Department for Levelling Up, Housing & Communities
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Parliament passes new economic recovery powers for councils and RDAs

Councils will have new powers to engineer economic recovery locally, following the Royal Assent of the Local Democracy, Economic Development and Construction Bill.

The Act strengthens the democratic role of councils to support local people and businesses to rebuild the local economy, increase jobs and skills, tackle housing shortages and improve infrastructure.

Councils will have a stronger economic role that requires them to work closely with local people and regional partners to deliver growth. The downturn has created different challenges for different areas, which is why councils, as local leaders, have been given the responsibility to find local solutions and to help to integrate these in a single, powerful regional strategy.

The Act creates:

  • The responsibility for developing a single regional strategy, which will provide a blueprint for housing, transport and economic development. This will create a coherent action plan for recovery in each region and will be developed jointly by the Regional Development Agencies in partnership with a new local authority Leaders’ Board.

  • A new requirement for councils to undertake an economic assessment of their area – to ensure that authorities can understand the challenges, make informed decisions and contribute to the development of the regional strategy.

  • New powers to create ‘Economic Prosperity Boards’ – to give local authorities the ability to create an executive decision-making body at sub-regional level to promote economic development and regeneration across council borders, within the overall framework of the regional strategy.

  • The creation of Multi Area Agreements (MAAs) with statutory duties – these will provide a further option for local authorities to work together on economic development by allowing MAAs to be put on a similar statutory footing to Local Area Agreements.

Local Government Minister Rosie Winterton said:

"The global downturn has affected different areas of the country in different ways, creating challenges that require local solutions.

"Now that this Bill has been given Royal Assent, RDAs and councils will be in the driving seat for delivering strong local economies and regeneration. They now have the tools to set their areas on the path to economic recovery.

"The Act strengthens the democratic role of councils as local leaders in every region, giving them the power to work with local people and their regional partners to increase prosperity and tackle social deprivation and inequality."

Other measures include:

  • New powers for councils to set up mutual insurance companies to help them make efficiency savings.

  • A new duty on councils to promote local democracy and ensure all sections of their community understand how the council and other public bodies work, who makes the decisions and how they can get involved.

  • A requirement for councils to respond to local petitions on the issues that are of most importance to their local communities

  • The provision of funding for a National Tenant Voice – to ensure tenants’ views are central to decision-making processes.

  • Strengthening overview and scrutiny through the creation of a scrutiny officer and broadening the scope of what joint overview and scrutiny committees can consider.
  • Making the Boundary Committee for England an independent body and separate from the Electoral Commission - implements Committee on Standards in Public Life recommendations to ensure Electoral Commission’s integrity and public confidence. A legally independent Boundary Committee will establish a strong national body that is impartial, independent and solely focused on overseeing boundary changes (electoral, administrative and structural) in England.



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