Localism Bill

Memorandum submitted by Fordham Research (L 12A)

Localism: Call for written evidence: Strategic vs. local issue

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. This Bill is in many ways innovatory and admirable. It is, however, weak on the issue of recognising the distinction between local and strategic issues. This could undermine the focus on local actions.

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. We are evidence base experts.

Topic: Strategic vs local decisions

4. There are good arguments in favour of dropping the formal structure of strategic decision making, as proposed in the Bill. But this will not remove the strategic issue completely.

5. It will remove a lot of bureaucracy. But there are many issues where a local/strategic divide must be recognised if localism is to work.

(i) Planning. There may be a need to build new homes in District A to meet demand in District B. This happens across the country where councils are tightly drawn around urban areas (eg Gloucester, Harlow and many others). In these areas there is unlikely to be any voluntary agreement to take ‘somebody else’s overspill’. There will be a local outcry and opposition. In some cases it may be justified to respond to the NIMBY pressure and do nothing. But in other cases there will be good strategic reasons why the general area can only flourish if District A does take some overspill. There is no real provision for that yet in the Bill.

As a generality, if the council (or other) local area) is not self-sufficient in terms of such things as sites for new development, then it will depend on decisions made in other council areas. The proposed Duty to Cooperate will need to be much more specific and policed as clearly there is a natural tendency to avoid it on the part of those who see themselves as losing by cooperating.

(ii) Healthcare. Moving expenditure decisions down to the GP level may be workable, if they are given suitable administrative support. But it is no use allocating budgets to GPs on the basis of the type of population they serve (young, older etc) if there is no provision for a strategic dimension. Allowance may be made in the budgets for GP’s for flu, but what happens if there is a chemical spill in their area? Who bears the cost? There needs to be a local/ strategic structure in this case also

6. These are just two examples. For Localism to work, there will need to be structures set up that deal with the strategic dimension. If that is not done, there is a danger that shadow strategic bodies will emerge that centralise back the power that has just been devolved. it will be damaging to the principle of localism if clear provision is not made for the strategic elements.

Example

7. In Gloucestershire both Gloucester (in particular) and Cheltenham have high levels of housing need and demand that cannot be met within their boundaries. The neighbouring council areas of Tewkesbury and Stroud have agreed to large urban extensions in their council areas to meet demand and need which arises from Gloucester and Cheltenham.

8. This strategic arrangement was arrived at during a time when formal strategic requirements could be imposed. As a result, whether Tewkesbury and Stroud actually wanted overspill in their areas or not, they were obliged to agree to it.

9. The map above shows the market areas that were defined in the county, which are different from the council boundaries. We first measured housing need and demand as it arose within each of the existing councils. But since much of the need and demand could not be met within existing boundaries we reallocated these to share them between the originating district and the district where the demand/need was being met through new urban extensions.

10. The table below shows the reallocated numbers. Although Cheltenham and Gloucester were the main sources of housing need, once the urban extensions were allowed for, the actual newbuild was much greater in Tewkesbury and Stroud.

Source: Fordham Research Gloucestershire household survey (2009); various secondary data sources

11. This analysis illustrates a case where the strategic/local issue has been resolved, using the old RSS procedures. But if each council had gone its own way, there is every chance of a messy result. There needs to be a mechanism in the Bill which will ensure that strategic issues are faced and not avoided. The latter outcome will prejudice the localism agenda.

Conclusion: why a more formal distinction is required if localism is to work

12. Strategic issues frequently arise in the course of addressing local issues. While it is good to have removed a lot of bureaucracy, it will be a mistake to ignore the issue. The proposed Duty to Cooperate is not enough to address these issues.

13. In the case of the area which we know best, housing, there are several ways of keeping the issue under control:

(i) Setting up a formal mechanism to adjudicate strategic issues. This might seem like a return to the old bureaucracy but is not. The new version would be ‘bottom up’ and not top-down. If the benefits of localism are to be achieved awkward decisions must be taken.

(ii) If the issues involved are suitably priced, the problem can be internalised. The incentives provided to local authorities for building new houses can be traded. But the scale of the financial incentive now proposed is nothing like enough to overcome the NIMBY force.

14. Another example arises with Community Infrastructure Levy (CIL). It is proposed that more of what is raised locally should be spent locally. This is regressive in tax terms (rich areas will get richer and poor will get poorer). But it will help to fund the necessary infrastructure. However there will need to be much clearer triggers to bring in central government funding necessary to make projects work. For example little new development will occur in the whole northern half of England without additional central government funding.

15. Our experience suggests that if there is no formal mechanism to address strategic issues in the areas we are familiar with (planning and housing), localism will be frustrated. Moreover, there is a high chance of undesirable side effects: the large scale equivalent of fly tipping, where communities unload undesirable land uses onto neighbouring areas.

January 2011