Memorandum submitted by Durham County Council (L 174)

1. Background information on Durham County Council

1.1 Durham County Council is a single unitary authority, serving over half a million people. It was created on 1st April 2009 when the seven district councils in County Durham were abolished and responsibility for the services, previously delivered by these councils, was transferred to the County Council. The Council is the fourth largest local authority in the country, in terms of population and the largest in the North East. It has 126 elected members and has adopted the Leader and Cabinet style of governance. In County Durham there are 13 town councils, 91 parish councils and 22 parish meetings where no formal local council exists.

2. Evidence

2.1 The Council’s views on the key areas of the Localism Bill are set out in four attached appendices:

· Appendix 1 - Part 1 - Local Government


· Overview and Scrutiny

· General power of competence

· Governance

· Standards

· Appendix 2 - Part 4 - Community Empowerment


· General comments on community empowerment

· Local Referendums

· Assets of Community Value

· Appendix 3 - Part 5 - Planning


· Plans and Strategies

· Community Infrastructure Levy

· Neighbourhood Planning

· Appendix 4 - Part 6 - Housing


· Allocations and Lettings

· Homelessness

· Tenure Reform

· Housing Finance Reform

· Mobility

· Regulation of Social Housing

March 2011

Appendix 1

Part 1 – Local Government

1. Chapter 1 - Overview and Scrutiny

1.1 The Localism Bill consolidates a range of existing scrutiny legislation covered by various Acts and introduces new powers in relation to flooding. The new powers to review and scrutinise the flood risk management functions or coastal erosion risk management are particularly welcomed, given the damage caused to properties and infrastructure in County Durham as a result of flooding.

2. Chapter 2 - General power of competence

2.1 The general power of competence to take any action, apart from that which is specially prohibited, is welcomed. With regard to procurement, the power is seen as a positive and helpful measure, which should enable the Council to make full use of its trading powers.

3. Chapter 3 - Governance

3.1 This Council is concerned that the ability of the Secretary of State to impose a Mayor, or any other form of executive, is inconsistent with any declared principles of localism. The success of the mayoral system is not yet established. One mayoral council has in recent times, required intervention. Imposing the mayoral system not only undermines the principles of local democracy, but risks disruption and dysfunction if the mayor is unable to work with the rest of the elected body.

3.2 The proposal that the Mayor can assume the responsibility or management of the Chief Executive is worrying. Under Section 7 of the Local Government and Housing Act 1989, every appointment to a paid office or employment in a local authority must be made on merit. The Chief Executive is responsible for the proper appointment, management and organisation of the authority’s staff. This ensures that an officer, whose role is to provide politically objective advice, is appointed by an officer who has the same duty and has been appointed on merit. This Council is concerned that these proposals will significantly undermine the principle of objectivity.

4. Chapter 5 - Standards

4.1 There is also a danger that public confidence in elected members could decline with the abolition of the Standards Board regime and the removal of sanctions. They are useful tools ensuring that checks and balances are in place. The risk of a standards complaint can curb bullying behaviour or actions, which put the authority or its reputation at risk.

4.2 The concerns of the Government about the cost of vexatious complainants are understood entirely. The reforms and the removal of the standards role for parish councils will be welcomed by authorities, who have had to spend disproportionate resources dealing with vexatious matters or low order code infringements. However, the removal of the standards committee, with the ability to sanction other than censure, is a step too far and risks creating a culture of misconduct with impunity.

4.3 It is doubted whether a register of interests, backed up with criminal sanctions, will work in cases where an abusive councillor’s conduct cannot be directly seen as linked to his/her desired outcome (e.g. if not part of decision making process but only operating in the background). It is also questionable that the police, also subject to public sector spending reductions, will have the resources to prioritise the investigation of councillor misconduct that falls short of obvious and reprehensible corruption. The removal of a code carrying sanctions is of concern when seen alongside the proposal of allowing a Mayor to take over the role of Chief Executive. This could become a fertile area for abuse.

4.4 It is suggested that a new code and sanctions menu be devised, which is simpler, clearer and allows the Monitoring Officer to weed out trivia or vexatious complainants and mediate with a view to securing desired outcomes (e.g. apologies). Referrals to the Standards Committee should become matters of last resort, and the Committee should be suitably empowered, if needed.

Appendix 2

Part 4 – Community Empowerment

1. General comments on community empowerment

1.1 Much of the Localism Bill has consequences for our wider communities and should therefore not be looked at in issue based silos or by organisations in isolation. In County Durham, partner organisations are working together through the County Durham Partnership to share the implications so as not to duplicate resources or develop contradictory approaches. Localism has far reaching implications on how services are shaped, delivered and managed, which should not be underestimated or accelerated without first fully exploring what they will mean for a locality and the communities within it.

