Welcome to the Local Government Forward View, where we take a look at what’s on the Local Government agenda in 2026.

2025 has been a very busy year in terms of new Legislation and Bills and 2026 shows no signs of slowing down with a number of Bills currently progressing through the parliamentary process.

With the English Devolution and Community Empowerment Bill reaching committee stage in the House of Lords, the Bill expected to become law later on this year. The draft statutory instruments for the six new combined and combined county authorities in the Devolution Priority Programme have also now been laid and the new CA/CCAs are expected to be established shortly.

Local Government Reorganisation (LGR) and postponement of elections

For the areas in the Devolution Priority Programme that are also going through LGR (East Sussex, Brighton and Hove, West Sussex, Hampshire and the Solent, Essex, Norfolk and Suffolk), the consultations on all 17 LGR proposals that were submitted on 21 November 2025 closed on 11 January 2026 and we await the results of these consultations.

For the remaining 14 areas subject to LGR who submitted their proposals on 28 November 2025, Government launched its consultation on the proposals on 5 February 2026, which will run for 7 weeks until 26 March 2026.

On 18^th December 2025, Government invited 63 areas undergoing LGR to provide their views on whether postponing elections next year would release capacity to deliver these essential reforms.

On 22^nd January 2026, the Secretary of State wrote to council leaders to confirm the decision made on the postponement of local elections in local government reorganisation areas. In his ministerial statement, Steve Reed confirmed that Government has decided to bring forward legislation to postpone 29 elections.

The following table sets out the Councils within the reorganisation area who will have their elections postponed and those Councils whose elections will continue to go ahead in May 2026:

*On 29^th January 2026, the Secretary of State wrote to Pendle Borough Council and Essex County Council leaders after receiving further representation in respect of the timing of their local elections.  The Secretary of State confirmed that Pendle Borough Council will be one of the councils who will have their elections postponed. Separately, the Secretary of State wrote the leader of Essex County Council and confirmed that the council will not be in the list of council who will have their elections postponed. Essex County Council will be on the list of councils who will hold their local elections in May 2026.

On 5 February, Government introduced the Order enabling the postponement of the elections in the 30 confirmed areas.

This is against the backdrop of Reform UK launching a legal challenge against the Government’s decision to postpone elections. Reform argues that the delays would be likely to discourage candidates from participating and may “undermine the conduct of local election campaigns”. The High Court is set to hear the case on 19 and 20 February.

Fair Funding Review

In June 2025, the Government opened consultation on the Fair Funding Review 2.0, which considered how funding is allocated across Local Government. These changes are expected to be implemented in 2026/27 through the first multi-year settlement in a decade.

The provisional Local Government Financial Settlement 2026/27 was announced at the end of 2025. This provisional settlement would make available over £77.7 billion in core spending power, which will be a 5.7% rise from last year. This makes 2026 a pivotal year for the future of Local Government funding. As spending power increases, as will economic opportunities.

The first multi-year settlement in a decade will consolidate grants, including the Homelessness, Rough Sleeping and Domestic Abuse Grant, which consolidates four funding streams totally £2.4billion, which commentators have said continue to present as an enormous strain on council budgets.

Generally, the announcement of the new financial settlement has been welcomed by commentators, particularly in light of the devolution and local government reorganisation, which will absorb capacity and resource of councils as they continue to work towards Government’s timescales for forming new unitary councils and strategic authorities.

You can find further analysis of the Local Government Financial Settlement in our insight here: Local Government Funding Reforms - The Local Government Finance Settlement

In addition to the above, the following will bring significant change to the Local Government Sector:

Planning and Infrastructure Act 2025

The Planning and Infrastructure Bill received Royal Asset on 18th December 2025, becoming the Planning and Infrastructure Act 2025 (“the Act”). The Act is intended to streamline planning and consenting processes, accelerate housing and major infrastructure delivery, and boost economic growth.

Various changes took effect immediately from 18^th December 2025:

• New schemes to reduce energy bills for households living near pylons;
• Measures to prioritise clean energy projects for grid connections processes;
• Powers to facilitate the faster construction of reservoirs

The Act sets out a number of significant reforms which the government has indicated are expected to be brought into effect on 18th February 2026. These include:

• Requirements for National Policy Statements to be updated periodically;
• Restrictions on the number of legal challenges that can be made to major infrastructure projects;
• Changes relating to Development Corporations, including duties such as sustainable development and infrastructure powers;
• Reforms to compulsory purchase and vesting provisions, including accelerated procedures for general vesting declarations in England.

