English Devolution and Community Empowerment Bill: LGA policy summary

Today, the Minister of State for Local Government and English Devolution, Jim McMahon OBE MP, introduced the English Devolution and Community Empowerment Bill - a major milestone for our sector.

This Bill builds on the Government’s English Devolution White Paper (Dec 2024) and signals a significant shift of powers from Whitehall to local leaders – making it one of the biggest changes to local government in 50 years. It will have a profound impact on all tiers of local government; both those at the very beginning of their devolution journey and those further along. 

The LGA has long called for the genuine devolution of powers to local places, and we want every council in England to be able to secure devolution that works for them, their local economies, and their residents. 

In preparation for the Bill, we have been working and listening to our members closely – through our policy boards, during member visits and webinars, and wider engagement with our Special Interest Groups. We have worked alongside our political group offices and regional teams to ensure that the views of our members are considered throughout our work. This also includes through our member-led devolution task and finish group who have shared with us invaluable insights and guidance over the last six months to shape our approach. 

We have also held regular meetings with the bill team and Ministers McMahon and Taylor, and these will continue in the weeks and months ahead as we continue to shape the Bill. 

We understand that not every issue can be addressed in one Bill, yet this legislation presents a rare and important opportunity for our members to shape the future of their places. It’s vital the legislation reflects the diversity and capability of local government.

Our next step will be to fully digest the legislation. The LGA will then publish a detailed briefing on the draft legislation ahead of the Bill’s Second Reading in the House of Commons. This will be shared with our members, parliamentarians, government officials, strategic partners and the media, and be made available online. 

We are arranging briefing sessions for our members in the coming weeks, so that we can delve deeper into the Bill and set out our positions clearly. The LGA will be in touch with further information on how to join these briefings shortly. 

The LGA will continue to work closely with our members, partners, and with parliamentarians (both in the Commons and Lords) to shape this legislation. We will also work with parliamentarians to secure amendments to this legislation where necessary. 

We are aware that the legislation, as currently drafted, does not provide significant new powers or responsibilities for London boroughs to evolve devolution in the capital. We will continue to work with our London members on the future of devolution in London.

You can keep updated through the LGA’s Devolution and LGR Hub and our Bill mini hub on our external website.

Please continue to provide feedback via our regional advisers and political group offices, as well as through the inbox: [email protected].

Clause 1: Strategic Authorities

Defines the new tier of authority in England, “strategic authority” (SA). There will be three levels of SA which will determine the powers conferred on an SA by Government:

• foundation strategic authorities – includes all non-mayoral CAs and CCAs
• mayoral strategic authorities – includes all mayoral CAs and CCAs, and
• established mayoral strategic authorities.

Clause 2: Areas of competence

This lists the seven areas of competence which SAs will have:

• transport and local infrastructure
   
• skills and employment support
   
• housing and strategic planning
   
• economic development and regeneration
   
• environment and net zero
   
• health, wellbeing and public service reform
   
• public safety.

These provide the broad thematic areas which functions of SAs are categorised under, as well as from which Government can provide new functions for SAs in the future.

Clause 3: Single Foundation Strategic Authorities

Introduction of single foundation SAs, and a power for the Secretary of State to designate a unitary district council (which excludes lower tier district councils) or a county council (which covers both two tier and single tier county councils), which is not covered by an existing strategic authority as a single foundation strategic authority, subject to the consent of the council involved. 

Clause 4: Combined Authorities and CCAs: establishment, expansion and functions

Streamlines the process for establishing and expanding CAs and CCAs. CAs and CCAs will be able to be established, and existing CAs or CCAs changed (including providing for a mayor) through ‘locally-led’ and ‘Secretary of State-led’ routes. 

A ministerial power to establish or expand an SA where local leaders have been unable to agree how to access devolved powers for their area. This ministerial power will also allow the Government to direct an SA to have a mayor.

Clause 6: Combined authorities and CCAs: decision-making and validity of proceedings

Amending existing legislation to standardise decision-making arrangements, whilst still providing the Secretary of the State with the power to provide specific decision-making arrangements for a function in a specific CA or CCA where appropriate. 

Any decision of a non-mayoral CCA is to be decided by a simple majority of the voting members present and voting on that question at a meeting of the CCA. Any decision of a mayoral CCA is to be made by a simple majority of the voting members present and voting on that question at a meeting of the CCA, which must include the mayor, or the deputy mayor acting in place of the mayor. 

If there is no mayor of a mayoral CCA and either no deputy mayor or the deputy mayor cannot vote, then a decision must be made by a simple majority. Each voting member has one vote and that tied votes do not pass. 

