Localism Bill

Memorandum submitted by Sheffield City Council (L 143)

1. The Localism Bill (the Bill) presents a significant opportunity to empower local people with the means to run and shape their local areas and better hold local services to account. The Bill is central to the Coalition Government’s approach to the reform of the public sector and presents a unique opportunity to fundamentally transform the relationship between central government, local government and local communities.

2. We believe the proposals in the Bill support our ambition to empower local people to take decisions about and to design the services they choose to access. We are committed to devolution of powers and decision making local people and communities through local democratically accountable structures. As an enabling piece of legislation, we believe the Bill supports the achievement of our ambition.

3. We welcome the opportunity to provide our views to the Committee. Our response is set out as follows:

· An overview and strategic position on the proposals

· More detailed responses to the specific parts of the Bill.

Summary and Overview

4. The idea of empowering communities and enabling local people to take decisions about issues that matter to them is nothing new in Sheffield. We have been working with our local communities to ensure that people from across the city have choice, voice and an equal opportunity to access services and influence decision making regardless of their background or geographical location.

5. We have established seven Community Assemblies across the city which have empowered communities to take decisions on local issues. This includes devolved streetscene and parks budgets that enable local people to shape services. We’ve also devolved further budgets and services including highways; youth services; community safety, and climate change.

6. The Assemblies are changing the way the Council responds to and works with local people and partners. We are now focussing our attention on delivering the next phase of devolving services and functions including planning, and devolving a wider range of budgets and powers. We are also reviewing our local strategic partnership, working with partners to devolve activity to the Community Assemblies.

7. In October 2010, Sheffield City Council agreed the Future Shape policy which provides our approach to reforming local services to meet local needs within the new financial context. Future Shape features seven policy principles, including ‘choose and use’ and ‘devolution and localism’. These two concepts are central to how we want services in Sheffield to be delivered in the future: with local people in control of the services they choose to access.

8. We feel that we are in an ideal position to deliver the localism challenge laid down by Government and indeed, we welcome the decentralising and localising principles that are inherent in the Bill.

9. Sheffield City Council is striving to devolve powers to local communities and enable people from Sheffield to make choices about and to design the services they access and have a say about the decisions that affect them and their communities. In many ways, the Localism Bill complements and strengthens our determination to empower local people, get things right first time for all our customers and deliver the priorities in our Corporate Plan. Clauses such as the General Power of Competence (GPC) will strengthen our capacity to find local solutions to issues which affect our communities. We’ve already made effective use of the Sustainable Communities Act to engage with Government to address legislative burdens which undermine the sustainability of communities and we expect that the GPC will embolden this and provide new solutions for local service delivery (shared services, mutual approaches, opportunities to open new venue streams).

10. The Bill also contains a range of powers which increase the ability of communities to influence decision making and have greater control over things that matter to them. The community right to buy, right to challenge, and increased use of local referenda, will support our ambition to increase democracy in Sheffield and in local communities through our Community Assembly structure. The introduction of Neighbourhood Planning also supports the empowerment of communities but we are concerned that the proposals do bypass democratic accountability structures and planning expertise in local authorities. We would however, welcome proposals which increase the engagement between communities and local decision making on planning.

11. Whilst the Bill contains a range of measures which impact on local government, it is potentially a missed opportunity to link with the Local Government Resource Review (LGRR) and fundamentally change the relationship between central government, local government and ultimately, local communities.

12. In conjunction with the LGRR, we would encourage Government to go further and grant local authorities greater freedoms and flexibilities which enable us to further devolve powers and budgets to local communities, co-ordinate spend across the public sector and drive economic growth through the Local Enterprise Partnerships (LEPs). We believe the Localism Bill should complement the LGRR and take a broad view of local government finance, incorporating greater opportunities for Tax Increment Financing (TIF) and community budgeting in addition to the localisation of business rates.

