Localism Bill

Memorandum submitted by Henry Peterson OBE (L 66)

1.0 Brief introduction

1.1 I worked as a director, deputy chief executive and Monitoring Officer for a London Borough (Hammersmith and Fulham) from 1984 until 2005 and have subsequently acted as a consultant and adviser to CLG (and former ODPM), the Local Government Association, Local Government Improvement and Development, and London Councils.

1.2. I have been closely involved in the localism agenda, and in particular on issues of governance, accountability, and local partnership working.

2.0 Summary

2.1. This submission concentrates on the local governance and community empowerment elements of the Bill. It argues that these parts of the proposed legislation do not, as a whole, support the Coalition’s stated aim of devolving power from central government.

2.2. Aspects of the Bill are as likely to weaken local political leadership as to strengthen it.

2.3. The Bill does not assist ordinary citizens in their understanding of how they are governed, and misses an opportunity to incorporate a codification of the central/local relationship.

2.4. Practical implementation costs of the community empowerment proposals in the Bill, as forecast in Impact Assessments, are likely to prove under-estimates in terms of the additional workloads and bureaucracy generated.

3.0 Potentially conflicting aims of the Bill

3.1. As a number of witnesses have already argued, there is a tension at the heart of the Bill. Is it primarily aimed at handing down power to the ‘people’, via community organisations and neighbourhood forums? Or is it aimed at devolving decision-making and powers to lower levels of elected government?

3.2. The community empowerment parts of the Bill provide new means for different community interests to influence local decisions and outcomes, in the context of a Big Society. There is much less in the Bill in terms of devolving power to (and through) successive layers of government, on European principles of subsidiarity, thereby ensuring that decisions are made by the lowest competent democratic body.

3.3. The proposed general power of competence is the one significant proposal which would bring UK local government closer to the principles expressed in the European Charter.

3.4. Apart from this, the Bill’s primary emphasis is on participatory democracy, with ‘communities’ and ‘neighbourhoods’ granted new forms of influence, direct from Parliament. Any resultant devolution or decentralisation of power or decision-making largely bypasses elected local authorities (at all spatial levels above parishes).

3.5. Subsidiarity principles would involve a different route for devolution, with powers and decisions devolved through each layer of sub-regional and local government. Each layer is then able to form its own judgements as to what decisions should be devolved further, and to shape the arrangements for this to take place.

3.6. Under such a model, decision-makers at each spatial level are well-positioned to ensure that requisite levels of capacity and public accountability are in place, before devolving decisions beyond themselves.

3.7. In the case of the Localism Bill, central government has taken it upon itself to make all such judgements, down to the neighbourhood level. It has opted to prescribe the detail of new governance arrangements at a very local level, taking no account of variations in the history, culture, and political traditions of different parts of England.

3.8. Hence the strong feeling amongst many ‘localists’ that this Bill is mis-titled. For those who had expected a Bill that moved the governance of localities in the direction of strengthened ‘democratic localism’, following the direction started by the 2006 White Paper [1] and leading on to [2] , the weight of this Bill is towards a centrally imposed and largely untested form of ‘neighbourhood localism’ [3] .

3.9. Apart from the general power of competence (an important step) there is little in the Bill that reinforces the role of local government. There is nothing that strengthens, or consolidates in statute, the wider role in ‘place-shaping’ that councils have taken on in recent years. There is little that gives fresh impetus to the integration of public services at the local level.

3.10. There are however a number of measures that could weaken local political leadership, depending on how they play out at local level.

4.0 Who governs and who decides?

4.1. As a Bill which simultaneously pursues two different forms of localism, it does little to answer the citizen’s question ‘how am I governed?’ Instead, it muddies the water still further.

4.2. The effect of several of the provisions in the Bill is to set up processes whereby sections of local communities, large or small in number, can exercise rights of challenge, or trigger referenda. Only close reading of the Bill (including a separate volume of schedules) begins to answer the question ‘who decides’ on an issue at the end of the day.

4.3. In many cases the final decision is left to elected members of the local authority (although expectations will have been raised of greater ‘people power’). In others, the Secretary of State may prove to be the effective decision-maker, through orders and regulations yet to be defined.

4.4. There is the risk that the complex processes initiated by the Bill will lead to no point of decision, other than through expensive legal proceedings in the courts. Several of the provisions on community empowerment set up potentially legalistic and adversarial conflicts, on matters which are currently settled at local level through regular dialogue between councils and community groups.