1.2 The principle of devolution of power to communities is positive. However it is by no means clear that the Bill as described will achieve its aim. This is because there is a lack of clarity as to how the Bill will work in practice. Detail is lacking both on how local authorities can practically respond to requests to invoke the Bill and to clarify how communities can invoke the Bill in practice. The former is of concern as there are clear financial risks and costs to local authorities arising from the Bill (as detailed below). In addition, clarity is needed to enable the general public to manage their expectations of what the Bill means in practice. Without resolution there could be a clear unintended consequence that communities feel less engaged and empowered through the creation of a system that does not work effectively.

1.3 Part of the overall costs which need to be weighed arise from the fact that, to support communities to exercise this power, there will be a need in many areas for communities to be enabled to develop their skills, knowledge and confidence to take initiatives forward. This support will need to be targeted, but due to reduced resources within the Public Sector and Voluntary and Community Sector (VCS), this may be challenging.

1.4 Implementing the Bill will be incredibly resource intensive, in financial and staffing terms for the public sector, as well as for town / parish councils and local voluntary and community groups.  Again these costs need to be identified and considered as they are additional to those incurred by local authorities at present. In order to meet challenging spending reductions many authorities, including Durham, have had to reduce staffing across the authority and will find it particularly challenging to meet the new obligations.

1.5 The new ‘Community Right to Build’ will require local communities to form a corporate body in order for them to enact this part of the Bill. In many cases people who become involved in local community activities do so because they have an interest in a particular issue, and voluntarily give up their free time to support and work with others with similar interests. They do not, in many cases, wish for this activity to become a commitment, either of their time or contractual. This involvement will also require detailed knowledge of strategic plans and policies of Local Authorities, specifically the Local Development Framework, which is a complex and technical series of documents.

1.6 The current commissioning system would be daunting to many (VCS) organisations especially the more locality based community groups.  If groups are to take on services then they would need support to get them into a position to enable this to happen.  Support in some circumstances would come from larger VCS organisations, however in the current economic climate, this may prove difficult for them.

1.7 In addition to increased direct costs associated with implementing the Bill, as framed it poses a considerable risk to the Council’s ability to deliver our Medium Term Financial Plan and indeed this has been incorporated in the risk register associated with the budget. Local authorities face a heavily front loaded reduction in government grant and in order to deliver such challenging reductions, it is vital that decisions and implementation take place as rapidly as due process and consultation permit. The largest risk to this is the adoption of an impractical or ill-thought out approach to challenge. Delays to implementation of service reviews through the Localism Bill or other means will inevitably lead to the need for further savings which are likely to impact on frontline services and jobs. This is not a risk that councils can manage alone and requires concerted thought and skilled drafting if the Bill is not to have unintended consequences for council budgets across the country.

1.8 It is not at all clear how the Council can take into consideration financial implications in assessing applications from community groups. Furthermore, what happens if the Council rejects an application from a community group to take over a service is not clear. It is possible that the community group could have the right of appeal to a higher authority although this is not stated in the Bill.

2. Chapter 1- Local Referendums

2.1 The most significant concerns for the Council regarding local referendums are also financial and mirror those identified in the previous section, namely the direct costs of holding referendums and the much larger, indirect costs of postponement or delay to budget implementation.

2.2 As described above, in the next few years councils will need to make significant savings. The size of the savings in this Council means job losses, termination of contracts and reductions in services. To meet these spending reductions, savings need to be planned into timetables that take account of consultation periods and contractual notice periods. If such timetables are the halted by referendums, which also have cost implications, more public money will be lost.

2.3 This Council is concerned that the ability and right of a democratically elected body to get on with its duties could be hampered by active minorities, who may wish to use referendums as a means of slowing down or halting an action that is not welcome to them, but is otherwise rational and has been subject to appropriate consultation. The Bill’s provisions on referendums seem to overlook the efforts made by councils to engage the community in the decision making process.

Appendix 3

Part 5 - Planning

1. Chapter 1 – Plans and Strategies

1.1 As a new unitary authority, the Council is 22 months into preparing a new development plan for the County and is on target to complete the draft plan later this year, prior to an Examination in Public during 2012. 

1.2 Two years ago, each of the seven former planning authorities in County Durham was obliged to abandon work on development plans. 