13. We firmly believe that the Localism Bill could support local authorities, as the democratically accountable representative of local people, to have greater influence over the funding that is allocated by central government across public services. We want to take opportunities to put communities in charge of budgets and support them to make funding decisions which impact on their community. We are already devolving budgets to communities (through our community assembly structures) and to individuals (through personal budgets). We are currently delivering a Local Integrated Services (LIS) pilot with the Cabinet Office which aims to engage communities in deciding how public expenditure from across the sector could be better spent in one area of Sheffield.

14. At a city level, we would like to see the Bill and the LGRR build on the commitments set out in the Comprehensive Spending Review 2010 and pursue community budgeting approaches which would enable locally elected representatives and local people to decide how best to use the totality of spend in an area. The Government have committed to giving local people control over public spending and whilst some steps have been made (eg. council tax referenda), the greater prize is to address the wider issue of specific organisational budgets controlled by Whitehall which remain focused on organisations rather than better outcomes for local people.

15. We would like Sheffield to have a greater say over the total funding available to the city so that local people have a real say in how the money is spent. Large urban areas which have more devolved financial controls are more economically competitive, across and beyond the EU (State of the Cities Report, ODPM 2006). The OECD average for locally raised finance through taxation is 55%. In the UK this is just 17%, with local authorities in direct control of only about 5% of all taxation – Council Tax. This leaves cities such as Sheffield less able to enhance their competitiveness, which disadvantages the country’s economic recovery and disadvantages local people greater democratic accountability.

16. We recognise and agree that London has a distinct and crucial role in the governance and economic success of Britain. However, we would like to see the Localism Bill provide a mechanism for the devolution of similar powers to cities such as Sheffield. As one of the eight Core Cities outside London, we see the powers available to the Mayor of London as the blueprint for what should be available to our cities, regardless of form of governance preferred by local people. Accounting for 27% of the national economy, Core Cities such as Sheffield need to be empowered to work with local business and deliver skills, jobs, housing and transport improvements. It is essential that Government does not miss this opportunity to enable the devolution of greater powers to cities and therefore we would like to see an additional element to the London section of the Bill which facilitates the potential for other cities to access similar powers.

17. It must also be made clear that such additional powers are not dependent on the adoption of a mayoral model of governance. The localist principles of the Government and the Bill, rightly, seek to deepen and strengthen democracy at the local level. The model of governance for councils should be a matter for local people to decide and should they opt to retain the Leader/Cabinet model that decision should not deny the city from accessing greater powers which will enhance local accountability and support public sector reform and economic growth.

The following sections comment on specific sections of the Bill.

PART 1 – LOCAL GOVERNMENT

General Power Competence (GPC)

18. We welcome the introduction of the GPC and the principle of enabling local authorities to better meet the needs of local people. It is a more explicit demonstration of the role and capability of local government to deliver local solutions.

19. However, we feel that the caveat which enables the Secretary of State to overrule local authority usage of the GPC undermines the principles of localism and decentralisation as it potentially enables Government to intervene in what may be overtly local issues. The notion of GPC is that it will encourage local authorities to take greater responsibility for local needs rather than referring issues to Government, as long as it is ‘within the law’. However, the potential for further involvement by the Secretary of State may deter the GPC’s usage.

20. The GPC will not help us with issues that are currently stopping us from realising our aspirations to devolve to the third sector. In particular, we are finding the TUPE, regulations and the VAT rules a constraint in endeavouring to transfer responsibilities to the Voluntary, Community and Faith (VCF) sector.

Governance

21. A recent consultation which asked local people about their preference between the two currently available forms of governance (i.e. strong Leader and Cabinet or Elected Mayor and Cabinet, under Local Government and Public Involvement in Health Act 2007), resulted in only 30% of respondents favouring the mayoral option and 70% preferring the strong Leader model.

22. We have no reason to believe the electorate would take a different view in 2012.

23. The imposition of shadow mayors without any mandate from the people in Sheffield and without any consultation prior to it being implemented we believe is unreasonable and potentially judicially challengeable.

24. Locally Elected Members have, thus far, favoured the Leader/Cabinet model as they believe that these models offer greater local accountability. The Council has the ultimate authority to remove the Leader, whereas an Elected Mayor cannot be removed by resolution of the Council.

