Localism
Memorandum from the British Retail Consortium (BRC) (LOCO 088)
1.
The British Retail Consortium (BRC) is pleased to contribute to the Community and Local Government Select Committee’s inquiry into the Government’s plan for localism and decentralisation of public services.
About the BRC
2.
The BRC is the lead trade association for the UK retail sector. We represent retailing in all its forms across the UK and work on the full range of issues affecting the sector. Our aim is to ensure the UK’s political and regulatory framework supports retailers in maintaining their outstanding record on job creation, consumer choice and product innovation. With the retail sector employing around 2.9 million people and contributing around 8 per cent of GDP, we play a vital role in the success of the UK economy.
Overview of BRC position on Localism
3.
The BRC recognises the opportunities presented by the Government’s plans for localism and decentralisation. There are many aspects of localism that appeal to the retail sector. Indeed, retailers have a long history of engaging successfully with local authorities and other local bodies through partnerships, such as Business Improvement Districts and Town Centre Partnerships.
4.
However, we are concerned that the impact of devolving greater powers locally could create accompanying challenges in specific areas of policy. In a policy field as broad as localism, it is inevitable that there will be some areas in which retailers would like to understand more about the potential impact for their businesses. It is important that the benefits of localism must be balanced against the possible negative impacts on productivity. We recognise this is a particular concern for businesses operating on a national basis which require certainty for effective business planning.
Summary of key points on Localism
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In some areas, localism could lead to more effective public service delivery. However, there are limits to the effectiveness of localism in relation to specific policy areas.
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Localism must not add to the already significant regulatory burden facing businesses.
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If local variations are introduced into those national policy frameworks that currently work well, it could damage their effectiveness unnecessarily.
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Local government should play an important role in delivering the Government’s localism objectives. However, localism can only be delivered effectively by local authorities that are fully fit for purpose.
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Central government must retain a crucial role in the oversight of policies that demand rapid changes to be delivered consistently across the UK.
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There needs to be an overarching framework and guidance in place to assist local decision-makers and to provide the level of coordination that is necessary for issues which require greater strategic consideration.
BRC Response
Question 1 - The extent to which decentralisation leads to more effective public service delivery; and what the limits are, or should be, of localism
5.
Decentralisation of local power can lead to more effective public service delivery in key policy areas. We recognise that, in some cases, local decisionmakers will be better placed to deliver programmes and services that address issues of real local concern. Through their extensive national operations, retailers are frequently in a unique position to identify and highlight examples of good practice in local areas (for example in relation to transport initiatives).
6.
The Government has indicated that the potential for increased localism will be a core consideration in all policy areas and general governance across the country. However, until greater detail as to what this will mean in individual policy areas is made available, it is challenging for many businesses to assess the scale of the potential impact. In our view it is essential that localism is set within a broad framework that will enable national businesses to work with local authorities and communities to deliver the services their area requires. Such a framework would enable a significant level of focus to emerge that all parties involved can deliver against.
7.
There are likely to be limits to the effectiveness of localism in relation to specific policies. Local variations in some policy areas could significantly increase the regulatory and administrative burdens for business. We believe that central government must continue to play a crucial role in policy areas that demand rapid changes to be delivered consistently across the UK (relevant issues in specific policy areas are discussed below). There needs to be an overarching framework and guidance in place to assist local decision-makers and to provide the level of coordination that is necessary for issues which require greater strategic consideration. It will also provide businesses with the reassurance that a consistent and coherent approach will be applied.
8.
An overview of the potential impact of localism on specific policy areas for the retail sector is set out below.
9.
Planning The localism framework must deliver a number of key objectives in order to stimulate regeneration and enable sustainable planning to be achieved. The development life cycle is already a lengthy one and it would be regrettable if the planning process was further slowed. If local planning departments are to make planning decisions based on local priorities, then a coherent national planning policy must guide that process, to ensure that localism benefits not only local people, but also national interests. As many local authority planning departments are already struggling to manage their existing workloads, any increase in their responsibilities must be matched by an increase in their resources, including qualified staff.
10.
Business rates The proposed reforms to local government finance, including business rates, have the stated aim of promoting transparency and economic growth. While acknowledging that these reforms could have some positive implications for retailers, any new measures should not increase the tax and regulatory burden for retailers in relation to local government or undermine the certainty that retailers need for business planning. We support the retention of the Uniform Business Rate and would be concerned at changes which introduce local variation. The greater the freedom for individual authorities to adopt their own rules in relation business rates, the more difficult it would be for national businesses to manage their rate liabilities. While welcome in principle, we need to be careful that the benefits of the proposed introduction of a new discretionary power to levy business rate discounts is not offset by an accompanying increase in complexity and the administrative burden for business.
11.
The Government has also committed to giving local businesses the right to vote on any Business Rate Supplement proposal. The BRC supports this commitment from the Government.
12.