1.3 Given this previous experience in undertaking abortive work, the Council is concerned that history may repeat itself, and is seeking assurances that appropriate transitional arrangements will be put in place to permit the Council to complete the County Durham Core Strategy DPD (The County Durham Plan) to enable an effective strategic planning policy framework to be put in place as quickly as possible for the new authority. The County Durham Plan is necessary to provide an effective policy framework for the proposed neighbourhood plans and support for its completion is sought from the Government. If this was not possible, it would leave the County Council in uncharted waters with not having such a framework to progress for example economic developments/regeneration plans.

2 Chapter 2 – Community Infrastructure Levy

2.1 The Council would like early clarification as to how the proportion of the new Community Infrastructure Levy to be ascribed to the neighbourhood level will be determined.   

2.2 Plan making is well advanced in County Durham and the cost of new infrastructure is a significant issue. It will not be possible to finalise the County Durham Plan and demonstrate its deliverability unless we can take account of the proportion of the Levy to pass to the neighbourhood level.  

2.3 As circumstances and infrastructure requirements vary widely from authority to authority, it is considered that this issue should be determined locally, however early clarification is required on how this will be addressed to avoid unnecessary delays in the plan making process.

3 Chapter 3 – Neighbourhood Planning

3.1 Durham County Council recognises the importance of Neighbourhood Planning.  The County is made up of more than 100 local councils and 250 separate settlements and this complex network of small neighbourhoods is a defining feature of County Durham. In terms of developing practical detail on how neighbourhood planning could work, we would urge the Government to think through the implications for an area of our complexity. We fully understand how much easier this will be in practice for many more compact, urban authorities.

3.2 The Council wishes to continue to engage effectively with these communities to bring forward development and accelerate the economic development of the County (the primary focus of the County Durham Plan).  It is anticipated that a variety of different routes will be adopted locally to pursue the development of Neighbourhood Plans, but the large number of local communities will make it difficult for the Council to respond and co-operate within the spirit of the Bill. 

3.3 The Council would like this aspect of the planning system, sensitively reformed to ensure that authorities as large and complex as County Durham, can continue to effectively engage with its local communities within the spirit of the 'Duty to Co-operate', and without the risk of being 'swamped' by the technical implications of these reforms. It may be possible to work with 'clusters' of adjacent and complementary communities, which would help to ensure co-operative local planning.        

3.4 The community support offered by the Planning Aid service has become a vital component of the planning system, and one which fits well with the 'Big Society'.  The Council urges that future funding is tailored to ensure the service survives and that arrangements are agreed to provide sufficient time for the service to adapt to the new circumstances.

Appendix 4

Part 6 – Housing

The Council’s Housing Service has consulted with its two Arms Length Management Organisations, Dale and Valley Homes and East Durham Homes and has agreed the following joint response:

1. Chapter 1 - Allocations and Lettings

1.1 We welcome the proposals that existing reasonable preference groups are retained alongside a new flexibility for Local Authorities to determine who should qualify to go on their list. We will take advantage of this flexibility, but are limited by the lack of housing in the social sector in our area. A refresh of the 2008 Strategic Housing Market Assessment has recently been completed, which recommends the need for 1477 affordable housing units per year over the next five years.

1.2 The potential advantages of the proposals are:

· Applicants for social housing would be more realistic about their housing options

· More realistic waiting lists would lead to a more accurate picture of need for sub market rented housing locally

1.3 Potential disadvantages are:

· Turning social housing into welfare housing – so it is only accessible by people in acute need

· Increased pressure to help applicants access accommodation in the private rented sector

· An increase in the risk of homelessness if and where tenancies fail in the private rented sector.

1.4 The new proposals in relation to transfers may not result in savings, indeed, we believe that a move to separating out transfers will increase stock turnover, resulting in an increase in administration costs and void relet costs.

1.5 We are concerned that there seems to be a suggestion that the differentiation between exclusion for unacceptable behaviour and reduced preference are going to be removed, and that it will be for each Local Authority and housing provider to decide what behaviour will lead to exclusion. Clarification is required as this could lead to inconsistencies, and people being excluded who are in particularly vulnerable groups.

2. Chapter 1- Homelessness

2.1 We have significant concerns with some of the proposals. Making it mandatory for homeless applicants to accept a private rented property in discharge of the main duty, raises the issue of affordability. In most cases private sector housing would only be affordable to those in receipt of benefits.

2.2 New local housing allowance caps and the shared room rate may limit access to private rented sector housing.

2.3 There is a particular issue in relation to vulnerable applicants who are under 35 years of age, as there appears to be a conflict with the announcement to extend the single room rent benefit restriction to those under 35 years. For those people who are accepted as homeless, it is unlikely that Local Authorities would ever be able to identify suitable private rented sector housing that was affordable for a single person under the age of 35. Whilst the applicant will qualify for Direct Housing Payment, this is discretionary and time limited and would not provide a stable solution.

