New session, new localism?

November 1, 2008

Chris Leslie, Director, New Local Government Network
LGC

The State Opening of Parliament may begin the last legislative session before a General Election, Labour’s final opportunity to recapture some momentum ahead of an undoubtedly nail-biting contest with the Conservatives. So what should local authorities be expecting? The Queen’s Speech will divide into four themes: ‘economic stability’, ‘personalisation of public services’, ‘helping individuals fulfil their potential’ and (enticingly for local government) ‘handing power back to the people’. These are high aspirations indeed. And if localists have the prospect of a quarter of the Queen’s Speech agenda, then surely things must be looking up!

Before we get too excited, we should remember that our desire to see true devolution is rarely matched by realities – and perhaps we are insatiable. Yet the big Bill of the coming session, the Community Empowerment Housing & Economic Regeneration Bill, has been shaping up as an important advance in sub national governance. The credit crunch may well tempt some departments to revert to centralising tendencies, in particular scaling back expectations on financial delegation as they seek to maximise their national room for manoeuvre. Hopefully these wobbles will not delay this Bill, because on the enduring constitutional issues, great steps forward towards a new regional and sub-regional settlement are in prospect.

Despite the best laid plans of advanced announcements, the rumours are that many of the other flagship Bills are undergoing a considerable rewrite. This is hardly surprising – the original iterations of the Banking Reform Bill before the summer will need completely reconsidering in today’s climate. My hope is that we see new thinking about the role of government in banking not just from a national perspective but also from a frontline view as well. One timely reform would be the removal of the requirement for local authority mortgages to be set at a standard nationally-determined interest rate. Councils have sufficient financial and actuarial acumen today to do their own deals helping local residents – and new actors in the mortgage business should be encouraged.

A move towards a counter-cyclical ‘New Keynesianism’ could point towards legislation which gives local authorities – representing a quarter of public expenditure – greater latitude on their annual budgetary processes, perhaps using the three year settlement process to create a new borrowing facility at local level to prevent undesirable redundancies at a difficult time for a local economy to bear. It might also be worth councils pressing for renewed commitments to the capital ‘prudential borrowing’ flexibilities that might be under pressure from a cash-strapped Treasury over the coming period. The commitment to legislate in this next session for Local Business Rates Supplement should also continue, though I would predict the business community might take the opportunity to urge Ministers to place even this modest change on hold.

The economic downturn should cause every corner of the public services to rethink their role in helping those least resilient to tough times. Whether through proposals councils are making via the Sustainable Communities Act and the LGA, or persuading Government directly, local authorities have a duty to address any obstacles that get in their way – including outdated legislative inflexibilities. Take the spurious law that prevents councils developing renewable energy generation at a local level and selling surplus electricity back to the national grid unless in connection with heat generation too. A small legal reform could help encourage new innovation in micro-generation, energy from waste and other useful steps to bring more affordable and lower carbon power sources for communities.

The last thing we need when the going gets tough is a disempowered battery of frontline agencies waiting for guidance from on high. Decentralising legislation should be fast-tracked rather than tinkered with. An Education and Skills Bill should make local authorities the strategic commissioners for skills as many Multi Area Agreements are arguing for right now. Offender management could be localised more effectively. The powers of unelected traffic commissioners could be given to local council leaders. PCT commissioning powers could easily transfer from non-executive board members to locally elected councillors. And Government should act consistently in the spirit of place-shaping and ‘whole’ area assessment and place policing accountability with local council leaders. The wish list is long but as the legislative clock ticks away the time for bold approaches must be now.


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