Localism

Memorandum from Shelter (LOCO 083)

Summary

Our summary response to the terms of reference is as follows:

1. The extent to which decentralisation leads to more effective public service

· Shelter feels that a vital means of achieving improved efficiency is to ensure that local authorities deliver services that prevent social problems occurring.

· It is important that residents in all local authority areas are able to access a base-line of preventative services. This is not only a vital safety net for local people, but also a means of ensuring that every local authority plays a role in delivering improved efficiencies by engaging in a preventative agenda.

· The Homelessness Act 2002 is an important example of legislation that places a duty on local authorities to deliver a baseline preventative service, whilst allowing them to retain the power to decide how to discharge their duty.

· Minimum standards should relate to households who have been accepted as ‘homeless’ by their local authority. Shelter believes that all families in this category should be entitled to a statutory level of support.

2. The lessons for decentralisation from Total Place, and the potential to build on the work done under that initiative

· There is a risk that greater pooling could lead to cuts to less popular and less obvious public services that protect some of the most vulnerable people. Such cuts could result in greater knock-on costs to other budgets. For example, cuts to homeless prevention services will lead to homelessness, destitution and increased levels of housing need, resulting in greater costs to the wider economy.

· Shelter is concerned that less popular or high profile public services, like homelessness provision, could be at risk if they are not given sufficient emphasis when ring-fences are removed.

3. The role of local government in a decentralised model of local public service delivery

· Local authorities will play an increasingly important role in a decentralised model of public service delivery as they take greater responsibility for local spending, particularly with the removal of ring-fences.

· Local authorities need to play a leadership role to help ensure effective public services reach vulnerable people.

· As local authorities take the lead role in housing delivery it is vital that they identify the need for affordable housing in their local area and work with local people to agree the best means of addressing it.

· Steps need to be taken to ensure that the ‘single conversation’ approach to business processes, adopted by the Homes and Communities Agency (HCA), aligns effectively with the increasingly strategic role local authorities will play in housing delivery.

4. The action which will be necessary on the part of Whitehall departments to achieve effective decentralised public service delivery;

· Central government needs to work with local authorities to create a policy environment which allows for greater transparency at a local level. This involves ensuring councils provide robust data on local need and performance, particularly in relation to housing. Clear guidance could also help local authorities to save money by reducing reliance on consultants.

· Consistent methodologies would make joint working between local authority areas easier as potential partners would be able to access comparable data sets.

· Whitehall departments could play a role in identifying and disseminating examples of best practice and coordinating pilots, allowing local authorities to operate more efficiently.

5. The impact of decentralisation on the achievement of savings in the cost of local public services

· If delivered with an emphasis on preventative services and effective partnership working, decentralisation has the potential to help deliver savings. The cost of repossessing the home of a vulnerable household could be as high as £34,000 in some cases [1] , decentralised services that help tackle these issues have the potential to deliver significant savings.

· Shelter recognises that greater freedom for local authorities could help to create an environment in which results in greater cooperative working. This may help local authorities save money by sharing skills or administrative costs.

6. What oversight of local authority performance will be necessary

· Local people will play the key role in holding their local authority to account and in order for this to be achieved robust, transparent and comparable data must be made available.

· Central government should work with local authorities to deliver appropriate systems of data collection that allow citizens to play an active role in shaping services. Shelter has identified some refinements to data collection on housing that could help achieve this, which are included within this response

7. How effective and appropriate accountability can be achieved for expenditure on the delivery of local services, especially for that voted by Parliament rather than raised locally.

· Ultimately local authorities will be accountable to the local electorate. If this is to be effective then local people need an accurate and comparable picture of the success their local authority has achieved.

· The consistent collection and presentation of data would also help to ensure that it is possible for those agencies spending money at a local level to be held to account nationally, where necessary.

· R equirements for loca l authorities to deliver a base- line of services may also be an effective means of ensuring that local authorities deliver the services for which they receive national funding.

