Local Authority round-up 25/06/20

Brexit

House of Commons Committee publishes report on need for progress in negotiations

The House of Commons Committee on the Future Relationship with the European Union has published a report on the need for progress in the negotiations if a deal is to be agreed before the end of the transition period on 31 December 2020, especially in light of the coronavirus pandemic. It also considers the preparations and Government assistance required to ensure that UK businesses are ready for post-transition changes whether or not an agreement is reached. The report notes that the EU has made it clear that timely implementation of the withdrawal agreement Protocol on Ireland/Northern Ireland is a prerequisite for any future relationship agreement. The Committee welcomes the Government’s decision not to introduce full border controls on goods coming into the UK from 1 January 2021 however it notes that firms exporting to the EU are likely to face full border controls from 1 January 2021. It also notes that firms which trade other than in goods, including hospitality, broadcasting and financial services for example, have concerns about preparing their businesses to operate under the terms of the future relationship from 1 January 2021 and the Committee reports that the Government should actively seek the views of these sectors and show the same flexibility when responding to their needs. The Committee says that the Government should develop and publish an economic and readiness assessment which sets out how it is preparing for circumstances in which no agreement is reached by the end of the transition period and which assesses the additional effects that the coronavirus pandemic will have on post-transition UK-EU trading relationship.

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Commercial

Government urged to relax the rules on council finance

The latest report from the Institute for Fiscal Studies (IFS) has revealed that, while deprived areas have been badly hit by the virus due to an increase in demand on services, more affluent areas are also struggling due to the sudden drop in income. The report from the IFS notes that in the short term, income is likely to be more affected than spending, more affluent areas and district councils are more dependent on income, deprived communities are harder hit by demand pressures, the income of neighbouring and similar authorities can vary widely and they will be impacted differently, council reserves also vary, with one in eight holding less than 20% of their annual non-schools budget and more deprived areas have populations which are likely to be more vulnerable to health and social impacts. The IFS is therefore calling for the Government to temporarily relax rules that prevent councils borrowing to cover day-to-day spending as they deal with the coronavirus crisis so that councils can access funding where they require it. IFS associate director, David Phillips, said “Big differences in financial risk and significant variation in the reserves councils hold mean the Government should also consider temporarily relaxing the rules that prevent councils from borrowing to cover day-to-day spending. If it does not, difficulty in targeting funding means it will either have to provide more funding to the sector as a whole than is necessary or step in to provide specific support for councils that are particularly struggling. Otherwise there is the risk that some councils could have to impose restrictions on all but the most essential expenditure.”

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Council launches petition over coronavirus funding promise

Redbridge Council has launched a petition urging the Government to honour its promise to fully compensate councils for all coronavirus related costs after the council reported that it has spent more than £60.5 million due to coronavirus but it has only received £15.7 million extra in funding. The council notes that in March 2020, The Rt Hon Robert Jenrick MP told 300 councils in the UK “My absolute priority is to ensure [councils] are well placed to respond to coronavirus and protect vital services, including social care. The Government will provide whatever funding is needed for councils to get through this and come out the other side.” In launching the petition for more funding, leader of the council, Jas Athwal said “We stepped up during the national crises caused by Covid-19 and put in place essential services to protect and support our residents. Despite incredibly pressurised circumstances, we were agile, able to meet local need and effective. It is outrageous that the Government is now withholding almost our entire annual budget for council services at a time when our residents are really struggling. They must honour their promise to properly compensate us.”

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Councils are facing shortfalls

In a recent report published by The Centre for Progressive Policy (CPP), it is reported that more than eight out of ten councils do not have enough money to cover the extra costs and reduced income caused by the coronavirus pandemic. The report found that despite emergency funding, 131 upper tier councils do not have sufficient unallocated reserves to make up the shortfall and that deprived councils will be hit hardest as the ability to raise additional funds through council tax and business rates will be limited. The CPP is therefore urging the Government to compensate councils for shortfalls as a result of the pandemic. The report states that “The Government urgently needs to change its thinking and methods so that levelling up to reduce inequalities between places is the default impact of all Government policy. To stand a chance of achieving this, the Government must first ensure that councils are – at least – in no worse a position than when they entered the current crisis, both to enable them to take their role at the forefront of an inclusive recovery and a longer term levelling up of the UK”.

