The First 100 Days: Impact on Local Government

The first 100 days: impact on local government

19 August 2015

Janet Sillett

Summary

What did the first 100 days of the Conservative government mean for local government? This briefing will focus on the key issues for local government, including devolution, social care, housing and planning.

It will be of interest to councillors and officers in all types of authority.

Briefing in full

The first hundred days is a significant milestone in a new government’s journey. August 14 was the Conservative Government’s 100th day in office. Maybe the milestone is largely symbolic – not all new administrations live up to Franklin D Roosevelt’s first 100 days in 1933 where the legislation was passed to create the New Deal (and where the concept of the first 100 days was born), but it is traditional to see how a new government measures up. Have they been implementing manifesto commitments, what has been dropped or amended, what’s new? What is the impact and what does it tell us about what the political weather may hold for the next 1725 days?

“I think the first 80 days have shown a government that has got a very clear direction and purpose about delivering for working people, about building a genuinely one-nation country of opportunity and also demonstrating that Britain is back on the world stage with a growing economy, a falling deficit, meeting our pledges on both defence and aid, and able to stand up for British values and British interests around the world. And I don’t think we’ve wasted a day, frankly, in the last 80 days.”

David Cameron July 2015

Whether you support most of what the government has done or oppose it, David Cameron is right that his government did not waste their first 80 days or the 20 after. There was a raft of significant legislation in the Queen’s Speech; the Chancellor has launched the spending review that will take place in the Autumn of this year; and the tone of the government has been firmly set.

Our May 2015 briefing, Conservative manifesto commitments – the local government perspective, sets out the main commitments made in the manifesto and during the election campaign. Below we go through the areas covered to check what has happened since 8 May.

The economy

Eliminating the deficit was the core commitment in the manifesto:

To reduce government spending by one per cent each year in real terms for the first two financial years – further £30 billion in fiscal consolidation through

• £13 billion from departmental savings
• £12 billion from welfare savings
• £5 billion from tackling tax evasion

In the budget, however, on 18 March, George Osborne revised this projected path of deficit reduction, owing mainly to improving economic conditions, but also to additional cash received through the sale of financial assets. Our budget analysis briefing sets out the macro economic background in some detail. There was some welcome news for services with the delayed cuts to departmental spending, but even with the cuts to be made being reduced (rising to a peak of nearly £18 billion in 2019-20 rather than the anticipated £42 billion in 2018-19), the savings will still mean 1.5 per cent a year in real terms in this parliament, compared to the 1.6 per cent in the last. With services like health protected, we are still talking about major cuts elsewhere.

Osborne published a paper in July to announce that the spending review will be on 25 November and to set out the review process. Non-protected departments are being asked to come up with model scenarios representing savings plans of 25 per cent and 40 per cent of their budget to meet the £20 billion further savings the government intends to make.

Sales of public sector land assets will be speeded up and departments will have to also consider further privatisation and contracting out. On local government the paper says that "the government will look at transforming the approach" to its financing and "further decentralising power, in order to maximise efficiency, local economic growth and the integration of public services".

Devolution and local government

Devolution in England

What did the Conservative manifesto say?

• Devolve far-reaching powers over economic development, transport and social care to large cities which choose to have elected mayors
• Cambridgeshire, Greater Manchester and Cheshire East pilot allowing councils to retain 100% of growth in business rates
• Further powers over skills spending and planning to the Mayor of London
• Deliver more bespoke Growth Deals with local councils
• English MPs a veto over matters only affecting England

Devolution to local government in England was a flagship Treasury policy before being included in the Conservative manifesto for the General Election. There was very little in the manifesto directly about local government beyond the devolution commitments.

The commitment to press ahead with devolution was acted on quickly with the publication of the Cities and Local Government Devolution Bill, now about to go into the Commons from the Lords after the recess (see our latest briefing on the Bill).

The proposals build on combined authorities – a scheme primarily to support collaboration between metropolitan authorities, introduced in 2009. The current Bill amends the [2009] Act. It allows the Secretary of State to make orders setting up mayoral combined authorities with additional powers. This type of Bill is usually referred to as enabling legislation – it can be relied on if the changes it introduces are agreed and needed.

The picture is a fast moving one, with groups of authorities pressing to set up deals following the announcement by the Chancellor in the budget that major deals need to be agreed in time for the spending review.

The Budget was used to maintain the devolution momentum and the government is now in talks with a number of combined authorities and potential ones. Cornwall is the first county to have negotiated a deal, with new powers over the economy, transport, energy, housing and health and social care.

