Localism Bill

My Lords, I congratulate the Minister on the customary skill and charm with which she has introduced this Bill. It was an impressive example of carrying out my ancestral trade of making bricks without straw. I am delighted that the noble Baroness’s long service to local government is about to be recognised by the conferment upon her of the freedom of the Royal Borough of Kensington and Chelsea, of which she was such a distinguished leader. This Bill, which purports to herald the renaissance of local government and shape a new localism, sprawls over 510 pages, with 215 clauses and 25 schedules. Together with 111 pages of Explanatory Notes, it weighs two pounds, 13 ounces, to which must be added impact assessments weighing all of eight pounds, 11 ounces. As Churchill might have said, ““Some impact, some assessment””. No wonder the Government have had second thoughts about their plans for forestry. There are some welcome provisions. The local government world has long called for a power of general competence, although candidly when asked what difference it would make, many of us have had some difficulty in identifying what the practical effects would be, given the existing powers to improve the environmental, social and economic well-being of areas. However, changes to small business rate relief and the housing revenue account, the latter building on work initiated by the last Government, and the promotion of a duty to co-operate are also being well received, and few except some estate agents will mourn the passing of home information packs. But overall the Bill, studded with populist gesture politics, is redolent of the prejudices—indeed, it would not be an exaggeration to say some of the obsessions—of the Secretary of State. I cite, for example, provisions about chief executives and pay, or the banning of charge and reward schemes for waste collection. The Secretary of State takes to himself 142 powers and, in what seems a remarkable echo of the Public Bodies Bill, powers to abolish or amend by order up to 1,296 statutory duties. Even the vaunted power of general competence is qualified by Clause 5(3), giving the Secretary of State power by order to prevent local authorities doing anything he specifies. It is impossible in the 15 minutes available to me to enumerate, let alone discuss, all the concerns raised by the Bill’s provisions. I will concentrate on the issues of governance, and on the impact of the measure as a whole on local government and representative local democracy. My noble friend Lord McKenzie will speak to the planning and finance issues, and my noble friend Lord Patel of Bradford on housing and community engagement. I am sure that many noble Lords on all sides of the House will wish to raise many of the detailed provisions of the Bill and the accompanying documentation. The Government's approach seems in many respects to be driven by a belief in an apparently inexhaustible appetite on the part of citizens to vote—for elected mayors or police commissioners, or in referendums called by a fraction of the electorate, a neighbourhood forum, or a handful of councillors. This assumed insatiable thirst for Athenian-style democracy—and Mr Pickles is, after all, only two letters short of Pericles—is matched in ministerial minds by a demand on the part of the public directly to manage local services. Let me be clear. There is, and must always be, space in a mixed economy of provision for voluntary and community organisations as service providers. Their commitment and capacity to innovate enrich civil society. But most of those engaged in the sector acknowledge that they complement the statutory services and neither wish, nor expect, to replace them. I turn to some of the more problematic provisions of the Bill, rooted as they are in the philosophy I have just outlined. I begin with mayors. At any time in the last 10 years a mere 5 per cent of the electorate could have requisitioned a mayoral referendum in England's towns and cities. Few have been called, fewer still have approved the idea, and neither in referendums nor in any ensuing mayoral elections, except when they have coincided with general elections, has the result been higher turnouts than in traditional local elections. I have always been sceptical of the argument that a direct personal mandate is a necessary condition of effective local leadership. The concentration of power in a single pair of hands is inherently undesirable, and it is also unnecessary; it diminishes the role of other elected members, and there is no reason why the grant of more powers to local authorities, which would be welcome, should be conditional on there being a mayoral system. But if sufficient people want elected mayors, they can easily secure the process, set it in motion and achieve their objective now. It is perhaps not without significance that Nick Boles, now MP for Grantham, succeeding my noble friend Lord Davies, urged the adoption of the mayoral system as potentially providing a ladder back to power for the Conservative Party in places like Manchester, where its prospects under the existing system continue to look a little bleak. The Bill, however, requires confirmatory referendums to take place in 12 English cities where the Government ordain that the mayoral system should apply. When she replies to the debate, perhaps the Minister would give a definitive answer to the question of whether and in what circumstances the Government would extend this requirement to other local authorities. Much worse than that proposal are two further extraordinary provisions concerning shadow mayors, to which the noble Baroness made glancing reference, and the delightfully euphemistically termed ““mayoral management arrangements””. Under new Section 9N in Schedule 2 the Secretary of State may order a shadow mayor to be appointed in an authority due to hold a referendum, in the first instance in the 12 authorities targeted for next May, who will be the executive leader at the date of the order. He will have the full range of mayoral powers until either the referendum fails or an elected mayor takes office. In Birmingham, for example, a Conservative council leader would be appointed shadow mayor and continue to hold office, assuming a referendum next year confirmed the mayoral model, for a further year from next May even though it is highly probable that