Feature Story

Going local

Director of Future of London Ben Harrison considers how the Localism Bill intends to increase local authorities' confidence to meet local people's needs.

Since assuming office over a year ago, the Coalition Government has embarked upon a series of radical reforms across a broad range of policy areas. A common theme running through many of these has been an emphasis on pushing power and responsibility down through all levels of government (national, regional and local) to communities, charities, individuals and companies. In economic development and regeneration, the Coalition has begun this process through the abolition of the regional tier in development and planning across England (excluding London), the creation of Local Enterprise Partnerships (new business-led economic development bodies), and through a range of other initiatives outlined in the Localism Bill that is currently making its way through parliament.

The Localism Bill contains detailed proposals that are structured around a number of key themes and designed to provide individuals and communities with greater power over the development decisions that affect them. It seeks to simultaneously empower both local authorities and the communities they serve, and the most symbolic reform contained within the bill is potentially the new 'general power of competence' for local authorities. Under this new directive, local authorities' legal capacity to do anything that an individual can do that is not specifically prohibited is re-enforced – the aim being to give authorities increased confidence to make creative and innovative moves to meet local people's needs in times of financial constraint.

Engagement in planning
The bill contains a number of measures that will have a significant impact on the planning system. Much of the approach to planning is about giving people more say over decisions that affect their local area, and an emphasis placed on neighbourhood planning is chief amongst these. Moving beyond traditional notions of engagement, this will enable communities to come together through a local parish council or neighbourhood forum to take a direct role in determining where new houses, businesses and shops should be developed in their area. Furthermore, in some circumstances, local communities will be able to grant full or outline planning permission in areas where they most want to see new homes and businesses.

Alongside this, in what could be seen as a fairly centralising move, the bill will also abolish the Infrastructure Planning Commission and restore its responsibility for taking decisions to government ministers in Whitehall.

Revolutionising social housing
The Localism Bill will also change the way social housing is funded and administered. Currently, local authorities collect rent from their social tenants and then send the money to central government, who gather this into a single pot. Local authorities are then paid a sum out of the pot each year for the upkeep, renovation and repair of social homes. In the future, instead of having to send the money raised by rent to central government and wait to see each year what share they get allocated back, councils will be able to keep the rent and use it locally to maintain their social homes. This will give them a more predictable and stable basis to plan for the long term.

Additionally, the Localism Bill proposes controversial reforms that will mean more decisions about housing are taken locally. Proposals in the bill will enable more flexible arrangements for people entering social housing in the future. While councils will continue to be able to offer lifetime tenancies if they wish, social landlords will be able to grant them for a fixed length of time. The minimum will be two years, and there will be no upper limit on the length of tenancy.

Clearly then, this is a wide-ranging set of reforms that will impact significantly on how development and renewal are undertaken across the country – and this is even before we consider the introduction of new community powers in relation to the provision of public services and the holding of local assets, the introduction of city mayors, reforms to homelessness regulation, changes to the Community Infrastructure Levy, and much more besides.

Localism and London
Predicting the impact of such an extensive package of reforms is not an easy task, and is even more difficult when you consider the implementation of these in the Capital. London is unique in the context of these reforms as, unlike the rest of England, it already has a mayor and a strong regional tier – which far from being dismantled by the Coalition Government, has actually been strengthened since 2010. Through the absorption of the London Development Agency and the London Homes and Communities Agency, the creation of a pan-London Local Enterprise Partnership (as opposed to progressing a number of sub-regional proposals), and the creation of new Mayoral Development Corporations that have taken over previously independent sub-regional bodies, the Greater London Authority (GLA) is currently more powerful than at any other point since its creation.

London also has an abundance of local government structures. There are 32 London boroughs (plus the City of London), each with separate planning, education and health functions, and each currently facing significant budget cuts together with growing pressures on key services. Some sharing of services and functions across borough boundaries has taken place, but only on an ad hoc basis. The skills, capacity and appetite that boroughs have to engage with in the Localism Agenda inevitably varies across London.

Finally, London is host to a dense and complicated array of neighbourhood, community and voluntary organisations, many of which operate at a very small scale, and some of which are transient and subject to frequent change. This presents a number of practical issues around how you identify and empower such groups, and what checks and balances can be put in place to ensure local accountability.

These factors raise a number of big questions for London, namely:
• What roles will the London boroughs, the GLA and neighbourhoods have in planning and development decisions going forward?
• How will the provision of social and economic infrastructure be strategically managed to ensure sustainable growth and regeneration?
&bill; How will a balance be struck between London's strategic position as a global city at the heart of the UK economy and concerns of empowered residents and communities?

As these bigger questions will take some time to resolve, there is an even greater need for all tiers of London government and their partners to start preparing for this shift now – something that many in the capital are already doing. Indeed, as across England, many authorities and developers have very effective means and practices of engaging with local residents that will inevitably help to make this transition smoother.

Nevertheless, there are likely to be implications for the delivery of social and economic infrastructure in and across the capital. The range of stakeholders and the types of engagement that local authorities will need to initiate during development planning and implementation is very likely to increase, adding to the strain on resources for building local consensus and support for projects. The introduction of neighbourhood plans and local referenda will change the starting point for some development, and will further underline the importance of authorities having a clear sense of direction for their area and an evidence base to inform and guide discussions with residents. In the context of housing provision, the reforms contained within the bill, combined with the new Affordable Rent Model, will add to the sweeping change in the sector, and will likely create some acute challenges in certain parts of the capital, particularly in the context of estate renewal.

Impact on the private sector
From the perspective of the private sector, this entire agenda signals potential uncertainty. Clarity over the process for engaging with communities following the introduction of the bill, together with transparent and inclusive governance arrangements for projects, will be critical. Developers will need to place a greater emphasis on community engagement, relationship building and stakeholder management, and it may take time to implement ways of working with newly empowered neighbourhood groups in order to get their buy in to plans. However, once secured, this support could create new momentum behind projects, greater certainty for investors and developers, and an increased sense of identity and community within the local area.
Furthermore, the general power of competence should, theoretically at least, encourage local authorities to take a more proactive attitude to engagement with the private sector, potentially increasing the likelihood of new and creative delivery partnership arrangements emerging, where authorities, and even potentially communities themselves, take a longer term stake in the development of their area.

Implications for stakeholders
Ultimately, a degree of patience will be required from all stakeholders. Any package of reforms on the scale of those contained in the Localism Bill will take time to be embedded. The very nature of these reforms means that different interpretations and working practices will develop in different places, according to the specific challenges and opportunities that different areas are faced with. Capturing the lessons of what works and what does not work will be key – local authorities and the private sector alike should be outward facing and willing to take on examples of best practice where relevant.

Most importantly, all stakeholders involved in the delivery of social and economic development should embrace the Localism Agenda fully. While it is true that some proposals appear to have been watered down, and that the government's new 'presumption in favour of sustainable growth' may yet undermine some of the initiatives in the bill, the general ideology of devolution and decentralisation that drives the proposals can be traced to the very heart of the Coalition Government.

Indeed, a Department for Communities and Local Government official recently clearly stated that it would be a mistake to underestimate how ambitious and determined the government is in relation to introducing localism. In his view, the Localism Agenda represents 'a significant statement of intent to fundamentally change how we conceive of, and implement, strategic planning and development across the country'. Depending on the wider fortunes of the Coalition Government then, the changes contained within the Localism Bill could just be the beginning.

Ben Harrison
Director
Future of London