Devolution White Paper: A Brief Update for Infrastructure and Development Practitioners

In 2017, I together with colleagues at Grant Thornton, produced a report entitled “Combined Authorities – Signs of Success”^[i]. That report analysed the previous Government’s devolution of further powers to Combined Authorities (since their creation in 2010) with the formation of Mayoral Combined Authorities.

The new Government has now unveiled the English Devolution White Paper ^[ii](December 2024) which seeks to unshackle restrictions on Combined Authorities and take majors steps to further decentralize power from Westminster to local government. 

This article is aimed at the development and infrastructure industries and thus concentrates on the planning, housing, transport, environmental, energy and climate change devolved functions. It also seeks to outline the extent to which private capital has a role in leveraging wider infrastructure development. 

What is Happening to Combined Authorities?

To date, the proportion of the population covered by some form of Combined Authority, and therefore benefiting from devolution, is 61% or just over 34 million people. This is not acceptable to the Government which wants to see all of England’s communities benefit from devolution. It is seeking to provide local leaders with the tools to unleash the growth potential of local areas. Its vision is to enable communities across the nation to pursue the path of devolution; the pinnacle of which is the historic devolution that created the Greater London Authority in 1999. 

 To realise the Government’s vision, the central element of the White Paper is the establishment of “Strategic Authorities,” to replace Combined Authorities. These are designed to streamline decision-making and unify regional governance. The government will therefore legislate to introduce the following:

• Foundation Strategic Authorities: Comprising non-mayoral Combined Authorities and certain local councils without a mayoral leadership.
• Mayoral Strategic Authorities: Including the Greater London Authority and other mayoral combined authorities, with plans to designate some as Established Mayoral Strategic Authorities based on specific criteria.

The government will put a framework into legislation, through the English Devolution Bill and a raft of Statutory Instruments, setting out the powers that go with each type of authority. It will move away from the current ad hoc and inconsistent approach based on devolution deals for each authority. The framework will provide a base with more limited powers for newly formed Strategic Authorities, with the most far reaching and flexible powers for Mayoral Strategic Authorities.

Enhanced Powers for Mayors

The White Paper advocates for expanding the powers of directly elected mayors, positioning them as pivotal figures in regional development. The proposed areas of competence most relevant for development and infrastructure practitioners encompass:

• Transport and Local Infrastructure: Overseeing integrated transport systems and infrastructure projects to improve connectivity. This includes streamlining the means of taking back the bus services into public control, a statutory role in planning, managing, governing, and developing the rail system in partnership with the newly formed Great British Railways and co-ordinating the road network in partnership with the constituent local highway authorities.
• Housing and Strategic Planning: Managing housing development and land use planning to address local demands. All areas, with or without a Strategic Authority, will be required to produce a Spatial Development Strategy to be adopted with support from a majority of constituent local planning authority members, to form part of the development plan for the area (see NPPF December 2024). There will also be the ability to call in planning applications of strategic importance (like the London Mayor) as well as to charge developers a Mayoral Levy to ensure that new developments come with the necessary associated infrastructure.
• Environment, Energy and Climate Change: As part of the Government’s ambition to make the UK a green energy superpower, Strategic Authorities will have a strategic role in the delivery of the newly formed Great British Energy’s Local Power Plans, particularly in delivering local sustainable energy generation. They will also have a role in the wider energy system, become the zoning co-ordinators for local heat networks, and with their plans considered in the National Energy System Operators’ Regional Energy Strategic Plans. 

In addition to significant devolved powers in these and many other functions, all Mayoral Strategic Authorities will be required to produce a Local Growth Plan, setting out a long-term vision for growth in their region over the next decade and a roadmap for how this can be achieved. National bodies including National Highways, Great British Railways, Great British Energy and the National Energy System Operator will be required reconfigure their system so that national and local systems work in tandem. 

Funding and Integrated Settlements

To support the devolution agenda, the White Paper introduces a simplified funding model for Strategic Authorities:

• Consolidated Funding Pots: For Mayoral Strategic Authorities, covering areas such as local growth, housing, skills, and transport.
• Dedicated Local Growth Allocations: For Foundation Strategic Authorities, determined by formulae with streamlined investment approval processes.

Additionally, Mayoral Strategic Authorities will be eligible for integrated settlements, providing a unified approach to spending controls and accountability frameworks. This financial restructuring is designed to offer local leaders’ greater certainty and flexibility in addressing regional priorities.

Role of Private Capital

Across Britain the Government has a focus on private capital to leverage high quality and speedy infrastructure development desperately needed to accelerate growth. Hence it makes a key component of devolution the involvement of private capital in infrastructure development. The White Paper seeks to empower Strategic Authorities to collaborate with the public, private, and voluntary sectors to deliver projects within their areas of competence. It also wants the newly formed National Wealth Fund (NWF) and the Office for Investment to work closely with regional mayors to stimulate economic growth by focussing on measures to attract private investment.

Local Government Reorganisation

The White Paper not only sets out the pathway to significant decentralisation, but it also announces that it will facilitate a programme of local government reorganisation for two-tier areas, and for unitary councils where there is evidence of failure or where their size or boundaries may be hindering their ability to deliver sustainable and high-quality public services. The Government will invite proposals from the local government sector. 

Essentially, the government’s preference is for larger unitary councils, each serving populations of approximately 500,000 residents. This approach is intended to achieve efficiencies, enhance capacity, and ensure financial resilience. Consequently, the White Paper proposes a reorganization of existing two-tier local government structures, encouraging the formation of single-tier unitary authorities to simplify governance and improve service delivery.

Conclusion

For development and infrastructure practitioners, the White Paper, and forthcoming legislation, is likely alter the approach to consenting strategies particularly for large scale developments and major infrastructure. It will be important to understand the powers granted to specific Strategic Authorities and to mould the approach taken for major schemes. There will also be significant investment opportunities for the private capital sector to partner with growth-focused Strategic Authorities to delivery schemes at pace and thereby stimulate economic growth.

[i] Combined Authorities - Signs of Success
[ii] A White Paper is a statement of government policy with a clear intention to on the part of the Government to pas a law.