Deregulation Bill

Written evidence submitted by the Local Government Association (LGA) (DB 13)

About the Local Government Association

1. The Local Government Association (LGA) is the national voice of local government. We work with councils to support, promote and improve local government.

2. We are a politically-led, cross party organisation which works on behalf of councils to ensure local government has a strong, credible voice with national government. We aim to influence and set the political agenda on the issues that matter to councils so they are able to deliver local solutions to national problems.

3. The LGA covers every part of England and Wales, supporting local government as the most efficient and accountable part of the public sector.

4. This submission will cover the areas of interest that the LGA is taking forward on behalf of councils on this Bill, and why we believe that the Government needs to go much further in terms of its proposals.

LGA’s Approach on the Deregulation Bill

5. The LGA welcomes the move by the Government to use this Bill to reduce the legislative burden on business, civil society, individuals and public sector bodies.

6. The burden of "red tape" and legislation is an important issue to all of local government. Councils have over 1200 statutory duties they must fulfil even if this Bill passes. Regulation and bureaucracy are often cited by our members as barriers to growth and the locally based decision making that would better serve our residents and communities.

7. The LGA has been campaigning to reduce red tape through its "Rewiring Public Services" campaign. We are calling for more localised decision making in order to drive growth and reshape public services around the individual and place by allowing councils greater flexibilities and freedoms from central government control and regulation.

8. The Bill contains many Clauses that we support and have argued for, especially on licensing; removing needless duties; street work permits; and rights of way.

9. Whilst we welcome the overall direction of the Bill, we think that there is an opportunity to widen it out to include further reductions in "red tape" including licensing burdens, and the removal of the duty on local authorities to publish statutory notices in local newspapers.

Right to Buy (Clause 21)

10. The current inflexibility of the Right to Buy, as this Bill does, system has a number of consequences which undermine the ability of local authorities to replace housing sold under the scheme. Local authorities must have a greater say over the Right to Buy to reflect local priorities and their local housing market.

11. Relaxing the eligibility criteria for the Right to Buy makes it more important than ever that the system delivers replacement homes for those sold. A blanket discount cap, as is currently in place, ignores the large differences in property values up and down the country, and in some areas will not provide a discount sufficient to generate sales and vice versa. Greater flexibility should be provided to enable councils to set the Right to Buy discount locally, to reflect local housing markets and stimulate sales.

12. Under the current system, the amount of receipts kept by the Treasury is based on the predicted amount of Right to Buy sales in each authority. This means that only when the Treasury has received the predicted amount does money become available to be retained locally. The restrictive criteria which accompany Homes and Communities Agency agreements to retain receipts locally also restricts the ability of local authorities to invest in housing. For example, the agreements limit councils to funding only 30 per cent of new build costs from Right to Buy receipts, as well as limiting the use of other housing revenue account receipts as funding. The Deregulation Bill should allow for full retention of receipts and greater flexibility over how they are used. This would incentivise councils to use their assets, such as land, for replacement housing and could allow councils to bring development sites forward that may not be attractive or viable to other providers.  

13. The Government should bring forward amendments to the Bill which would allow for direct and full retention of receipts and greater flexibility over how they are used and ensure the discount could be set locally. This would incentivise councils to use their assets, such as land, for replacement housing and could allow councils to bring development sites forward that may not be attractive or viable to other providers.

14. The Bill represents an opportunity to alter the current arrangements to enable additional reinvestment in new affordable housing. The changes set out above would enable councils to reinvest significantly in new homes.

Household waste: de-criminalisation (Clause 29)

15. The Deregulation Bill amends the Environmental Protection Act (EPA) 1990, Section 46. The EPA allows councils to prescribe how residents must put out their waste and recycling for collection. It also creates an offence, punishable by a £1,000 fine, of not complying with the prescribed arrangements after receiving a written warning.

16. The purpose of this is to allow councils, as a last resort, to enforce standardised collection arrangements. Standardised arrangements save money and improve recycling rates. The enforcement powers, to date, have been used extremely sparingly.

