Localism

Memorandum submitted by Southwark Council (L 175)

Summary

1. Southwark Council welcomes the opportunity to submit evidence on the Localism Bill as part of the House of Parliament’s call for evidence process. The Council has a solid record of achievement in transferring powers towards neighbourhoods and community areas.

2. Recognition by the coalition government of the need for further devolvement of power away from the centre towards local government, communities and individual groups is welcome. However the Council considers the Localism Bill a missed opportunity for rebalancing powers between the centre and local arms of government, and there are valid concerns that in its present form the Bill provides little impetus for enabling innovation and improvement of local public services. Furthermore it does not address the core issue of increased financial sovereignty for local authorities, and indeed partners, which would enable local public services to more effectively meet the needs and aspirations of our local communities.

3. Overall Southwark Council is concerned that this Bill neglects to provide local government with a clear role in the devolution of powers across public services and also fails to deliver freedoms in local government funding. The Bill contains at least 142 powers for central government to lay down regulations, issue guidance and otherwise dictate how localism will work in local areas. This is contrary to the principles of localism and could impose costly and rigid bureaucratic process on local people and councils. These controls should be significantly reduced to an appropriate level, which are funded new burdens.

4. Southwark Council’s submission highlights areas within the Bill that require further clarification or improvement at this stage in Parliament. The areas particularly highlighted for consideration include the sections relating to local government, housing, planning, community empowerment and the provisions for London mayoral powers.

LOCAL GOVERNMENT

General Power of Competence Part 1 Chapter 1

5. The constraints which the Bill sets out on the general power of competence are lengthy and complex. The government’s ambition to "abolish ultra vires" has certainly not been met. Clause 2 appears to take away much of the power conferred by clause 1. Clarification is therefore required on the difference between a restriction in 2(1) as opposed to a limitation in 2(2). Clause 2 applies the existing limitations on local authority powers, so that, in reality, it is unclear what local authorities will be able to do in addition to what they can do already. It is therefore not clear whether this changes very much at all, or whether it will simply create a new set of legal arguments about the scope of powers which will not help us move forward on this matter.

Predetermination Part 2 Chapter 4

6. The Council supports the objective of the predetermination provision, to better enable councillors to express their views, and represent their community, whilst retaining an open mind when debating and voting on key issues on which they may have campaigned. There is sound logic to this provision. Councillors are elected on the basis of what they campaign on, and it would seem obtuse that, once in a position to vote on such matters, they should be barred from doing so due to a previously adopted, and publicised, position. Members will clearly be able to champion causes but must still, as part of the decision-making process, avoid bias and predetermination.

Standards Part 2 Chapter 5

7. The regime which regulates the standard of conduct of local authority members in England will be drastically changed with the provisions of this Bill. The arrangements which the Bill proposes to put in place will generally allow local authorities to make their own decisions as to how to regulate the conduct of their members. However, new criminal offences will be introduced, relating to the failure of local authority members to register or disclose interests and their participation in local authority business will therefore be contrary to prohibitions or restrictions.

8. Southwark Council considers there are advantages to replacing the current prescribed regime, however we are concerned that the proposals for a duty to promote and maintain high standards, will be difficult to comply with without a national code of conduct so councillors and the public to judge what is, and what is not, acceptable behaviour. This will leave it up to each local authority to decide whether to have their own code, and if so what it should contain and risks creating confusion.

9. In addition, while there is a duty on local authorities who have a voluntary code to investigate any allegations that are made about a member; there is no clarity in the Bill as to the extent of the "action" that can be taken against an offending member. Although the drafting of the Bill seems defective in this respect, we understand that the government’s intention is to remove the power to suspend or disqualify councillors whose behaviour brings their authority and local government generally into disrepute. If the government clarifies this to meet its intention, it would mean that unless members commit a criminal offence and are convicted of that offence, they will remain in office.

10. Southwark Council believes that rather than removing powers from councils to suspend and disqualify disreputable councillors, the localism bill should be used as an opportunity to give authorities or communities new powers to remove councillors who have lost the confidence of their constituents. We believe that the law regarding the conditions under which councillors can be removed from office, as set out in the amended 1972 Local Government Act, currently sets the bar too low. We would instead prefer to see the bill set out either a mechanism, with the proper safeguards, for authorities to remove councillors from the authority, or for consideration of the power for the community to call a recall election to be extended to local government.