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£258 million more in funding for Scottish councils

The Scottish Parliament has agreed a further £258 million in funding for Scottish councils in order to tackle coronavirus and has reported that a further £72 million is currently under discussion with the Convention of Scottish Local Authorities. Public finance minister Ben Macpherson said “To date, Scotland’s councils have received £405m in advanced payments this financial year, and by the end of July this will have risen to £455m. The Scottish Government has also relaxed current guidance on some of the education grants to allow additional resource to be diverted to the COVID-19 response. We will continue to work with COSLA and local authorities, as well as pressing the UK Government for urgent additional funding and flexibility for our partners in local government.”

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Regulatory

Councils urged to shy away from enforcement action that would unnecessarily restrict outdoor stalls

The Ministry for Housing, Communities and Local Government has called on local authorities not to undertake enforcement action which would result in unnecessarily restricting outdoor stalls. In a letter to councils, Emran Mian, Director-General for Decentralisation & Local Growth at the Ministry, said “Over recent weeks, the continuing hard work of local authorities has allowed us to make progress along the Government’s roadmap to recovery. We have begun to bring life back to our high streets and town centres by opening retail businesses that were closed, with effective social distancing. I am now writing to set out how you can continue to support hospitality businesses in particular, ahead of regulatory checkpoints that may see further changes.” The letter also called on councils to explore options to set up more outdoor markets and to proactively contact hospitality businesses in their local area to ensure they understand the guidance and ask whether they wish to make use of the opportunities available to them.

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Planning and housing

Calls for a flexible zoning system to end housing crisis

A report published by Centre for Cities called “Planning for the future: How flexible zoning will end the housing crisis” has suggested that a flexible zoning system would help build more homes in the UK and end the housing crisis. The report criticises the current planning system as it rations land, restricts the supply of new homes and decreases affordability saying it is “wasteful and inefficient.” The report states that “If we want, we can end the housing crisis. To do so, Government needs to make the political choice to minimise the discretionary element in the planning system. Much as the Soviet-style economies of the former Eastern Bloc experienced shortages for decades until they underwent systemic reform, the only option is reform of the planning system from first principles. A flexible zoning system can make this happen. There will of course be debates and disagreements about the details of any new approach. But a flexible zoning system will use land more efficiently, make more land available for development, and provide more homes in places where the housing crisis is most desperate than the system today.”

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Councils call for 100,000 social homes for key worker ‘heroes’

A new report from the Local Government Association (LGA) called “Delivery of Council Housing – Developing a Stimulus Package Post-Pandemic” has called for 100,000 social homes to be built each year for health, care and other key workers which would also help to boost the national economy. The report sets out a range of recommendations including by bringing forward and increasing the £12 billion extension of the Affordable Homes Programme. It also recommends that Right to Buy be reformed so that councils are able to retain 100 per cent of receipts from the sale of homes under the scheme, the deadline to spend the money from sales should be extended to at least five years and councils need the power to set the size of discounts locally. Cllr David Renard, LGA housing spokesman, said “As the nation comes through the biggest crisis we have faced since the Second World War, we owe it to the health, care and other essential public service workers, who have risked their lives to keep the country running to provide them with affordable, high-quality homes fit for heroes. The Government should let councils take charge of the housing recovery, by giving them the powers and tools to build more of the affordable homes the country desperately needs. ”

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£105 million more funding for the homeless

The Government has announced a further £105 million of funding to help keep rough sleepers off the streets after the pandemic. The funding will be used to help rough sleepers secure their own tenancies as well as provide short-term housing while delivery of long-term homes continue at pace. This will include helping with deposits for accommodation and securing rooms which are already available to be used to house homeless people such as student accommodation. An additional £16 million will also be provided to provide drug and alcohol services for people. Dame Louise Casey said “Everyone In has been an extraordinary effort from councils, charities and many others to provide a safe haven for almost 15,000 homeless people who were either on the streets or at risk of rough sleeping during this Covid-19 pandemic. We now have an extraordinary opportunity to help keep them in and turn their lives around if we get the next steps right. I am clear that there can now be no going back to the streets as people begin to move on from the emergency accommodation that has been put in place.”

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If you have any questions about the issues raised in this update, please do not hesitate to get in touch.