4.5. Decisions on ‘what is a neighbourhood’ or a ‘community asset’, or how far a neighbourhood plan has been adequately reflected in a district plan, will not always be clear-cut. It will be a backward move if such issues have to be decided either through central intervention or through legal proceedings.

4.6. Procurements and asset disposals initiated through the community ‘right to provide’ and ‘right to buy’ will re-open many of the issues of process and interpretation experienced during the CCT era. Where there is no initial consensus between all parties as to how or whether an asset should be marketed, or a service outsourced, top-down legislation has in the past created huge workloads and costs in implementation.

4.7. This is not a period where either central or local government can afford to re-introduce the bureaucracy and central/local gaming behaviours that flowed from CCT legislation.

4.8. As witnesses have commented, EU procurement requirements kick in. The Bill does not appear to address what enforcement regimes may be required, from the centre, to ensure that the prescriptive detail of its various provisions on community rights are implemented across 350 local authority areas.

4.9. Greg Clark MP has suggested to witnesses at the committee that the general power of competence is a radical step, and of itself redefines the central/local settlement. This is true to the extent that the new power breaks with the ‘vires’ principle of the past.

4.10. But is this a decisive shift that citizens will recognise? There will be continuing debate over the constraints that still surround the new power, and the potential for it to be further limited by any Secretary of State at any time.

4.11. A weakness of the Bill is that it takes little account of the role of elected councillors, and particularly council leaders and mayors, in deciding between competing interests and priorities, mediating between different interest groups and sections of the community, or rationing and re-prioritising public services at a time of austerity.

4.12. Rather than strengthening the hand of democratically elected decision-makers, the community empowerment proposals in the Bill add a new set of legalistic processes through which a range of decisions have to be made. Scope for obstruction and delay by single-interest lobbies is significant. Potential for the voices and actions of a well-informed and articulate few to override the interests of those less well positioned to participate in civic life is increased.

4.13. Those who have worked over several decades in local government (particularly in politically contested areas or those with sharp social and economic divides) have experience of where well-meaning aspirations for community development and empowerment can lead.

4.14. Where such aspirations are translated into legislation and imposed prescriptively from above, they may sometimes work. But equally often the consequences can prove costly, resource-intensive, and ultimately counter-productive. The previous government’s experience with New Deal for Community (NDC) Partnerships is an example, as are aspects of Inner City Policy from the 1978 White Paper onwards and the 1988-91 Action for Cities programme.

4.15. For the remaining life of this Parliament, and much of the next, local political leaders face enormous challenges in reducing public expenditure and national debt. They will require all the legitimacy of their electoral mandate to take through very difficult decisions, and to bring the majority of their electorate with them. Representative local democracy will be put to severe tests.

4.16. To introduce from the centre untested forms of direct democracy, without giving locally elected politicians the discretion to determine the pace, scope, and means of their introduction, seems a high risk strategy. Centralist micro-management of the Big Society is surely a contradiction in terms?

6.0 The case for codification of the central/local settlement

6.1. Witnesses to the committee have already drawn attention to the separate inquiry being held by the Political and Constitutional Reform Committee, on codification.

6.2. If the Localism Bill is indeed to prove a historic landmark for local democracy (as declared by the Secretary of State at Second Reading) it would be much strengthened by the addition of a statement of the underlying principles of the role of local government, and its relationship to central government.

6.3. Localists have long argued for some legislative underpinning of the European Charter for Local Self Government. These arguments have been rehearsed in depth in several sets of evidence to the PCR Select Committee [4] and to the CLG Select Committee inquiry on Localism [5] , and need not be repeated here.

6.4. Some were hoping that the Localism Bill (announced originally as a Decentralisation and Localism Bill) might fill a current gap, in clarifying for the public the respective roles, responsibilities, and electoral accountabilities of local and central government. At present, the UK citizen can search in vain for a succinct and unified explanation of how they are governed, at local and national level.

6.5. The draft Cabinet Manual [6] very briefly covers the role of local government, including its accountability to a local electorate and the relationship of local decision-making to Ministerial authority. Even in this short explanation of the UK constitution, some of the principles set out on the central local relationship remain open to question and debate.