Labour will take control of that council then. The nearest precedent that occurs to me, though absolutely without the horrific overtones of the original, is the Anschluss: occupy Austria first and have a referendum afterwards. Yet that is not all. In those of the 12 authorities which end up with elected mayors, the positions of mayor and chief executive will have to be combined while other authorities with a leader and executive model will have to consider this novel, and in my judgment, wholly inappropriate conflation of the political and officer roles. It does not seem appropriate that the political head of a local authority should effectively be the head of paid service. Contrast this with the separation of roles prescribed by the Cadbury rules in the private sector. This is not local democracy but local autocracy. These two proposals are the most objectionable in what is in many respects a deeply flawed Bill. I trust that through today's debate, if it does nothing else, the House will send a clear message to the Government that those proposals are totally unacceptable, and an affront to democracy and good governance. Less fundamental but still serious misgivings arise from other proposals. Take, as an example, the provisions for referendums. Non-binding referendums may be called by 5 per cent of the authority's total electorate or, in the case of a single electoral area—or two or more contiguous electoral areas or wards—by 5 per cent of the electors in that area or areas. They may also be called by one or more members of the authority, or in the case of a ward by a majority of members for the relevant area, or by one member if there is only one representing that ward. There are very limited grounds on which a council can decline to hold such a referendum. I fear that the potential for mischief here is simply enormous. Political, religious or ethnic groups, possibly people with extremist views—perhaps even worse, disgruntled or attention- or election-seeking councillors in their wards—could generate referendums without limit, damaging community cohesion or effectively delaying the implementation of properly derived decision-making. There are better alternatives at present: for example, the councillor's call for action, citizen's petitions—the provisions for which the Bill, incidentally, abolishes—and the right to address councils. In any case it is the practice of most although, I have to submit, not all councils increasingly to engage their local communities about the decisions which affect them. As the noble Baroness pointed out, the Bill provides for compulsory referendums on the council tax levy where it is deemed excessive by the Secretary of State. This is capping by the back door, applied perhaps in different ways to different classes of authority, but without any close regard to the circumstances of the individual authority and with no ability to modify the cap after a referendum, as would be the case under the present—and, in the views of many of us, still unsatisfactory—system. But why should a referendum on council tax, especially given the complexity of the local government finance system, displace the role of the ballot box and elections in holding councils to account? When it comes to planning and what the Bill terms ““community empowerment””, there are again many problems. In these areas, the impression is given that communities are inherently self-contained, able in large measure to determine their own preferences in isolation. Of course, for some purposes and in some areas—for example, parish councils—this may well be true, but if I look at my own experience in the ward I represent in the west end of Newcastle, I can count around 23 distinct areas in that ward alone, with a population of some 11,000. Those are in addition to communities of interest, based—as they might be—on age, gender, ethnicity, class or employment. It is the function of local government to mediate those interests and, with its partners, to shape the future not only of the individual areas but of the whole city or county. The raft of propositions about neighbourhood forums—now expanded from the original three men and a dog in the first draft of the Bill to 21 people—the significantly named ““community right to challenge”” over the provision of services, and the provisions relating to community expressions of interest all have some potential for good. However, they also raise the dangers of nimbyism and the atomisation of local governance, which are of a piece with other government policies, such as those we see in education or the wholesale abandonment of regional or sub-regional structures, except for a vague duty to co-operate. Others will no doubt enlarge on these and other issues during this debate and in more detail in Committee. I wish to conclude with two more worrying matters. The first relates to issues of propriety. I am disturbed—and so are some of the professional bodies—by the provisions relating to predetermination on the part of members in relation to planning matters. This appears to me to breach the quasi-judicial approach appropriate to such issues in planning and licensing. In addition to that, there is the proposal to make the existence of a community infrastructure levy a material consideration in planning. That could be regarded in effect as an inducement to sell planning permissions by the local authority. The second concern is again a matter touched on lightly by the noble Baroness the Minister. It is the power under Part 2 of the Bill to require councils to pay fines levied by the European Union in respect of breaches of treaty obligations. I recently tabled a Question to ask what estimate had been made of the potential UK liability in this respect, rumoured to be in excess of £1 billion. The reply from the noble Lord, Lord Sassoon—who is not in his place—was that no such penalty had been incurred by the UK and none was anticipated. In which case perhaps the noble Baroness the Minister could say why there is such a provision in the Bill at all? Finally there is one delicious irony in the Bill. Clause 28 repeals the duty to promote democracy which is established by Part 1 of the Local Democracy, Economic Development and Construction Act 2009. A Bill purportedly about local democracy repeals the duty to promote it. I need not—and your Lordships will be pleased to hear that I will not—say more.