English Devolution Bill brings opportunities and challenges for charities

The government’s landmark devolution bill, the ‘English Devolution and Community Empowerment Bill’, is finally now being considered in Parliament following the summer recess. Once passed, it will have a substantial impact on the operating environment for tens of thousands of charities across England, because it will reshape how local authorities are structured and run. 

The Bill follows the publication of a 100+ page white paper at the end of last year, which set out the main policy aims and objectives. It has also been accompanied by a very helpful research briefing from the House of Commons Library. This analysis is useful to interpret the complex legislation but also the reactions from different stakeholders so far.  

The theory and practice of devolution differs 

The idea of devolving power in Britain’s highly centralised government structure has been around at least since the New Labour government devolved power to Scotland, Wales and Northern Ireland (sporadically) nearly 30 years ago, and then failed in its attempt to introduce nine regional governments in England towards the end of its time in power. 

The current legislation and policy can be viewed as a way of reintroducing a version of that regionalisation again in England (critics might say by the back door), by combining many smaller district councils into larger, so-called ‘Strategic Authorities’, which will eventually encompass larger aggregations of at least 500,000 and more likely 1.5 million people. 

Over the years, councils in the UK have been heavily constrained by what they can do, not just by central government’s legislation, but by central controls over their ability to tax and their dependence on central government for much of their budgets.  

In theory, devolution means bringing power, decision-making and spending down to the most local level possible, enabling more local ownership of resources and results, and therefore better and more accountable decision-making. The types of powers the government plans to further devolve relate to many areas that charities and social enterprises are active in: 

• Transport and local infrastructure 
• Skills and employment support 
• Housing and strategic planning 
• Economic development and regeneration 
• Environment and climate change 
• Health, wellbeing and public service reform 
• Public safety 

But is this government’s agenda really devolution? In a way it is, but only to a point. By scrapping more local political representation or merging it into larger entities, this is pushing power towards a more regional level that could be more distant from communities. But on the other hand, if those regional representatives take on more power from the centre to make decisions and allocate resources, this still might rebalance substantial power away from Westminster. Either way, its hard to see much evidence of a ‘neighbourhood renewal’ or community development strategy in the Bill, with some limited exceptions. 

Rationalising a messy hotch-potch 

This government wants to align the current hotch-potch of different existing arrangements in England that previous governments negotiated individually over the past decade or so. More highly devolved areas like Manchester and Birmingham are now quite different in terms of their local control (and political accountability) to many other parts of England. 

There has been some confusion and muddying of the waters too, because the reorganisation is happening already, whereas the legislation and policy to devolve the powers and funding haven’t been finalised yet. It’s a bit of a case of cart before horse at the moment. 

Cumbria, Cheshire and Warrington, Norfolk and Suffolk, Greater Essex, Sussex and Brighton, and Hampshire and the Solent have been chosen as an initial six ‘Devolution Priority Programme’ areas and are now well advanced in discussions about dispensing with district councils and reorganising at a ‘strategic’ level. However, more areas will be on the way soon, so you may have already experienced some of the debates and impacts in your own area already, even if it isn’t on this initial list. 

Stay engaged and informed to help your charity plan strategically 

There will be local opposition to what the government is doing in different places, and some of it will be justified. There’s a valid argument that this is not ‘community empowerment’ but rather another reform from above, not below. However, it’s highly likely that the government’s huge majority means their reforms are likely to be implemented as planned. 

Considering the Bill and what we know about the policy agenda at this stage, here are some things for charities, voluntary organisations and community groups to take note of, and some actions they can take now to try and manage the changes. 

Potential for disruption to services and relationships

Many local organisations will be rightly concerned about the pace of change and potential disruption to key services for their beneficiaries. For example, when district councils are dissolved or incorporated into larger entities, this may mean a greater amalgamation of commissioning and disruption or cessation of long-established funding and service provision arrangements between local VCSE organisations and district councils.  

It’s vital that organisations engage local information networks to track the latest developments, and stay in contact with local politicians and officials who are themselves navigating the transition. Local Infrastructure Organisations as well as local chambers of commerce are good starting points. 

Financial viability

Local authorities still provide a substantial amount of financial and in-kind support for local VCSE organisations, not just by contracting, but via grants and the use of assets and property. District councils also frequently provide grant funding which might become further at risk due to reorganisation. Amalgamating some councils which are in serious financial difficulty with others which may not be could also create political tensions and instability locally, and we don’t know how central government will address this issue. 

Here again, it’s worth having early conversations with key contacts in your local government about their plans. Charity boards should evaluate risks to key services for the community. Start the dialogue early wherever possible and stay informed. 

Community rights

The new Bill now carries the added wording ‘Community Empowerment’ in the title. The main nod to this seems to be what’s known as the Community Right to Buy. The Localism Act 2011 introduced something called the ‘community right to bid’, which required councils to maintain a list of ‘assets of community value’. The government is proposing to strengthen this right – Chapter 5 of the House of Commons Library research briefing provides a clear synopsis. 

Local groups and parish councils can already nominate buildings or other property to be listed, and the local authority must consider listing them. If a listed asset is put up for sale, there is a six month moratorium on it being sold to allow time for prospective bidders to raise funds and prepare bids to take over ownership. This Bill would enhance this right, by amending the Localism Act to give local groups or parish councils a ‘right of first refusal’ when these assets are put up for sale.  

This could be an important development and strategic consideration for local charities who reside in, depend upon, or want to take over local buildings or other assets. The financing to buy and maintain such assets will always be a challenge, but if the Right to Buy gives local groups an advantage in preventing valued assets from being sold off and taken out of public or community use, it could prove important. 

Learn more at Engage 2025 

Join us for DSC’s Engage Conference on Thursday, 16 October – a powerful day dedicated to equipping charities with the tools to influence politicians, shape public policy, and make their voices heard where it matters most.  

We’ll dive into critical policy issues, including the Devolution Bill, and explore how your organisation can drive real change. Learn more and register for Engage here.