25. We do not agree that elected mayors would strengthen local democracy. Indeed, many local people have indicated that it would concentrate too much power in one individual, thus reducing the power of locally elected councillors to represent their communities by scrutinising the actions of the Executive.

26. The Bill indicates that the successful introduction of an elected Mayor would enable local areas to access broader and more wide ranging powers. As an ambitious city that works closely with local people to meet their needs, we fundamentally believe that the devolution of additional powers from Government should not be dependent on the election of Mayor.

27. If local people decide through a democratic referendum to retain the Leader/Cabinet model, local politicians should be empowered to best meet local needs through the same devolved powers available to other cities in England, regardless of their governance model.

28. In addition, we do think a Chief Executive is required to run the council managerially, and think a Chief Executive and Leader model is one that works well. Further, the potential compensation costs for existing Chief Executives are high.

29. Even if an Elected Mayor were to be in place, we still believe that expecting a mayor to oversee managerial responsibilities such as staffing and delivery would be an unnecessary distraction and detract from the strategic and visionary leadership which the role of Leader provides. We believe that a head of Paid Service is required.

Predetermination and Standards

30. We support the proposals outlined in the Localism Bill which bring an end to the Standards regime and empower local people to hold their democratically elected representatives to account. We fundamentally agree that local areas should have the power to define the standards to which Elected Members should adhere, empowering local people and councils to hold Members to account.

31. We welcome the duty to promote and maintain high standards of conduct and our Members will be keen advocates of the new approach. Sheffield’s existing Standards Committee have previously written to the Secretary of State with regard to the abolition of the standards regime:

· Affirming its commitment to upholding of high standards in public office and in relation to the Committee’s role in raising the profile of Members’ conduct and the valuable involvement of independent members. The Committee also pointed to the importance of transparency and independence in investigating allegations.

PART 2 – EU Fines

32. We agree with the view of the Local Government Association (LGA) that that the proposals in the Bill which would require local authorities to contribute to fines passed down to the UK by the EU are unfair.

33. We would strongly urge Government to retain the current system.

PART 4 – COMMUNITY EMPOWERMENT

Local Referenda

34. We welcome the extension of referenda as a method to enable local people to have a greater say in local decision making but Local Authorities must be adequately resourced for this by central government.

35. We were pleased that on 25th January 2011, Greg Clark MP responded to a question from Simon Kirby MP about the potential cost of referenda. Greg Clark stated that "the Government are committed to ensuring that additional burdens on local authorities are funded in accordance with the new burdens doctrine" [1] .

36. We are supportive of the Government’s commitment to enhancing local democracy and see local referenda as an important mechanism for inspiring local democratic engagement and empowering people to directly influence decision making.

37. However, we have estimated that the cost of a standalone referendum (ie not aligned to any other local, national or European election) would be around £500k for Sheffield. Therefore, Government must adhere to the New Burdens Doctrine and ensure that local authorities are not financially undermined by our efforts to support local democratic accountability.

Council Tax Referenda

38. We are supportive of the proposals to introduce referendums on excessive Council Tax increases as it should be for local people to decide how their money is spent. However, the Government may want to consider enabling local people to decide what is ‘excessive’ when Council Tax is raised. Empowering the Secretary of State to define ‘excessive’ is not reflective of the localist principles inherent in the Bill.

Community Right to Challenge

39. We are supportive of the principle of a Community Right to Challenge. It is important, however, that community groups demonstrate due diligence and be viable bodies able to take on council assets and services before such transfers can go ahead. The council must have adequate safeguards in place to ensure protection of public assets and property and services.

Community Assets

40. We welcome the Government’s proposals to enable communities to have greater control and influence over the running of local services and important community assets. We work closely with local people through our Community Assemblies and would seek to support community groups and organisations to develop sustainable business models of community assets.

41. We want to ensure the sustainability of our approach to maintaining and improving community assets and we will work with communities to ensure that their business plans have full recognition of the resources needed to support community assets.