HOUSING

Part 6, Chapter 2

11. With regard to flexible tenancies the Council are not in support of proposals for flexible tenancies. There is a risk that these would produce uncertainty and lack of security for tenant. There is also a risk that it be more difficult to support the establishment and empowerment of stable communities on Council estates. The Council is also concerned about the potential administrative costs of the proposed scheme which potentially could be high.

12. With regards to tenancy strategies, within the Council’s enabling and strategic role for housing in the area, the Council considers that local authorities should have the lead role with regards to Tenancy Strategies for the district, including those of RSLs. There would be an expectation that councils would consult widely on these, and would also work with our sub-regional partners.

13. Southwark Council are not in favour of proposals to charge 80% market rents, because these would not be affordable for those of our residents, many of whom are vulnerable or in deprived circumstances, who are in housing need. These residents would become, in the Council’s view, an additional call on Housing Benefit provision. The Council does not support the use of this measure for re-lets or council or RSL properties. This provision would decrease the existing supply of social rented housing.

14. Further details of the Council’s views on these issues are contained in the response to the consultation ‘Local Decisions: Fairer Future for Social Housing’ submitted on 17th January 2011.

Part 6 Chapter 3

15. In essence the Bill removes the duty of the Government to provide support via housing subsidy to authorities in England. However, DCLG have supplemented this proposal by issuing a series of implementation documents in order to set out how a new system of "self-financing" Housing Revenue Accounts will operate from April 2012. Updated financial projections of how this will work for individual local authorities have been issued, and Council officers are evaluating this data in more detail.

16. The Council has raised several areas of concern as part of the consultation process on changes to the social housing system, and whilst some of these have been addressed by the implementation documents or other government actions, such as funding the Decent Homes backlog via the HCA; others were not, principally the cancellation of Southwark's PFI bid for the regeneration of the Aylesbury estate, and also any moves to mitigate significant rent rises in the next few years.

PLANNING

Neighbourhood Planning Part 5 Chapter 3 and Schedules 9-12

17. There is a general lack of clarity in the planning section of the Bill, particularly with respect to 'duty to cooperate'. More clarification is needed as to relationship between neighbourhood plans as prepared by neighbourhood forums and the local development framework. The mechanism and use of referendums in this area also needs to be clarified. The proposals are not sufficiently flexible to increase the involvement of local people and could lead to proposals coming forward from sectarian or narrow-focused self-interest groups which could have the effect of disenfranchising minority groups. The community right to bid may reduce these instances if local authorities are able to offer Asset Transfers (assuming the presumption is that the Right to Buy will be a market rate).

18. Southwark Council has applied to for pathfinder status for neighbourhood plans in the north of the borough and would welcome the opportunity, through the pathfinder framework, to work with the Government on developing solutions to these issues.

19. The Bill does not clarify the implications should the policies in a Neighbourhood Development Plan (NDP) conflict or contradict with policies in the local development plan. Clarity is needed as to whether the NDP would prevail in such circumstances. There is also a lack of clarity about how sustainability appraisals and strategic environmental assessments should be applied to Neighbourhood Plans.

20. There is furthermore a lack of clarity about the 'duty to cooperate' in Schedule 10 clause 3 (1) and (2) and the extent of cooperation required. It is envisaged that this will go as far as helping the Neighbourhood to actually draft the Neighbourhood Plan, and the mechanism and way that this would work in practice needs to be considered.

21. Under Schedule 10 clause 7(6) there appears to be no provisions or regulations intended about who may be a suitable Inspector to undertake an Examination in Public. It would seem that the intention is not to use PINs Inspectors as these are appointed by the Crown. However, clarification on this issue would be welcomed. The Council is of the view that PINs Inspectors are the most qualified to conduct such a process.

22. Clause 61F(6) does not make provision or indicate regulations intended to deal with situations where there are two or more community groups with competing interests that come forward wanting to be recognised by the local authority as a qualifying body for the same or substantially the same neighbourhood area. Clarification on how the local authority would be expected to manage situations like this would be welcomed.

23. Local businesses are an essential part of the community. The Council is of the view that Clause 61F(5) should reference local businesses giving them the opportunity of being part of a Neighbourhood Forum. It is the Council’s view that business has a clear role to play in the formulation of planning policy. Business should also have a vote in any referendum in those circumstances.

24. Southwark Council is of the view that a referendum should not be essential if a neighbourhood plan is prepared that is fully in conformity with strategic plans and that the local authority is prepared to adopt it without a referendum.