Introduction

Shelter welcomes the opportunity to contribute to this inquiry which looks at a policy direction that is likely to have a significant and far reaching impact on a wide range of issues.

This submission will mainly concentrate on the impact plans for localism and decentralisation of public services are likely to have on housing need and housing advice.

Shelter maintains that the starting point for all moves towards localism and decentralisation must be the active engagement of local people.

For localism to work in empowering people , allowing them to play a ro le in shaping local plans and hold ing their local authority to account , particularly in meeting local housing need, a starting point must be the transparent and robust collection, analysis and publication of comprehensive data , that is comparable between local areas .

Evidence

The extent to which decentralisation leads to more effective public service delivery; and what the limits are, or should be, of localism;

1. Shelter accepts that in many instances local authorities, working with local people, are best placed to decide the ways in which public services should be delivered in their community.  The people closest to the challenges and opportunities facing an area are often best placed to find the most effective ways forward.

2. Decentralised services should aim to prevent social problems, such as homelessness, from occurring and escalating. This approach will not only prevent individual households from experiencing a life-changing crisis, but also deliver savings to the public purse by avoiding the knock-on costs associated with such problems.

3. Shelter feels it is important that residents in every local authority area are able to access a baseline level of services that meet an agreed national minimum, particularly with regards to preventative services. This will help to ensure that all local authorities play a role in improving public service efficiency by engaging in a preventative agenda.

5. Shelter believes that central government should work with local authorities to ensure they deliver preventative services that ultimately save money for the taxpayer. Setting agreed national baseline level of services, to which all vulnerable people are entitled, is an effective means of achieving this.

6. By making sure that local authorities work to deliver a minimum standard of provision the government will help to ensure that decentralisation does not lead to a ‘postcode lottery’, with regards to vital base-level services, but still allow innovation for add on ones.

7. Minimum standards are particularly important in relation to provision for households who approach their local authority with a homelessness application. Shelter believes that in all local authority areas families who have been accepted as ‘homeless’ should be entitled to a statutory base level of support from their local authority. This support should, for instance, include local authorities being obligated to give reasonable preference to homeless families in their social housing allocations schemes.

8. Decentralisation has the potential to allow greater flexibility to tailor services to better fit local demographics. For example, if there is a greater concentration of BME communities within an area, who require translation services, local authorities would have more scope to provide this. Similarly, adaptations could be made to accommodate particular needs that may arise in areas with a higher concentration of older people or young families.

The lessons for decentralisation from Total Place, and the potential to build on the work done under that initiative, particularly through place-based budgeting;

9. Shelter feels it is important that, if local authorities engage in greater pooling of budgets, sufficient funding is made available for preventative services that help save money in the long-term.

10. There is a risk that greater pooling could lead to cuts to less popular and less obvious public services that protect some of the most vulnerable people. Such cuts could result in greater knock-on costs to other budgets. For example, cuts to homeless prevention services will lead to homelessness, destitution and increased levels of housing need, resulting in greater costs to the wider economy.

11. In 2009/10, using dedicated homelessness prevention funding, local authorities reported 165,200 cases of homelessness prevention or relief [2] . Shelter wants to see local authorities continuing to invest in these vital services, as housing issues are likely to increase as a result of the continuing economic downturn and proposed reforms to housing benefit.

12. As an example of the savings possible through tackling homelessness and bad housing, figures from the BRE Trust show that Category 1 hazards, as defined by the Housing Health and Safety Rating System, are costing the NHS in excess of £600 million per year [3] . If local authorities are better able to invest in preventative services, perhaps by working with their local Primary Care Trust, they would be well placed to not only improve the lives of local residents but also tackle the significant costs to the NHS.

14. Shelter welcomes approaches that proactively improve the lives of vulnerable people and provide long term savings to the taxpayer. Initiatives such as the one outlined above, show that pooled budgets and skills, offer the opportunity for local councils to help coordinate an effective holistic approach to preventative services.