Crime The BRC recognises the benefits of having crime and police priorities driven at the local level. However, this needs to be accompanied by a clear national strategy for business crime which is developed through engagement with key stakeholders. We support the establishment of a National Crime Agency that will focus attention on serious and organised crime groups and the proposal to ensure better collaboration from police forces where offences cross force borders. We are concerned that if the local election process is used to appoint elected police commissioners and set local policing priorities, this could act to exclude the business community who would not play an active part in this process.
13.
Environment (green issues) Localism can play an effective role in addressing some environmental issues such as waste and land management where circumstances are specific to different regions. Flexibility in terms of local delivery is clearly important in achieving strong recycling rates. However, a national strategy that ensured consistency of materials collected (rather than collection mechanisms) would further improve collection rates. It would ease the burden of communicating with consumers regarding what can and cannot be collected and would improve significantly consumer understanding and awareness of what can be recycled.
14.
With respect to waste management infrastructure, there needs to be strategic guidance and direction from a national perspective. In order for plants to be appropriate they need to be in the right place and the right size. If there are incentives or disincentives at a local level there is a potential risk that inappropriate infrastructure may emerge.
15.
Localism alone will not allow us to address effectively the challenges presented by reducing carbon emissions and tackling the causes of climate change. Climate change needs to be tackled at a national and international level, and decisions made from a local perspective will often run contrary to central government ambitions. If the UK is to exploit fully the economic opportunities presented by climate change, such as the renewable energy market, then we must be at the forefront of investment in green technology. If more power is devolved to local authorities, then we could see more green-tech planning applications being turned down, with the risk that the UK is left behind.
16.
Public Health Devolving responsibility for public health to a local level could present problems of coordination for many national businesses. Without central government’s guidance on the commitments required to achieve the campaign’s objectives it will be increasingly difficult to achieve official endorsement of the activity. Demonstrating to external stakeholders that this approach is credible and will deliver the outcomes required will be a significant challenge.
17.
Alcohol licensing and pricing: Members need consistency of licensing conditions to ensure they can operate alcohol sales efficiently, implement national measures such as Challenge 25 to prevent illegal sales and to ensure local competition is not affected. Whilst we understand the key role local communities need to play in licensing, giving greater regulatory powers to local licensing authorities risks adversely affecting the ability for national companies to administer licences efficiently and responsibly. It could also have a damaging impact on local competition in the grocery market by imposing restrictions on individual premises on licensing hours or even access to new licences.
18.
We understand that local authorities are also considering the implementation of local by-laws for the minimum pricing of alcohol. Local pricing of goods, including alcohol, could present significant administrative challenges for national businesses and have an impact on local competition. As an alcohol licence is a key requisite for a supermarket, regulating different pricing policies would have an impact on wider grocery sales.
Question 2 - The lessons for decentralisation from Total Place, and the potential to build on the work done under that initiative, particularly through place-based budgeting
19.
The Coalition Government should have regard to the experience of Total Place in framing its localism proposal. Total Place had significant similarities to aspects of the Coalition Government’s localism agenda. It provides some of the direction and structure that national business has been looking for from localism. The semblance of a framework that is provided by Total Place would go some way to providing the structure and security for national businesses to plan and operate successfully within the Government’s localism agenda.
20.
Total Place recognised that there are specific service areas that are well suited to devolved governance, but also implied that this is not necessarily the case for all service areas. It also demonstrated that localism has been tested by local authorities over a period of time to gauge what can be achieved and where. This in turn enabled them to put in place sufficient and suitable structures to manage effectively the governance and finance of these devolved functions.
21.
We recognise the principle behind place-based budgeting which will enable local authorities and partners to bring together their budgets and work collaboratively to reduce unnecessary costs and deliver better, more efficient services to their local area. However, we would like to know more about how this could work under the Government’s localism agenda.
Question 3 - 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
22.
Local authorities should play a key role in a decentralised model through their responsibility for the delivery of local public services, their participation in new Local Enterprise Partnerships and the provision of guidance and support to these partnerships. However, a decentralised model can only be delivered effectively by local authorities that are fully fit for purpose. The recruitment of sufficient qualified staff remains a challenge in many areas of local government activity, such as planning.
23.
We support localism being extended to other local agents but the BRC would not want to see a situation develop whereby businesses are compelled to deal with a proliferation of local agents with responsibility for a wide variety of local issues. From a business perspective, it would not be practical for businesses to be expected to engage individually with a large number of local agents.
24.
Local Enterprise Partnerships, with equal public and private sector representation, will have an important role to play in the future success of their local area. They must be implemented effectively. We question whether, from the outset, all partnerships will have the right level of skill, knowledge, expertise and possibly the time to pursue the extensive remits which it is proposed that they will have. In our response to the Government’s consultation on Local Enterprise Partnerships, we recommended that there needs to be a framework and support structure in place at the national level to assist Local Enterprise Partnerships to carry out their role effectively.
Question 4 - The action which will be necessary on the part of Whitehall departments to achieve effective decentralised public service delivery
25.