42. We support the principle that communities should have greater ownership over assets but we feel that the proposals would be strengthened by emphasising the opportunities for cross sector ownership of community assets and the development of radical new ownership models, such as co-operative models. For example, we hope that the legislation enables the establishment of shared asset ownership models where the sustainability of the community sector could be supported by owning premises with private and public sector organisations or as co-operatives with other voluntary, community and faith sector organisations.

43. We will look to support opportunities to be involved in service hubs whereby public sector agencies co-locate, reducing the cost of the local public sector estate and delivering economies of scale. The rationalisation of the public sector estate may create further opportunities for communities to find new uses for former public sector assets.

44. We hope to support communities and community organisations to be sustainable and have access to the appropriate premises. For example, it may be appropriate to set a shorter term for a lease to ensure the project that the community of interest group wish to deliver is sustainable and/or that the group do have the capacity to deliver – this being used to protect the community interest in the asset.

45. We welcome the opportunity for local communities to take greater responsibility and ownership over important community assets. However, we feel that some of the proposals in the Bill conflict with the ethos of localism as they enable the Secretary of State to regulate on community assets, limiting to ability of communities and local councils to decide which community assets should be available to be co-ordinated by local communities. We feel that such decisions should be made by local people with local councils and not by Whitehall .

46. In particular, we feel that the Bill should define exactly what a ‘community asset’ is or preferably empower local communities to agree this with local authorities and embrace the localist intentions of the Bill rather than enabling the Secretary of State to set a national definition .

PART 5 – PLANNING

Plans and Strategies

47. We support the planning proposals which abolish unnecessary regional approaches and enable councils and local communities to shape plans to reflect local need. The abolition of the RSS, prospect of leaner national planning policy and new Neighbourhood Plans all increase the importance of strategic local development plan policies.

48. We welcome the provision that Inspectors’ Reports would not be binding. The present arrangement introduces a backloaded element to the process, can result in Inspectors getting into too much detailed change and leaves an impression that local opinion as well as the local authority can be overridden. It is sufficient for the Inspector to be able to conclude on the soundness of the documents and for that to be on the record.

Community Infrastructure Levy

49. The retention of CIL is supported. Also supported are the amendments in Clause 95 to pass some funds to neighbourhoods where the development has taken place and allowing funds to be spent on infrastructure maintenance as well as new infrastructure.

Neighbourhood Planning

50. We welcome th e s e proposals and indeed Sheffield has undertaken neighbourhood plan ning in various ways . For planning decisions t o be taken at neighbourhood level , it will be important to determine the level of decision making, and those who might be involved and how communities would exercise the right to determine planning. We will look to work with local communities through the Neighbourhood Planning Process to support them to achieve their local planning needs and ensure their needs are supported by the local development plan.

51. We are keen to support the Government’s ambition to put local communities in charge of decisions that affect them and believe the neighbourhood planning proposals enable this. However, we believe that the ‘right to build’ proposals would operate more effectively if they had greater local democratic accountability through linkages with local devolved mechanisms (eg our Community Assemblies) and local Elected Members.

52. We would also welcome further clarification around how the costs of plan making support, examination and referend a are to be recovere d in the Neighbourhood Planning model.

53. We strongly support the principle that Neighbourhood Planning should conform with the strategic content of the local development plan. This is covered for Neighbourhood Development Orders in Schedule 10 8 (2)(b) ("the making of the order is in general conformity with the strategic policies contained in the development plan for the area of the authority (or any part of that area)". We suggest that the Government may wish to insert something similar for Neighbourhood Plans in to Schedule 9.

54. Our Core Strategy does not go as far as specifying how much development should take place in each local area. The City Policies and Sites document will allocate a lot of sites and go some way towards indicating levels of development in each area but we will still expect other windfalls to come forward. Neighbourhood Plans could be used to refuse the windfalls and reduce supply and therefore increase pressure elsewhere in the district.

55. Neighbourhood Plans will be produced by resident groups and ratified by a referendum of local residents. We believe that local people and businesses should have an equal opportunity to influence local planning decisions and that any local referendums should be on a ‘one member, one vote’ approach, allowing people and businesses an equal say.