Any decision of a non-mayoral CA is to be decided by a simple majority of the voting members present and voting on that question at a meeting of the CA. Any decision of a mayoral CA is to be made by a simple majority of the voting members present and voting on that question at a meeting of the CA, which must include the mayor, or the deputy mayor acting in place of the mayor. 

Clause 8: Combined authorities and CCAs: designation as established mayoral strategic authorities 

Provides the Secretary of State with the power to designate a mayoral strategic authority, a mayoral CCA, and a mayoral CA, as an established mayoral strategic authority. The designation may not take place unless the Secretary of State has received a proposal to become an established mayoral strategic authority. 

If the Secretary of State decides not to grant the designation, the Secretary of State must notify the authority in writing of the reasons for their decision. 

It is not possible for an area to lose their established mayoral strategic authority status by secondary legislation once it has been granted. 

Clause 9: Appointment of commissioners by mayors

This clause inserts provisions into the Local Democracy, Economic Development and Construction Act 2009 (the 2009 Act) and the Levelling-up and Regeneration Act 2023 (the 2023 Act), enabling the mayor of a combined authority (CA) or combined county authority (CCA) to appoint commissioners to assist on one of the 'areas of competence' as defined in clause 2.

A mayor may appoint up to seven commissioners to act as leads in relation to the seven areas of competence. The mayor may arrange for a commissioner to assist in the exercise of either the mayor’s general functions, or to otherwise assist the mayor in relation to the exercise by the CA or CCA of its functions.

• Subsections (3) and (6) insert paragraphs into the 2009 and 2023 Acts that reference new powers given to overview and scrutiny committees in relation to the appointment of commissioners. 
   
• Subsection (7) introduces Schedule 3 of this Bill, which provides further practical detail on the role of commissioners. 

Clause 10: Combined authorities and CCAs: allowances for members with special responsibilities

This clause inserts sections into the 2009 and 2023 Acts to provide CAs and CCAs the ability to pay allowances to members who have special responsibilities, for work done in service of statutory instrument that prevent CAs and CCAs from paying their members other than for travel and subsistence. 

The process for arranging the payment of allowances, provided for in subsections (1) and (2), will largely follow the way it is done at the local authority level in England.

The Secretary of State may issue guidance on the use of the ability to remunerate members (subsection (4) of the inserted sections) and on the reporting requirements for relevant remuneration panels (subsection (5) of the inserted sections). 

Clause 11: Mayoral combined authorities and CCAs: precepts

This clause enables the mayoral precept to be used as a source of revenue which can be spent across all functions of mayoral combined authorities (CAs) and mayoral combined county authorities (CCAs). 

Subsections (2) and (3) remove subsections 107G(1) of the 2009 Act and 41(1) of the 2023 Act that allow the Secretary of State to make a bespoke order providing for mayoral functions to be met by the mayoral precept for an individual authority. 

Clause 12: Power to borrow

This clause amends Section 23 of the Local Government Act 2003 (the 2003 Act) to confer the power to borrow on mayoral CAs and mayoral CCAs. To retain fiscal oversight, a new subsection (9A) introduces a requirement for these authorities to obtain consent from the Secretary of State before they exercise the power to borrow for the first time, unless borrowing for purposes relevant to their transport, fire, and policing functions. 

Clause 13: Levies

This clause amends the Local Government Finance Act 1988 (the 1988 Act) to enable all CAs and CCAs to charge a transport levy to constituent councils, subject to regulations where these are made under section 74(2). 

The clause also sets out that CAs and CCAs, if charging a transport levy, can only levy sufficient funding to pay for costs in exercising transport functions, except those transport functions only exercisable by the mayor and where relevant transport costs are not otherwise met (such as through a precept). 

Clause 15: Additional functions of the GLA

This clause provides the Secretary of State with the power to confer additional powers on the GLA and its functional bodies without the need for primary legislation in specific circumstances. 

Clause 16: Members of legislatures disqualified for being a mayor of a strategic authority

This clause disqualifies a person from being a mayor of a strategic authority if they are an elected member of a legislature in the United Kingdom. 

Clause 17: Functions of mayors of combined authorities or CCAs

This clause ensures that when functions are conferred on a mayor of a CA or CCA by primary legislation or by regulations made under this Bill, the Local Democracy, Economic Development and Construction Act 2009 (the 2009 Act) or the Levelling-up and Regeneration Act 2023 (the 2023 Act), they are exercisable by the mayor acting on behalf of the CA or CCA.

