Written statement to Parliament

Local government: delivering for England

Written ministerial statement by Eric Pickles on actions put in place by DCLG since May 2010 on local government.

• From: Ministry of Housing, Communities & Local Government and The Rt Hon Lord Pickles
• Published: 26 March 2015

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

• Location: Parliament
• Delivered on: 26 March 2015

As this Parliament draws to an end, I would like to update hon. Members on the actions that my department has put in place since May 2010 on local government, and what we have done on the coalition agreement’s pledge to deliver a “fundamental shift of power from Westminster to people”, “to promote decentralisation and democratic engagement, and to give “new powers to local councils, communities, neighbourhoods and individuals”.

[Political content removed]

Protecting families from unfair taxes

[Political content removed] We have stood up for hard-working people:

• provided additional funding to local councils to freeze Council Tax. Council Taxes have fallen by over 11% in real terms over the last 5 years; this saved £1,059 on the average Band D bills in England

• given local residents a new legal power to veto excessive Council Tax rises, via local referendums, being introduced via the Localism Act [political content removed]

• scrapped [political content removed] plans for an expensive and intrusive Council Tax revaluation in England which would have meant soaring bills for millions of families and pensioners [political content removed]

• abolished Council Tax (through 100% tax relief) for military personnel serving on operations overseas

• removed the unfair Council Tax surcharge on family annexes by introducing a new national discount, to help support extended families

• changed Council Tax rules to give local taxpayers a new legal right to pay their yearly bills over 12 monthly instalments rather than 10, should they wish, helping those on fixed incomes like pensioners in particular

• scrapped [political content removed] plans for new bin taxes on family homes, which would have harmed the local environment by fuelling fly-tipping and backyard burning, taken action to stop both the levying of ‘backdoor bin charging’ for the collection of household waste and new ‘tip taxes’, and scrapped the levying of unfair and arbitrary bin fines on families

• [Political content removed] taken a series of measures to stop parking charges being used as a stealth tax, including introducing new grace periods and stopping the industrial use of CCTV spy cars

• centrally funded Council Tax relief for the victims of floods

Helping local firms and shops with their business rates

As part of our long-term economic plan, we have helped local shops and local firms with their business rates, complementing the government’s other cuts to National Insurance and corporation tax. We have:

• doubled small business rate relief scheme, to help the occupiers of 600,000 properties; from October 2010 to April 2016, small firms are receiving 100% rate relief (i.e. pay no business rates at all) on properties up to £6,000 rateable value, and a tapered rate relief from £6,000 to £12,000; an estimated 400,000 small firms are now paying no rates at all as a result, and a further 200,000 firms are benefiting from the lower rate relief

• introduced a new discount on business rates for retail premises (with a rateable value of up to £50,000) worth £1,000 in 2014 to 2015 and £1,500 in 2015 to 2016; this is helping 200,000 firms

• [political content removed] we introduced a new reoccupation relief to bring empty shops back into use; this is providing 50% rate relief for 18 months for firms who move into retail premises that have been empty for a year of more; we are exempting empty new build property from business rates; this will help promote development and regeneration

• allowed firms to spread their business rate bills over 12 monthly payments, helping them with their cash flow

• centrally funded business rate relief for the victims of floods

• maintained the government’s commitment to the annual Retail Price Index (RPI) cap, meaning there has been no real terms increase in annual business rates; in 2014 to 2015 and in 2015 to 2016, business rates have been capped at 2%, helping 1.3 million ratepayers

• [political content removed] stopping retrospective business rates on firms in ports that threatened the whole export and manufacturing sector; £175 million of unfair rate demands have been cleared

• made it easier for small firms to get small business rate relief to which they are entitled; our changes in the Localism Act ensure all eligible ratepayers can automatically receive the small business multiplier, and we have removed the legal red tape requiring ratepayers to fill in paperwork to claim the relief; small business rate relief has also been extended to including small firms taking on an additional second property (for up to a year), helping them expand

• given local councils new powers via the Localism Act to levy local business rate discounts, for example, to support local shops, community pubs, new business parks or vital local facilities; under the local retention of business rates, central government funds 50% of any local discount granted

• taken action to speed up business rate appeals, with a series of practical reforms and measures to tackle the previous backlog of unresolved cases [political content removed]

• ensured that no new supplementary business rate can be imposed without a backing of local firms in a referendum, via the Localism Act [political content removed]

