LGR and the LGPS: the government pauses

On 7 September Angela Rayner, Minister of Housing, Communities and Local Government, announced a delay in the Local Government Reorganisation (LGR) programme. Changes in Surrey are set to continue but the decisions about how other affected areas would be transformed are to be reviewed. A letter has been sent to each of the affected councils. 

Is this the end of LGR? 

Almost certainly not. When Andy Burnham became Prime Minister, he did so on a platform of localism. He was also the very Mayor of Manchester which the previous PM highlighted as an inspiration behind LGR. 

At the risk of dusting off the crystal ball, it feels safe to say this is just a pause. 

What happens next? 

When it comes to timeframes, obviously the decisions that were scheduled for funds to make by February and March 2027 (as per the recent LGPS guidance) will have to be delayed. The government will need to reconsider the decisions already made and re-make them (or make them for West Sussex and Cambridgeshire), with appropriate announcements in the House and letters to local leaders. 

It goes without saying we don’t know what the new decisions will look like. However, the period between guidance being made available for LGPS funds on what the government expected from them and the deadline for action was already short, especially for those funds looking to adopt the Single Purpose Pension Authority model. 

This latest announcement gives officers time to work on the planning needed for LGR. 

Pause or go? 

The certainties of just a few days ago have become much less clear. But, assuming LGR happens in a format that is not hugely dissimilar to that which was initially proposed, much of the groundwork remains the same. 

Funds can still consider what governance model will work best for them in the future, even if they can’t yet point to a specific unitary to become the new Administering Authority – should that be the model they support.  

Stakeholder mapping can still take place and will be a benefit to funds whatever happens. Depending on how each fund groups its stakeholders, many funds will have at least 40 stakeholder types to engage with, including various Council departments, pools, employer types, and service providers covering areas such as printing and posting. This means building a better understanding of the needs of both the fund and stakeholder which can only drive long term positives, with or without LGR. 

Policies and procedures can be re-visited. This is something many funds would benefit from, with Independent Governance Reviews expected to start next year ahead of the March 2028 deadline. As long ago as 2019, key person risk was being discussed as one of the main challenges faced by the LGPS, with too much knowledge being stored in the head of experienced officers rather than being recorded for the use of all. 

If you'd like to discuss anything further, we would love to hear from you so please get in touch. 

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