Localism Bill

Memorandum submitted by

Emeritus Professor George Jones and Emeritus Professor John Stewart (L 39)

Introduction

1. The Bill has two main defects. The first is that the Government’s approach does not recognize that the main barriers to the development of localism lie in central government itself and that localism will not develop its potential unless there is fundamental change in the working of central government. While the Bill contains a limited number of proposals for localism, they are set in a centralist framework based on attitudes and practices embedded in the workings of central government, and the need for change in central government is not even recognized. Rather, centralism is entrenched by many new powers, regulations and orders proposed for ministers to exercise. Central government advocates localism but only if it can ensure local authorities do what it wants. The Bill is so dominated by this centralist culture of central government that it could well have been called the Centralism Bill.

2. The second main defect of the Bill is that the Government’s policies involve both decentralization to local authorities and decentralization to local communities and citizens, but it has failed to clarify the relationship between these two approaches, and to tackle problems of implementing the latter.

General Power of Competence

3. We welcome the general power of competence, although we wonder why it is not described as the power of general competence, the phrase normally used. We hope the power has been made judge-free by not setting out the purposes for which the power can be used, which could be the subject of judicial interpretation.

4. Alteration of a local authority’s internal political structures is specifically excluded from the general power of competence. One would expect a competent authority to be able to determine its own internal political arrangements.

5. The glaring weakness in the Bill [Part 1, chapter 1, 5(3)] is that it gives powers to the Secretary of State to make orders that prevent local authorities from doing anything specified in the orders, which negates the whole point of the general power of competence. The power should enable local authorities to determine their own purposes.

Regulation Mania

6. The Bill is fundamentally a centralism bill because of the plethora of powers taken by the Secretary of State to intervene in local affairs. The Local Government Association has calculated there are at least 142 order and regulation-making provisions. They empower the minister to lay down procedures for local authorities and establish criteria or definitions that constrain their decisions. The Committee should focus on these new powers and seek their elimination to secure localism. Otherwise the forthcoming Act will be accompanied by panoply of regulations and orders, as well as by almost endless pages of guidance, as central government seeks to determine what should be done locally, rather than the local authority which knows local conditions and is accountable locally. It is ironic that a Localism Bill contains so many means by which central government can prescribe how local authorities are to use their powers, develop their procedures, and apply criteria in their decision-making.

Excessive council tax

7. Through the complex procedures and calculations laid down the Secretary of State will, in effect, decide whether the rate of council tax proposed by an authority is excessive, thus triggering a referendum. This capping is an affront to localism. [Part 4, chapter 2, 56 (1), Schedule 5,52ZB & 52ZC].

Petitions

8. The Bill requires that local authorities should consider any petition for a referendum on a local matter if signed by 5% of the electorate. Local authorities can reject the petition but only on limited or technical grounds. The Bill however gives the Secretary of State power to specify by order additional criteria for rejection, although the local authority cannot apply its own additional criteria, the Secretary of State may vary the 5% up or down by order, and decide what a is local matter. Centralism trumps localism.[Part 4, chapter 1, 41 (2), and 44 (5) & (6)].

Community Right to challenge - expression of interest

9. Local authorities are required to consider whether a community group’s "expression of interest" in providing one of its services would promote or improve social, economic or environmental well-being, but it can be rejected only on grounds laid down by the Secretary of State in regulations – centralism again. The spirit of Localism is absent when a local authority is allowed to reject an expression of interest by a voluntary or community body only on grounds to be specified by the Secretary of State.[Part 4, chapter 3, 68 (8).

Assets of community value

10. The Secretary of State will define community value in the bureaucratic procedures proposed for local authorities in compiling lists of local assets of community value, although what is of community value should be a matter to be determined locally rather than at the centre, in relation to the local community, not nationally.[Part 4, chapter 4, 72 (2)].

11. The so-called Localism Bill empowers central government to prescribe how powers are to be used, procedures developed, criteria applied, and community groups responded to. Through countless regulations and orders the Secretary of State is given the right to prescribe in detail what is done at local level.

Directly-elected Mayors

Imposition of directly-elected mayors

12. The Bill allows all authorities to adopt the committee system previously available only to authorities with a population of under 85,000. While this greater flexibility for local authorities expresses localism, at the same time the largest city local authorities will be compelled to hold referendums on elected mayors. For most authorities there is greater choice, but for these eleven (or twelve) there is compulsion. Under current legislation these authorities have not chosen to hold a referendum and there has been no demand from their citizens only 5% of whom need sign a petition to secure a referendum. Central government thinks it knows better than the local authorities concerned and their citizens.

Shadow mayors

13. The Bill gives the Secretary of State the power once the Act has been passed to appoint by order the Leader of the authority as shadow mayor with all the powers of the mayor (except for the ill-thought-out new powers enabling the mayor to act as chief executive). The Secretary of State’s powers can be exercised even before any mayoral referendum has been held. If enacted, the Bill will give the Secretary of State power to make this critical council appointment rather than the local authority or the electorate, even if it is against the wishes of the authority, thereby giving a firm rebuff to localism. Granting a minister the power to appoint to political positions in an elected council is a dangerous precedent. [Part 1, chapter 3, Schedule 2, (9N & 9NA].