• rewarded councils for promoting local economic growth, by allowing them to keep the funds from locally-raised business rates, rather than it being snatched back by Whitehall, through the Local Government Finance Act 2012; these reforms have been estimated to increase economic growth by £10 billion over 7 years

• given councils the freedom to borrow against those extra business rates from additional new developments and infrastructure (so-called Tax Incremental Funding), to help make such developments go ahead

• introduced 24 new enterprise zones across the country; businesses in these zones will benefit from a 100% business rate discount worth up to £275,000 over a 5 year period for firms who move into a zone over the course of this Parliament; all business rate growth within the zone will be retained and shared by the local enterprise partnership area for at least 25 years to help support local growth and investment

• postponed the business rates revaluation in England to 2017, which will prevent up to 800,000 firms from facing big hikes in their business rates bills (whereas only 300,000 would see a fall)

• scrapped [political content removed] plans for penalty business rates to be imposed on parking space at local supermarkets which would have forced up the cost of a family’s local shop

Cutting red tape in local government

• abolished the unnecessary Comprehensive Area Assessment inspection regime and scrapped the Audit Commission [political content removed]; replacing this with a localised audit regime will save £1.35 billion for taxpayers (over 10 years), and reduce the burden of unnecessary inspection on local councils; we have also abolished the [political content removed] Tenants Services Authority.

• scrapped [political content removed] local area agreements, removing 4,700 top-down and bureaucratic Whitehall targets from local councils and abolished the Whitehall red tape of national indicator set, place surveys and local development framework monitoring

• cut back on the thousands of pieces of data that councils must report to a proliferation of departments and quangos, introducing instead a single, simple and transparent list for data collection reporting requirements for councils across all of government

• abolished the [political content removed] local government 2-tier code that pushed up councils’ costs and hindered the voluntary and independent sector from delivering better value for money

• significantly reduced the ring-fencing of local government grants, giving councils power and discretion to focus their resources on frontline services

• allowed councils to embrace the 21st Century, by removing century-old red tape that prevented from parish councils from using internet and telephone banking; and we have allowed councils to issue agendas and papers electronically

Promoting local democracy and accountability

Localism should go hand in hand with greater local transparency, local accountability and robust democratic scrutiny. We have:

• worked with councils to deliver a new era of town hall transparency, with town halls to publish online their spending, contracts, tenders, senior pay and property assets through a new transparency code; we have enhanced citizens’ rights to inspect council accounts, creating a new army of ‘armchair auditors’

• ensure greater transparency on councillors’ interests, including requiring councillors to declare trade union funding and pecuniary interests

• abolished the Standards Board, which fuelled petty and malicious complaints against councillors and discouraged freedom of speech

• made it easier to create new town and parish councils, to help decentralise power down

• allowed councils to return to the committee system if they wish, which many have done

• introduced new guidelines to ensure elected councillors can approve or veto 6-figure salaries in local government in the public glare of full council, and stop practices like ‘double dipping’ which rip off the taxpayer

• given stronger rights to ‘citizen journalists’ to report, blog, film or tweet from council meetings

• introduced tougher controls on unfair competition by local authority newspapers and taken action to stop the corrosive and wasteful practice of councils and quangos hiring lobbyists to lobby government

• scrapped [political content removed] expensive and time-consuming top-down imposition of unitary local government restructuring

• taking forward proposals to remove the ‘volunteering tax’ on councillors through data protection registration fees [political content removed]

• introduced new community rights for people to run local services, protect community assets and safeguard valuable green spaces

• tackled the serious and rare cases of systematic failure in local government, sending in commissioners to turn around dysfunctional governance in Doncaster; to tackle alleged corruption and maladministration in Tower Hamlets; and to protect vulnerable children in Rotherham

Supporting frontline services

We have had to pay off [political content removed] deficit, but local government services have risen to the challenge, and residents’ satisfaction with local services has been maintained.

Even with the savings that have been made to date, public satisfaction with services has been maintained and English local government still expects to spend over £115 billion in the current financial year.

Net current expenditure by councils (excluding education due to the shift to academy funding) has risen in cash terms under this government, moving from £70.9 billion in 2008 to 2009 to an expected £78.9 billion in 2014 to 2015.

We ensured that savings in local authority funding were applied in a fair and sustainable way, to north and south, shire and city, rural and urban England, with the average spending power per dwelling for the 10% most deprived authorities still around 40% more than for the least deprived 10%.

