Localism Bill

Memorandum submitted by London Borough of Hackney (L 179)


1. The London Borough of Hackney welcomes the opportunity to submit evidence with regard to the Localism Bill.

2. The Bill is designed to enable a significant shift of power from central government to local government and communities [1] . The stated aim of the Bill is to give greater control and freedom to local communities and individuals to manage their lives in their own way. The six key aims include:

· Lift the burden of bureaucracy – by removing the cost and control of unnecessary red tape and regulation, whose effect is to restrict local action;

· Empowering communities to do things their way – by creating rights for people to get involved with, and direct the development of their communities;

· Diversifying the supply of public services – by ending the public sector monopolies, ensuring a level playing field for all suppliers, giving people more choice and a better standard of service;

· Strengthening accountability to local people – by giving citizens the power to change the services provided to them through participation, choice or the ballot box.

· Opening up government to public scrutiny – by releasing government information into the public domain, so people know how their money is spent and to what effect.

· Increase local control of public finance – so that more of the decisions over how public money is spent and raised can be taken within communities.

3. The shift in power to councils and communities is supported. Any move towards devolution and localism is a positive step for democratically elected local government. However the Bill does not reflect a truly localist agenda, and actually means greater central bureaucratic control, and more powers for the Secretary of State. The sections below make a number of specific and general comments on these aspects.

4. These comments are the view of London Borough of Hackney, however, the work to promote localism by London Councils and the Local Government Association is supported. In line with this, and in addition to the points below, it is proposed that opportunities for introducing further devolution to councils are explored.

Part 1: Local Government

5. The London Borough of Hackney welcomes the introduction of a General Power of Competence (clauses 1 – 7). However the restrictions that remain and the powers reserved for Ministers, which conflict with the principles of localism, are unnecessary.

6. In this sense, the true spirit of localism is not part of the Bill. The Secretary of State can prevent local authorities from doing anything they specify, or place specific conditions on them. Parliament is urged to reconsider these severely limiting powers.

7. Additionally, it should be noted that the size and speed of the cuts to local government finances will seriously affect the potential of local authorities and local communities to get the most out of the localism agenda.

Part 2: EU Fines

8. The London Borough of Hackney opposes the clauses (31 – 34) which allow for EU fines to be passed on to local authorities. This is in line with concerns voiced by the LGA with regard to this part of the Bill: that it has been introduced without consultation, and is both unfair and unworkable.

Part 4: Community Empowerment

9. Under the proposals on the duty to hold a local referendum, Hackney will need to be prepared to hold referendums on local issues in the case that a petition with as few as 504 signatures if the referendum is at ward level. While local involvement in decision making is supported, local referenda should not, and are not, the only opportunities for local people to get involved. There are concerns over the additional administrative and financial burden that numerous local referendums would cause and there is support for the review and amendment of clauses 39 to 55 in line with this.

10. London Borough of Hackney notes the intent behind the provisions for the community right to challenge (clauses 66 – 70), and indeed there are already numerous examples in Hackney of support for local residents, social enterprises or community organisations running services. However, the LGAs concerns are echoed that this right should not be over-engineered and limit the flexibility of councils to contract out in a way that is locally appropriate.

11. In relation to the community right to buy (clauses 71 – 88), the ownership and long lease of assets by community groups is noted and London Borough of Hackney is keen to support these organisations. However, for many community groups taking over the costs and responsibilities of running a community asset can be prohibitive, and what is necessary is a sustainable model for the long term management of assets. A community right to buy does not address these issues, and may add an additional layer of overly complex and bureaucratic systems.

Part 5: Planning

12. The introduction of neighbourhood planning (Clauses 96 – 101, Schedules 9, 10, and 11) represents a radical shift in the planning system. The London Borough of Hackney welcomes resident and community involvement in the local planning system, but the practicalities of the changes raise a number of questions and risks potential uncertainties, particularly around the follow issues:

§ Defining neighbourhoods: The lack of criteria on neighbourhood boundaries may lead to uncertainty in implementation. This is particularly the case if applications overlap or two cover the same area.

§ Alignment and conformity: There is potential for tension between proposed neighbourhood plans and ‘higher level’ planning documents, such as the borough’s LDF, the London Plan, and the national planning framework. Greater clarity is required as to how these plans would relate to each other.

§ Voice and consistency: It is likely that there will be both communities and areas which may be less able to engage with neighbourhood planning, which may actually reduce democracy and fairness in the planning system.

§ Representation:  The Bill seems to imply that each neighbourhood comprises a single homogeneous community with common aspirations. However, in a dense inner city borough such as Hackney, each neighbourhood will comprise a number of different communities that may well have different aspirations, expectations and needs.  To this end, neighbourhood plans have the potential to be divisive. 

For these reasons there are concerns over the complexity and practical implementation of the new system. Additionally, concerns by London Councils regarding the bureaucracy of the new system, and by the LGA on the excessive powers for the Secretary of State are echoed.

13. The Government has indicated that Neighbourhood Development Plans will give Hackney the powers that it requested under the Sustainable Communities Act to manage the sustainable development of high streets. Specifically Hackney Council was seeking to control the use of betting shops and there are significant questions over whether or not NDPs will enable us to do this. At present it seems unless a change-of-use planning permission is needed and an NDP is already established in the neighbourhood the Council might not have the powers to act to prevent the opening of Betting Shops. Clarity is sought on this issue.

Part 6: Housing

14. In line with London Councils view, the London Borough of Hackney welcomes the provision for abolition of the Housing Revenue Account subsidy system (clauses 140 – 147). However, this must be supported by an acceptable mechanism for apportioning historic housing debt.

15. The proposals for tenure reform represent fundamental changes to the way that social housing works. The tenure reforms proposed will have a particularly important impact in Hackney, where almost half of all households live in social housing; a higher proportion than any other London borough. Hackney also has one of the highest levels of deprivation in the country, with a median household income of £17,846, and high levels of housing need, with over 17,000 households currently on our housing waiting list. The high levels of housing need include overcrowding and homelessness. The Borough’s popularity with home seekers on higher incomes compounds market housing affordability locally, both to buy and rent, exacerbating the particular difficulties faced by larger families seeking suitable homes.

16. For the above reasons, the Borough works hard with our partners to make the best possible use of existing and new social homes. Hackney also continues to play a significant role in contributing to housing growth requirements, accounting, for example, for 8.1% of net housing completions in 2008/9 in London (compared to our target only accounting for 3.5% of the total London Plan target figure).

17. Some of the proposals for local flexibility are welcomed, for example in relation to allocation rules, and for promoting mobility. However, there are significant concerns about other proposals such as the introduction of so-called Affordable Rents and fixed term tenancies, which could impact upon the affordability of social housing and on the council’s efforts to create mixed and sustainable communities. There are also concerns about the extent to which the private rented sector locally will prove to be a suitable source of alternative housing options going forward for those on low incomes.

18. London Borough of Hackney also has concerns about how Affordable Rents, taken together with other key changes coming in over the next few years, notably on welfare benefits, will affect the disposable incomes of our many residents on low incomes. These other changes include the 10% reduction in national funding for Council Tax Benefit, the changes to Housing Benefit and Local Housing Allowance, and the freezing of the basic and 30 hour rate for Working Tax Credits. Vulnerable tenants in need of support are also likely to be affected by the reduction in and withdrawal of the ring fence for Supporting People funding, given competition for reduced resources with statutory and mainstream front-line services, and may also particularly struggle should they face loss of incapacity benefit. Therefore, the London Borough of Hackney calls for a longer transition to Affordable Rents, to allow a proper assessment of the likely impacts.

Part 7: London

19. London Borough of Hackney echoes concerns raised by London Councils, about the wide ranging scope of Mayoral power (clauses 168 – 171). It is argued that there is a need for greater Borough say and representation.

Part 8: Cost Burdens

20. A number of these changes will result in a cost to the London Borough of Hackney at a time when public sector funding is being cut. The cost of the new burdens in the Bill at £21m seems to be a great underestimation.

March 2011

[1] The Bill seeks to make legislative provision for the proposals outlined in The Coalition: Our Programme For Government and the Conservative Green Paper Control Shift: Returning Power to Local Communities .