Localism Bill

Memorandum submitted by the British Retail Consortium (L 58)

1. The British Retail Consortium (BRC) is the lead trade association representing the whole range of retailers, from independents through to the large multiples and department stores, selling a wide selection of products through town centre, out of town, neighbourhood, rural and online stores.

Overview

2. The BRC welcomes the opportunity to provide evidence to the Localism Bill Committee. Retailers provide vital investment and employment in all areas of the UK. We actively pursue a localist approach, adapting and tailoring the products and services we offer to the communities in which we operate. People living and working in local communities are often best placed to understand and address the drivers and barriers to local growth and prosperity. Local authorities, working closely with local businesses and individuals, can deliver tailored solutions to local problems.

3. However, the Government’s localism agenda could present some significant challenges for the retail sector, both resource-stretched independents and highly centralised national (and multi-national) companies. All retailers strive for improved efficiency and productivity in a highly competitive environment. However, the dramatically increased policy variation which may result could act to hamper these efforts.

4. As the largest private sector employer, employing 2.9 million people, retail has a key contribution to make to the economic recovery. It is essential that the introduction of localism takes place in a way that positively supports these efforts. We would be pleased to provide additional information for the Committee to support our written evidence. Our priorities for ensuring that the introduction of localism is effective and compatible with the growth agenda are set out below.

Making Localism Work – Retail’s Priorities

1. Developing a national framework for local growth.

2. Supporting economic development through the planning system.

3. Providing operational cost certainty at a local level.

4. Protecting assets of community value without inhibiting growth.

5. Enabling businesses to play a key role in reform.

Developing a National Framework for Local Growth

5 We recognise that a blanket one-size-fits-all approach would not give local communities the flexibility they need to develop and deliver solutions that best meet the needs of their area. At the same time, for nationally organised businesses operating in highly competitive markets, added cost and complexity could act to limit growth. In addition small businesses need assurance that they are receiving the same local service standard as competitors in neighbouring communities.

6 The BRC believes that to achieve responsible and effective localism, the Government needs to adopt a framework approach in key areas which clearly defines the parameters within which local decision-makers are able to act. This would give businesses greater certainty about what they can expect from local decision-makers, which is crucial for business planning. It will also give local authorities a constructive understanding of what is possible, addressing the potential for misalignment between the central government vision of localism and the practical challenges involved in allocating scarce resources for the delivery of vital services.

Retail is the localist sector

7 Retailers understand and support the concept of localism – it is essential to the success of their commercial activities and their operations. Serving customers means adapting to local requirements both in terms of products and the location and the type of stores each retailer establishes. Many retailers already engage successfully with local authorities and other local partnerships and have the mechanisms and relationships to maintain local engagement. At the same time, national retailers also recognise the benefits of national approaches to a very wide range of operational issues. These can include matters such as due diligence procedures so they can be sure every store in the chain is complying with consumer protection, labelling, employment and health and safety laws; sales and returns policies; staff training; and on-line retailing. Many of those functions are best delivered primarily nationally and decentralisation would inevitably create excessive cost through duplication of effort.

8 Retailers play a key role in assisting the Government to deliver public policy goals of significant benefit to consumers. These include measures in relation to the promotion of healthy eating. A local approach to such initiatives could adversely affect the capacity of retail to deliver. The BRC believes that those outcomes that can best be delivered with a degree of consistency should continue to be delivered nationally, while those issues in which a distinct local flavour is possible and desirable should be determined locally.

The Role of Primary Authorities

9 Retailers highlight the significant importance which they attach to the Primary Authorities scheme. The scheme gives participating companies certainty and consistency about enforcement of key regulations, based on a statutory partnership with a single local authority. The local authority is then able to provide robust and reliable advice for other councils to take into account when carrying out inspections or dealing with non compliance. This drives considerable benefits for all parties, including cost savings and targeting activity for local authorities and is the basis for more successful local regulation. We are concerned that the operation of this scheme is not impeded by the content of the Bill and, in particular, seek reassurance that the introduction of a new General Power of Competence will not undermine the scheme’s operation.

Supporting Economic Development Through the Planning System

National Planning Policy Framework

10 We support the Government’s commitment to reform the planning system. Many multiple retailers want to grow their business and have the capital available to do it, but the complex, protracted and inflexible planning system often acts a barrier.

11 The new national planning framework should move towards a more predictable and strategic plan-led approach. Reforms to the planning system should focus on delivering greater speed and consistency in planning decisions and should address the existing economic barriers to investment and lack of infrastructure.

