Estimate of Localism Bill cost burdens "woefully inadequate": London Councils

The additional new cost burdens on local authorities quoted in the Localism Bill at £21m seem “woefully inadequate”, London Councils has claimed.

In a briefing ahead of the Bill’s second reading in the Commons, the group said some explanation of how the figure was determined “would be most welcome”. It added: “Having considered all the additional procedures required of local government in the Bill, this amount seems very small in comparison. Is this extra charge per individual authority?”

London Councils said it welcomed the devolutionary provisions in the Bill, but said it took issue with some of the centralising powers. “In several cases the provisions include an unreasonable level of powers which are retained for ministers,” it argued, citing clause 5 of the general power of competence in particular.

This clause allows the Secretary of State to restrict what the local authority may do under the general power or make its use subject to conditions, although the SoS must consult before exercising any of these powers.

The group called for “more ambitious” provisions to be included in three areas: constitutional change; boroughs’ role in place-based budgets; and health provisions in London.

On constitutional change, London Councils called for the relationship between national and local government to be codified. Such a code could include defining the broad status of local government, an expectation that local government is the default option for activity below national level, and a recognition that local government is funded “commensurately to fulfil its agreed role”.

The group urged the government to introduce amendments giving statutory force to place-based budgets for all local authorities. It also said it would be seeking statutory powers to set up the London Health Improvement Board in the forthcoming Health Bill. The group added that London Councils and the Greater London Authority would seek amendments to the Localism Bill to enable the GLA to commit funds to public health activity.

London Councils said it welcomed the principle of the general power but questioned the need for some of the restrictions that remain “and in particular the powers reserved for ministers”. The proposed clause 5 “is not embracing the true sense of localism and should be resisted”.

As drafted, councils will still not be able to change their statutory delegation arrangements, change their governance arrangements, trade other than through a company, and charge their assets to raise money.

On other aspects of the draft legislation, London Councils said:

• Contribution to EU fines: describing these provisions as “unfair and too onerous”, the group noted that there was no precedent for this, that there was no appeal and that on environmental issues it would be hard to determine who was to blame. The change would also create budgetary problems for councils
• Community empowerment: The “badly thought through” referendum provisions could “allow extremists to gain publicity and saddle boroughs with high levels of costs each time a referendum takes place”. Provisions on the ‘right to challenge’ are also too costly and complex, and should be scaled back, while the clauses on listing of assets of community value are “hugely complex and detailed”
• Planning: the principle of greater involvement of communities in planning is welcome but London Councils said it had “real concerns” on some of the detail. “These provisions are too wide-ranging, too complex and….would be better managed at a local democratic level”. The group said some decisions should be taken by elected councillors with their “unique legitimacy to mediate between competing interests”. The provisions for neighbourhood forums “seem flawed” in particular
• Housing: the group expressed around the instability and risk that would result from the reopening of individual housing revenue account settlements. It said it welcomed the principle of apportioning historic housing debt, and was looking for an acceptable mechanism that did not disadvantage London boroughs
• Mayoral Development Corporations: London Councils said it opposed the wide-ranging scope of MDCs as currently proposed, and called for borough involvement to be built in. Boroughs should have a veto over new MDCs in their area and be able to insist on representation
• GLA powers: the long-term aim should be to devolve power and resources beyond the GLA to boroughs. The group also said that it was concerned by the proposed power of ministers to devolve powers to the GLA. “This is a very wide-ranging extensive power and we do not see the need for this”.