Clause 20: Extension of general power of competence to strategic authorities 

This clause introduces Schedule 4 of this Bill, which amends sections 1 to 5 and 8 of the Localism Act 2011 so that: the general power of competence applies in full to mayoral combined authorities (CAs) and mayoral combined county authorities (CCAs) and their mayors; and applies to non-mayoral CAs and non-mayoral CCAs for the purposes of economic development and regeneration in addition to local authorities in England. 

Clause 21: Power of mayors to convene meetings with local partners

This clause provides the mayors of strategic authorities (SAs) with the power to convene stakeholders who operate within the SA’s geographical area on matters relating to their areas of competence (see clause 2 of this Bill). The clause places a corresponding duty on those stakeholders to respond to a request when a mayor notifies them of their intention to convene such a meeting. 

Clause 22: Duty of mayors to collaborate

This clause provides a formal process by which the mayors of neighbouring strategic authorities (SAs) can make and respond to requests for collaboration. A request for collaboration must be in respect of a matter that relates to one or more of the areas of competence (see clause 2 of this Bill), and the request must be made in writing and be published. The request must specify the matter on which the mayor proposes to collaborate, and the way in which the mayor wants to collaborate. 

A mayor may only use the formal process to request collaboration with a mayor of a neighbouring SA, and may only do so if they think that the collaboration would be likely to improve the economic, social or environmental wellbeing of people who live or work in their area (mayors can also consider the wellbeing of people in the neighbouring area). 

A mayor who has received a request for collaboration must: consider the request; set out a response in writing; provide a response to the requesting mayor and publish the response in such a manner as the mayor thinks appropriate. When considering their response, the mayor must have regard to the economic, social and environmental well-being of those who live or work in their area. 

If a mayor does not agree to the collaboration request then they must outline their reasons and share these with the mayor who has made the request.

Transport and local infrastructure  

Clause 23: Regulation of provision of micromobility vehicles

This clause provides that combined foundation strategic authorities, mayoral strategic authorities or the highest tier of local authority for an area, will be licensing authorities for micromobility vehicles. Licences will be mandatory for anyone providing passenger or non-passenger micromobility vehicles for use on a public road or place (unless expressly exempted in some limited circumstances). In respect to passenger vehicles, such as bikes and e-bikes, these are vehicles which are taken possession of, from the street or other public place. Operating these businesses without a licence would be a criminal offence. 

Clause 24: Arrangements to carry out works on highways

This clause amends the Highways Act 1980 (the 1980 Act) to provide that CAs and CCAs can have functions regarding trunk roads, and the power to enter into agreements with strategic highways companies delegated to them, subject to the consent of the relevant constituent local highways authorities. 

Clause 25: Civil enforcement of traffic contraventions

Allowing a combined authority (CA) or combined county authority (CCA) to take on the same civil enforcement powers within the geographic scope of existing designated civil enforcement areas of its constituent councils. In order to be able to take on these enforcement powers, the CA or CCA must have the written consent of the constituent local authority in whose area it is proposed that the enforcement functions are to be exercised. 

Clause 26: Restrictions on disposal of land by Transport for London

This clause devolves the power of the Secretary of State to consent to disposals of operational land under section 163 of the Greater London Authority Act 1999 (The 1999 Act) to the Mayor of London. 

Clause 27: Key route network roads

This clause requires mayors of CAs and CCAs to prepare a proposed designation of a key route network in their area, and to publish and maintain a record of such a network. 

This also provides mayors of mayoral CAs and mayoral CCAs with the power to direct constituent highway authorities in the use of their highway, traffic, street and permit authority powers on key route network roads. There will also be a duty on mayoral CAs and mayoral CCAs to be responsible for making reports on levels of road traffic on key route network roads for the Secretary of State. 

Clause 28: Constituent councils to act in accordance with local transport plans

This places a duty on all constituent councils to implement the CA’s or CCA’s local transport plan when carrying out their transport functions, as well as restating the existing duty on metropolitan district councils. 

Clause 29: Local transport authorities and other transport functions

CAs and CCAs, where they exist, are the sole local transport authority for their area, with the relevant powers and duties including over local transport planning, securing public passenger transport services, bus partnerships, bus franchising, and concessionary travel. 

In line with CAs and CCAs being the strategic decision-making authority for the area, some transport functions are held solely by the CA or CCA, and not also by constituent local authorities. This does not extend to highways authority and traffic authority functions which remain with the relevant constituent councils. 

Skills and employment 

Clause 30: Adult education

This confers duties and provisions relating to the education and training of adults on SAs. 