2.4 Homelessness and 12 month tenancies can lead to ’revolving door homelessness’ as 12 months is insufficient time to recover from the negative impact homelessness can have. Families and individuals need time to access support and recover in a stable home environment.

2.5 There is a risk that formerly homeless households may be concentrated in one area for example, where private rented sector is the cheapest, thus concentrating deprivation and creating problems for an area.

2.6 Care will need to be taken to ensure that shorter term tenancies do not exacerbate the risk of homelessness by providing less secure housing options for vulnerable people – the reasons for ending a fixed term tenancy need to be clear, fair and transparent and not landlord led.

3. Chapter 2 - Tenure reform

3.1 Moving away from lifetime tenancies to flexible tenancies is a radical shift in thinking and social housing management practice. We think that careful consideration will be required when using our new duty to publish a Strategic Policy on Tenancies, particularly around protecting our older and more vulnerable tenants.

3.2 There is currently some discussion about the legality of introducing flexible tenancies given that under current legislation, landlords are not permitted to end tenancies on the basis of time. In addition to this, concerns about the implications of Human Rights legislation on flexible tenancy proposals have been raised. Before implementing the proposals, Government needs to consider the recent judgement of Manchester CC v Pinnock and the issue around proportionality included within the Human Rights Act. We are of the opinion that the new proposals will place social housing providers at greater risk of challenge when seeking to end tenancies.

3.3 The shorter-term tenancies could work against community cohesion and risk creating ‘sink estates’ over time. There is a high risk that large amounts of tenancy turnovers on estates will have a detrimental impact on the stability of the area and community cohesion

3.4 Flexibility of tenure requires landlords to demonstrate value for money and best uses of resources, which can be beneficial in high demand areas. However, in communities of low demand, this will create a situation whereby tenants are regularly having their tenancy renewed (as allowed in the proposals) and are less stable within their local community, conflicting with our overall housing strategy objectives.

3.5 There will be a need for substantial additional resources to manage the shorter term tenancies in terms of follow up visits. There may be a shortage of appropriately skilled staff to assist tenants in choosing follow on housing solutions and we are unsure where these additional resources will come from.

3.6 Social housing should not be exclusively used as part of the welfare system, and moves to require housing managers to police it, will be strongly resisted.

3.7 It is important that social rented housing remains a positive tenure of choice, and we are concerned that through some of the proposals it may become solely a backstop for people, who have no other housing options.

3.8 There seems to be a disparity on succession rights and clarity is required. There is potential for error depending on tenancy type and any additional contractual rights the provider may or may not provide under their own policies on succession for flexible tenancies. Legislation should reflect that when a succession takes place, any credit or arrears transfers to that person.

3.9 There should be clear safeguards in place to ensure that additional income from affordable rent tenancies is ring fenced and used to fund new build properties or improve existing properties.

3.10 We strongly recommend that the ability to introduce affordable rent be extended to all social housing, including ALMOs and in-house providers.

4. Chapter 3 - Housing Finance reform

4.1 The Localism Bill paves the way for legislation to abolish the current system and introduce self financing for all authorities from 1 April 2012.

4.2 Whilst the principle of devolving responsibility for the Housing Revenue Account to local authorities and the abolition of the current and unfair Housing Subsidy System is welcomed, we do have concerns.

4.3 CLG has published guidance and details of the model used to calculate notional business plan for stock retaining authorities. We have concerns regarding some of the inputs and assumptions used, which in turn may affect the level of debt, we have been allocated. However, we are pleased that some recognition has been given to authorities who have borrowed to help finance new build and nationally to increase the allowance made for adaptations.

5. Chapter 4 - Mobility

5.1 We agree that all social landlords should be required to subscribe to a national mutual exchange scheme to help with increasing mobility in the social sector.

5.2 IT services are fundamental to helping tenants organise a mutual exchange: however the needs of tenants who do not have access to IT must be recognised if the scheme is to be inclusive and comprehensive.

6. Chapter 5 - Regulation of Social Housing

6.1 The proposals to abolish the Tenants Services Authority and rest the responsibility of regulation with the Home and Communities Agency for finance and governance is questionable. We remain to be convinced that this, together with self regulation will achieve the continuous improvement seen with housing providers over recent years and wonder if this approach will result in more provider organisations simply ‘coasting’ rather than ‘improving’.