WRITTEN EVIDENCE
SUBMITTED BY
THE BRITISH
PROPERTY FEDERATION
(LOCO 59)
INTRODUCTION
1. This submission by the British Property Federation
has been prepared in response to the CLG Select Committee's request
for evidence on localism.
2. The British Property Federation (BPF) is the
voice of property in the UK, representing companies owning, managing
and investing in property. This includes a broad range of businesses—commercial
property owners, financial institutions and pension funds, corporate
landlords, local private landlords—as well as all those
professions that support the industry.
What is localism?
3. It is important to be clear what localism
means. For us, localism is not simply about devolving powers to
the lowest possible level but rather ensuring that powers are
exercised at the most appropriate level. Given the centralization
that has taken place over recent years, we recognize that this
is likely to involve a shift of control from both central Government
and the (former) regions to local authorities and the communities
that comprise them.
At what level should power be exercised?
Local Authorities
4. Localism presents a major opportunity to reinvigorate
local government. For many years, local authorities have been
sidelined in key areas of decision-making. They need to be put
back in the driving seat and trusted to act in a prudent and responsible
way. This means that they should be at the core of the localism
agenda.
5. We would stress the following points:
¾ We strongly
support giving local authorities a general power of competence.
But if such a power is to be meaningful it must involve a real
transfer of financial responsibility to local authorities. The
Government's commitment to introduce TIF is a good indication
of its intention to move in this direction as are its plans to
allow local authorities to retain council tax and rate revenue
arising from new development. As we indicate below, however, we
believe that there is scope for much greater devolution of financial
powers to local authorities.
¾ Central
Government has got to accept that the price of greater local autonomy
is an increased risk that from time to time local authorities
will make mistakes. That is, however, the point of localism. If
local authorities make bad choices they should face the consequences
at the ballot box.
¾ There
is a need to consider what powers are most appropriately exercised
at a "larger than local authority level" as well as
at a neighbourhood/community level. We discuss these issues further
below.
The larger than local authority level
6. There will always be some issues (such as
economic strategy and the delivery of strategic infrastructure)
that will require some form of strategic planning or other co-operation
between neighbouring local authorities.
7. The Government seems to envisage that the
requisite degree of co-operation will be delivered through:
¾ Imposing
a duty on local authorities to co-operate with their neighbours.
Such a duty will be a helpful starting point but will need further
elaboration to avoid confusion and to ensure that each local authority
plays their part. If the duty is to take effect as it should,
enabling authorities to work together effectively to produce cross
boundary agreements and facilitating collaborative working, a
clear definition of its scope and meaning will be needed in the
forthcoming legislation. The emphasis should be on regular planned
engagement rather than sporadic communication to ensure that the
most effective collaborative systems and methods of working can
be put in place.
¾ Cross-border
structures: Whilst we agree that imposing
a duty on local authorities to co-operate with each other is a
good starting point, it would need to be coupled with some clear
structure within which that co-operation can take place. Whilst
local authorities should be free to set up whatever structures
they think would work best in areas such as strategic planning,
we believe that there should be some requirement on them to demonstrate
that they have put workable procedures in place. Local Enterprise
Partnerships (LEPs) could be appropriate vehicles for this but
there are too many uncertainties surrounding their role at present
to be able to judge whether they will be up to the task.
8. We believe that the need to absorb cuts and
work more efficiently will increasingly push local authorities
to work more closely with their neighbours. The localism agenda
should help expedite this process. Such closer working may take
place through LEPs and we have set out our thoughts on their role
in evidence to the Business, Innovation and Skills Select Committee.
However, it may take other forms:
¾ Greater
skills sharing between authorities is desirable as it will become
less and less feasible for local authorities, particularly smaller
ones, to possess in-house the full array of specialist skills
that they may from time to time require. This is particularly
the case in regeneration and planning. It could be that each authority
within a LEP agrees to host a particular area of expertise (eg
land assembly/compulsory purchase) and make it available to all
authorities within the LEP.
¾ Full
scale mergers of departments between neighbouring authorities
might also become more common. We note that Westminster and Hammersmith
and Fulham are looking to merge educational services, whilst Cambridgeshire
and Northamptonshire are looking to merge back-office services.
Neighbourhoods
9. Local neighbourhoods that make up local authorities
should have greater opportunities to help shape the decisions
that affect them. However, the creation of formal neighbourhood
plans in which all of those living and working in the area participate
might be a step too far. In urban areas, where there are complex
and overlapping neighbourhoods, communities and social networks,
defining a specific community or neighbourhood would be problematic.