17. The Deregulation Bill converts the £1,000 fine into a £60 civil penalty, enforceable as an ordinary debt. But it also removes the power to prescribe collection arrangements. The new trigger for a penalty is that the resident’s behaviour is "detrimental to amenities of the locality". This is a novel test with no legal precedents to define it. It almost certainly would not allow a council to enforce, for example, the recycling arrangements which may be needed to get best value for money from a waste collection contact.

18. The key issue for councils is their ability to operate standard collection arrangements to help them increase recycling levels and meet EU targets. Working towards the common aim of reducing landfill and general waste pollution councils and residents have transformed recycling and waste services levels in the last decade. Since 2000, the proportion of household waste recycled has increased from 11 per cent to 43 per cent. At the same time resident satisfaction levels for council waste collection services have risen and are now at 86 per cent nationally.

19. Councils encourage recycling through raising awareness and providing information to residents about waste services and how waste and recycling should be presented. However in a small minority of cases, there are households who consistently fail to comply with arrangements and cause a nuisance to neighbours by continually leaving rubbish out in the street or failing to separate waste for recycling. It is important that councils are able to tackle these problems since the waste from such residents can contaminate much larger quantities, making it unsuitable for recycling and significantly increasing the costs of disposal. The cost of this contamination is shared by all tax payers, the majority of whom have taken care to separate waste for recycling.

20. In such instances, councils use a number of interventions including notices on bins, letters to householders and visits to the property to discuss how bins are used. The limited powers that councils have to issue fixed penalty notices in the case of serious and persistent misuse are only ever used as a last resort and after other means have been exhausted.

21. The most recent data from Defra demonstrates that councils are using these powers proportionately. In 2008/9 a total of 876 fixed penalties were issued and pursued for payment, of which only 100 latterly involved criminal prosecutions due to non-payment. On average this is just over two penalties issued per council area each year or one for every 26,000 households. The powers to issue penalties and the ultimate sanction of prosecution serve as a backstop in extreme cases and a deterrent to wider misuse of waste and recycling facilities.

22. This Clause will put future recycling rates in jeopardy. This Clause will significantly undermine councils’ efforts to work with their communities to increase recycling rates and reduce use of landfill sites and pollution. The changes will also mean councils no longer have any enforcement powers in circumstances where residents persistently fail to comply with arrangements for separation of waste for recycling. There is no evidence that these powers are being used disproportionately and the LGA does not therefore see an evidence-based reason to change the system. The LGA opposes this Clause in the Bill and would encourage the committee to delete it.

Further deregulatory measures this Bill must bring forward

Licensing Review

23. The LGA would like the Government to introduce a Clause, committing it to undertake a review of all local authority licensing regulations and how they could be simplified.

24. There are well over 150 licences, permits, consents and registrations issued by councils, and many more issued by Government and its agencies. A business establishing even a standard business model can be required by law to submit numerous licence applications, relating to the same premise and containing overlapping information, to different parts of the relevant council. For example, a small restaurant could be required to apply for up to 8 or 9 different licences or registrations.

25. This is because some legislation, most notably the Licensing Act, requires that councils must use the application forms set out in regulations. This means they are unable to combine forms so that a business can provide basic information, such as name and address, only once. Instead, applicants must complete this for each and every form required. Councils would like the freedom to remove this burden by combining and simplifying forms. Ending proscribed forms in legislation would enable this to happen without needing parliamentary time.

26. We already know that some large businesses have to employ a dedicated person to keep track of the different renewal dates that their licences require. This is costly and burdensome, and detracts from their core focus of growing their business and serving their customers.

27. Individually, licensing regimes make sense and mostly continue to provide valuable safeguards. Typically, they have been brought in to tackle specific problems as they occur, as we have seen with the recent Scrap Metal Dealers Act, and this has been taking place for hundreds of years. However, tackling problems on an individual basis requires a time-consuming process that can last years.

