We explore the key provisions of the English Devolution White Paper, its potential impacts, both positive and negative, on local government and its suppliers, and recommend next steps for both parties to get ready for the rollout.

The UK government’s ‘English Devolution White Paper’ sets out a plan to reshape local governance in England. It reflects the government’s goal to drive economic growth and improve public services by giving local and regional authorities more power and resources.

Published just before Christmas 2024, the document proposes transferring significant powers from central government to local authorities, allowing for a more tailored approach to meeting regional needs. This marks the biggest change in local government policy since the 2022 Levelling Up White Paper.

The White Paper outlines the government’s aim to create an economy that works for all, giving mayors unprecedented powers and budgets to help deliver 1.5m new homes, expanding regional authorities’ responsibilities, and restructuring local government.

So, will this devolution bring greater power to the people – and what will this mean for local government buyers and suppliers?

What Is the Purpose of the White Paper?

Devolution is central to the government’s plan to unlock the economic potential of England’s regions, improve public services, and strengthen local democratic accountability.

The success of combined authority mayors, especially in Greater Manchester and the West Midlands, has fuelled momentum for devolution.

The White Paper builds on this, focusing on four key themes:

• Addressing Regional Inequality: Regional disparities in England have long affected economic development, health, and education. The White Paper aims to reduce inequalities by giving local areas more control over their future.
• Improving Public Services: The government believes decentralising powers will help local and regional authorities deliver more efficient, responsive services tailored to their communities’ needs.
• Moving Power Away from Whitehall: The White Paper seeks to strengthen local democracy by giving local leaders more authority and ensuring that decisions are made closer to the people they affect.
• Driving Economic Growth: Crucially, with more control over key areas such as transport, housing, and skills, local authorities can design and implement strategies designed to drive local economic growth.

What Are the Key Points of the White Paper?

 “England is one of the most centralised developed countries. Too many decisions affecting too many people are made by too few. The number one mission of this Government is to relight the fire of our economy and ignite growth in every region.”

– Rt Hon Angela Rayner MP

The White Paper’s centrepiece is the creation of “Strategic Authorities” as the default devolution model, building on existing combined authorities and replacing joint committees, growth boards, and other arrangements.

There will be several levels:

1. Established Mayoral Strategic Authorities (EMSAs): Primarily existing Mayoral Combined Authorities, these represent the most advanced stage of devolution.
2. Mayoral Strategic Authorities (MSAs): Areas aspiring to establish a directly elected mayor and gain enhanced powers.
3. Foundation Strategic Authorities (FSAs): Areas without a mayor, often encompassing a single large local authority, with more limited devolved powers.

The government will open negotiations on forming Strategic Authorities with any area able to demonstrate wide local support, strong leadership and decision-making, along with a substantial population and economy.

Strategic Authorities will gain specific powers from central government, arms-length bodies, and sometimes local authorities, depending on their devolution level. These powers will include transport, skills, housing, planning, economic development, and health and social care integration, aligned with NHS reforms.

Notably, the White Paper grants greater fiscal powers than previous devolution rounds, giving Strategic Authorities a flexible funding pot (“Integrated Settlement”), multi-year budgets, and the ability to retain business rates growth, introduce tourist taxes, and road user charges, providing more financial certainty and autonomy.

The White Paper also encourages reorganisation of local authorities within Strategic Authority boundaries, favouring unitary structures with larger populations to improve efficiency and service delivery.

Sixteen counties and two unitary authorities requested to postpone May 2025 local elections to 2026 to meet ambitious reorganisation and devolution timelines as part of their bid to join the devolution priority programme, and in February 2025 six new areas – Cumbria, Cheshire & Warrington, Norfolk & Suffolk, Greater Essex, Sussex & Brighton, and Hampshire & Solent – joined the Devolution Priority Programme and will be electing mayors by May 2026. Four new devolved institutions will also be created, including mayoral authorities for Greater Lincolnshire and Hull & East Yorkshire, alongside combined county authorities in Devon & Torbay and Lancashire.

What Does This Mean for Local Government (Buyers)?

