Localism Bill

Memorandum submitted by the Association of Greater Manchester Authorities (L 162)

Introduction

Greater Manchester (GM) is the UK’s second city in economic terms, playing a key role in the economic performance of the North of England, and providing the national economy with a strong source of growth, diversity and resilience.

Greater Manchester generates 40% of the North West’s total GVA and 4% of national economic output. Outside of London and the South East, GM has the most potential for economic growth because of its scale and the potential for improving productivity. However, our recent Manchester Independent Economic Review (MIER) concluded that GM has lower than expected economic output for a dynamic modern city of its size because we have some of the most deprived communities in the UK.

We are working to improve and strengthen labour market efficiency and economic productivity and at the same time reduce dependency by tackling worklessness, low skills and deprivation which hold back individuals and communities. We are tackling these issues by designing and delivering ground-breaking interventions in our most deprived neighbourhoods, working with partners and investing public sector resources creatively to engage people, build skills and generate jobs.

As a voluntary collaboration of ten local authorities that has existed for over 20 years, AGMA is well-placed to take on more powers and responsibilities offered in the Localism Bill to help our drive for greater economic growth and to reduce dependency. Recently, we have taken our collaboration to a new level through the creation of a business-led Local Enterprise Partnership (LEP) which will be complemented by a newly-created Combined Authority to be responsible for a range of statutory functions including transport, regeneration and economic development. The key to the success of AGMA is that it has been led and owned locally, acting in the interests of GM communities.

We are keen to see that legislative measures in the Bill can be translated into real changes on the ground in our communities. It is critical that the central role of local government in shaping places where people want to live and want to invest is recognised and that local authorities are fully empowered and trusted to carry out this leadership role. We have a clear vision of a successful and dynamic city-region with successful communities and neighbourhoods and look to central government to help us achieve this vision.

For localism to work there is a need for subsidiarity - devolving services and activities to the most appropriate level closest to the citizen - but also for a cultural shift at the centre of governance in Britain. This is not something that can be achieved quickly or easily and is not a single programme, project or a piece of legislation. It is a function of consistent and committed leadership of Government and the civil service over time. Whilst the Bill is an important milestone towards greater devolution in the UK, it needs to be supported by wider and more fundamental reform before localism can really take root in the culture and governance of our nation.

The Localism Bill does not go far enough in addressing these underlying issues: There is no clear shared vision between central and local government about the role that local government should play and collaboration between public sector partners is still seen as a permissive activity rather than an obligation for some central government departments and agencies. This poses a significant challenge to our successfully delivering community budgets, a key priority for both central and local government, as the reality is that public sector partners do not always engage consistently or positively. In addition, there is also in the Bill a lack of understanding of the appropriate levels for devolution, particularly in the reforms of the planning system.

Above all, we are concerned that the ability of city-regions such as Greater Manchester to fulfil their vital role in driving both local and national economic growth and re-balancing the national economy will not be achieved without the devolution of further powers and responsibilities. The powers proposed in the Bill for Greater London need to be available to Greater Manchester and other cities. This needs to sit alongside greater autonomy and flexibility over finance and spending that will hopefully result from the Local Government Resource Review. We need, as a matter of course, leverage over spending by central government departments and agencies in our local areas.

Of the totality of public expenditure within our areas typically only around 15-20% of spending is under local democratic control because of centralised models of delivery. AGMA firmly believes that local solutions are the best and most efficient solutions and we wish to work with central Government departments to co-design and deliver local outcomes. Only in this way can we deliver more employment, greater productivity, better skills and greater growth. There is great potential for Community Budgets to co-ordinate and harmonise spending and services to deliver better outcomes in local communities – but they need to go further and faster.

The Role of Local Government

In order for localism to work, there is an urgent need for both a clearer definition of the role of local government in the governance of the nation and a change in the central – local relationship to build trust and confidence. Only then can local government perform fully its community leadership role as a key facilitator of local community engagement and co-ordinator of efficient public services.

AGMA has recently submitted evidence to the Political and Constitutional Reform Committee arguing that there is a need to codify the relationship between central and local government. We think the code should define the overall role of local government and ensure central government departments co-operate with local government in the planning and delivery of services and in the local co-ordination of spending. The code would seek to establish more financially and democratically autonomous local government and would put in place measures to ensure that this is upheld. It is necessary to have both the code and the measures contained in the Localism Bill working in tandem otherwise localism will not be able to operate to its full potential.