The role of local government in a decentralised model of local public service delivery, and the extent to which localism can and should extend to other local agents.

15. Under the decentralised model of public services, local authorities are set to play an increasingly important role in shaping public service delivery.  As ring-fences are removed from many budgets to give greater freedom over spending, local authorities will play the central role in deciding how many frontline services are run.

16. Shelter feels that local authorities need to play a leadership role locally, working with residents to devise sustainable methods of service delivery that offer long-term value for money. In doing so, they will have a vital role in ensuring the well-being of their residents. Specifically, local authorities should work with local people to look at means of protecting vulnerable people from spending cuts.

17. As part of this leadership role local authorities need to work with local people to devise the best means of delivering services which are not always the first priority of all residents in a local area.  For instance, provision for homeless people, such as hostel accommodation, occasionally encounter local opposition as a result of myths and preconceptions about the impact such services may have a on a local area.  In such instances, the local authority is well placed to work with local people and address any concerns as early as possible.

18. As part of the localism agenda, local authorities will also be taking an increasing responsibility for delivering upon the need for affordable housing in their area. A recent study compiled by Shelter found that 98 per cent of local authorities in England are failing to deliver enough affordable homes to meet the need authorities themselves have identified. This crisis is having serious negative impacts for millions of households across the country, leaving families without access to homes they can afford and increasing levels of poverty and overcrowding with associated knock-on costs.

19. By taking steps to deliver greater numbers of affordable homes local authorities will be working to avert a worsening housing crisis, thus improving the lives of local residents, by helping to tackle growing housing waiting lists and overcrowding.

20. Furthermore, recent figures produced by Shelter show that investment in housing can be a major stimulus to the economy. A study looking at housing investment found that every £1 of public investment in new housing is currently generating £3.51 of economic output [4] . The report goes on to show the wider economic benefits of investment in housing, such as employment in construction sector [5] .

21. As local authorities are given greater control over housing delivery, they will be well placed, in partnership with local people, to kick-start affordable housing delivery in their local area. As the figures above suggest this could have a significant and positive impact on the local economy.

22. With a greater drive towards localism it is important that there is sufficient clarity of role at a local level and that agencies avoid duplication of work. The Homes and Communities Agency (HCA), has played a central role in housing delivery and their ‘single conversation’ approach to business processes has been a key element of their work. It is important that the HCA is able to work closely with local authorities to ensure that its ‘single conversation’ process aligns effectively with local authorities’ increasingly strategic role on housing delivery.

The action which will be necessary on the part of Whitehall departments to achieve effective decentralised public service delivery;

23. Shelter feels that with greater devolution of power and the removal of regional structures there is a need for central government to create a policy environment which allows for greater transparency at local level. This will enable people to become more active and informed citizens, able to help shape local plans and, where necessary, hold their local authority to account.

24. A starting point for this must be central government working with local authorities to ensure they provide useful data on local need and performance to electors . If local people are to be able to engage with plans for their community they need robust data that is clear, comparable and comprehensive .

25. Data collection on housing need at a local level is an example of an area where clear central government guidance could both promote greater accountability and save money.

26. In our view, there is a role for central government in publishing clear guidance for local authorities on the methodology for collecting housing need data, and its analysis. This would save local authorities from having to incur the expense of commissioning external consultants to arrive at individual data collection methods, as is currently often the case. The National Housing and Planning Advice Unit (NHPAU) found that "the original intention, as expressed in the CLG Practice Guidance (2007), was that local authorities should be able to undertake SHMAs themselves. However, less than 10 per cent of published SHMAs have been done in house, with most of these using consultants for some elements" [6] . Clearer guidance would help to address this issue.

27. Once this data has been collected it is important that it is presented in a consistent manner across local authorities. This would allow local electors to gain a clear picture, for example, of how well their local authority is delivering affordable housing, relative to others. Government departments would be ideally placed to provide guidance on these formats.

28. Consistent methodology and presentation would also make joint working between local authorities easier, as they would have comparable data sets against which they could assess their relative needs and future plans.