The Act also introduces additional procedural changes, which will only take effect on dates set by the Secretary of State through separate commencement regulations, rather than automatically. The notable changes cover:

• Environmental delivery reforms and amendments to existing environmental law, forming part of the wider mechanism which integrates planning with nature recovery.
• Planning and local decision-making reforms, such as accreditation and designation of training providers, and obligations on local authorities to record and publish completion certificates relating to local planning authority training regimes;
• Detailed changes to fees and surcharges framework for planning advice and assistance;
• Additional compulsory purchase and vesting provisions including procedural reforms intended to streamline land assembly for development.
• New statutory extensions of time for implementing planning permissions where they are subject to legal challenge, with automatic extensions to commencement periods (including both outline permissions and reserved matters).
• Mechanisms like the Nature Restoration Fund and reforms to Nationally Significant Infrastructure Projects (NSIPs), including modernising consultation and pre-application requirements, where detailed procedures are to be set out in separate regulations.

Employment Rights Act 2025

The long-promised Employment Rights Bill proposed to give workers and employees upgraded, stronger, earlier rights at work, and to ensure that those rights are enforced more effectively.

The Bill received Royal Assent in December 2025, and we now have an Employment Rights Act 2025.

The changes under the new ERA are wide-ranging, and will take effect over a period of 2 years, but take note - most changes are happening within 2026 and in early 2027. As such, now is the time to prepare.

The following change came into force on 18th December 2025 when the Bill received Royal Assent:

• Rules on minimum service levels during industrial action were removed.
  

The following change will come into force on 18th February 2026:

• Changes around increased dismissal protection for industrial action, where dismissal for taking part in industrial action will become “automatically unfair”.
  

From 1st April 2026, the following are some of the reforms which will take effect:

• Statutory sick pay will be available from day one, rather than from the fourth day of absence; and paternity leave becomes a “day one right”, allowing employees to give notice of leave from the first day of their employment (removing the current 26 week qualifying period);
• The new Fair Work Agency will have powers to undertake its own investigations of employers and impose fines to enforce employment law around minimum wage and holiday pay.

From 1st October 2026, the following are some of the key changes which will come into force:

• The time limit to bring a claim in the Employment Tribunal will be extended from three to six months;
• New rules restricting use of “fire and rehire”/ replace, with associated liabilities and a new potential cause of action for affected employees;
• New rules on sexual harassment, including a duty to take ‘all reasonable steps’;
• Employer liability for third party harassment of employees and workers;
• New rules on public sector outsourcing regarding “equality of terms”; PLUS a raft of new rules relating to trade unions and related employment rights.

Prime Minister Sir Keir Starmer has said "We have just introduced the biggest upgrade to workers' rights in a generation...”. This is definitely the biggest change in employment law for a generation, and the new changes will be of great significance in the LG sector.

Mental Health Act 2025

The Mental Health Act received Royal Assent on 18th December 2025 and makes significant reforms to the law governing compulsory admission, treatment and care for detained individuals and those subject to conditional discharge. There is increased patient autonomy on treatment and the choice of “nominated person”.

Most of the provisions in the 2025 Act will come into force at later dates, which have not been fixed and will be set out in forthcoming regulations.

From the 18th February 2026, the following key changes will come into force:

• Changes to conditional discharges permitting the Secretary of State for Justice and Tribunal to impose conditions that amount to a deprivation of liberty (DOL) for restricted patients in the community under changes to sections 42, 71 / 73 respectively.
  
• Changes to Section 71 also give the Tribunal powers to vary and impose conditions, including a DOL if the serious harm test is met, when reviewing the detention of a referred conditionally discharged patient.
  
• Changes to section 75 require the Secretary of State to make references to Tribunal for conditionally discharged patients with differing time limits depending on whether there are DOL conditions in place . Additionally,  section 75 now permits conditionally discharged patients to apply to the Tribunal for review, with different time limits for those not subject to DOL conditions.
  
• Whilst changes in relation to the timings and process of prisoner transfer to hospital will not come into force until later, changes to section 48 means that additional detainees (such as civil and immigration detainees not serving sentences) are covered by the existing transfer provisions for “other prisoners”.
   

Dr David Crepaz-Keay, Head of Research & Applied Learning at the Mental Health Foundation said: “This reform must now lead to better treatment for those in crisis, and a greater focus on support that keeps people healthy and stops them from reaching crisis point and being detained in the first place. Ultimately though, whether these reforms achieve the scale of change needed will be dependent on the resources the mental health sector receives."