Some duties that are conferred will be solely exercisable by the SA in relation to its area. These include: a duty to secure the provision of appropriate facilities for the education and training for persons aged 19 or over (other than those aged under 25 who are subject to an education, health and care plan); a duty to secure the provision of appropriate facilities for education and training to enable adults who lack particular skills to obtain relevant qualifications; and a duty to ensure certain eligible individuals are not required to pay tuition fees for statutory entitlements to specified qualifications. 

Other duties and funding powers will be exercisable concurrently by the SA and the Secretary of State in relation to the SA area. These include: a duty to encourage participation in education and training by persons aged 19 or over (other than those aged under 25 who have a maintained education, health and care plan); powers to fund other persons for the purpose of fulfilling the duties and exercising the powers under these provisions; and the power to place conditions on such funding and carry out means testing. 

Housing and strategic planning

Clause 31: Planning applications of potential strategic importance

The powers which are currently afforded to the Mayor of London in relation to applications of potential strategic importance may also be exercised by mayors of CAs and CCA, where the mayors exercise the power on behalf of their CA or CCA. This is subject to other requirements and the Secretary of State, by an order, defining the scope of applications of potential strategic importance and any other relevant criteria set out in a development order. This Schedule also omits 

Town and Country Planning Act 1990 (the 1990 Act), allowing mayors to use these powers if the local planning authority is a mayoral development corporation. 

Clause 32: Development orders

This extends the mayoral development order powers provided to the Mayor of London by permitting mayors of CAs and CCAs to make mayoral development orders, where mayors would exercise these powers on behalf of their CA or CCA. 

This removes the requirement for local planning authority consent before preparing and consulting on a mayoral development order enabling the mayor to seek the consent of the Secretary of State to approve the mayoral development order where the relevant planning authority has not approved the order before the end of the specified period.

Clause 33: Power to charge community infrastructure levy

This enables mayors of CAs and CCAs to be community infrastructure levy “charging authorities” in addition to local planning authorities. 

Clause 34: Acquisition and development of land

This clause amends the 2008 act and the 2009 act to confer housing and land functions of both Homes England and local authorities onto strategic authorities. 

Clause 35: Housing accommodation

This confers housing and land function of local authorities onto strategic authorities outside London. 

Clause 36: Mayoral development corporations

Currently, the remit of a mayoral development corporation is to secure the regeneration of its area. Measures in the Planning and Infrastructure Bill seek to expand this to include development, so mayoral development corporations can deliver new settlements, including on greenfield sites, in addition to urban regeneration. 

This clause confers mayoral development corporation functions on all mayoral strategic authorities. It ensures that provisions originally designed for application to the Mayor of London and Greater London Authority are suitably modified for mayors of strategic authorities, and the mayoral development corporations they establish. The powers are to be exercised solely by the relevant mayor. 

Economic development and regeneration 

Clause 37: Assessment of economic conditions

This clause extends the duty on upper-tier local authorities to prepare an assessment of the economic conditions of its area to all CAs and CCAs. This will be exercised concurrently by the CAs and CCAs and their constituent councils.

Clause 38: Local growth plans

This requires mayoral strategic authorities except the GLA to produce and publish a local growth plan. This clause also inserts new sections into those acts and the Greater London Authority Act 1999 to require non-departmental public bodies to have regard to shared local growth priorities agreed between mayoral strategic authorities and the Government. 

Clause 39: Local Government Act 2003: expenditure grant

This makes provision for mayors of CAs and CCAs to pay grants to their constituent councils. Subsection (3) sets out the power for mayors of CAs and CCAs to pay grants to their constituent councils for their expenditure. It sets out potential conditions that may be placed on the grant, such as how it is used and in what situations it must be repaid. It also sets out the relevant duties on the mayors of CAs and CCAs when exercising this power, where the grant is to be paid for costs relating to the exercise of highway functions. 

These duties are: to consider whether the constituent council has enough funding to deliver its highways functions when deciding the amount of grant funding to provide; and to take into account any other funding the constituent council has for this. 

Clause 40: Encouragement of visitors and promotion of visitors

This extends the powers currently available to local authorities over encouragement of visitors and promotion of visitors, and power to facilitate provision for entertainment, dancing, premises suitable for entertainment, maintenance of a band or orchestra, and promotion of the arts to CAs and CCAs. These powers will be exercised concurrently by the CAs and CCAs and their constituent councils. 

