, some of which was borrowing and some of which was local authority contributions, to extend the tram system. The benefit of the tram system was that it unlocked significant private sector investment, allowed central Government to align their capital programme with what we were doing locally and, importantly, had an earn-back mechanism that allowed the ticket sale revenue to be offset against loan liability. In that sense, it is a self-financing model that can grow and grow.”
“In terms of democracy and accountability, it makes it a lot easier for people to hold the mayor to account for the money that is being spent in their name. I accept that in broaching any idea of new taxation, we must take into consideration the fact that people are reeling from the cost of living crisis and recognise the impact of tax, but we are clear that this is not a new tax in the overall sense. This is about transparency in the tax system so that people can see where their money is really going. The shadow Minister rightly mentions borrowing limits. We have seen examples of local authorities that have borrowed far in excess of their revenue, to the point that they are now financially unviable. We all know the local authorities in scope for that.”
“It costs money to establish a mayoral office and carry out mayoral functions. The more responsibilities and duties we devolve down—there are significant areas of competence in the White Paper—the more mayors and combined authorities will need to marshal to provide the staffing support and resource to deliver them. There are two ways of doing that. Either we do it through a levy provided to each local authority—through what I would call the back door—that does not appear on people’s council tax bills and is agreed from council to combined authority; or we do it through a precept. The benefit of a precept is that it increases transparency. It is published on everyone’s council tax bill, and they know exactly what they are paying for.”
“I thank the hon. Member for his contribution and for his support for the measures. One thing that has stood out over quite a long period is that belief in devolution mostly rises far above party politics. It is about a structural change in how the country is governed and where power sits. There may be differences about pace, perhaps, and about focus, and there will always be a conversation about resourcing, but Members across the House absolutely support the direction of travel that we are embarking on to take power away from Westminster and put it into the hands of those who know their areas best. We talk often about precepts. I believe strongly that a precept is the most transparent way for taxpayers to hold to account those who spend public money on their behalf. The reality is that mayoral functions cost money.”
“—(Jim McMahon.) Draft Hull and East Yorkshire Combined Authority Order 2025 Resolved, That the Committee has considered the draft Hull and East Yorkshire Combined Authority Order 2025. —(Jim McMahon.) Draft Lancashire Combined County Authority Regulations 2024 Resolved, That the Committee has considered the draft Lancashire Combined County Authority Regulations 2024. —(Jim McMahon .)”
“We need to keep that in context, but it must be approached with caution, given that in the end, the fund must be there for pensioners and future pensioners. The legislation delivers the commitment made in the devolution agreements with Devon and Torbay, Greater Lincolnshire and Lancashire to establish combined county authorities, and to establish a combined authority for Hull and East Yorkshire. I commend the regulations and the order to the Committee. Question put and agreed to. Resolved, That the Committee has considered the draft Devon and Torbay Combined County Authority Regulations 2024. Draft Greater Lincolnshire Combined County Authority Regulations 2025 Resolved, That the Committee has considered the draft Greater Lincolnshire Combined County Authority Regulations 2025.”
“I will be careful not to stray too far from the subject, but given that I raised it, I will say that we are out to consultation on pension funds. The exact construction of the requirement to invest via pools rather than via individual pension funds is still subject to discussion. We accept, of course, that pension fund members and boards will always have fiduciary duties. The English devolution Bill does not require blind investment regardless of the consequences; it requires an investable product to be created. That is the test. Is it safe and secure, and does it provide a return on investment that can hold water? That is a requirement. The investment pot is £400 billion, so even 5% of that—unlocking £20 billion of investment to UK plc—would be significant and could be game-changing.”
“With respect, the hon. Gentleman is conflating two entirely separate issues. One is reorganisation, which will take money away from the back office and put it on the frontline where people can see the benefit of that investment, but to be absolutely clear on rural services, the provisional settlement that was laid out ensures that primarily rural councils get an average increase of 5%, and no council sees a net reduction in its income levels. That is our commitment to rural communities, and it is firm.”
“The Government are not requiring any area to reorganise. What we did was write out and invite proposals to be submitted, and I pay tribute to councillors across the country for the leadership they have shown in putting those proposals forward. Investment to support LGR or devolution will follow a bit later, but to be clear, this is a bottom-up reorganisation being requested by local councils, and they have our full support in that process.”
“The English devolution Bill will strengthen public services by delivering local government reorganisation and establishing more directly elected mayors, who will have the new power to convene public services. The Bill will also deliver a new health improvement duty for strategic authorities, and enable more mayors to take on responsibility for police and crime commissioner functions, and health functions as well, to co-ordinate better on local public services. Beyond mayors, the White Paper reasserts the role of local authorities as leaders of place and the delivery arm for the Government’s missions.”
“That is a shared ambition. The Government are determined to take power away from Westminster and put it into the hands of local communities. We know that driving better outcomes and better public services rests on fair funding, and for too long councils have been impoverished, while more expectations have been placed on them. The funding reforms we are consulting on will be part of rebuilding the foundations, but this is a very significant project to get power away from this place to local communities.”
“I thank my hon. Friend and the many other MPs with whom I have had meetings to talk about devolution—at the last tally, about 140 one-to-one meetings with MPs have taken place, such is the interest being shown in devolution for the right reasons. I am more than happy to continue those conversations and to welcome the local leadership being shown.”
“It is important to say that any requests for local government reorganisation are proposed to Government by the local areas. It is for the Government to provide the process by which those applications are heard. Over at least the last four years, local authority elections have been postponed countless times to allow reorganisation to take place. To be clear, there is a bottom-up approach for both the postponement of elections and the boundaries that are drawn for the unitaries. Our job is to ensure that the process supports that approach.”
“In a sense, a council is only an organisation at a point in time, but there will always be a local authority responsible for the area. We want to ensure that the authority is strategic but also takes that wider view. Reorganisation is of course part of that, but, importantly, a strategic authority can also take wider responsibility for aligning public service reform with local growth. The hon. Gentleman talks about housing numbers and we can sometimes miss how important that is: housing targets are one thing, but we must not forget that for every one of those numbers there are people and families who currently do not have a safe and affordable place to live. This agenda is about tackling exactly that.”
“We know that local government is feeling the pressures after 14 years that did not bode well for local and public services. We understand the pressures associated with national insurance, which is why the Treasury has committed £515 million to support councils in that endeavour. I am more than happy to meet the right hon. Gentleman about his particular circumstance.”