Renters Right Act 2025

The 2025 Act received Royal Assent on 27 October 2025 and provides greater security for tenants/renters, abolishes Section 21 Notices and fixed term tenancies, places controls on rent increases per year and increases accountability on landlords.

The following provision came into force on 27 December 2025:

• Local authorities will have the power to investigate and enforce housing laws, such as entering premises and demanding documents for the purposes of compliance checks.

From 1 May 2026, a number of further changes will come into force including the below:

• The abolition of “no-fault” evictions whereby landlords in England can no longer use Section 21 of the Housing Act 1988 to evict tenants without a reason.
• All private tenancies will automatically become assured periodic tenancies replacing fixed-term assured shorthold tenancies.

Public Authorities (Fraud, Error and Recovery) Act 2025

The 2025 Act introduces legislation to deal with safeguards public money by reducing public sector fraud, error and debt by introducing powers to the Public Sector Fraud Authority and to the Department for Work and Pensions and became law on 2 December 2025.

The Act establishes enhanced powers for the Public Sector Fraud Authority to:

• investigate suspected fraud against public authorities;
• gather and share information from third parties such as banks to identify evidence of fraud;
• enforce recovery of money owed to public authorities;
• apply civil penalties as an alternative to prosecution to defer fraud.

The Act also establishes requirements for independent review and reporting on the exercise of the above powers.

The following change is already in force from 3rd December 2025:

• The rights of audience for designated officers in debt recovery proceedings.

The following changes are expected to come into force in early February 2026:

• The provisions around eligibility verification regime, which allows the Department of Work and Pensions to issue notice to banks for data to help identify incorrect payments.

Further provisions around core investigatory, enforcement, civil penalty and recovery powers for the Public Sector Fraud Authority are expected to be introduced in 2026 once supporting Code of Practice and parliamentary oversight and operational frameworks are established.  

Childrens Wellbeing Bill

The Bill aims to raise standards in educations as well as strengthen the role of education in multi-agency safeguarding arrangements to protect children. The Bill is currently undergoing the House of Lords report stage.

The key changes proposed include changes to local authorities who would be required to offer family decision meetings before applying for care or supervision orders, legally defining kinship carers and introducing requirements for local authorities to publish support information for kinship care arrangements.

Commentators have welcomed this long awaited schools white paper, the president of the Association of Directors of Children’s Services has commented in the press that “The next 12 months presents a defining opportunity to make a real difference in children’s lives, provided the government can bring departments, stakeholders and partners together around a clear, deliverable vision, backed by funding, capacity and a stable workforce.”

Public Office (Accountability) Bill

This Bill is also quoted as the ‘Hillsborough Law’ and introduces a statutory duty of a “duty of candour” aims to stop cover-ups by creating a “duty of candour” and assistance for public authorities and requires them to be transparent in investigations.

The Bill also grants a non-means-tested legal aid for bereaved families in official inquiries, ensuring better support and “parity of arms” against well-resourced state bodies.

The Bill has reached report stage at the Houses of Commons but the third reading has been delayed to allow further amendments, particularly to clarify how the duty of candour applies to sensitive areas such as intelligence and national security. At this stage, no dates have been published for the next parliamentary stage for the Bill.

Pension Schemes Bill

The Bill introduces several new powers, building on the Government’s ‘Fit for Future’ consultation response, including clarity on its power to compel the merger of LGPSfunds, introduction of the requirement for independent governance reviews and extension to the exemptions to procure investment management services where those services are carried out by the Asset Pool Companies.

With the Bill reaching Committee stage in House of Lords, Torsten Bell, the Pensions Minister, said “This Bill aims to deliver fundamental reforms to our pensions landscape…In its principal focus on higher returns for pension savers, the Bill also responds to specific responsibilities that we hold in the House.” See our earlier insight for a more in-depth review here:  Reflecting on the changes in the new Pensions Scheme Bill for the Local Government Pension Scheme (“LGPS”)

Summary

The year will bring significant change to the sector, particularly to the landscape of local government with the biggest changes in 50 years under the English Devolution and Community Empowerment Bill added to this, there are significant legislations being brought across other key areas of local government, which together will have a tremendous impact on the sector.

How Capsticks Can Help

As other parts of legislations come into force and Bills are enacted, we will be monitoring progress and we will provide updates in our monthly newsletter.

Please don’t hesitate to contact our experts if you have any questions or particular concerns on the topics raised in this forward view.

To discuss anything relating to the above, please get in touch with Tiffany Cloynes, Head of Local Government , Rebecca Gilbert, Principal Associate and Megan Tam, Senior Associate at Capsticks.