Clause 41: Co-operation with local government pension schemes

The Pension Schemes Bill seeks to include provisions to require the Secretary of State to make regulations requiring local government pension scheme administering authorities to co-operate with strategic authorities (SAs) to identify and develop appropriate investment opportunities.

This clause provides for duties on SAs which will be reciprocal to those requirements on administering authorities under the Pension Schemes Bill. This clause places a duty on all SAs to collaborate with the relevant administering authority of the local government pension scheme to develop investment opportunities appropriate to the scheme. 

Subsection (1) requires each combined authority (CA) to collaborate with the pension funds of the relevant local government pension scheme to develop investable opportunities for the scheme. 

Health, well-being and public service reform

Clause 43: Health improvement and health inequalities duty

A new duty on all CAs and CCAs to have regard to the need to improve the health of persons in their area and reduce health inequalities between persons in their areas, when deciding whether or how to exercise their functions. The clause also makes corresponding provision in relation to the mayor of a mayoral CA or mayoral CCA. 

Public safety

Clause 44: Functions of police and crime commissioners

This clause amends legislation so that the mayor for the area of a mayoral CA or mayoral CCA is to exercise PCC functions in respect of that area if the CA or CCA meets the eligibility condition and the transfer condition. 

A CA or CCA meets the eligibility condition if the authority’s area is the same as a single English police area or the authority’s area is the same as two or more English police areas (when those areas are taken together). A CA or CCA meets the transfer condition if the Secretary of State has specified the time at which the mayor for that area is to begin exercising PCC functions and the transfer time has passed. 

It will still be possible for the Secretary of State to transfer PCC functions by order.

Where a mayor exercises PCC functions in relation to more than one police area, the council tax requirement calculated under section 42A of the Local Government Finance Act 1992 may include separate PCC components in respect of the different police areas. 

Subsections (7) and (8) amend the four orders transferring PCC functions to the mayors of Greater Manchester, West Yorkshire, York and North Yorkshire, and South Yorkshire to provide that each mayor must appoint a person as the deputy mayor for policing and crime for the area. These mayors will retain the responsibility for the core functions set out in Section 18(7) of the 2011 Act. 

Clause 45: PCCs and police areas 

This section updates legislation to reflect circumstances where a mayor takes over police and crime commissioner (PCC) functions. It clarifies that a police area does not need a PCC if those functions have been transferred to a mayor under new powers in the 2009 or 2023 Acts. It introduces a new section (76A) and Schedule 10A into the Police Reform and Social Responsibility Act 2011 to set out provisions for such transfers. It also allows the Secretary of State to alter police areas to facilitate these transfers and specify when they take effect.

Clause 46: Functions of fire and rescue authorities

The Fire and Rescue Services Act 2004 (the 2004 Act) sets out a number of different models of fire governance. These include county council and unitary authority fire and rescue authorities (FRAs), mayoral FRAs, combined FRAs and police and crime commissioner FRAs.

This clause adds a new category of FRA by providing that a mayoral strategic authority is the FRA for one or more fire rescue areas outside of Greater London, if the mayoral strategic authority meets the eligibility and transfer conditions outlined. The fire and rescue functions of a mayoral strategic authority are exercisable by the mayor on that authority’s behalf.

Subsection (2) states that, where two conditions are met (the eligibility condition and the transfer condition) the mayoral combined authority (CA) or mayoral combined county authority (CCA) are the FRA for the area in question.

Subsection (3) provides that where a mayoral strategic authority is the FRA, no other body (local authority or otherwise) can be the FRA for that area. It also ensures that fire and rescue functions of a mayoral strategic authority must be exercised by the mayor of the area on that authority’s behalf.

Subsection (4) sets out provisions including the eligibility and transfer conditions needed to be met before a mayoral strategic authority can become one or more FRAs for its area. Where a mayoral strategic authority’s area is coterminous with the areas of two or more FRAs, each FRA is to have the same transfer time. 

Regulations may also set out the transfer time for an FRA whose area is being altered by another order or regulations (made under any power) so as to achieve co-terminosity with a mayoral CA or mayoral CCA. In such a case the transfer time must be on the day or the day after the order or regulations altering that FRA’s area come into force.

This legislation includes provision for shadow functions of the fire rescue authority for that area to be exercisable by the mayoral CA or mayoral CCA for the year proceeding the transfer of those functions, on who is to scrutinise the mayoral CA or mayoral CCA’s exercise of fire and rescue functions and any other incidental, consequential, transitional or supplementary provision.

Clause 47: Mayor with PCC and fire and rescue functions

This clause updates relevant legislation to reflect the new ways by which a mayor of a CA may exercise fire and rescue and PCC functions. It also reflects the new ways by which a mayor of a CCA may exercise fire and rescue and PCC functions.

