Dear Andy – a scorecard and a manifesto for local government

Dear Prime Minister,

Congratulations on entering Downing Street – and on making localism the opening argument of your premiership. 

Few incoming Prime Ministers have made their first speech about devolution. You chose to stand in the People’s History Museum and identify the power imbalance between Westminster and the regions as a key cause of national stagnation. You are quite right.

You promised the “biggest rebalancing of power our country has seen”, and you set yourself a test, the Makerfield Test: will policy benefit every community? This letter is written in the confident expectation of holding you to that test.

LGIU has made the case for empowered local government for over 40 years. In recent decades, through austerity, Brexit, a pandemic and a cost-of-living crisis, we have seen local government continue to innovate and to deliver for communities.

But we have also seen local government starved of resources, hollowed out and sidelined. We have seen successive governments talk the language of localism while failing to deliver it.

Ahead of the 2024 election, we set out a manifesto for the future of local government with a series of recommendations, which we have subsequently built on with further international comparisons of local government finance systems, modelling a road map for devolution to 2050 and supporting the local government APPG in their recent inquiry on fiscal devolution. 

The Labour Government elected in 2024 began to implement many of these recommendations and built some important foundations: the English Devolution and Community Empowerment Act set out an aspiration for universal Strategic Authority coverage, and the largest reorganisation of council structures in fifty years; multi-year settlements and the Fair Funding Review created breathing space in council finances; and the promise in the Mais Lecture to assign tax revenue to places opened up a conversation about fiscal devolution. This is real progress and should be celebrated. 

But foundations are not a building. You inherit a local government system which, according to LGIU’s most recent survey, fewer than 1 in 10 senior leaders believe to be financially sustainable – up from fewer than 1 in 20, which tells you how low the bar had fallen. You inherit a devolution settlement, which leaders in established combined authorities told our Looking to 2050 research was “a starting point, not a destination.” And you inherit a set of political and technological forces – the erosion of trust in institutions, artificial intelligence, geopolitical instability, climate breakdown – that no amount of structural tidiness will answer on its own.

What follows is a scorecard of where things stand, and a manifesto for what you should do next.

The scorecard

Scored directly against the recommendations set out in LGIU@40: For the Future of Local Government (2024).

What the government has got right – and must now be accelerated

Change fatigue is real, in Whitehall and in town halls alike. Do not mistake it for a signal to slow down.

• The intended direction of devolution was correct. Universal Strategic Authority coverage, a clearer spatial logic, and a decisive move away from competitive bidding rounds would all be steps in the right direction. But the original intent of the Act has been watered down. There’s no clear road map to devolution in large parts of the country and we need a clearer functional division of responsibilities between combined authorities and councils. 
• The scale of Local Government Reorganisation is broadly warranted. The patchwork of two-tier England was not a stable equilibrium. Bigger, better-resourced unitaries can build the institutional resilience LGIU has argued for since 2010 and can provide a platform for innovation and public service transformation. The problem has been the process, not the principle. But we’ve come too far now and the programme must be pushed through. 
• Multi-year settlements and the fair funding review have stabilised local government finance to some extent, but they are not a cure. Exceptional Financial Support is still being overused as a back stop. We need to learn from other jurisdictions and construct a local government financial system based on a diversity of funding sources, meaningful fiscal devolution and a real understanding of the duties and costs that sit on local authorities. 

Unfinished business: what still needs doing

These are commitments already made, in your speech, in the Mais Lecture, or in the Devolution and Community Empowerment Act, that now need to be completed rather than reinvented.

• Publish a fiscal devolution roadmap properly and on a statutory footing. The APPG’s fiscal devolution report is blunt: a Treasury-led roadmap, developed without transparent criteria and confined to places with “greatest capacity to benefit,” will fail the Makerfield Test before it starts. Put the framework in primary legislation, not a policy statement that survives only as long as the Chancellor who wrote it.
• Build the equalisation system before you build the tax devolution. Germany’s Länderfinanzausgleich and Japan’s Local Allocation Tax show that fiscal autonomy and redistribution go hand in hand, not in opposition to each other. Devolving income tax to strategic authorities without a rules-based equalisation formula will simply let London and Manchester pull further ahead of less developed economies.
• Fund the New Burdens doctrine honestly. You cannot ask either newer Strategic Authorities or financially exhausted councils to manage more complex fiscal and delivery responsibility without investing in the analytical, financial and governance capability to do it properly. Treat this as infrastructure spend, not administrative overhead.
• Give Local Scrutiny Committees teeth. A statutory footing without research capacity or resource is a statutory footing in name only. If power is flowing to mayors and combined authorities faster than the means to hold them to account, that is a democratic deficit you are creating, not inheriting.
• Finish the job on council tax. Referendum principles, frozen 1991 valuations and a missing top band are not technical details; they are the reasons why local taxation is regressive and, increasingly, why it lacks public legitimacy. Council tax needs reforming or replacing.

