Although the full implications for local authorities of the Spending Review 2010 (SR 2010) will not be known until later in 2010 when the Department for Communities and Local Government releases details of grant settlements, what is apparent from the SR 2010 is that even with the increased freedoms and flexibilities which the government has promised, such as removing ringfencing on local authority grant funding or giving local authorities a general power of competence, local authorities are facing a significant challenge. For more information on the implications for local government of the SR 2010, see Legal update Spending Review 2010: local government implications.
The Local Government Group (LGG), in its paper Delivering more for less: Transparency in action outlines various proposals which, if accepted by the coalition government, it believes would reduce the burden imposed on councils by central government, strengthen local accountability and reduce costs. The paper’s key recommendations can be summarised as follows.
- In line with the LGA’s earlier proposal, the government should enact a broad and clear general power of competence, see Legal update, SR 2010: local government implications: local government reform. What is apparent is that local authorities are wary of using their statutory existing powers, given the restrictive interpretation by the courts in a succession of cases starting with the interest rates swaps legislation, see Legal update, Local authority swaps: lessons for all transactions to the Court of Appeal decision in Brent London Borough Council v Risk Management Partners Ltd [2009] EWCA Civ 490 (see Legal update, Court of Appeal ruling on well-being powers). The LGA considers that a power of competence would:
- enable local authorities to do anything that they consider likely to benefit their areas and their local residents; and
- deliver necessary savings
In addition, the LGG recommends that codifying and consolidating existing legislation would provide further certainty about powers for local authorities, reduce their administrative burden and enable them to respond to the needs of local people.
- All local government legislation should be reviewed to identify any provision that is incompatible with a general power of competence or would be obsolete if a general power was enacted.
- An Abolition of Ministerial Consents Bill should be passed, in order to “sunset” all provisions in primary legislation which require local authorities to obtain the Secretary of State’s consent to their actions, unless the government confirmed them individually via affirmative resolution in both houses. The LGG’s view is that, although a number of these consents are legitimate, the vast majority relate to local issues and decisions that local authorities are best placed to deal with.
- Guidance on implementing statutory duties should be scrapped, since the meaning of the primary legislation is a question for the court and does not depend on the view that is taken by the Secretary of State. As the Brent London Borough Council case confirmed, guidance has no legal force.
- The government should cut its demands for local authority data and only collect statistics where they have a proven value to local people. The LGG’s view is that this recommendation would save between £473 million and £698 million per year.
- The burden imposed on local authorities by inspection and assessment bodies such as Ofsted and the Care Quality Commission should be brought to an end. The LGA is currently consulting on whether there is a continuing need for such inspections or whether a self-assessment approach would have the same effect.
- Information on public expenditure should be made accessible to local people.
- The certification of grants paid to local authorities, currently carried out by the Audit Commission, should stop given that the annual audit of local authority accounts (which are available for public inspection) provides assurance that public money is spent appropriately. Having a separate certification process is an unnecessary, and expensive, duplication.
- The government should revise the process for assessing new burdens imposed on local authorities. Under the current process, government departments consult with the LGA and councils but provide too little funding so that local authorities and their taxpayers are left to fund government policies. Therefore, the LGG proposes involving an independent and impartial third party to assess the burden and incorporating an automatic retrospective review mechanism mediated by that party to help secure agreement on whether the funding provided is adequate. A formal route for local authorities to challenge and comment on the issue of burdens on councils is proposed, via an independent panel or periodic consideration.
Given the steps highlighted by Eric Pickles that local authorities should take to meet the 7% annual reduction in budget, such as eliminating waste by becoming more transparent, the LGG’s paper contains sensible recommendations for significant reform to enable local authorities to be more efficient and to deliver more for less.
For more information on existing local government powers, see the following practice notes: