Daniel Goodwin

Bill and Budget: Localism and settlement

Four days in from the local government settlement and the dust is now beginning to settle. For my Council it will be a very tough settlement. Our grant from government will be reduced by around 27% over the first two years, with 17% going in year one.

The published figure of closer to 5% expresses the reduction in terms of our overall budget, although the grant is just one part of the Council’s income. However there is no prospect of raising Council Tax next year, fees and charges for things like parking and planning are either fixed or must be seen to be fair, and we are subject to inflation above CPI for many of our supplies and services. That means that we will be reducing our overall budget by about 25% in the next two years, with most of the savings coming from staffing costs and reconfiguring services. However this is not to bleat and there are opportunities still to work innovatively.

Fortunately our planning and work to date has been on the basis of just such a tough scenario. The grant figures are within 1% of our planning assumptions in the first two years and our work to address this began to be formulated in March. It is still a tough circle to square, though, and there are some very long hours being worked by top teams to solve the budget conundrums.

The parallel launch of the Localism Bill provides some interesting new situations which I review below.I should stress that these are considered from a politically neutral but localist public policy point of view. What follows is therefore a managerial assessment of feasibility and whether the provisions in the Localism Bill look likely to deliver the coalition government’s policy aims.

I think of greatest public interest will be the changes surrounding the planning system, for example with regard to neighbourhood planning. Planning colleagues have expressed some alarm and consternation at the proposals, and I believe that they need more detailed working through. However they appear to apply subsidiarity* to the planning framework, and I regard this in principle as a good thing. I have never understood why a dormer window or extension, which can only have a street impact, should be agreed at anything above a neighbourhood level. Whilst clearly some strategic decisions may need to be taken in the national interest, providing there are sufficient safeguards to ensure that local concerns can be given proper weight. Here we should not lose sight of the place shaping role of local authorities and the need to address ‘common good’ and public value issues at appropriate social, environmental and economic scales.

The housing measures will also be of significant public interest. How the development of local frameworks for the community right to build might be achieved is unclear, and of course there is a presumption towards the desirability of development which some communities would question. Greater locally determined approaches to Councils’ roles in social housing will be helpful, alongside flexibility in homelessness measures. Also, whilst the initial notion of flexible tenancies at 80% of market rent caused alarm bells to ring, the discretionary aspects of this are now clearer and this may yet prove to be a useful tool to assist in managing the churn of social housing stock. Whilst based in very technical financial arrangements, the demise of the housing subsidy is welcome. However at the back of one’s mind the concern remains relating to the impact of housing benefit changes and what the implications might be for people’s lives in the long run.

The areas which need most thought, in order to avoid unforeseen policy consequences, are those relating to the new rights for local people and communities. There must be clear public value tests for the right to take over a service, for example, and a clear understanding about how the value of community assets might be maintained, perhaps with a potential reversion to the public purse in the event of the activity being wound up. However the potential for some groups in some areas will be huge and it will be interesting to watch the first out-workings of these.

Whilst it is of possibly lower public interest, I thoroughly welcome the prospect of the general power of competence which will give local authorities new freedoms to run services free from central government. Detailed work on what this could mean in practice needs to be thought through urgently, in order that the legislation can be developed to enable this to maximise the possible opportunities – we don’t need a repeat of the mutual insurance problems of a couple of years ago.

Finally following various ‘fat cat’ banking controversies, which have spilled over into the public sector there needs to be a more measured approach on public sector executive pay, which recognises the need for local accountability. The Bill’s proposal for publication of senior pay policy, and agreement at Full Council, is a sensible step, I believe. It will make it clear that it is elected Councillors who approve top pay, not chief executives, and done well it could be a good mechanism for recruitment and motivation.

An important piece of work that we can now start on is to see how the Localism Bill will help to bridge some of the budget gaps and what level of facilitation will be needed to help it do so. We run a ten year budget plan and will need to start making some assumptions which anticipate new ways of working to support the reduction in the public purse. An obviously key factor in all this will be for people like me to work closely with politicians and local communities to establish how all the various elements of this emerging legislation can be combined with their vision and used to further develop and protect the place, its people and their livelihoods and prospects for the future.

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*Subsidiarity: the principle that decisions should always be taken at the lowest possible level or closest to where they will have their effect, for example in a local area rather than nationally (Cambridge Dictionary Online).

Useful link summarising the Localism Bill: www.communities.gov.uk/documents/newsroom/word/1795339.doc

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This entry was posted on December 17, 2010 by in Community and culture, Local Government Futures, Place and planning, Public Value.
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