Neighbourhood Planning

12 We support proposals to enable greater involvement from local communities and neighbourhoods in local planning decisions. At the same time, it is crucial that neighbourhood planning does not add significant additional bureaucracy for the businesses concerned.

13 Greater local responsiveness can result in significant benefits for local communities. However, it is essential that such increased sensitivity is balanced against the positive benefits of sustainable economic development. Meaningful incentives are needed to ensure support for economic development by local communities and business alike.

14 It is important, therefore, that businesses have the opportunity to participate in neighbourhood forums. Such business participation will enable a longer term vision for neighbourhoods, removing rather than introducing barriers to growth and development.

15 There is also a strong consensus among members that the planning reforms in the Localism Bill must be considered in the context of the Government’s wider reforms to the national planning policy framework.

Community Infrastructure Levy

16 We support, in principle, the proposal for CIL to be spent on the ongoing costs of providing infrastructure; however the powers in the Bill are very open-ended. Further detail is required as to how the new CIL provisions will work in practice. There is a potential risk that, over time, local authorities could use a greater proportion of CIL for ongoing service provision instead of supporting infrastructure requirements for new developments. We would oppose such an application.

Providing Operational Cost Certainty at a Local Level

17 The BRC supports initiatives that are designed to give local authorities more flexibility to raise the finance they need to promote economic growth and investment. We recognise there is an opportunity to utilise the business rates system to incentivise local authorities to deliver sustainable economic development in their area.

18 Although the Bill will give local government a stronger financial stake in the local economy by allowing local authorities to grant discretionary business rate discounts, making small business tax breaks easier and giving businesses a greater say in rate supplements, 94% of the UK of tax and spend is still through central government; well above the EU average of 60%.

19 The calls for more financial autonomy will grow louder if localism is a success. The BRC would have significant concerns if this led to calls for the setting of business rates to be returned to local authorities.

20 The Local Government resource review is due to report in the summer. It is important to ensure that any new measure introduced by the Government does not increase the tax or regulatory burden for businesses in relation to local government or undermine the certainty that businesses need to invest for the long-term.

21 Implementing localism on the ground will create significant challenges for local authorities with central government spending on local government falling 7.25% in real terms in each of the next four years. These cuts are also front loaded with 73% of the reduction in the first two years, just as implementation of reforms is imperative.

22 Business is a willing partner in the localism agenda, but it must not be achieved through added complexity and cost which will ultimately lower growth and job creation.

Protecting Assets of Community Value without Inhibiting Growth

23 Proposals in this area are still at an early stage leaving more questions unanswered than resolved. The BRC will be submitting a response to the forthcoming consultation in this area outlining existing areas of concern.

24 Retailers are concerned that there is a potential for the community right to buy mechanism to be tokenistic and ineffective. The moratorium (initially a period of 6 weeks, followed by a 1-4 month period) would be long enough to scupper a potential property sale but may not provide sufficient time for a community group to put together a suitable business plan and raise finances. Proposals could also have important unintended consequential impacts on the market through lost sales, with the criteria to inform the community of an intention to sell having unintended consequences on turnover. The new power could also have an adverse effect on the development process through further delays and/or preventing a company from purchasing an asset crucial to consolidation.

25 As with other areas of the Bill, businesses are concerned that they will have little say in whether they appear on the List of Community Value. The right of appeal should be open, independent and transparent.

Enabling Business to Play a Key Role in Reform

26 Many of the powers proposed in the Bill are positive. Retailers strongly support mandatory business ballots in advance of the introduction of a Business Rate Supplement. This change in policy represents an essential improvement for business which enables them to have a meaningful input into a key aspect of relevant local decision making about economic development. Such mechanisms to permit business input should be a key underpinning of localism. This dialogue will support capacity building in local communities on economic development issues.

Role of local referenda

27 Local referenda have the potential to have a significant impact on retailers and other businesses despite these groups having no direct means to participate. Effective methods must be found to give business a voice on relevant decisions. Local Enterprise Partnerships must have a key role in this regard. At the same time, referenda should only take place where there is robust, demonstrable local support.

28 Businesses have also raised concerns at the threshold at which a referendum can be called. BRC members are concerned that as it is currently proposed in the Bill referenda would be open to misuse in cases where there is not clear demonstrable local support. This could in turn in itself be detrimental to the local democratic process. Additional safeguards should be considered to provide greater certainty in this area.

February 2011