Clause 48: Sharing of information

This clause updates section 115 of the Crime and Disorder Act 1998 so that combined authorities (CAs) and combined county authorities (CCAs) are included in the definition of a “relevant authority”. This means that the duty to share relevant information (in relation to crime and disorder) with other relevant authorities applies to CAs and CCAs. It also means that other relevant authorities have a duty to share relevant information with CAs and CCAs.

Requests by mayors for established mayoral strategic authorities 

Clause 49: Requests by mayors of EMSAs for changes

This clause makes provision requiring the Secretary of State to respond to proposals from mayors of established mayoral strategic authorities for further powers that would help them deliver against their areas of competence.

Subsequent subsections: 

• State that the request can cover changes to the law but also changes to funding or other changes in relation to strategic authorities.
   
• Provide that the Secretary of State can publish guidance on the formal request process, which mayors will need to follow when making a request.
   
• Set out the process by which the Secretary of State must respond to a request.  

Regulations relating to functions of strategic authorities and mayors 

Clause 50: Powers to make regulations in relation to functions of strategic authorities and mayors

This clause introduces Schedule 23 of this Bill, which gives powers to the Secretary of State to make regulations relating to the functions of categories of strategic authorities (SAs).

The provisions in this Schedule will allow additional public authority and local authority functions to be conferred on categories of SAs on a permanent basis, existing functions conferred on SAs to be moved between different categories of SAs on a permanent basis, and governance arrangements of existing functions conferred on SAs to be changed on a permanent basis.

The provisions in this Schedule will also allow for additional public authority and local authority functions to be conferred on specific SAs as part of a pilot programme on a time-limited basis, and also allows for the governance arrangements of existing functions conferred on a specific SA to be changed as part of a pilot programme on a time-limited basis. The Schedule outlines the conditions of the pilot programmes.

Clause 51: Health service functions: application of existing limitations on devolution

This clause makes consequential amendments to section 18 of the Cities and Local Government Devolution Act 2016 to reflect changes introduced in this Bill. Section 18 of the 2016 Act will have the same effect as previously, but the wording will reflect the new structures in place, and the new mechanisms for devolving functions, established by this Bill.

Supplementary provision relating to extension of functions  

Clause 52: Incidental etc provision 

When relevant legislation is made relating to the functions of a strategic authority (SA) or how those functions are exercised, it will sometimes be necessary to make additional provision to ensure the law has the intended effect.

Where relevant legislation is made conferring a function on one or more categories of SA, modifying such a function or making provision in relation to how such a function is to be exercised – this clause enables the Secretary of State to also make consequential, supplementary, incidental, transitional or transitory provision, to help ensure that the regulations and other relevant legislation work as intended.

Regulations made under this clause may amend any Act of Parliament. However, subsection (2) provides that these provisions cannot alter the provision made in relation to political balance on local government committees and sub-committees set out in sections 15 to 17 of and Schedule 1 to the 1989 Act.

Regulations made via this clause which contain provision amending an Act of Parliament are subject to affirmative resolution procedure, and any other regulations are subject to negative resolution procedure

Clause 53: Transfer of property, rights and liabilities

Where relevant legislation is made that either confers a function on a strategic authority (SA), modifies such a function or changes how the function is exercised in some way, it will sometimes be necessary to ensure that there is the effective transfer of property, rights and liabilities from the public authority that was exercising the function to the SA that will now be exercising the functions.

This clause enables the Secretary of State to make regulations facilitating the transfer of property, rights, and liabilities (including criminal liabilities) when relevant legislation confers a function upon an SA, when such a function is modified or when provision is made which changes how the function is exercised by an SA.

Protection of functions 

Clause 54: Prohibition of secondary legislation removing functions

This clause prevents ministers from making secondary legislation to remove functions from categories of SA or all SAs.

Subsequent subsections provides that the provisions in this clause do not apply to functions conferred on SAs under clause 50 of this Bill as part of a pilot scheme.

Further subsections provide that the provisions in this clause do not limit the Government from making certain kinds of permitted provision, or related provision if the function is abolished for all public authorities or where the function has been superseded by other legislation.

Chapter 1: Reorganisation, governance and elections  

Clause 55: Single tiers of local government

This clause allows the Secretary of State to invite or direct principal authorities where there is a single tier of local government to merge by submitting a proposal for the establishment of new unitary councils in their area. The Secretary of State will then be able to decide whether to implement the proposal after consulting affected local authorities that have not made the proposal and such other persons considered appropriate.