56. The Councils supports the proposals of The Royal Town Planning Institute. Neighbourhood Development Orders (NDOs) add an unnecessary complexity when the Local Development Order mechanism is already available to encourage development. If progressed, it is essential that NDOs are only designated in the context of approved Neighbourhood and Local Plans and that sufficient resources and expertise are available to all communities to participate in neighbourhood planning and the designation of Development Orders.

Consultation

57. Separate DCLG statements indicate that this is intended to supplement LPA consultations on planning applications, but this clearly needs defining. The requirements are so loosely defined that less scrupulous developers could easily do an ineffective job. Given that LPAs like Sheffield have used their extensive experience and local community contacts, with inspector scrutiny, to develop local pre-application consultation guidelines as part of their Statement of Community Involvement, it would make more sense for the Bill to simply add a statutory requirement for major developers to comply with the pre-app requir ements of their local SCI.

Enforcement

58. These clauses introduce some elements that are clearly intended to strengthen LPAs’ enforcement powers, particularly with respect to persistent advertising offences and concealed breaches of control, and are welcomed.

59. Clarification on predetermination is helpful and should remove any fear planning committee members may have of community engagement due to the possibility of legal challenge.

PART 6 – HOUSING

Allocation

60. We welcome the local flexibility to decide who should qualify to go on the social housing waiting list.

61. We agree that the proposal to introduce new flexibilities to the allocation framework would allow landlords to reduce void and turn around time through arranged chain lettings and therefore generate savings. However, we also think that changes as a result of the new flexibilities will generate new costs. For example, there may be additional costs for local authorities associated with financial assessments to test against new qualifying criteria for the waiting list. Costs will also be generated by removing existing tenants from the framework as this is likely to require a dual register and process for recording need of both existing tenants and new applicants and for allocating to both sets of applicants. This may cancel out savings generated from reduced turnaround time.

62. We also have concerns that this proposal will restrict the ability of landlords to meet newly arising need particularly in cases where households need larger homes. This is because chain lettings to existing tenants will result in the larger homes being allocated to existing overcrowded tenants and the smallest properties being advertised to new tenants.

Homelessness

63. We agree that the current statutory reasonable preference categories should remain unchanged; they include all homeless households who are not in ‘priority need’ and ensures that homeless households are prioritised.

64. We welcome the flexibility to be able to allocate a suitable property in the private sector to discharge homelessness duty. However we are concerned that the welfare reform, for example a reduction in the Local Housing Allowance to the 30th percentile will restrict our ability to use changes to the homelessness legislation and that it will have an undesirable impact on peoples housing choices. The LHA issue is particularly relevant for young homeless people as the LHA doesn’t adequately meet private rent levels for shared accommodation in the city.

65. We support the Government’s view that that the right period for a fixed term tenancy in the private rented sector should be 2 years which is in line with proposals for local authorities and registered housing providers.

Social Housing: Tenure Reform

66. In line with our commitment to empowering local areas to make decisions based on local need, we are supportive of the Government’s approach which enables local areas to determine the tenure length. We have resolved that lifetime tenure for local tenants is an important principle that must be upheld and confirmed that it will not be ending lifetime tenure for council tenants in Sheffield.

67. We are particularly concerned about the impact the affordable rent and flexible tenure proposal could have on long term regeneration schemes. On 2 schemes in particular, Sheffield City Council has made a commitment, supported by the RHPs, that existing residents can move into a new home, with the same rent level (taking into account rent convergence and the fact that it is a new house) and same level of security of tenure as their existing council home. In order to deliver these schemes there needs to be a transitional arrangement for specified schemes which allows both for the new build to be let on a social rent with an assured tenancy and additional funding to be made available to enable the commitments made to existing tenants to be honoured.

68. Whilst we are supportive of the housing proposals, we feel Government may want to consider the impact of the new affordable rents and flexible tenancies on housing choice for residents on the lowest incomes. The proposals might mean that secure council tenants will be less open to future regeneration schemes, involving the demolition of their obsolete council home and its replacement by a RHP. While they would still have the option to move into alternative council housing, the pressures on demand here would severely restrict the speed of the whole project and condemn some people to living on partly inhabited estates for many years.

