MPs call for statutory code going beyond general power of competence

A group of MPs have called for the introduction of a code covering relations between central and local government that builds on and goes further than the general power of competence.

The Political and Constitutional Reform Committee said such a code should be enforced by statute and interpreted in line with the European Convention on Human Rights.

The code would replace the estimated 1,293 duties currently imposed on local government. It would set out where powers do, and should, lie – thus increasing transparency, the MPs claimed.

The committee argued that the code could redress the overcentralisation of England and provide an economic boost.

The MPs predicted as well that codification, taken together with the general power of competence contained in the Localism Act 2011, would lead to a decline in litigation relating to a local council’s power to act, “as that right would be doubly enshrined in law”.

The Local Government Association welcomed the report, with chairman Sir Merrick Cockell saying it would be particularly interested in how such a code could be given “real legal force”.

Key conclusions from the report, in which the MPs called generally for local government to be give more autonomy and greater fiscal powers, were that:

• The balance of power between central and local government was skewed in favour of the centre and needed to be addressed. “Government should give local councils the ability better to shape their services to the needs of local people”;
• Devolution to Scotland, Wales, and Northern Ireland had been successful and was an evolving process. “England is the odd one out. There is no apparent reason why local government in England is not capable of using similar powers”;
• Power and finance must go together if local government were to become an equal partner. “Any attempt to make the relationship between central and local government more balanced would be meaningless without giving local government its own source of revenue. To achieve fully the potential of localism, a key plank of the Government’s policy platform, local government requires financial freedoms.”
• The Government should consider giving local authorities in England a share of the existing income tax take for England. “The committee does not propose a change in income tax rates. The concept of tax transparency would allow local people to see more clearly what their taxes pay for locally and encourage them to hold local councils to account for their expenditure”;
• The Government should consider how it can take its devolution of financial power further and free local councils in England to raise additional revenue, with the consent of their electorates;
• English local government “lacks some of the most basic constitutional protections that are available to some of its counterparts in a number of other mature European democracies”.

Graham Allen MP, chair of the committee, said: “Codifying the relationship between central and local government would pave the way for a radical new settlement for local government in England, freeing it from some 1,300 duties set by Whitehall, with which local councils are forced to comply.

“The committee’s draft code would clarify at what level of government power and accountability lie and provide a framework within which local councils would have the freedom to meet local needs and priorities. The code would give local councils in England greater autonomy over their financial affairs, allowing them to plan long-term investment for their local communities and providing the spur to restart economic growth.”

Allen described the Government’s commitment to localism as “laudable”, and praised City Deals as a step in the right direction. However, he added that there was “still much more we can do to set local government free”.

“In the long term, I would like to see English local government retain a sizeable part of the income tax take for England, and have the ability to implement other revenue-raising schemes, with local consent,” he argued.

“This ‘tax transparency’ would allow the ordinary voter to see what their taxes were spent on, allowing them better to hold all levels of government to account. These measures could revitalise local democracy and kickstart the local economic growth that we so desperately need.”

The LGA’s Sir Merrick Cockell argued that councils needed the freedom to make independent decisions about local issues.

He said: “The LGA has worked closely with the committee to develop the foundations for a more balanced relationship between central and local government, and we back the report’s recommendation to move away from the 1,293 existing duties imposed on councils and replace them with a more balanced relationship between Whitehall and town halls.

“We echo the committee’s praise of the City Deals. These arrangements should not be reserved just for cities and their surrounding areas. Wherever viable, councils should be given greater autonomy and the financial flexibility to plan long-term investment for their local communities.”

Sir Merrick expressed the hope that the committee’s report would open a wider debate over the importance of independent local government.

He added: “It is time for government to let go of the reins and give councils the independence to meet the needs of their communities and offer genuine local accountability.”

The report was also welcomed by the Society of Local Authority Chief Executives and Senior Managers (SOLACE)

Its chair, Joanna Killian, said: “English local authorities have, for too long, been in an inferior position, with regards dependence on central government. England is one of the most centralised countries in Europe, with devolution in other parts of the UK further highlighting this constitutional weakness. This fact is having real consequences on councils’ abilities to deliver the services that people and communities need and expect.

“Given the current economic climate, it is imperative that local authorities should be allowed to be innovative and creative in working out their own solutions to how they are going to continue to meet demands for services and stimulate local economies. Local authorities know what is needed locally to stimulate growth, we need more devolution to make this happen.”

Solace said it welcomed a range of the report's recommendations, including proposals for full retention by local authorities of uncapped and locally-decided council tax and business rates, subject to retaining mechanisms for fairness and redistribution, and restating the general power of competence, and extending its principles, by making it a default position that local authorities should have the power to provide any local public service, not explicitly reserved to another body.

A copy of the report can be viewed here.

Philip Hoult