Where you need a more radical departure

These are the places where completing the current programme will not be enough – where your own diagnosis, taken seriously, points further than the government has yet gone.

• Make the constitutional choice explicit, and make it now. In Looking to 2050, we explored three future states for English devolution: Integrated Regionalism, Localist Reset, and Connected Governance. This uncertainty exists precisely because the current settlement dodges a genuine constitutional question: how much sovereignty is Westminster actually prepared to give up, permanently, in law? “No10 North” is a good instinct, but only if it genuinely moves power out of Whitehall, not just moves a piece of Whitehall. A durable settlement needs a statutory floor beneath it – something closer to Germany’s constitutional guarantee of equivalent living conditions than to another administrative reshuffle.
• Treat institutional capacity as a precondition of devolution, not a consequence of it. Every one of England’s international comparators – Germany, Japan, even Scotland and Wales – built fiscal and administrative capability before, or alongside, transferring power, not after. England is doing it backwards: devolving responsibility to combined authorities built up of constituent councils whose functions have been hollowed out for fifteen years. This is not a resourcing detail. It is the single biggest risk to your whole agenda succeeding. If local government fails, combined authorities fail.
• Confront the trust problem as a democratic crisis, not a communications one. We have a catastrophic decline in trust in institutions. Digital algorithms drive filter bubbles and reinforce division. Polarisation and atomisation are making “big tent” party politics less and less viable. Politics is increasingly driven by activist bases and supporters rather than by shared culture or mass media. These are structural challenges to our democratic system. Rebuilding trust in local democracy has to be a named, resourced strand of your programme, not an assumed by-product of better service delivery or of devolution.
• Extend meaningful devolution settlements beyond the strategic authorities that already have capacity. A fiscal devolution model that starts with places with “greatest capacity to benefit” is, by definition, a two-tier (at least) settlement. If the Makerfield Test means anything, rural, coastal and non-metropolitan England – and the local authorities beneath your mayors, not just the mayors themselves – need a credible, funded route into the same sort of settlements, not a promise that their turn will come.
• Public service reform is too fragmentary. The government’s first Finance Policy Statement argued that local government finance reform, devolution and public service reform were three pillars of the same project. In reality, they have progressed on different time frames and with little reference to each other. The SEND white paper and the Casey review both have important things to say, but they are stronger on diagnosis than solution, and they both risk passing additional unfunded burdens for local authorities. Our failure to achieve a connected, preventative approach to public service reform not only drives local authorities ever closer to bankruptcy but, as the Milburn report makes devastatingly clear, it fails the very people who need us most.

A last word: the four forces

Every part of this letter, so far, has argued within our current policy paradigm: devolution, reorganisation, financial settlements, and public service reform. It is worth being honest that this frame may itself be too small. Artificial intelligence is beginning to change everything, including what it means for a public institution to make a decision at all. The post-war international order that gave us relative stability is fraying. Representative democracy is under structural strain that predates and will outlast any single reform programme. And climate breakdown is a permanent, cross-boundary emergency that does not map onto any administrative map you inherit or redraw.

None of this is a reason to delay the practical asks above – the equalisation framework, the capacity investment, the statutory scrutiny, the constitutional floor. It is a reason to think beyond them and to ask whether the forces reshaping the world are so profound that even our most ambitious programmes risk being small answers to very large problems?

Local government cannot be the only place where we tackle those four forces. But it is the democratic layer without which no answer to them, at any scale, will be legitimate or effective. That is both a more modest claim than we have sometimes made for the sector and a more demanding one, because it means that the questions local government needs to be asking are not primarily about governance structures. They are about purpose, identity and role in a world undergoing systemic change.

You have staked your claim on the premiership by asserting that power redistributed is growth unlocked, services improved and trust rebuilt. We think you are right. We also think you know, better than most incoming Prime Ministers, exactly how hard that is to deliver. This letter, and the scorecard behind it, is offered so that you – and we – have a shared, honest account of what we have achieved and how much we still have to do.

 Yours, in the expectation of being a critical friend for the duration of this Parliament,

Local Government Information Unit (LGIU)