69. When consulted, tenants and RHPs agreed that tenancies for social housing should support the sustainability of our neighbourhoods and the communities that live there. It is our opinion therefore, that the minimum fixed term for flexible tenure should be for no less than 5 years for general tenancies and longer in certain circumstances, for example families which include children of school age. We also think that the landlords should be able to decide whether certain households are guaranteed a home for life rather than this being set out in the Tenancy Standard

70. We also think that the duty on local authorities to produce a tenancy strategy is at odds with funding rules, set out by the Homes and Communities Agency for registered housing providers (RHPs), which means that grant allocation is determined by the RHP business plans, and not local authority tenancy strategies, which have been developed in consultation with local people.

Housing Finance

71. Sheffield City Council responded to the previous Government's consultation on th ese proposal s in the spring of last year. We were minded to support the move to self - financing as we are keen to see greater local determination on finance decisions for Council housing, but emphasised that the Council's willingness to accept a financial settlement offer from the Government depende d on the detail of that offer.

72. On 1 st February 2011 , the new Gov ernment issue d a revised settlement to all Councils for moving out of the HRA subsidy system and into a self- financed position. This revised settlement is no longer an offer - Councils no longer have the choice of which approach to take.

73. We support moves which enable greater local determination of housing finance and welcome the dismantling of the inflexible and bureaucratic system that exists currently. We urge the Government to ensure that the new approach will ensure greater local independence and will not leave councils worse off.

Housing Mobility

74. The proposals to remove existing tenants from the allocations framework are intended to help landlords make best use of their stock. The legislation relating to mutual exchanges does not help landlords ensure best use of stock. The grounds for withholding consent to an assignment by way of exchange are set out in Schedule 3 of the Housing Act 1985. Ground 3 of this schedule is "The accommodation afforded by the dwelling-house is substantially more extensive than is reasonably required by the proposed assignee." There is no definition of "substantially" so it's up to the judgment of the landlord with the proviso that if consent was refused unreasonably (the property was bigger than needed but not substantially so) the tenant could challenge the refusal by way of judicial review.

75. We therefore feel that there is a case for removing the word "substantially" from schedule 3 of the 1985 Housing Act to help landlords ensure that in all assignments, social housing is being occupied according to need.

Regulation of Social Housing

76. As the TSA is to be abolished, we would welcome greater clarity on the future arrangements for social housing regulation.

PART 7 – LONDON

77. Whilst we welcome many aspects of the Localism Bill, we do feel that for cities such as Sheffield, it simply does not go far enough in addressing the imbalance of powers between Whitehall and local areas. In particular, we feel that cities such as Sheffield should be entrusted with similar powers to those available in London. This is crucial to ensure cities are able to meet the challenge of driving economic growth in the UK.

78. We would therefore like to see an amendment to the Bill which facilitates the future devolution of similar powers to those available to the Mayor of London to other English cities.

79. We appreciate that there are distinctions between London and other English cities and accept that there would likely be appropriate competency criteria attached to the devolution of such powers. However, we are clear that the devolution of such powers should not be dependent on the adoption of a mayoral model following a positive referendum result. Such powers should be available regardless of executive structure.

80. The powers proposed to be devolved to London in the Localism Bill are significantly greater than those enjoyed by any elected mayor anywhere else in the country and will be more than those mooted for the 12 cities. The Mayor of London powers provide a blueprint for what Sheffield , other Core Cities and/o r their Local Enterprise Partnerships (LEP) may want access in the future to drive local economies and meet the needs of local people.

81. This is not a n issue of resentment over the powers available to London : we recognise and support its distinction and importance to the UK . However, we wish to see greater recognition of the economic and political importance of cities such as Sheffield and the Localism Bill presents a real opportunity for Government to entrust cities with the powers to deliver democratic and economic change for the benefit of local people and the country as a who le.

February 2011


[1] Hansard (25 th January 2011) Written Answers http://services.parliament.uk/hansard/commons/bydate/20110125/writtenanswers/part015.html