Ministry of Housing Communities and Local Government (MHCLG)
UK department running Local Government Reorganisation and Reform-commissioner standoffs across England.
The Ministry of Housing, Communities and Local Government withdrew its March merger decisions for Essex, Hampshire, Norfolk and Suffolk on 7 September 2026, on updated legal advice, and put all 14 reorganisation decisions taken on 16 July under a rapid review.
Last refreshed: 7 October 2026 · Appears in 2 active topics
Will Steve Reed's 134-into-38 council merger survive five judicial reviews before 2028?
Timeline for Ministry of Housing Communities and Local Government (MHCLG)
Published 2025-26 revenue outturn and per-authority returns
Is Britain Actually Broke?: Sefton holds £3.2m against £104m deficitIssued the withdrawal letter and launched a rapid review
UK Local Elections 2026: McMahon drops four mergers on legal advicePublished individual EFS amounts with no published cohort total
Is Britain Actually Broke?: We withdraw our £1.74bn council support figureCommitted to deciding the option by October
UK Local Elections 2026: £63m and an October deadline for LGRPublished the CIPFA review of Worcestershire
Is Britain Actually Broke?: CIPFA sees no exit for Worcestershire before 2028Background
The Ministry of Housing, Communities and Local Government (MHCLG) is the UK Government department responsible for housing policy, planning, devolution and the structure of local government in England. It sets the legal and financial framework English councils work within; it does not deliver their services. Angela Rayner has led it as Housing Secretary since Andy Burnham formed his Cabinet in July 2026.
On 25 March 2026, the department set 16 new unitary authorities for Essex, Hampshire, Norfolk and Suffolk. In February 2026 it reversed a decision to postpone 30 local elections in reorganising areas after Reform UK won a Divisional Court challenge, paying Reform about £100,000 in costs.
The department also publishes national council finance data and runs Exceptional Financial Support, the route by which councils in distress are allowed to borrow or sell assets to balance a budget.
MHCLG withdraws four county mergers
In a letter to council leaders on 7 September, local government minister Jim McMahon withdrew the department's March reorganisation decisions for Essex, Hampshire, Norfolk and Suffolk, citing updated legal advice. The May 2027 council elections will run on existing boundaries, so the planned shadow-authority polls are off.
The department's 16 July decisions, which would have merged 134 councils into 38 unitaries across 14 county areas, were paused rather than withdrawn, so they still stand in law. West Sussex and Cambridgeshire and Peterborough, held back in July, were folded into the same review. A week earlier, on 1 September, ministers had told Westminster Hall that £63m would go to 21 reorganising areas.
MHCLG keeps councils under support
MHCLG's outturn figures, published on 17 September, showed English councils spent £5.8bn over budget in 2025-26 while their non-ringfenced reserves rose to £31.1bn. Ministers have also pledged to fund nine-tenths of the schools deficits councils carried at the end of March 2026, after extending the Dedicated Schools Grant statutory override by two years to 2027-28.
The department's Exceptional Financial Support guidance, refreshed on 18 August, lists 36 English authorities, every one marked "support agreed in-principle". The Isles of Scilly were added at £0.926m. No final amount, capitalisation direction or Section 114 notice had followed by 3 September.