Localism - a primer

With localism the mantra of the new Government, this internal HouseMark briefing paper looks at the origins of the concept, the views of the main parties and the implications for social housing.

Pages 11-12 of The Coalition: our programme for government gives details of the planned Decentralisation and Localism Bill.

Regional local authority leaders' boards scrapped

The dismantling of these boards, which took over most of the functions and staff of the old regional assemblies, will "see local authorities put firmly back in control of delivering the services and provision for their area and will ensure local people can hold their leaders to account."

Regional leaders boards had an overall budget of £16m per annum - by closing them down, at least £6m will be saved this year from their running costs. The decision will also save local taxpayers money as boards also received funding from local councils of more than £10 million last year.

House builders argue their corner in advance of emergency budget

The Government must not do anything to destabilise the fragile recovery in the housing market in next week's Budget, the Home Builder Federation has warned.

Its budget submission includes demands that the government:

Urgently implement its proposed Local Authority financial incentives for house building as part of a robust transition plan for the move to an incentives-based planning system;

Maintains funding for Kickstart, which has been so vital in maintaining housing delivery. Every £1 of public money invested generates £3 of private sector expenditure;

Retain HomeBuy Direct for beleaguered first-time buyers, whose number have been significantly cut by the ongoing mortgage famine.

It must not:

Introduce VAT on new homes, which would decimate sales and reduce house building still further - resulting in a net revenue loss for the public sector.

Affordable house building could grind to a halt

Affordable house building is in danger of grinding to a halt this year – as money already pledged for new projects is threatened with withdrawal, budgets are cut, and sweeping changes to the planning system make it increasingly difficult to get homes built.

This was the message from the NHF in a letter to Grant Shapps. NHF's Gavin Smart spoke on the Today programme to make the Fed's case, and suggesting that at least 40 local authorities have stopped processing planning applications since the abolition of regional planning targets.

The Observer had advanced sight of the Fed's letter and ran a feature on 13 June.

Scrapping TSA would damage associations’ credit ratings

According to Inside Housing a leading ratings agency has implied that any move by the government to close the Tenant Services Authority could see it downgrade housing associations’ credit ratings. Moody’s Investor Services said: ‘The strong role of the regulator, the TSA, and the funder, the HCA, have proven effective in minimising the sector’s credit risk in times of severe financial distress.’

Moody’s suggestions were echoed by the Housing Finance Corporation, which makes loans to associations funded by bond issues. They said the role of a single, independent regulator was important for investors and axing the TSA could potentially affect bond pricing.

Fed warns of cuts impact on vulnerable

The National Housing Federation has warned that the cuts of £446m to area based grants announced on 10 June could have a dire effect on vulnerable people – with many local authorities feeling compelled to reduce housing care and support services.

Government sets out further detail on local government savings

The Government has published details of the £1.166bn Local Government contribution to the £6.2bn cross government savings in 2010/11. Communities Secretary Eric Pickles has confirmed that no local authority will face reductions in their revenue grant of more than 2 per cent.

Savings include £150,000 from housing programmes and £186,000 from Regional Development Agencies.

The housing funding comprises £100k from the National Affordable Housing Programme and £50,000 from Kickstart. Both pots of money had been announced but not allocated.

There are also cuts of £30m from the Gypsy and Traveller Programme and £50m from Housing Market Renewal.

£30m will be cut from the Supporting People Administration grant, and more than £49.9m from the Working Neighbourhood fund 

Ring-fences have been removed from £250m hypothecated local government revenue grants and £950m hypothecated capital grants (including £236m Housing Market Renewal grants). This is presented as "a first step to giving councils more freedom over spending decisions".

The Kickstart Housing Delivery programme is targeted at stalled sites, to support construction of high quality mixed tenure housing developments.

Performance management burden on local government

Eric Pickles, in his statement on local government savings:

"It is time for a fundamental shift of power from Westminster to individuals and their communities. We want to end the era of top-down government by providing a radical devolution of power and greater financial autonomy to local authorities.

"So we will reduce the performance management burden on local government through abolishing the Comprehensive Area Assessment and reducing ring-fencing of central government grants, freeing up resources to concentrate on local priorities and the delivery of essential frontline services. We are committed to a full review of local government finance, to giving councils a general power of competence, and to working with local authorities to freeze council tax in England for at least one year as outlined in the Coalition Agreement and seek to freeze it for a further year, in partnership with local authorities. All of this will help to create the shift of power from the centre to local people that we are determined to deliver."