The Culture of Centralism in Whitehall

14. Centralism pervades central government in forming its attitudes and determining its procedures and practices. It draws strength from the culture of the various departments of central government, which do not trust local authorities to run their own affairs and know no other method to deal with them than through regulation and detailed guidance designed to ensure they act in ways determined by the centre. These departmental attitudes are reinforced by ministers who have their own views as to how local authorities should act and wish to require them to act in that way.

15. There are plenty of examples even in the Department of Communities and Local Government sponsoring the Bill. The Secretary of State thinks that all authorities should publish details of the salaries of senior staff, and therefore sees it as right to require them to do so in the Localism Bill. These duties may be sensible for authorities, but it should be for local authorities to decide, as localism suggests. [Part 1, chapter 6, 21 (3).]

16. The centralism implicit in the accepted ministerial role is well illustrated by the letter sent by Bob Neill, a CLG minister, to all Leaders informing them they should provide an effective refuse collection even in difficult circumstances, as if they did not already know that and many of them were being successful in doing so. Ministers believe they must act even when localism means matters should be left to local authorities to deal with.

Changing the Centralist Culture

17. The behaviour of ministers and civil servants towards local government needs to change. Urging them to do so will not be enough. A new pattern of central-local relations is required through the enactment of a semi-constitutional statute giving statutory expression to the principles of localism. Whitehall departments recognize statutes more readily than words that carry no legal weight.

18. A statute will not be enough to secure change. Procedures for monitoring and enforcement are necessary. There should be a codification of the key principles of central-local government relations, building on the words of European Charter of Local Self-Government, and within central government there should be a unit in the very centre of government – probably in the Cabinet Office or a department responsible for constitutional affairs - to monitor the operation of these principles as set out in the statutory code, ensuring its application by departments.

19. Even more important would be a joint committee of the two Houses of Parliament with responsibility for monitoring central-local relations in accordance with the principles of the code, reporting to parliament both annually and on specific proposals. Similar recommendations were put forward by the CLG Select Committee in its 2009 report The Balance of Power: Central and Local Government but were neglected by the then Government. The need for these proposals gains urgency from the need to ensure that the Government’s commitment to localism informs the culture and practice of central government in all departments. Without such changes localism will remain a topic more spoken about than acted on. The weakness of the Government’s approach to localism is that it has not recognised the need for a change in the centralism entrenched in the workings of central government itself.

Below the Local Authority

20. The Government has not faced up explicitly to the issue of how decentralization to local authorities and decentralization to communities relate to each other, or recognized the complexity of the issues that have to be faced in the development of community groups, especially their representativeness of their community, their accountability, probity, transparency for open government, financial control, legal requirements and the relationship of their activities to local authorities’ policies.

21. Many issues need to be faced in decentralization to communities. What is a community? Is decentralization about only communities of place or does it include those of background, interest and need? What if more than one group claims to be the sole expression of the community? Is the community group genuinely representative of the community? How are transparency and open government ensured in community groups? How is the community group accountable to the community? How far should the community group be bound by the policies of the authority? How are financial accountability, legal requirements and probity ensured? What is the role of the local authority in determining these issues? The questions are left unanswered in the Bill.

22. If these issues are not resolved problems could emerge as decentralization to communities develops. Unrepresentative community groups could arise, dominated by a few individuals and sectional interests. There could be little accountability of groups to local people. Early enthusiasm in the community could be eroded by time. Individuals sustaining the group could leave the area. The requirements for open government could be ignored. Financial irregularities could occur, even financial scandals. Conflicts may arise between the local authority and community groups, unless the relationship is clear, close and productive of a shared understanding. While disagreements are inevitable the danger is they can lead to sustained conflicts which could undermine not merely localism but the aspirations of the Big Society.

23. The Bill appears to be based on the assumption that these issues can be resolved only by central government prescription in orders and regulations that could well aggravate the problems because central government is remote from the actual issues being faced locally. The issues can be resolved effectively only at local level by effective working between local authorities and community groups who share an understanding of their area and its communities. The Bill should place the main responsibility for involving, empowering and working with communities on local authorities.

The Big Gap in the Bill

24. There is a huge gap in the Bill. A Localism Bill that lived up to its name would have dealt with the financing of local government, and not left this key topic to a later inquiry. Centralism will prevail as long as local authorities are so massively dependent for their resources on central government. They become supplicants for funding from central government rather than engaging in a dialogue with their citizens about local priorities. A real Localism Bill would establish the principle of genuine financial accountability, with grant reduced to that required for equalization, and containing legislative authority for the decentralisation of local taxation, so that local authorities would draw the bulk of their resources from their own voters through taxes whose rates they determine.

Conclusion

25. Central government should recognize it does not know what is best at local level because it does not understand local circumstances as well as those at local level. Only on that basis can a real Localism Bill be built. The Bill might well be called the Centralism Bill because it contains so many examples of ministerial powers to issue orders and regulations, which should be removed from the Bill. If the Bill is to live up to its title the Bill should be amended to express trust in the right of elected councils to shape the development of their localities, to be primarily responsible to their local citizens and to promote community empowerment. The Bill should contain a codification of the relationship between central and local government, and give legislative authority to the decentralisation of local taxation, so that local authorities draw most of their resources from their own voters with taxes whose rates they determine.

January 2011