A local authority might have more than a hundred merging and overlapping
neighbourhoods and would find it difficult to facilitate the creation
of formal plans for each one. There would be questions, too, about
the status of such plans and their relationship with any overarching
local plan.
10. However, much greater involvement by neighbourhoods
and communities could be achieved by:
(a) ensuring that neighbourhoods and community
interests, and particularly "the silent majority", feed
more effectively into the construction of local plans.
(b) More active support for representative neighbourhood
groups, providing them, for instance, with toolkits that enable
them to assess the quality of their neighbourhoods and develop
schemes for improving them. Some models for doing this already
exist. The active involvement of local people in this way fits
very much with our understanding of the "Big Society".
However, whilst a good deal can be achieved by voluntary action,
we recognise that local authorities would need to adjust their
budgets to provide a pool of money able to support neighbourhood
initiatives.
Total Place
11. We have long been concerned that large amounts
of capital spending have been poured into neighbourhoods in an
incoherent and uncoordinated way with little understanding of
what additional benefits could be leveraged off each individual
investment and no proper evaluation of its impact. The Building
Schools for the Future funding programme typified the problem,
being wholly divorced from the way in which the health and housing
needs of local communities were being met. The Total Place/Total
Capital approach that seeks to achieve a more joined up approach
to all funding destined for a particular area, creating shared
facilities where feasible, was introduced by the previous Government
but the progress made to date has been very limited. There is
still a silo mentality in many publicly funded bodies. It is therefore
imperative, that the Government fully embraces the Total Place
agenda and translates what has so far been mainly rhetoric into
reality. It may be that the severity of the forthcoming cuts will
provide the impetus that is needed to persuade local authorities
and other public bodies to go down this route with genuine conviction.
12. A crucial underpinning of the Total Place
agenda is place-based budgeting and we are pleased that the Government
is enthusiastic about this approach. Place-based budgeting enables
all of the public money spent in a local area, whether by councils,
the NHS, central government departments or others, to be pooled
to focus on the needs of local people. Designing services around
places in this way can reduce duplication and maximise the collective
contribution of those services. It can produce savings in many
ways, for instance through administrative savings in regional
and national government, shared services between neighbourhoods
and asset rationalisation.
The role of central government in delivering localism
Learning to let go
13. As we have said above, if localism is to
work Government has got to learn to "let go". Above
all Government has to accept that the devolution of responsibility
involves a risk that local authorities will not exercise their
powers wisely or prudently. The sanction is that local authorities
will have to live with the consequences of their actions and account
for their actions to their electorates.
Proper national frameworks
14. Localism will not obviate the need for some
degree of national guidance in various areas. However, the degree
of central guidance needed could be much reduced. Planning is
a good example. There is scope for a greater degree of local discretion
and the thousands of pages of planning guidance are ripe for pruning.
At the same time there is a need for a national approach to the
delivery of nationally significant infrastructure (such as energy,
airports, ports, etc). Equally, a national planning framework
could be expected to encompass such priorities as:
¾ The
weight to be attached to community needs and consensus;
¾ The
need to secure sustainable economic growth;
¾ The
need to address local housing needs;
¾ The
sequential preference for brownfield land and regeneration;
¾ The
importance of carbon and sustainability;
¾ The
need to plan for and provide infrastructure;
¾ The
benefits of joint working with business, communities and other
stakeholders.
Incentivising authorities to act responsibly
15. Whilst localism involves allowing local authorities
to make their own decisions, they are likely to need some "encouragement"
to persuade them to pursue policies that support broader Government
objectives.
16. A consequence of localism in some places,
for instance, could be an increase in nimbyism—a reluctance
to accept new development despite a clear local need for new housing
or employment generating commercial development. The Government
is aware of this and has announced proposals to incentivise local
authorities to take a more positive approach to development proposals
via the New Homes Bonus and the Business Increase Bonus, both
of which we strongly support. It is difficult to judge how effective
these incentives are until they are up and running. This approach
could be more effective than some think, particularly as those
local authorities who sit on their hands will not only lose out
on the bonus but be further penalised by a fall in their overall
grant income.
17. We believe the Government could be even bolder
and move towards a more substantial relocalisation of rating revenue.
Breaking the link between local authorities and rating income
has been deeply damaging, giving local authorities no financial
reward for fostering beneficial development. A gradual move towards
greater relocalisation of rate income would provide a much stronger
motivation for local authorities to back new development that
generates economic activity and creates new jobs. It would show,
perhaps more than anything else, just how seriously the Government
is taking its localism agenda.
Proper auditing
18. Clearly there will be a continuing need for
rigorous auditing of local authorities to ensure that public money
is spent responsibly. With the abolition of the Audit commission
new arrangements will need to be put in place to ensure this happens.
October 2010
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