7.0 The length and complexity of the current Bill

7.1. Assuming passage of the Bill, an Act of 400 pages will be overlaid, often by way of detailed amendments, on the 2000 Act (itself hugely complex) and on the 1972 and 1989 Acts (which still define many of the basic provisions on which English local government operates).

7.2. For practitioners in central and local government, let alone the ordinary citizen, day-to-day interpretation of such legislation has become almost impossible. Even the most dedicated local government lawyer or Monitoring Officer has found it hard, since the 2000 Act, to keep up with waves of highly detailed acts and regulations.

7.3. The 1972 Local Government Act, which survived nearly 30 years, provided a sufficient legislative framework for the work of English local authorities over a long period. It allowed for flexibility and innovation. It dictated only a few of the internal arrangements of local authorities, and its very brevity allowed scope for creative re-interpretation [7] . As a result, it allowed for experimentation and local variance in ways that neither the 2000 Act, nor the Localism Bill, would permit.

7.4. The current position, with various measures from the 2007 LGPIH Act and the 2009 Local Democracy Economic Development and Construction Act being part repealed and part left in abeyance, has reached new levels of complexity. For example, how many local authority chief executives (or civil servants interfacing with local government) can state with any certainty:

· which ‘duties to co-operate’, included in different pieces of legislation on local government, policing, and health still apply, and which are now defunct? What is the effect of the new duty to co-operate in the Localism Bill?

· does the ‘duty to involve’ still apply? If so, to which public bodies?

· what strategies and plans are now required from a local authority, and which have to be approved by full council as opposed to the executive?

7.5. There are many other examples. It would be unwise for Parliamentarians (including those who master most of the intricacies of the Bill at committee stage) to assume that public servants at the front-line will be equally well-informed when the subsequent Act reaches the stage of implementation.

7.6. A number of new duties placed on public bodies in recent years have been so ambiguous, opaque, or short-lived that there is a growing tendency for them to be ignored in day-to-day practice. This undermines the legislative process.

8.0 Gaps in the Bill

8.1. Members of the Bill Committee have been asking witnesses to identify any significant gaps in the Bill.

· The fact that the Bill does nothing to alter the financial arrangements for local government (other than introduce referenda on council tax levels) has already been commented on. Given that a further review of local government finance is underway, expectations that the Bill would address these issues were low. But as others have pointed out, genuine devolution and localism will make little headway in the absence of buoyant and varied sources of tax or income for local authorities.

· A second gap is that the Bill does little to advance the cause of ‘integrated localism’, through which the full range of public services delivered at local level (and the resources to support them) are overseen by a unified public service body of the kind that many councils and local strategic partnerships have been working towards.

The moves made in this direction made under the previous government, through local area agreements and public service boards, are now at risk of coming to a halt. Silo-based legislation from different departments is sending out conflicting messages to public service providers.

Department of Health reforms, with the localising of public health responsibilities and the advent of statutory Health and Wellbeing Boards, are more localist in many respects than the Localism Bill. They build on the significant advances made since 2006 in joining up health and social care, and working through local partnerships. The Justice Department is following a similar approach. Policing reforms, on the other hand, are introducing wholly new local accountability arrangements, separate from local government, with the risk of conflicting electoral mandates.

The CLG Select Committee, in its report on the Balance of Power commented on the longstanding division of local accountability for health and policing, saying that "So long as two such important local services - arguably the most important for most local people - remain outside its scope, the full benefits of an empowered, autonomous local government cannot be realised." [8]

8.2. The Localism Bill is passing through Parliament on broadly the same timetable as other major pieces of legislation on health and on policing. From the local perspective, there is little by way of a consistent narrative on localism and devolution, across these three major Bills. The CLG Essential Guide to the Localism Bill does not attempt this task.

9.0 Risks of under-estimating the costs of implementing the Bill

9.1. The Impact Assessments published on the community empowerment elements of the Bill vary in the quality of evidence offered.

9.2. That on the ‘community right to buy’ makes many assumptions in monetising the costs and benefits of this proposed measure, but at least has experience of comparable Scottish legislation on which to build.

9.3. The assessment on the community ‘right to challenge’ is thin on evidence and acknowledges the impossibility of monetising many of the anticipated benefits and costs. The case for applying this measure initially only to local government services is stated as being to ‘ensure that local authorities are an examplar for this right’ [9] .