25. The Council would further welcome more clarity about the relationship envisaged between neighbourhood plans as prepared by neighbourhood forums and the local development framework. An additional provision similar to those set out in Schedule 10 clause 5 is needed. This would set out that the local authority is not required to work with a Neighbourhood Forum on a Neighbourhood Plan for an area in cases where the local authority is already well advanced in preparing an area action plan or has recently adopted one.

26. The Bill does not make any provision for local authority’s ability to be able to share the cost of holding an Examination in Public or for Referendums. With the average cost of holding an election in a ward costing £25,000, this is potentially a huge burden on public sector budgets overall.

27. Schedule 10 clause 15(1) and (2) provides that regulations may be made as to when, where and how voting in referendums should take place. The Council suggests that to cut down on costs, there ought to be an electronic method of conducting referenda e.g. for instance, via a password protected website.

COMMMUNITY EMPOWERMENT

28. Under community right to buy Councils are involved in moves to support local people, social enterprises and community organisations to take over the running of services and assets. If, through changes set out in the draft Bill, this process becomes too bureaucratic, costly or complex this could limit local people’s inclination to make right to buy proposals and local councils’ ability to respond.

29. Additionally, under Community Right to Bid/Buy, there is a requirement that buildings to be disposed of are advertised and allow community groups time to bring together a bid. There is a question if the seller of an asset would be compensated for any loss or costs associated with allowing community groups to bring together a bid. As the local authority holds the asset register, there could be a presumption that this would be borne by councils. There is also a cost in maintaining a private and public asset register and the complex management that would need to be undertaken in order to provide a quality product. Clarity is additionally needed as to the implications of a decrease in the market value of the asset after a failed community right to bid. The definition of community assets is very wide and the Council is concerned as to how this would actually work in practice. Clarity is required as to whom would fund the work required to bring together a bid and assess the bids. The community would also need support in capacity building to prepare bids. There also needs to be clarity as to who would make the decisions regarding rival bids and whether this would include an appeal process. Overall the Council is concerned that the process of community right to bid/buy as set out could end up being extremely bureaucratic with little added value to the people of a borough like Southwark.

30. The administration of dealing with nominations, assessing them and maintaining the data (across publ ic and private sectors ) would place a new financial and bureaucratic burden on local authorities. One question i s whether there would be an assumption that if an asset is not on the list then it c ould be disposed of without a community right to buy . If so , there would be a question as to whether there is a need to keep a list at all . Clarity is needed as to w hat the mechani sm for advertising invitations to bid will be. How would the assessment be weighted against community/private bids (private bids could be able to provide a more sustainable and cost efficient model with a smaller community element) ? Further clarification is also needed as to the insurance provision need ed to be in place if the project fails . Another concern is the definition of what constitutes an asset of community value. There is confusion as to whether this would include a private house, a piece of brown field land in the middle of an estate, a council bui lding. T his might adversely affect strategic master planning.

Community Empowerment Local Referendums Part 4 Chapter 1

31. Southwark Council considers that the provisions, as set out, will be difficult and costly to implement for local authorities. The average ward electorate in Southwark is approximately 9,400. 5% of the electorate would therefore constitute 470 people. This is in accordance with current provisions relating to the setting of a referendum for a directly elected mayor, which acts as a precedent for local accountability.

32. In addition, Section 42 provides for a majority of members in a multi-member ward being able to request a referendum. Section 43(2) then allows the authority to determine whether this is appropriate, within a restricted framework. In an authority like Southwark, with highly competitive local politics, the result of these two provisions may be to undermine confidence in local democracy rather than to enhance local accountability.

33. The costs of holding referendums are considerable, as there are no provisions for all-postal or electronic voting. We consider that the forthcoming regulations on the conduct of referendums must include a way by which local authorities should be permitted to conduct ‘electronic’ referenda e.g. via a password protected website. In any event, consideration should be given to the cost of holding local referendums, as these would add significant new costs for local authorities.

LONDON MAYOR’S POWERS

34. Southwark Council notes the stated intention to return some of the decision-making powers on major schemes, but that these will not be returned to London Boroughs but to the Mayor of London under Mayoral Development Corporations (MDCs). This seems to contradict the spirit of localism. The Mayor’s power to establish MDCs appear to be very wide, and whilst the Mayor will have a duty to consult with the London Boroughs, the Council is of the view that this is not sufficient in order to ensure that local authorities views are considered.

March 2011