Following the submission of the Interim Plans for Local Government Reorganisation by local authorities within the 21 two-tier areas in March, there have been several recent announcements made by the Government.  

Capacity Funding 

Following the announcement of a £7.6 million capacity fund, the Government has recently announced how this would be allocated. The purpose of this funding is to contribute towards facilitating the development of a shared evidence base that will underpin the final proposals.  

The allocations, set out below, are based on a flat rate of £135,000, plus an additional 20p per person based on the latest ONS population estimates.  

The Government has asked each area to agree between themselves up to three councils to receive an equal share of their area’s allocation. Payments will be made as soon as possible once those authorities have been decided and notified to the MHCLG area lead. It’s not clear what will happen if areas cannot agree, save that there is a statement that “support will be provided to assist”.  

Areas have been encouraged to share non-public data to ensure all proposals are supported by the same robust evidence and analysis. Such sharing could be supported by a Memorandum of Understanding and a data-sharing agreement, and the Local Government Association also provides useful guidance on data sharing.  

Government has also mentioned that CIPFA and F3 Consulting will shortly be releasing a template to support the presentation of financial information in proposals.  

Feedback  

Early this month, Jim McMahon, Minister of State for Local Government and English Devolution, confirmed in his ministerial statement that all 21 areas had now received written feedback on their Interim Plans and meetings were underway. A summary of the feedback provided has been published (available here).   

In his minister statement, Jim McMahon reiterated Government's position that a population size of 500,000 or more is a guiding principle, not a strict target and that they understand the need for flexibility. All proposals should clearly outline the rationale for their proposed approach.  

It has been noted that the feedback did not seek to approve or discount any option or plan put forward but rather was designed to assist in the development of final proposals and the priority is now to support areas to build a shared evidence base that will underpin the development of final proposals, and to co-produce solutions to challenges identified. It is clear from the statement that Government would like areas “to submit their final proposals as a single submission, underpinned by a shared evidence base that includes all options being put forward by councils”. 

Government has clarified that decisions on the most appropriate option for each area will be made in the round, having regard to the guidance and the available evidence. None of the criteria which are set out in the invitation letter are weighted.   

In summary, it clarified: 

Criterion 1 - A proposal should seek to achieve for the whole of the area concerned the establishment of a single tier of local government 

• The proposal should include a clear single option and geography for the area as a whole 
• Areas may wish to consider an options appraisal to provide a rationale for the preferred model against alternatives 
• It would be helpful to include a high-level financial assessment 

Criterion 2 - Unitary local government must be the right size to achieve efficiencies, improve capacity and withstand financial shocks 

• 500,000 or more is a guiding principle only, not a target  
• Boundary changes will be considered if clear rational – The Boundary Commission to consider on a case-by-case basis 
• Ceremonial roles of counties to be retained 
• Further detail on expected transition costs welcomed, together with evidence of potential efficiency savings, including how efficiency savings have been considered alongside place and local identity 

Criterion 3 - Unitary structures must prioritise the delivery of high-quality and sustainable public services to citizens 

• Impact on crucial services to be considered 
• Collaborative working models cross unitaries 

Criterion 4 - Proposals should show how councils in the area have sought to work together in coming to a view that meets local needs and is informed by local views 

• Stressed importance of working together – continue to build strong relationships and agree on ways of work, including around effective data sharing 
• Engagement, especially with people affected by the disaggregation of services 
• Criterion 5 - New unitary structures must support devolution arrangements 
• Encouraged councils to think further about how LGR will facilitate devolution  
• It would be helpful for areas to outline how each option would interact with a Strategic Authority  

Criterion 6 – New unitary structures should enable stronger community engagement and deliver genuine opportunities for neighbourhood empowerment 

• Areas to provide additional detail on their plans for neighbourhood-based governance and thoughts about formal neighbourhood partnerships and area committees.  

With regard to the timing of Elections, the Government noted that they will work with the areas to hold elections for new unitary councils as soon as possible. The exact timings and details will depend on the proposals received and the decisions taken, and there are no plans to postpone any further elections unless there is a strong justification.  

Government also identified a number of common challenges, these included   

• Funding Reform – Government confirmed its expectation that costs will be met by Councils within the area, but they also want areas to bring forward ambitious proposals that will make our councils of the future more efficient, effective and financially sustainable. The need for upfront investment was recognised to modernise back-office functions, and Government are open to discussion about flexible use of capital receipts and borrowing. Further changes to the funding regime are expected to be consulted on shortly.  
• Local public service reform – Government is expecting areas to work with local public service providers to manage the risks of disruption and think creatively about how they can design new ways of working to achieve better outcomes. Government will work across departments to develop joint strategies.  
• Strong community voice – LGR should facilitate better and sustained community engagement. The government would like to see every local authority hardwiring local community engagement into their own structures, preferably through neighbourhood Area Committees. 
• Pathway to devolution – Government reiterated that reorganisation should not delay devolution and plans for both should be complementary. They are also open to thinking practically about disaggregating services such as police and fire, only to reaggregate them at the point a Strategy Authority is established.  

A period of further consideration and engagement is now underway by local authorities to prepare their final Proposals, which are due for submission on 26 September for those areas in the Devolution Priority Programme and 28 November for others. There have been requests from some local authorities for extensions to the deadline, but as of yet, we have not seen any agreement.  

Surrey Consultation 

On 17 June, Government opened its consultation on the proposals submitted by Surrey in relation to local government reorganisation in the area, and this closes at 5pm on 5 August 2025.  

The Local Government and Public Involvement in Health Act 2007 requires the Secretary of State to consult with any council affected by the proposal that did not make it and any other person considered appropriate, prior to making any decision. 

The consultation is on the following two proposals. 

1. Proposal from Elmbridge Borough Council, Mole Valley District Council and Surrey County Council for two unitary councils, 
2. Proposal from the Borough Councils of Epsom and Ewell, Guildford, Reigate and Banstead, Runnymede, Spelthorne, Surrey Heath, Waverley and Woking, and Tandridge District Council for three unitary councils  

A third proposal was submitted by the Borough Councils of Reigate and Banstead and Crawley, in West Sussex, but Jim McMahon confirmed in his ministerial statement that he had decided this proposal does not meet the statutory requirements for a proposal or the terms of the invitation and is accompanied by insufficient information that would enable a decision to be taken to implement it. 

The consultation seeks review from any interested person, including the councils that made the proposals, other councils affected by the proposals, and councils in neighbouring areas, public service providers (including health providers and the police and fire service) and other business and voluntary sector bodies. 

Once the consultation is concluded, the Secretary of State has stated he will carefully consider all representations received, along with all other relevant information, before deciding which, if any, proposals are to be implemented, with or without modification.  There is no timescale specified in the legislation for this.  

Devolution  

The consultation process for the six devolution priority areas closed on 13th April, and we are currently awaiting the outcome of those consultations. 

We have yet to see the l English Devolution Bill, which is intended to implement the proposals set out in the White Paper. It was expected to be published in the summer, but there has been no mention of it in Jim McMahon's recent ministerial statement, so we will wait and see. 

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