This schedule also reverses the provision that prevented the Secretary of State from directing principal authorities in two-tier local government areas to submit a proposal. The effect of this provision is to create a process for mergers that is the same as the process of unitarisation.

Further, it allows for the Secretary of State to either abolish a combined authority (CA) and combined county authority (CCA), or convert a CCA to a CA, for the purpose of implementing a proposal for the establishment of new unitary councils.

Clause 56: Certain functions of shadow authorities for single tiers of local government

This clause amends the Local Government and Public Involvement in Heath Act 2007 to provide that where an order is made to confer functions on a new local authority in relation to a combined authority (CA) or combined county authority (CCA), the order may also provide that the predecessor local authority to the new local authority will no longer hold those functions. 

This may apply to areas undergoing local government reorganisation simultaneously to establishing a new CA or CCA which include these areas. In these instances, the exercise of this enabling power would provide that consent will no longer need to be sought from the predecessor councils to the establishment of a new CA or CCA once the shadow authorities have been established and given the necessary functions of consent.

Governance

Clause 57: Local authority governance and executives

This clause introduces Schedule 25 of this Bill, which changes the available governance arrangements for councils in England, requiring those currently operating the committee system to move to the leader and cabinet model, and preventing the creation of new local authority mayoralties.

Clause 58: Local authorities: effective neighbourhood governance 

This clause introduces a duty on local authorities to make appropriate arrangements for effective governance of any neighbourhood area. It provides the Secretary of State with the power, by way of regulations, to define a neighbourhood area and to specify the parameters of what arrangements will be appropriate to meet this duty.   

Elections 

Clause 59: Mayors and Police and Crime Commissioners: supplementary vote system

This clause introduces Schedule 26 of this Bill, which sets out provisions that change the voting system used for electing P(F)CCs in England and Wales, and the Mayor of London, CA mayors, CCA mayors and local authority mayors in England from the First Past the Post voting system to the supplementary vote system.

Chapter 2: Assets of community value 

Clause 60: Community right to buy assets of community value and protection of sporting assets

This clause will provide new powers for community groups in England who wish to purchase local assets that are important to them. The provisions for Wales will remain the same.

Further schedules introduce a new sporting asset of community value category, which builds on the asset of community value provisions in the Localism Act 2011. This new designation provides enhanced protections for sports grounds and their supporting facilities.

The amendments in this clause provide for the automatic and indefinite listing of sporting assets of community value. This clause also broadens the scope of what can be included within a listing, allowing assets that support the functioning of a sports ground, such as car parks, to be indefinitely listed as assets of community value.

Clause 61: Establishment of Local Audit Office

The Local Audit and Accountability Act 2014 (the 2014 Act) sets the key legislative framework for the current local audit system.

Provisions in this clause will enable the establishment of a new public body, the Local Audit Office (LAO), to oversee the local audit system. These provisions set statutory objectives for the LAO and prescribe key elements of its governance processes and structures.

The LAO will conduct its functions as set out in clauses 61-65, which include setting fees, appointment of auditors to eligible bodies, setting the code of audit practice and overseeing a regulatory framework.

New section 1B sets out that the main objective of the LAO is to ‘secure the effective operation of the audit system’. Section 1C provides for financial matters and how the LAO will be funded, and section 1D provides for oversight and intervention by Secretary of State, whereby the LAO is required to exercise its functions in accordance with any direction or guidance issued to it by the Secretary of State.

Clause 62: Local audit providers: registration and public provision

This clause inserts Part 2A into the 2014 Act, and introduces Schedule 29 of this Bill which inserts Schedules 1B, 1C, and 1D into the 2014 Act. Together, these provisions establish a new framework for the eligibility and regulation of local auditors.

New section 6A gives the Local Audit Office (LAO) the power to keep a register of audit providers who are eligible to carry out audits, or otherwise to designate an external registration body to hold such a register. Section 6B sets out further details of how external registration body status may be granted or revoked.

Section 6E provides for the LAO to be able to establish or support a firm which could act as a public provider of audit. Section 6F sets out that if the LAO itself decides to carry out audits its audit practice is also independently monitored, inspected and reported on.

Clause 63: New appointment arrangements for non-NHS audits

Clause 63 inserts new Part 2B into the 2014 Act and sets new requirements regarding the appointment of auditors to relevant authorities that are not NHS bodies. New Section 6G specifies that the Local Audit Office (LAO) must appoint auditors to these authorities and that the appointed auditor may be either the LAO itself or a registered local audit provider.