9.4. Many would argue that local government already achieves better value for money in its commissioning, and is more open to provision through the independent sector, than much of central government. There is no evidence of learning from the costs of the former CCT regime, similarly applied to local and not to central government.

9.5 This ‘community right to provide’ could equally well be tested initially on designated central government activities, or offered as a voluntary measure to local authorities committed to making it success. This would avoid the potentially contentious (and costly) issues around enforcement that will arise if the measure is imposed from the centre on all English local authorities.

9.6 The Impact Assessment on proposals for non-binding referendums again has a thin evidence base, and makes big assumptions in its forecast costs for England as a whole. As has been seen with FoI legislation, administrative costs of such ‘empowering’ legislation can grow steadily, as lobbying organisations and the media learn to use such tools. The assumption that ordinary citizens will always use such measures, sensibly, proportionately, and for the greater public good, sadly proves unrealistic in practice.

9.7 For this measure, the argument given for central imposition of local arrangements is that ‘local authorities will need to adhere to robust processes’ and hence ‘Government involvement is appropriate’. [10]

9.8. This is not localism. Local authorities are perfectly capable of holding robust referendums, under present legislation, where this is seen as an effective way of airing and deciding an issue. Where it is not, imposition of non-binding referendums will only add cost and frustration for all parties involved. Again, Government should contemplate applying the same measures to its own workings, before imposing them on a subsidiary layer of elected and representative government.

9.9. More generally, the costs of the proposed measures on community empowerment cannot be forecast with any precision. Levels of take-up and of ‘challenge’ will vary widely from place to place.

9.10. In many areas, with local authorities alert and responsive to the views of their communities and with a long history of consultation and dialogue, occasions when groups of citizens choose to exert their new ‘rights’ may prove to be rare.

9.11. However, cutbacks in funding to the third sector, while deplored by Ministers, are the reality for those councils retreating to core statutory services. And this is but the first year of successive rounds of budget cuts.

9.12. This creates a climate in which relationships between councils and the community and voluntary sector are already under huge strain in many areas. It is worth looking back at the experience of local councils in the 1980s and 1990s. There may well be local areas in the coming months where every asset disposal, every library closure, every old persons home threatened, every cycle lane left unrepaired, will be contested by one or more specialist local interest group or organisation.

9.13. The objectives of such interest groups may be narrow, and they may involve small numbers of people. They will have no obligation to consider other competing demands, or the wider interests of the whole area. The range of tools available to pursue their campaigns, which may often draw public resources away from more deserving demands, will be enhanced by the Bill.

9.14. Similar issues apply to the radical proposals for reform of the planning system, where the balance between individual rights, the rights of small self-appointed groups, private rights, and the wider public good are even more complex.

9.15. There are some safeguards provided in the Bill, for representative democracy to prevail over direct democracy. Local authorities are in most cases the final arbiters following ‘challenge’ processes. But much effort, energy, time and cost may have been expended on the way, by all parties involved.

9.16. Local councils already set aside significant resource, to consult and communicate with local people. They handle petitions and deputations, and less formal lobbying meetings, along with a growing volume of transparency requirements, and formal decision-making at meetings open to the public.

9.17. This servicing of the democratic process already operates to standards of openness, and with more opportunities for community access and influence, than in central government or other parts of the public sector. This is rightly so, given that local councils are the layer of government closest to citizens. But should further costly processes be added? And why should local government once more be subjected to arrangements that Whitehall does not impose on itself or on other parts of the public sector?

9.18. The empowerment measures in the Bill will also demand more specialist resources. These include legal advice to handle the complexities of the legislation, valuation advice to assemble community asset registers, and procurement advice to deal with ‘triggered’ outsourcing. In many authorities, such professional advice is in short supply, or is outsourced to commercial firms unused to dealing with the ‘community’ aspects of this legislation.

9.19. All councils are under immense pressure to cut back on central support staff. Such staff are seen as ‘pen-pushers’ by the public, and as ‘back-office’ by Whitehall. The additional workloads generated by the Bill are impossible to forecast in advance, and are unlikely to be monitored in future with any precision. But these additional workloads will be there, displacing other much needed activities.

9.20. Many Parliamentarians have direct experience of local government, and know the realities of what the Bill will involve at local level. All will need to weigh up, in the passage of this legislation, what likely costs are being added to the public purse, and what resultant benefits will accrue.

February 2011