There are clear tensions in the Bill between the drive to localise and the remnants of centralism which pervade Ministerial and official decision-making in Whitehall. One example of centralism is that Manchester and other cities are to be compelled to hold referendums for elected mayors. AGMA has long believed that determination of its local governance arrangements should be a matter of local determination and not national imposition. In any event, the Mayoral model will make little difference without the wider constitutional settlement between central and local government we seek.

AGMA and the soon-to-be-established and pioneering Combined Authority demonstrate excellent, functioning city-region governance arrangements that have been established from the local level. There have been discussions around the Mayoral model in the past, for example, Bury MBC held a referendum for an elected Mayor in 2008 which resulted in a large majority voting against the proposal, even though the vote itself had been triggered by a petition in the run-up to the controversial vote on congestion charging.

General Power of Competence

We welcome the General Power which appears to go further than the existing well-being power but as currently worded in the Bill the Secretary of State can prevent local authorities from doing anything that he might specify or place conditions on them. These restrictions are unnecessary and do not embrace the spirit of localism where local authorities would act in the interests of, and be accountable to. their local communities. The proposed general power also means councils cannot trade other than through a company. This is not therefore a fully localist measure but one where again, certain central controls are exerted by Government.

Local Authority Schemes of Election

There is a current issue on electoral cycles for one AGMA member Council which may require an amendment to the Localism Bill: Oldham Council is seeking to reduce the number of Councillors from 60 to 40 for reasons of efficiency. As a consequence it wishes change its electoral cycle to elect by halves every two years. Currently, metropolitan councils are not able to revert to election by halves under the Local Government and Public Involvement in Health Act 2007, although section 37 allows non-metropolitan district councils to do so. There needs to be an amendment to section 37 of the 2007 Act to enable metropolitan councils to elect by halves which could potentially be achieved by an amendment contained in the Localism Bill.

Planning

AGMA welcomes the principle of greater involvement of communities in planning, building on existing good practice across Greater Manchester. However, the provisions for planning are extremely wide-ranging and complex, and would be better managed at a local democratic level. At present there is little or no recognition of the democratic accountability of locally elected politicians in the planning process and this is particularly necessary at a time of economic recovery. Elected councillor’s play a key role in mediating between competing interests, ensuring the public good is maintained and ensuring long term planning needs. This is in danger of being overlooked.

The provisions for neighbourhood planning and forums are difficult to operationalise and could lead to conflict and confusion at neighbourhood level with competing interests and there are questions about the democratic legitimacy of groups that may come forward. We have questions over how well taken up neighbourhood planning will be especially in deprived areas where there is little development pressure and no development industry or landowners to fund the process and also a lack of capacity in community groups.

The impact of the changes to the planning system on development is also of concern. A vacuum has appeared at regional level which has created uncertainty for developers until sub-regional arrangements emerge. It is also unclear what delays may occur as neighbourhood plans emerge and are harmonised with Local Development Frameworks and what impact this may have on planning applications and development in general.

AGMA however welcomes the proposed changes to the definition of predetermination, as this will empower councillors to carry out their normal duties – campaigning, talking to constituents, making their political views known – without this being regarded as evidence of having a closed mind on an issue that can lead to local challenge.

Housing

We welcome the freedom for local authorities to apply the changes proposed to meet local circumstances and respond to the needs of communities in their own areas. AGMA wishes to achieve greater devolution of powers and resources over housing and regeneration similar to those proposed for London. With greater control over investment decisions and priorities we can better direct and stimulate development in appropriate locations.

Community Empowerment

Whilst Greater Manchester has for many years supported local communities to take responsibility for their own futures, the continuing impact of the recession and the ongoing impact of welfare benefit changes and public sector cuts mean that both local authorities and communities will struggle to utilise the measures proposed. The Community Right to Challenge is complex and potentially onerous on both interested parties and local authorities. The Community Right to Buy is limited and there is no guarantee that the community itself will be successful. Treasury rules that require disposal by public bodies on the basis of ‘best consideration’ may mean the highest bidder on economic grounds wins and therefore may run counter to the aspirations of this measure.

London

It is inconsistent with the Governments aim of rebalancing the national economy that powers available to the Mayor of London should not be available to Greater Manchester and other core city regions. AGMA therefore seeks the same executive powers over housing investment and regeneration and the power to establish Development Corporations as are available to London. These should be available to all cities irrespective of their governance arrangements.

EU Fines

Sections of the Bill would require local authorities to pay parts of national fines passed down to the UK Government by the EU. It is not clear from the Bill under what circumstances these would apply and this needs to be clarified. However, as a general rule we suggest that such a regime should be operated consistent with the principles of both fairness and localism whereby responsibility for local government finance and expenditure is increasingly a matter of local responsibility and accountability.

March 2011