Localism Bill

Memorandum submitted by New Local Government Network (L 158)

Localism Bill

New Local Government Network
Innovation Network of Local Authorities Response

NLGN has an Innovation Network of 34 of England's leading local authorities. The Innovation Network contributes to NLGN's research work and helps to inform our broader thinking on the challenges facing local government.

As part of our ongoing work with our local authority members we have engaged the Innovation Network on the government's Localism Bill. Below is a summary of responses received from the Innovation Network. NLGN would like to share a series of key themes that emerge from our Network partners.

Key themes that merit debate:

1) Amending the Secretary of State's power to restrict the activity of a local authority under the General Power of Competence.

2) Devolution of functions to Mayoral authorities but not to other authorities with alternate governance arrangements.

3) A change to the Executive Management Arrangements

4) European Union Fines and the recouping of these charges from local authorities.

5) Local council tax and the potential for central government to interfere .

6) Planning and a universally expressed concern at the lack of real oversight at an appropriately spatial and strategic level.

1) Removing the Secretary of State's power to restrict the activity of a local authority under the General Power of Competence.

NLGN's Innovation Network of local authorities have expressed a concern that the Secretary of State's power to restrict council activity undermines the broadly localist thrust of the bill. NLGN has advocated removing these restrictions in their entirety. If the Government considers this too radical, a compromise proposed by some Innovation Network members would be to require the Secretary of State to try to reach agreement with local authorities on the scope of any restrictions. This change would safeguard the clarity on local powers that the General Power of Competence introduces and would help prevent a repeal by future governments.

2) Devolution of functions to Mayoral authorities but not to other authorities with alternate governance arrangements.

Innovation Network responses supported in general the move to devolve more powers to local authorities, and to mayoral authorities. However, concerns have been raised that this move could disenfranchise and exclude authorities with different governance models. Partners felt that powers
devolved to mayoral authorities should also be available where appropriate to non-mayoral
authorities to negate the risk of creating a two tier localism.

3) A Change to the Executive Management Arrangements

Concerns were expressed about the bill requiring elected mayors to take the role of Chief Executive. The view was put forward that the roles of politician and Chief Executive are separate and that they perform different functions. To ensure service continuity there would need to be a Head of Paid service if the Chief Executive was replaced and this would be a Chief Executive in everything but name. A mandatory change would introduce significant risks in the system at a time of transition.

4) European Union Fines and the recouping of these charges from local authorities.

Innovation Network responses recognised that public bodies guilty of infractions should be held to account. However, the bodies charged with the responsibility for the European Regional Development
Fund were Regional Development Agencies and not local authorities. Also, at a time of great financial
difficulty for local authorities, the extra pressure of this levy would place an even greater burden on already hard-hit services. Local authorities would welcome at the very least a proper consultation on the process to determine impact on services. As the bill stands it leaves central government with the ability by executive action to pass fines onto councils extra judicially.

5) Local council tax and the potential for central government to meddle.

Innovation Network partners expressed broad concern regarding the provisions made around local
council tax. In particular, unease was expressed:

i. That the Secretary of State's right to determine what constitutes an acceptable or 'excessive' tax level dramatically undermines the bill's localist credentials.

ii. That the role of elected representative loses a key responsibility in the setting of local tax rates.

iii. Regarding the complexity that could arise in two tier areas from precepting authorities if their precept were to be considered 'excessive'.

iv. That the ability to raise tax to offset gaps in funding is a flexibility councils are likely to need in

the coming years - removing this flexibility places an unnecessary constraint on local authorities.

6) Planning and a universally expressed concern at the lack of real oversight at an appropriately spatial and strategic level.

Responses from the Innovation Network expressed considerable concern over the bill's planning elements. Without an appropriately spatially placed strategic mechanism to bring councils together and resolve policy disputes, the bill's proposals look unlikely to result in the Government's desired outcomes. The Innovation Network has expressed a desire for strategic spatial planning through secondary legislation and looks forward to government coming forward with further proposals on how to improve this aspect of the bill. NLGN has suggested that this could come through strengthening the functions of LEPs.

March 2011