Localism Bill

Memorandum submitted by Sunderland City Council (L 120)

1.0 Summary

1.1 The Localism Bill is a highly complex piece of legislation which covers a wide range of subjects. In this submission we would like to express some of the overarching comments Sunderland City Council has about the Bill. This submission will then go on to give more detailed comments about specific points in the Bill.

2.0 Overview

2.1 Sunderland City Council is supportive of many of the principles behind the legislation, in particular the intention to increase freedoms for local authorities through the General Power of Competence and the desire both to empower communities and to give communities a responsibility for developing their area.

2.2 However, the Council has a number of over-arching concerns:

2.21 We recognise that the measures around neighbourhood planning and the community rights to buy and challenge, are part of a wider agenda around the ‘Big Society’ and supporting and empowering communities to take responsibility for their own areas. We support the principles behind this agenda, and indeed already work to empower and engage our communities, but we feel that it is still unclear what this now looks like on the ground for communities and local authorities in the context of reducing budgets and the potential for greater economic hardship.

2.22 This is a particularly difficult agenda for a local authority such as Sunderland, which is responsible for providing services and enhancing the life chances of communities that suffer high levels of deprivation. We are committed to ensuring that we spend fairly and support those communities that face the most entrenched problems, however it is unlikely to be these areas that are best able to exercise the rights introduced by the Localism Bill. In the current financial climate it will be particularly difficult to balance resources between responding to those communities that come forward whilst also supporting those communities who are in most need.

2.23 A further area of concern for Sunderland is that this Bill does not clearly define a role for Elected Members. In Sunderland we see the Elected Members as Community Champions who will work with communities to enable them to use the new powers they have under this Bill. Elected Members are the democratically accountable local representatives, and should have a pivotal role in this agenda. Government should recognise the enthusiasm and status that elected members have and ensure that they are not sidelined by a focus on unelected community activists.

2.24 There are many provisions within the Bill which have the potential to place further resource pressures on local authorities in already difficult times. These include local referendums, the community right to buy and to challenge and Neighbourhood Plans and Development Orders. Although the Bill suggests that local authorities will have powers to impose charges in relation to development authorised by neighbourhood development orders, Government urgently needs to provide clarity about what resources will be available to councils to enable the delivery of all of these provisions. This concern is particularly acute as councils are unable to be able to accurately predict the numbers, and therefore the cost, of responding to these requests.

2.25 There are a number of overriding powers that will, under the provisions of the Bill, be held by the Secretary of State, for example; to challenge councils’ activities under the General Power of Competence, to determine a ‘local’ issue in a referendum and to place limits on Council Tax rises. If these powers remain in place, they will need to be used sensitively. If not, they threaten to reduce the confidence of local authorities to respond innovatively and appropriately to the challenges they face at a local level.

3.0 Specific Aspects of the Bill:

3.1 Part 1: Local Government

3.11 The General Power of Competence is to be welcomed, it gives Sunderland City Council the opportunity to think more radically about how we can work differently to deliver front line services and drive down costs. However it is constrained by a variety of existing legislation, by limitations in the Bill on the use of charging and by the potential for the Secretary of State to make orders for the power to be subject to conditions. As noted above, the Secretary of State should avoid restricting the use of this power. Local Authorities will work in the interests of their communities and should be allowed the freedom to innovate, which this power can offer.

3.12 The Centre for Public Scrutiny (CfPS) has recommended a number of changes to the provisions of the Localism Bill as they relate to scrutiny. Sunderland City Council is supportive of the CfPS recommendations, in particular we support the proposals for the Localism Bill to strengthen and widen scrutiny powers over partner organisations. In particular that health, and crime and disorder, should be included within the same scrutiny framework and that a number of other organisations should be brought into the scope of scrutiny. CfPS propose that this should be supported by measures which will ensure scrutiny functions act proportionately and appropriately when scrutinising partner organisations.

3.13 Government has committed to clarifying the legislation around predetermination. This is to be welcomed. This clarification should give Councillors more freedom to be involved in a Committee’s business on which they have already spoken in public, allowing Members to connect better to their localities.

3.14 Sunderland City Council has now published its Executive Officer pay in line with the requirements of the Localism Bill and Communities and Local Government.

3.15 Importantly, local authorities need to understand better what additional powers Government will propose for elected mayors. Government should consider giving the same powers to all local authorities no matter what their Executive arrangements. Powers that CLG believe can be effectively devolved to local authorities should be devolved as a matter of course, in line with Government’s commitment to decentralisation.

3.16 With regard to changes to regional governance arrangements, we are also keen that local authorities don’t lose out with the abolition of RDAs. There are a number of assets currently held by the Regional Development Agency, the deployment of which will be crucial to the future contribution of the North East to the UK economy and need to be retained to assist in driving the economic growth of the area.

4.0 Part 2: EU fines

4.1 We share the widely held concerns about the delegation of EU fines to Local Authorities. Local Authorities are not represented nationally when agreements are made with the EU. It is also not clear how the fine will be distributed between local authorities in a fair way. This measure poses significant risks to local finances and therefore to local authorities’ ability to fund services in their areas. It may also make local authorities wary of taking on European funding responsibilities.

5.0 Part 3: Non Domestic Rates

5.1 Sunderland City Council does not currently collect supplementary business rates, but agrees with the principle of engaging businesses in any future decision. This is supportive of our existing commitment in the city to work more closely with the private sector and engage with them in decision making.

5.2 The Council is broadly supportive of the automatic small business rate relief and the power to cancel liability for backdated rates.