We are pushing forward with plans to join up public services, and allow councils to pool resources across the public sector to tackle social problems – through new community budgets and troubled families.

As of the end of February, the Troubled Families Programme had already turned around the lives of over 105,000 families and over 10,000 of these families include an adult who is off benefits and in sustained work. The programme is firmly on track to achieve its goal of turning round 120,000 families by May 2015, having already achieved 90% percent of this. A recent report of the work of 7 exemplar areas showed the average reactive cost of families in the year before entering the programme was £26,200, with the average gross fiscal benefits achieved in the year following totalling £11,200 per family.

We have supported frontline services and sensible savings through our guidance, 50 ways to save. Our Weekly Collections Support Scheme has shown how councils can increase recycling and delivering savings without cutting the frequency of the service. We have actively supported weekly bin collections, [political content removed].

Scrapped regional government

We have championed England’s long-standing tiers of local government, and supported natural economic areas, as opposed to the arbitrary and distant government regions. We have:

• abolished the unelected regional assemblies and revoked their top-down regional strategies

• replaced the distant and unaccountable regional development agencies with 39 new local enterprise partnerships of local firms and councils working together

• closed all the unelected Government Offices for the Regions [political content removed]; this has saved £420 million over the Spending Review

• stopped the forced regionalisation of the fire service, and stopped [political content removed] FireControl project – a project which wasted almost half a billion pounds

• tackled the waste and inefficiency of pan-national Euro regions in the EU’s INTERREG programme

Empowering local councils to stand tall

We have given new freedoms to councils to help champion their areas. We have:

• granted councils a general power of competence via the Localism Act, allowing councils greater flexibility to work together, undertake joint ventures and improve local services
• allowed councils to keep the funds from locally-raised business rates (via the Local Government Finance Act 2012). Overall, councils get to keep 50% of all business rates revenue and growth, giving them a real incentive to go for growth and encourage enterprise and job creation; these reforms are estimated to give a £10 billion boost to economic growth over 7 years
• ensured 70% of local authority income is now raised locally
• localised Council Tax support, so councils are rewarded for getting people off the dole and welfare dependency and back into work
• reformed the Housing Revenue Account via the Localism Act to give councils greater autonomy and freedom to run their own council housing budgets

• give councils stronger powers on licensing to tackle the alcohol-fuelled violence that plagues local high streets at night, and allow councils to recover fully all the costs of licensing so council taxpayers are not left with the bill

• Strengthening local councils’ influence over the NHS by creating executive Health and Wellbeing Boards to agree NHS commissioning plans, giving councils a lead role in public health, and ensuring more joint working between the NHS and social care; the Better Care Fund from this next month joins up health and social care spending, with further integration being piloted in Greater Manchester

• rolled out neighbourhood Community Budgets (allowing public services to be managed at a neighbourhood level) and whole-place Community Budgets (pooling local public services in an area) - including action on troubled families

• championed 39 growth deals, 24 enterprise zones, the £12 billion Local Growth Fund and 28 city deals.

Championing common sense, not political correctness

We have stood up for British values of common sense. We have:

• allowed councils to disregard a challenge by aggressive secularists to stop the long-standing practice of prayers at meetings, thanks to the Localism Act and the new Local Government (Religious etc. Observances) Bill

• issued guidance to stop the gold-plating of equality rules, and challenge the practice of local residents filling out intrusive questionnaires about their sexuality and religion in order to get out a library book or make a planning application

• supported the Royal Wedding, Diamond Jubilee and VE Day by cutting Whitehall and municipal red tape on holding street parties, and introduced new laws to cut ‘elf and safety’ red tape on community events

• backed British values and identity, flying the United Kingdom’s national and traditional county flags, and recognising England’s traditional boroughs, towns, cities and counties

• revoked [political content removed] 200 page planning guidance on equality and diversity in planning, which undermined the sense of fair play in the planning system by suggested special treatment for certain groups

• supported teaching the English language rather than translating documents into foreign languages, and promoted a more integrated society, better equipped to reject extremism; we have championed united communities and British values

Delivering on housing and planning

I am also laying a written ministerial statement in parallel outlining what we have done on housing and planning, including introducing a locally-led planning system and abolishing top-down regional planning.

Conclusion

There is more to do to decentralise power, empower local communities and strengthen civic pride. But I believe we have transformed local democracy for the better – more efficient, more responsive and more innovative than before: we have delivered on the aspiration set out in the coalition agreement 5 years ago.

Published 26 March 2015