CLG questions in the House

The first CLG question session in the Commons covered a number of housing topics. Follow the whole debate on They Work for You, or check out these topics of particular housing significance:

• Private Rented Housing
• Shorthold Tenancies
• Homelessness
• Housing Revenue Account
• Social Housing
• Affordable Housing

Gipsy and Travellers in the firing line

Amelia Hill, writing in the Guardian, highlights the impact of coalition policies on the Gypsy and Traveller community.

Less than a month in power and the new government has already reversed policies giving incentives to councils to develop land for Gypsy and Traveller communities. As a result, all bids to fund new sites and refurbish existing ones across England and Wales have been cancelled.

Eric Pickles, the communities and local government secretary, has said he wants to revive elements of the Conservative's 1994 Criminal Justice and Public Order Act that turns trespass from a civil into a criminal offence. This will mean that Travellers who refuse to move from land that is not privately owned by them could be arrested by police or forcibly evicted. Pickles has also announced his intention to scrap new rules giving Gypsies and Travellers a "level playing field" in planning disputes with local authorities.

Hill predicts protests from the Gipsy community with motorway blockades on the cards.

The age of aspiration is back!

Grant Shapps made his first major speech as Housing Minister to an event hosted by the Royal Institution of Chartered Surveyors.

The event had been specially arranged to allow him to make it clear that "Home ownership is a very good thing." He did acknowledge that not everyone should somehow aspire to home ownership. "Renting a home can be a positive and flexible choice. And social housing provides a sense of security for millions of families."

"In place of those meaningless targets - we will introduce powerful incentives.

"In place of centralisation - I will devolve power.

"In place of expensive Quangos - we will trust people.

"I'm going to release those centralised levers that don't work anyway - and as I do, I am certain an extraordinary thing will happen.

"The more power we give away - the more people will act to generate real change.

"For the first time incentives will create direct benefits for local communities. Bringing jobs, investment and yes - more homes for local people.

"Rather than being told what to build and where - residents of villages, towns and cities will be able to develop their own vision for their place.

Regional spatial strategies have gone

LibDem MP for St Ives Andrew George secured an adjournment debate on the lack of affordable housing for local people.

The debate touched on the availablility of morgages, private rented sector, rural housing and second homes amongst others. Parliamentary Under Secretary of State at CLG Andrew Stunell as part of his reply for the government said:

Regional spatial strategies have gone. The Secretary of State has written to planning authorities telling them that it is now a material consideration for them to take account of his letter saying that regional spatial strategies are to be disposed of. 

The legal decision must await legislation, but clearly we are there already. It is not just a question of telling local authorities, "You're on your own"; there will be clear incentives for local authorities that permit the development of housing, and a reward system that will give them the opportunity to develop infrastructure and services to match the investment that they are allowing.

Can local councils implement a radical localism agenda at speed?

Brendan Nevin, blogging for NewStart magazine thinks not:

"The implementation of a radical localism agenda at speed poses many challenges and raises many questions about the capacity of local government and communities to respond and cope with new responsibilities. "

He questions the wisdom of elected mayors:

"It is also widely understood that some areas experience systemically weak governance and political leadership, the recent interventions by central government in Doncaster and Stoke being two examples. Both of which have experimented with elected mayors in recent years, an innovation which will now be subject to a referendum in the 12 largest cities in England."

He predicts melt-down:

"The speed and scale of expenditure reductions, which may be phased over three rather than five years, will send much of the public sector into shock. Many communities will rely on local decision making to produce a rational and equitable response. However, at the same time as attempting to manage a large-scale financial crisis, the public sector will become increasingly preoccupied with institutional and governance reform. Managing either of these two processes over the period of one parliament would be a heroic achievement, but to attempt both at the same time probably sets the scene for a chaotic period that will not be characterised either by good governance or budgetary management."

Supporting People housing programme could face massive cuts

According to Community Care magazine:

Supporting People housing projects for vulnerable adults could face cuts of up to 20% this year in response to huge reductions in government grants.

Regional Development Agencies - what next?

The Secretary of State for Business, Innovations and Skills Vince Cable faced questions in the House on the future of RDAs. He replied:

"The Government intend to replace RDAs with local enterprise partnerships and to bring together business and local authorities to establish local accountability. Where they enjoy clear public support, the partnerships may take a similar form to existing RDAs. In making the necessary reductions in RDA budgets and reviewing their functions, we will seek to mitigate the impact on economically vulnerable parts of the country. "

Elsewhere in the debate Conservative MP Margot James referred to the Richard report commissioned by the Conservative party in opposition.

"It found that a third of RDA  money was spent on administration and that much of the rest was spent on signposting to other sources of information. I beseech him to ensure that in the new policy businesses and locally elected authorities can get together to avail themselves far more directly of all that taxpayer money."