5.3 Sunderland City Council also recognises and supports Government’s wider intention to give local authorities greater financial autonomy and the reduction in ring fencing is to be welcomed. However, with regard to proposals to consider the localisation of business rates, Government should recognise that this will not be beneficial to all councils. The impact of localisation of rates on a council’s overall grant funding levels will vary and Government should consider different funding options to support the different needs of different areas. Those councils currently in receipt of NNDR redistributed business rates would still need a form of additional government grant to help make up the shortfall in funding. These are likely to be the more deprived areas, like Sunderland, that have high spending needs but low business rate and council tax bases on which to draw funding from. The position here is far from straight forward and needs to be considered carefully by Government with any solution being fair and equitable.

6.0 Part 4: Community Empowerment

6.1 There is a great deal of complexity within these arrangements. For example, it is not currently clear what the boundaries will be for referendums (including those required for Neighbourhood Plans). It will be complex to determine in each case the extent of the potential impacts of any referendum. Government will need to support local authorities to ensure that these referendums are carried out fairly, and represent the needs of all groups within an area, not just those with the capacity to get involved.

6.2 As noted previously there is a significant resource requirement in the checking of petitions, holding referendums, putting services out to procurement etc. Realistically, Government will need to support local authorities to ensure these costs do not impact on service provision. The resource implications for local authorities of this part of the Bill should not be underestimated.

6.3 Local Authorities and Government need to work locally and nationally to raise awareness of this Bill and what it means for the Voluntary and Community Sector (VCS). Currently it appears that, whilst there is some general support for the idea of increased empowerment and transparency, elements of the VCS in Sunderland are not fully aware of what this means for their organisation, particularly during this time of widespread cuts. There are also concerns that many smaller organisations, particularly those at the grassroots level, lack the capacity to fulfil the role expected of them. If they are not able to fulfil this role, does this, for example, mean that the private sector or big VCS organisations with no local links will deliver services further removed from communities?

6.4 The Bill states that the referendum on Council Tax rises will be based on the electoral roll. As such, some individuals will be voting in a referendum about a tax they don’t pay and others, who pay Council Tax, will not get a vote.

6.5 It is not clear how the Council would manage its business, should a budget not be agreed by the 1st April. Timing will be a very important issue to consider as councils will need to hold the referendum before the 1st April where possible. The Secretary of State will need to be mindful of councils’ needs in this regard, when setting the limit and when judging individual councils’ situations.

7.0 Part 5: Planning

7.1 Whilst the Bill discusses the importance of sustainability it is not clear how sustainable building practices are actually supported by the provisions of the Bill.

7.2 Sunderland understands that whilst the Regional Spatial Strategy is being abolished, a Strategic Environmental Assessment will still be required. If CLG intend to do this work centrally then we consider that it could add delay and complexity to the process.

7.3 The process for developing Neighbourhood Plans seems to be complex and therefore is not in line with Government’s commitment to reduce bureaucracy. Sunderland City Council has a number of specific concerns including; how we will allocate neighbourhood forums and how we will ensure they are representative, how the boundaries will be drawn for referendums on neighbourhood planning issues, what level of technical support will be expected from Local Planning Authorities and what the obligations are on the appointed examiner, particularly with regard to how they judge whether the neighbourhood plan is broadly in line with strategic level planning in the city.

7.4 Furthermore Neighbourhood Plans can be passed by 50% of the votes cast in a referendum meaning that a very small number of people could be responsible for passing a plan that could have wide ranging impacts for a community, bypassing the Elected Members of the Council. Government needs to support councils to ensure Neighbourhood Plans are representative of the whole community they cover.

7.5 It is not clear at this stage what volume of requests the Council may receive through this process. The Bill does state that the Secretary of State may make regulations that allow for charges to meet the expenses incurred by local authorities in delivering some of their neighbourhood functions. The detail of the charges that can be imposed will be important as this process has the potential to be both time consuming and expensive, and could potentially detract from the delivery of city wide priorities and objectives.

8.0 Part 6: Housing

8.1 Sunderland City Council welcomes many of the provisions on housing detailed here. In particular we welcome the requirement for a Tenancy Strategy, which should allow us to ensure more consistency across Landlords in the city. We also welcome the introduction of the new approach to the Homelessness duty, which has the potential to lower costs and bring empty properties into use.

8.2 With regard to the new Homes Bonus however, Sunderland City Council does have a significant concern regarding the method proposed for financing this scheme in future years, which is predicated on the top slicing of Formula Grant. This means the benefit of the New Homes Bonus could potentially be offset in the future by reductions to Formula Grant. Whilst this approach may be beneficial to many areas, Government should tailor its approach to local funding to meet the needs of different areas.

9.0 Conclusion

9.1 Sunderland City Council is supportive of the principles behind the Localism Bill. In Sunderland we already work hard to engage communities and the voluntary sector in the city, to ensure that individuals are able to achieve their aspirations. For example, 85 Council assets are currently being managed by Voluntary and Community Organisations, Area Community Co-ordinators support Area VCS networks which provide an environment for collaboration and partnership working in localities. A range of contracts are let by the Council to a variety of organisations across the statutory and voluntary sector, and in some cases service users are now part of the evaluation process for contracts.

9.2 Supporting and developing communities is integral to the ambition of Sunderland City Council and our partners. Government can have confidence in local authorities’ desire and ability to implement this agenda, and should continue its support to local authorities by reducing red tape and barriers, pooling funding and scaling back legislation.

February 2011