The White Paper’s “Devolution Revolution” is ambitious, but not new, continuing the work of the 1997 Labour Government. However, it is a far more limited model to that of the devolved nations of Scotland, Wales, and Northern Ireland. The Institute for Government (IfG) have suggested that perhaps ‘decentralisation’ is a closer definition.

Nevertheless, the changes proposed create both opportunities and challenges for Local Government and Authorities:

Opportunities:

• Greater Autonomy and Control: Mayors will have much greater impact and control over their areas, allowing them to tailor policies and initiatives to their regions’ unique needs and priorities.
• Stronger Local Voice: Strategic Authorities will have a more powerful platform to advocate for their regions and influence national policy.
• Sustainable Financial Resources: Consolidated multi-year budgets and new revenue-raising powers, like business rates and tourist taxes, will give local authorities more financial stability and flexibility.
• Enhanced Public Services: With more control over budgets and decision-making, local authorities can deliver more responsive and effective public services.
• Streamlined Governance: Unitary authorities could lead to greater efficiency and improved service integration, reducing duplication and complexity, but with increased accountability to residents.
• Changes to Voting: Mayoral Strategic Authorities will move to simple majority voting, including the mayor’s vote (wherever possible), and unanimous support will no longer be required.

Threats:

• Complexity and Potential for Conflict: The process of merging councils and establishing new governance structures can be complex and may face resistance from local stakeholders. It is likely there will be some geographical boundary challenges – for example, some Trusts cross over several boundaries.
• Potential for Overreach: Some MPs have raised concerns about Strategic Authorities potentially overreaching, questioning whether decisions will truly be made closer to local communities, or if they could end up further removed.
• Concerns Over Local Identity and Engagement: Smaller areas may fear losing their unique identities and the loss of elected members. There is also uncertainty over the practicalities of increasing community engagement.
• Potential for Uneven Devolution:  Sequencing will be challenging, with some areas at risk of uneven service delivery and being left behind. Regions better equipped for new powers may see unequal outcomes, while struggling areas could face ongoing funding shortages.
• Capacity Challenges:  Strategic and local authorities may struggle with increased responsibilities and the need to build capacity in the short term, leading to reliance on consultants. Borrowing staff from local authorities or using secondments is possible, but building in-house capacity is preferable.

What Does This Mean for Public Sector Suppliers?

The White Paper has major implications for companies that provide goods and services to local government.

On one hand, it creates significant opportunities as Strategic Authorities, flush with new powers and funding, will be ready to invest in major projects around infrastructure, regeneration, skills and innovation.

The flipside is greater complexity in navigating the landscape. With the potential proliferation of new Strategic Authorities, each with their own leadership, plans and processes, suppliers may need to engage on a wider scale.

Here’s a closer look at the key pros and cons:

Opportunities:

• New Opportunities for Contracts: With increased powers and budgets, Strategic Authorities will seek new partnerships with suppliers for infrastructure, transport, housing, skills development, and digital transformation.
• Focus on Local Impact:  Mayoral authorities may use broader criteria, focusing on localism and social value, benefiting suppliers committed to local communities and economies.
• Longer-Term Contracts: Multi-year budgets and financial certainty could lead to longer contracts, offering stability for suppliers. This enables deeper, more collaborative relationships with local authorities for more effective partnerships.
• Reduced Fragmentation: Simplified funding settlements mean one pot of money to manage rather than competitive bidding for numerous smaller pots and funding streams, potentially speeding up budgetary decisions.
• Accelerated Payment: Moving buying decisions to local authorities with Early Payment Programmes will allow suppliers to receive faster payments.
• Strong Local Leadership: Mayors as identifiable civic leaders and champions for their area, driving projects forward and making procurements happen.
• Rewarding Innovation: Suppliers offering innovative and efficient solutions that align with local priorities (such as sustainability and digital transformation) will be in high demand.