28. Moreover, collectively, licensing regimes are a complex mess of conflicting and irrational rules. The Licensing Act 2003 made an initial attempt to bring together multiple licences in one form – alcohol, entertainment and late-night refreshment. We want to take this approach further by rationalising and updating the legislation across at least 5 departments. A review of all local authority licensing legislation is a necessary first step to achieving this.

Removing the duty on local authorities to publish statutory notices in their local newspapers

29. The LGA would like a new Clause introduced, removing the duty on local authorities to advertise statutory notices in local newspapers.

30. It is a legal requirement for local authorities to pay to advertise public or statutory notices in local newspapers, covering a range of subjects such as informing residents about planned road closures, certain types of planning and licensing applications, road traffic orders and changes to local education provision.

31. The requirement dates back to 1972, a time when local and weekly newspapers and radio were popular sources of information. The last 41 years has seen vast changes in technology and shifts in consumer preferences. This requirement remains in force despite evidence that the way people access news and information has changed significantly and the circulation of local newspapers is falling.

32. The legal duty to publish statutory notices in local newspapers should be removed. This reform would not remove the duty on councils to inform their residents about statutory notices or any other area of council policy, it would simply allow them to decide whether or not the local newspaper was the best place to do this. For instance, licensing applications are also advertised through notices placed on the building, and the majority of representations are triggered by seeing these notices, rather than those in the paper.

33. Statutory notices are an expensive and ineffective way of communicating with residents. Councils spend £26 million a year on public notices; 84 per cent of councils say there are more cost-effective ways to publish public notices, such as on websites and direct emails; 42 per cent of councils are charged more by local newspapers to publish public notices than for other general advertising and the costs are continuing to rise. Businesses also incur significant costs through this archaic requirement and the British Beer and Pub Association has recently joined the LGA in calling for their scrapping. These are substantial costs at a time when local government is facing the dual challenge of ensuring financial stability and sustainability.  Statutory notices are also out of date when evaluated in the context of recent technological advances in online communications (websites, Facebook, Twitter and e-mail being some of the most popular digital platforms).

34. We urge the Government to remove the duty to publish statutory notices in local newspapers.

Removing the Housing Borrowing Cap

35. The LGA would like to see the Bill used as a legislative vehicle for removing the housing borrowing cap.

36. Meeting housing need and demand locally will not be achieved through the current operating model. The private sector cannot and will not deliver on the scale required. It has averaged 130,000 completions a year over the last 40 years. Housing Associations are also capacity constrained. Building over 200,000 units per annum is achievable only if councils play a full part in delivery including building on their own account.

37. In the 2013 Autumn Statement, the Government announced that borrowing limits for the Housing Revenue Account will be raised by £150 million per year in 2015/16 and 2016/17. The LGA has welcomed the announcement as recognition by the Treasury that the current model to cap local authority borrowing is not fit for purpose. We see this as an important first step to support local authorities to increase supply of affordable housing.

38. Removing the housing borrowing cap would align council borrowing for housing with the wider approach to local government borrowing. This approach means that local government can only borrow what it can afford to pay back, a principle which is enshrined in the Prudential Code. We estimate that the total level of borrowing that would occur, if the cap was removed, would be insignificant when compared to national debt.

39. Research by Capital Economics, of economists, fund managers and credit ratings analysts indicates that there would not be a significant reaction from the markets to the likely increase in borrowing (£7bn over five years) that would result from lifting the borrowing cap. This is mainly due to the relatively small size of the figure, which is far smaller than the statistical error for public borrowing. The LGA will shortly publish research findings demonstrating the potential of councils to increase their house building rates directly if the cap was removed. This information can be shared with the Committee.

40. The LGA’s call for removal of the cap is supported by a large number of housing stakeholders including: Shelter; the CLG Select Committee; Home Builders Federation; Federation of Master Builders; Chartered Institute of Housing; National Housing Federation; London Councils; National Federation of Builders; National Federation of Arms-Length Management Organisations; and Association of Retained Council Housing.

March 2014

Prepared 13th March 2014