29. Whitehall departments can also play a very useful role in coordinating local pilots of new services. This would enable councils to establish arrangements for comparing results across areas and generating economies of scale in procurement. It would lesser the risk of pilots for individual councils and ensure a better spread of best practice. With the removal of regional structures, and bodies such as the Audit Commission, this coordinating role for government departments will be increasingly important.

30. Whitehall departments are also well placed to ensure that minimum standards for housing development are agreed at a national level. Standards relating to areas like affordability, design, economic and social standards and environmental impact are of vital importance and central government is well placed to ensure that these are put in place.

31. This approach would be in line with the direction of the Conservative Party’s Green Paper Open Source Planning which states that there will be a National Planning Framework setting out planning priorities and, as part of this, ‘a reduced number of simplified guidance notes, setting out minimum environmental, architectural, design, economic and social standards for sustainable development’ [7] .

The impact of decentralisation on the achievement of savings in the cost of local public services and the effective targeting of cuts to those services;

32. As discussed above, greater moves towards decentralisation and concentration on local solutions does have the potential to promote savings.

33. However, this is clearly dependent on the ways in which local authorities choose to administer their budgets. If preventative services are given sufficient support and budgets are used to help vulnerable people avoid more negative outcomes devolution of funding could be an effective means of cutting long term costs to the taxpayer.

34. Housing advice and the role it plays in homelessness prevention, provides an example of the savings that can be made. Figures from the Department for Communities and Local Government estimate that repossessing the home of a vulnerable household can lead to housing benefit costs alone of £16,000 per case [8] - without taking account of local authority time and expense in processing a homelessness application or any other support that may be needed. This could be as high as £34,000 in some cases, according to the New Economics Foundation [9] .  In contrast, effective face to face, mortgage debt advice costs the state as little as £229 per case [10] , on average.  Whilst recent Citizens Advice research found that every £1 of legal aid spent on housing advice, potentially saves the taxpayer £2.34 [11] .

35. Decentralisation gives local authorities greater freedom over how they commission service providers and therefore the opportunity to use resource s in a way that provides the most effective services locally and the best value for money. Shelter welcomes this aim , however there are concerns that i f effective preventative services are targeted for cuts in order to provide short term savings, this will effectively represent a false economy for local authorities, and the wider community, as - for reasons outlined above - failure to tackle problems at an early stage can result in mounting costs for the taxpayer.

36. D ecentralisation also provides local authorities with greater opportunities to cooperate with neighbouring authorities. Shelter recognises that this could provide an opportunity for the sharing of skills and costs across local authority areas, which could lead to improvements in frontline services and savings , by sharing costs, particularly in relation to back office and administrative spending .

37. One potential area for joint working could be to ensure proper enforcement of laws relating to tenants in the private rented sector. Some adjoining councils are exploring merging their housing enforcement teams to create joint services, allowing them to build on their respective areas of strength and to achieve greater economies of scale. A similar principle could be applied to planning teams dealing with cross-council developments.

38. It is important to consider that people s ’ lifestyles, particularly in larger cities, mean that the services they access, the areas in which they live and places that they work or study can often be across numerous local authority boundaries. As a result it is important that local authorities are able to account for this in their plans for local service delivery.

What, if any, arrangements for the oversight of local authority performance will be necessary to ensure effective local public service delivery.

39. As part of the localism agenda the role of oversight of local authority performance will, to a large extent, fall to local people. The Secretary of State for Communities and Local Government, Eric Pickles, recently outline plans to "create an army of armchair auditors - local people able to hold local bodies to account for the way their tax pounds are spent an d what that money is delivering " [12] .

40. Shelter wants to see the localism agenda deliver more engaged citizens, who are able to work with their local authority to shape services and effectively hold them to account. If this is to be achieved it is vital that local people are given the necessary information. Good local data is a key tool in ensuring the success of the localism agenda and it needs to be collected via a robust, consistent methodology and presented in a comparable format.