Threats:

• Juggling Regional Priorities: With local authorities setting priorities, suppliers must adapt to varying regional demands. Understanding each Strategic Authority’s goals will require significant investment.
• Increased Competition:  As local authorities gain procurement control, competition may increase, with more local SMEs participating from a wider region. Post-Brexit, local suppliers could be favoured over larger national or multi-national firms.
• Uncertain Procurement Processes:  As Strategic Authorities develop their procurement strategies, there could be a period of uncertainty and inconsistency in procurement processes, requiring flexibility from suppliers.
• Added Focus on Value for Money: Despite increased funding, Strategic Authorities will face pressure to demonstrate value for money from day one, which could lead to tighter margins for suppliers.
• Pressure to Demonstrate Social Value: Suppliers will need to demonstrate not only cost-effectiveness but also how their services contribute to social and economic value in the community.
• Need for Local Presence: Suppliers may need to establish or strengthen their local presence to compete effectively for contracts and build relationships with local authorities.

Are There Any Other Aspects to Consider?

Beyond local governance and funding, the White Paper introduces broader ambitions with clear supplier opportunities:

• Health and Social Care Integration: Integrating health and social care services offers opportunities for suppliers in care coordination, data systems, and workforce training for better service delivery.
• Education and Skills: Aligning education with local job markets prioritises skills development. Suppliers in training programmes and educational technology can address regional shortages.
• Transport and Employment: Simplified public transport management and flexible skills funding open doors for suppliers in transport planning and infrastructure systems.
• Housing and Planning: Mayors’ increased powers over development and infrastructure charges create opportunities for suppliers in construction, urban planning, and related projects.
• Sustainability and Net Zero: Control over retrofit funds, energy plans, and biodiversity initiatives provides opportunities for suppliers in sustainable technologies and climate-focused solutions.
• Community Engagement: Greater community involvement and new rights to buy assets create demand for public engagement tools and services to support local authorities in empowering residents.
• Digital Transformation: Emphasis on digital solutions will enhance efficiency, transparency, and collaboration. Suppliers can provide platforms, software, and consultancy to meet public sector modernisation needs.
• Accountability and Capacity: Strengthened governance and leadership capacity provide opportunities for suppliers offering audit solutions, leadership development, and capacity-building services.

Key Actions for Local Government and Public Sector Suppliers

Based on the direction set out in the English Devolution White Paper, potential next steps for buyers and suppliers include:

For Local Government (Buyers):

• Engage with Stakeholders: Involve local communities, businesses, and other stakeholders in developing local growth plans and priorities.
• Build Capacity: Invest in building the capacity and skills of local leaders and staff to manage new responsibilities effectively.
• Streamline Procurement: Simplify procurement processes to encourage innovation and attract a diverse range of suppliers.
• Foster Collaboration: Work closely with regional partners, NHS bodies, transport providers, and other key actors to drive integrated and coordinated service delivery.
• Promote Accountability: Establish robust accountability and audit systems to ensure transparency and build public trust.
• Keep Up-To-Date on Changes: Establish clear responsibilities for staying abreast of the latest guidance via the Devolution .gov page.

For Public Sector Suppliers:

• Understand Local Priorities: Research and align your offerings with the specific needs, goals, powers, and functions of each Strategic Authority.
• Demonstrate Social Value: Highlight how your services contribute to local economic development, community wellbeing, and environmental sustainability.
• Invest in Local Presence: Strengthen your local presence to compete for contracts and build trust with partners. Develop relationships with strategic and local authorities to understand their needs and collaborate effectively.
• Innovate and Adapt: Be agile and ready to innovate, offering solutions that address the evolving challenges faced by local authorities and help them deliver quick wins.

The English Devolution White Paper aims to transform local governance by redistributing powers and resources to drive growth, improve services, and strengthen democracy. While it hopes to reduce regional disparities and level-up with London, concerns exist about mayors gaining too much power, potentially leading to autocracy, contrary to the Government’s intentions.

We remain cautiously optimistic about the White Paper’s potential to transform local communities. As Siobhan O’Neill, Sourcing & Contracts Manager at Oxygen, states, “Hopefully devolution will help Councils to make strategic decisions on the ground. It should drive more value for money & innovation and improve collaboration.”

While these far-reaching plans present challenges, they also offer significant opportunities for local authorities and suppliers to build a more prosperous, equitable future for all regions of England. Only time will tell how effective Devolution will be in achieving these goals.