Further provisions include:

• Requirements regarding the timeframe in which auditor appointments must be made. 
   
• Procedural requirements, including in relation to when and how information is published once an auditor has been appointed. 
   
• Requirements in relation to the resignation or removal of an auditor, including that the LAO must make a new appointment as soon as practicable should this occur. 

Section 6K sets out new arrangements for auditor fees. It gives the LAO the power to charge local authorities a fee for the audit, and sets a requirement for the LAO to publish indicative fees, but not by any set date. It also gives the LAO the power to approve any additional work proposed and charge local authorities accordingly. As such, the LAO will be able to revise fees if more or less work is required, so that fees can more directly reflect the work involved.

Clause 64: Audit providers to nominate lead partner

The removal of section 18 and Schedule 5 of the 2014 Act means the key audit partner requirements will no longer apply. Inserted section 19A ensures that, whether the LAO or a firm is appointed auditor, a lead partner must be nominated by the provider. Subsequent paragraphs provide that lead partners will be required to be approved as eligible by a registration body, but the requirement for these decisions to be compliant with statutory guidance will be removed.

Clause 65: Code of audit practice

This clause amends Schedule 6 to the 2014 Act so that responsibility for codes of audit practice passes from the Comptroller and Auditor General to the Local Audit Office (LAO).

Further provisions relate to:

• Refining existing language
   
• Amending the list of bodies who must be consulted on a new code
   
• Establishing that codes of audit practice and statutory guidance already in place will continue to have effect until the LAO decides they should be replaced.

Clause 66: Audit committees

This clause states that a relevant authority, other than a health service body, must have an audit committee and arrange for the committee to exercise specific functions. Subsections in this clause:

• Subsection (2) enables relevant authorities that have the legal power to set up committees to choose one of its existing committees to act as its audit committee.
   
• Subsection (3) outlines the audit committee functions.
   
• Subsection (4) allows the Secretary of State to make rules so that a law which usually applies to a relevant authority or one of its committees can also apply to a group of people who have been appointed to carry out similar duties on the authority’s behalf.
   
• Subsection (5) allows the Secretary of State to issue regulations concerning the membership of an audit committee or the appointment of its members. 
   
• Subsection (6) directs that at least one member of an audit committee is an independent person. 
   
• Subsection (7) asserts that the Secretary of State may issue regulations about the payment of members’ allowances to audit committees.
   
• Subsection (8) specifies the definition of a 'constituent council', which applies to the previous subsection.
   
• Subsection (9) requires that an authority must have regard to any guidance issued by the Secretary of State in relation to audit committees. 
   
• Subsection (10) specifies that references to a 'committee' apply to any sub-committee of an audit committee. 
   
• Subsection (11) states that, for the Greater London Authority, the responsibility for audit committees is shared by the Mayor of London and the London Assembly.

Clause 67: Smaller authorities: change of terminology

This clause, and the repealing of Schedule 5 of the 2014 Act, will allow the Local Audit Office flexibility to set assurance and audit regimes for authorities which are proportionate and risk-based, rather than focussed solely on binary financial-based thresholds. The term 'smaller' would otherwise suggest regimes will continue to be size-based.

Clause 68: Power to provide for smaller authority treatment in previous years where audit outstanding

This clause provides the Secretary of State with the power to lay regulations to retrospectively treat a public body as a smaller authority for a particular financial year, even if it does not normally meet the criteria to be a smaller authority under the existing rules. This will ensure that certain relevant authorities can undergo a limited assurance review where otherwise no audit or assurance review had been possible for financial years 2022/23, 2023/24 and 2024/25.

Clause 69: Amendment paving way for separation of LGPS accounts

This clause allows for future flexibility to enable the mandatory decoupling of pension fund accounts from administering authorities' accounts by removing the implied requirement in the current subsection to keep the pension fund accounts with the relevant administering authority’s other accounts. 

The amended section continues to align with requirements under the Public Service Pensions Act 2013, ensuring that local government pension schemes are audited distinctly from other accounts.

Business tenancies in England and Wales are governed by several key pieces of legislation:

• Landlord and Tenant Act 1954 (the 1954 Act)
   
• Landlord and Tenant (Covenants) Act 1995
   
• Landlord and Tenant Act 1987.

None of these Acts provides substantial legislation to define the parameters for rent review provisions in commercial leases in England and Wales.

Clause 71 inserts new section 54A into the 1954 Act, to allow the 1954 Act to now define the parameters for rent review provisions in commercial leases in England and Wales.