Whitehall departments will need to retain a crucial role if an effective, decentralised public service delivery is to be achieved. As noted above, the Government needs to establish an overarching support structure for local authorities, Local Enterprise Partnerships and other local agents to carry out their responsibilities. This is particularly important for issues which require greater strategic consideration, such as planning and infrastructure. It will also give businesses the reassurance they need that a coherent and consistent approach will be applied across the country.
26.
Whitehall departments should be involved substantially in developing the necessary support structures and guidance for various policy areas. Staff should also be called upon to assist and provide expert advice to local government and partnerships in the performance of their functions. In relation to Local Enterprise Partnerships, we have recommended to the Government that a support structure is required to advise these partnerships on crucial matters of economic development. This support could be provided by a pool of central or local government officials dedicated to giving specialist advice and promoting best practice.
27.
While recognising the value of individual policies being developed to meet local needs and circumstances, for national businesses to engage at a local level, there needs to be a base level of consistency in terms of the quality and effectiveness in the delivery of those policies.
Example 1 – Waste Management
28.
Local authorities are currently free to design their own systems in terms of what items are collected for recycling and how they are collected. There are benefits under this approach (systems can be designed to suit local demographics) but there are also challenges. The most significant issue is that different items are being collected by different local authorities. There are no materials in the UK that are universally collected in all local authorities and consumers remain confused as to what they can and cannot recycle in their local area. The UK-wide On-Pack Recycling Label scheme was developed to overcome this issue. A framework that guides local authorities on the materials that need to be collected (in order to achieve national carbon reduction targets) would still provide the freedom for local authorities to develop collection systems that suit their local circumstances.
Example 2 – Crime
29.
A centralised strategy for tackling crime against the business community would help to recognise and share effective practices across each of the police force areas. We acknowledge that it is beneficial for priorities to be largely driven at the local level, but having a complementary national strategy will provide support to the locally elected commissioners and will remove duplication of effort/resources. It should highlight the importance of businesses to safe and vibrant communities and encourage effective engagement between local businesses and elected commissioners. A good example of where this has worked well is with the National Counter Terrorism and Security Office where national leadership/training of the Counter Terrorism and Security Advisers ensures a consistent approach across the UK based on a greater understanding of how national businesses operate.
Question 5 - 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
30.
It is essential that the Government’s decentralisation agenda achieves real savings in the cost of public services. The Government should build upon the financial priorities identified in Total Place and the case studies that have demonstrated that significant savings can be made in local public services. However, we recognise that such an approach will not be appropriate for all public service areas.
31.
The retail sector is supportive of the Government’s strategy to address the fiscal deficit. We recognise that public sector spending, across both central and local government, must be reduced significantly if the UK economy is to emerge from the recession stronger and more competitive internationally. At the same time, sufficient resources need to be made available to achieve the Government’s localism objectives.
Question 6 - What, if any, arrangements for the oversight of local authority performance will be necessary to ensure effective local public service delivery
32.
The BRC recognises the Coalition Government’s strong desire to move away from a top-down, target-driven approach to governance. However, there needs to be a certain level of central oversight over local authorities in a new localism environment. While we are not necessarily advocating that the Government should prescribe in detail what local authorities should be required to do, in relation to certain policy areas, we consider there is a case for having some performance targets for local authorities to be determined centrally. Should the Government proceed with plans to remove all existing centrally-set performance targets and statutory controls, then measures are needed to help asses the performance and effectiveness of local authorities and identify areas of improvement. We are also keen to understand what mechanisms will be put in place to address local authorities that continually fail to meet the needs of their local communities.
33.
The Government plans to introduce a ‘general power of competence’ in the forthcoming Decentralisation and Localism Bill, which will permit all local authorities to take action unless they are forbidden expressly by the law. With significant cuts to local government funding expected following the October 2010 Spending Review, we recognise that this general competence power would give local authorities the freedom to work in partnership with private sector organisations and local communities to drive improvements in the delivery of local services. However, for national businesses that have operational models that address issues from a corporate perspective, this power needs to be accompanied by sufficient safeguards to ensure business certainty is not undermined.
Question 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
34.
Accountability for expenditure on local services delivery can be achieved by monitoring the performance of local authorities through their strategic business plans. Some local authorities have established a Standards Committee for the purpose of maintaining and promoting high standards of conduct within the authority. It is possible that the costings for expenditure on the delivery of local services could be assessed through these committees.
35.
However, as noted above, ultimately we consider that central government should retain some oversight over local authorities if they are to be held properly accountable for the expenditure on local services delivery which has been voted by the Parliament.
36.
To drive economic development in conjunction with delivering community objectives the Government has spoken about the potential to incentivise local authorities to take a business focused approach.
37.
This proposal would need to be supported with a strong framework for delivery that enabled accountability to be demonstrated to the electorate, stakeholders and the Government. It is inevitable that some authorities will fail to achieve their objectives should this approach be taken and the Government needs to be aware and in a position to take appropriate action.
October 2010
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