41. If central government works with local authorities to arrive at a set methodology for assessing local housing need, this will not only save money for local authorities, as discussed above, but also empower local people by giving them a clear picture of the challenges and opportunities that face their local community. It would also allow local authorities and local people to better benchmark their performance against that of similar local authority areas, enabling the most effective local authorities to give guidance to those authorities that have been less successful.

42. Many local housing and planning authorities are already very good at collecting and analysing local data on housing need. However, there is still a long way to go to ensure citizens are better able to play a more active and engaged role in housing delivery. Shelter has identified some of the refinements that could be made to the collection of presentation of housing data below:

Strategic Market Assessments

43. SHMAs were introduced in 2006 and provide the main e vidence base required in local planning and housing policy. The most recent guidance on SHMAs was published in 2007, with robustness and transparency identified as key aims .

44. However, Shelter identified a range of problems in citizens using SHMAs to hold councils to account. Most stem from the fact that, despite the guidance, the methodology falls short of being robust, transparent and user-friendly. This issue was recently identified by the National Hou sing and Planning Advice Unit, as discussed above.

45. One of the key reasons for this shortcoming is that SHMAs vary so much in their method ology , which produce s very different results across local authorities. This variation in results ma k es it difficult for the public to compare evidence from their local authority with that of other s and therefore effectively hold them to account .

46. SHMAs have also proved to be costly to local authorities. The original intention was for councils to undertake SHMAs themselves , but fewer than 10 per cent have been produced in this way, with most councils usin g consultants for some elements . R ecent Shelter estimates suggest that commissioned out SHMAs cost between £80-150k.

National standards forms

47. Local homelessness statistics are a vital measure of housing need. The use of a standard Local Authority activity under homelessness provisions of the 1996 Housing Act (P1E form) has helped in the 99 per cent voluntary collection by councils of consistent data on homelessness. This is a good example of how central government can facilitate the collection of data locally and efficiently .

48. However whilst useful, the P1E statistics are flawed in their recording of homeless ness because they exclude large numbers of homeless people who approach the council for assistance but do not make an application for assistance or are not deemed to be in need of statutory assistance.

49. Shelter believe s that everyone approaching the council for assistance should have their case recorded , including the reason for the loss of their last settled home and the council's determination of their case. This will help to ensure that local people have a clearer understanding of the housing situation in their area and have the information necessary to play a useful role in shaping local provision.

Comprehensive data on the local need and demand for social housing

50. Local housing registers (often known as council waiting lists) are an important indicator of the need and demand for social housing and local authorities should ensure local people understand the local allocation scheme and operation of the register.

51. Shelter urges councils to take an open approach to registering applications, to continue to use 'cumulative preference' to determine priority, and to have objective criteria for prioritising between applicants, so that banding schemes reflect complex levels of need. Councils should ensure their housing registers are regularly reviewed and updated and publish statistics on the numbers of people within each band or range of points, again helping to ensure that local people can help shape a vision for housing in their area, with possession of the full facts .

How effective and appropriate accountability can be achieved for expenditure on the delivery of local services, especially for that voted by Parliament rather than raised locally.

52. Ultimately local authorities will be accountable to the local electorate and de centralisation means that those responsible for making spending decisions will stand for election , based on their record, on a regular basis.

53. If this accountability is to be effective then local people need an accurate picture of the success their local authority has achieved in delivering local services and how this compares to other local authority areas. As discussed above, in relation to data on housing need and homelessness, the collection and presentation of comparable data is vital to ensuring that this is possible .

54. The consistent collection and presentation of data would also help to ensure that it is possible for those agencies spending money at a local level to be held to account at a national level. If each local areas arrives at a method of data collection that varies significantly it will be very difficult for national stakeholders to have a clear picture of how well expenditure voted for by parliament is being delivered .

55. Setting in place requirements for local authorities to deliver a base line of services may also be effective means of ensuring that local authorities deliver the services for which they receive national funding.

October 2010