Localism Bill

Memorandum submitted by Fordham Research (L 12)

Localism: Call for written evidence: Issue of empowerment

Introduction

1. This document responds to the Call for Written evidence on the Localism Bill published on the Parliamentary website on 18th January 2011.

2. The bill is in many ways innovatory and admirable. But we believe that the local empowerment it seeks will only occur through a more explicit reference to the required evidence base.

Background on Fordham Research

3. The firm is a consultancy set up in the mid 1980’s to work for local authorities in the fields of housing and planning (www.fordhamresearch.com). The firm has worked for most of the local authorities in Britain. Its main work has been on viability analysis for planning purposes, and on gathering and analysing data and for Housing Needs Surveys and later Strategic Housing Market Assessments. We hold a database of about 300,000 recent household surveys (about 1% of the total population). This can be used to analyse a wide range of social and economic issues.

Topic: Empowerment

4. The Bill’s emphasis upon local empowerment is praiseworthy. It will, however, be difficult to achieve. At one end of the spectrum there are difficulties with the centre. The Minister for Decentralisation Greg Clark said (at CLG Committee on the Comprehensive Spending Review (21st December 2010)): It may seem strange to have a central government minister for localism but

‘people who have their fingers on the levers of power at the moment often taken them off reluctantly’ (answer to Q43)

5. One danger is therefore that central government will fail to release power. That is a matter for the Government upon which we offer no further comment.

6. An equally difficult problem lies at the other end. Local people may want to take decisions but do not have the information required to form a view and make decisions. Various procedural proposals are made in the Bill, but none of them will be effective unless local people can get to grips with the implications of what they wish to do.

7. The missing link is hard local information from which to start the process. This will enable the ‘what if’ questions that will arise in developing local policies to be answered. Much of the information concerns what people can afford and what they actually need (rather than wish for). Many councils have excellent information in the form of a local survey database that contains income, savings/debt and wealth information from their Housing Needs Survey / SHMA (these collect information on topics well beyond housing). This has to be suitably anonymised, but once that it done it can be used for many purposes. More than half of councils, though, do not have such a database and so would need to be encouraged to set one up.

8. Once the evidence base is established, the following are examples of the sort of question that are likely to arise are:

i. If we put new development in Location A rather than Location B how will it affect local people?

ii. Who will gain and lose if we raise the Council Tax by X%

iii. What will happen if we reduce charges for this, and increase charges for that?

iv. How many people can afford housing

v. Is there a local demand for new housing and of what sort?

9. There is of course a role for local consultation and perhaps referenda. But without knowing what the impacts will be, it is hard to devise effective policies. The issues should first be examined by analysing the local evidence. Without such evidence policies may backfire and bring the idea of localism into unjustified discredit. Or, they may simply have no effect at all. The sort of evidence required to answer the questions listed can easily be derived, with a little training, by local neighbourhood groups and local authorities.

Example

10. The chart below shows the proportion of households in three possible target markets for affordable housing products that are able to pay a particular rent (without support from housing benefit or Local Housing Allowance).

11. This is useful for suggesting an appropriate range of rental costs for affordable rented housing. This analysis was produced for households requiring family housing (2+ bedrooms) in West Lancashire, but could be produced for any other area or group of households where survey data is available.

* Excludes those generating need

Source: Fordham Research West Lancashire household survey (2009)

12. Looking at the chart, it can be seen that only about 20% of the households in housing need (as defined by CLG) could afford a monthly rent of £320 or more, and 50% could not afford more than £200 each month.

13. Overall, the rents affordable by those in housing need and households currently living in social housing (but not in need) are similar. However, most private renters have considerably more income available.

Conclusion: why a primary survey database is required for empowerment

14. For local people, neighbourhoods and councils to assess the sorts of choices they face, it is essential to have a current database. This should include financial data about local households. There is no reliable existing source for this (sources such as Experian and CACI do not provide either reliable data or combine it with other features which would be required for policy analysis).

15. The Census lacks the crucial household financial data and the questions about need and aspiration. To examine the practical questions which arise with empowerment, one needs financial data and information on say their housing preferences. This permits policy analysis at the local level.

16. The Localism Bill should therefore contain a requirement that each council maintain an up to date household survey database. Some councils already have this, gained indirectly through having done recent HNS or SHMAs. But most do not. Without this the empowerment of local groups will be severely limited.

17. There is a collateral requirement for some staff in the local authority to be capable to analysing the database to answer policy question from neighbourhood groups. That is not very difficult to achieve. it would only require the equivalent of one or two staff whose workload would not be fully taken up by this work.

January 2011