English votes for English laws

On 2 July the government published plans to change the way legislation is considered in the House of Commons to give English and Welsh MPs a ‘fairer say over laws that only affect their constituencies and are on matters which have been devolved’. The explanatory note was published alongside the proposed new Standing Orders and an Explanatory Memorandum.

Following an emergency debate, however, the government published a redrafted version of the plans and decided to delay the vote on the changes to after the summer recess. Legislation is not required to implement the reforms, but the Amended Standing Orders has to be approved by the Commons.

Scotland Bill

Additional devolved powers for Scotland was clearly a political priority after the referendum. The government published draft legislation before the election and the Scotland Bill after. There are significant proposals in the Bill – though the SNP will argue for more extensive ones – including almost complete devolution of income tax, assignment of half of VAT income and the devolving of around £2.5 billion of benefits.

Health and social care

Perhaps the most significant development in health and social care affecting local authorities since the election has been the postponement of the cap on social care costs until 2020, following representation from local government. The manifesto had said that the cap would take effect from April 2016. The delay affects:

• the cap on the amount an individual will contribute to their own care
• the proposed increase in the threshold above which people will start to contribute to residential care.

Councils will also be affected by the proposed £200 million cut in the 2015-16 public health grant, announced without warning in June. A consultation is now taking place over how this will be done.

There has been more welcome progress on mental health. All the main parties in the election acknowledged the need to improve mental health services. The health minister, Alistair Burt has since committed the government to improving crisis care and to introduce waiting times for mental health.

Welfare

The government has acted swiftly to implement the proposals they made in their manifesto for further welfare reform – through the Welfare Reform and Work Bill (we will be publishing a briefing on this shortly). The Bill (here) was introduced into the House of Commons on 9 July 2015 and is scheduled to become law before the start of the new financial year in 2016.

The Bill consists of several parts, one of which is of provisions relating to changes to welfare benefits; other parts include new duties on the government to report to parliament, the repeal of most of the 2010 Child Poverty Act, changes to rent policy in social housing, and provisions on employment and apprenticeships.

The Bill includes new duties to report to parliament on progress towards achieving full employment, on progress towards creating three million apprenticeships in England, on progress with the Troubled Families Programme in England, and the repeal of most of the Child Poverty Act 2010 and the introduction of a new duty to report on “life chances”.

On welfare reform, measures in the Bill account for about 70 per cent of the expected savings. The other measures announced in the July Budget (see briefing) can be implemented via regulations. The details of the provisions on welfare changes will be set out in the briefing to be published later this week, but to summarise, the main provisions are:

• The Bill lowers the level of the benefit cap from £26,000 per year for families and £18,200 for single people to £23,000 for families and £15,410 for single people in Greater London and from £26,000 per year for families and £18,200 for single people to £20,000 for families and £13,400 for single people outside London.
• Clauses in the bill provide for a freeze in the rate of selected social security benefits and in Child Benefit rates for four years, and equivalent provision for tax credits.
• The total amount of Child Tax Credit (CTC) payable for families in respect of births on or after 6 April 2017 will be limited. Clause 12 makes equivalent changes to Universal Credit (UC). It restricts the number of children or qualifying young persons for whom the child element of UC is payable to two.

Other changes to housing benefit, and the other tax credit and UC changes announced in the Budget will be made via regulations.

Thegovernment will repeal the legally-binding targetsto eradicate child poverty by 2020. The Secretary of State has said measuring poverty by defining poor people as those living in a household with an income of less than 60 per cent of the average had put the aim of reducing child poverty on an “unsustainable” path. The government intends to replace the legislation with a new definition of child poverty that will not be legally binding, with measures focused on levels of work within a family and improvements in education attainment. The government will also develop a range of other measures and indicators of root causes of poverty, including family breakdown, debt and addiction, setting these out in a children’s life chances strategy.

Housing and planning

The most controversial proposal on housing in the manifesto was the plan to extend right to buy to 1.3 million housing association tenants. This was confirmed in the Queen’s Speech (see our briefing) and will be part of a housing bill that will be published in the Autumn. The bill will also include manifesto commitments on home ownership, including the pledge to build 200,000 starter homes to be available at a 20 per cent discount to first-time buyers under 40.

In the July budget it was announced that rents in social housing would be reduced by one per cent a year for four years. Some tenants will be required to pay market (or near market) rents if they earn £30,000 or more outside of London or £40,000 or more within London.

The key developments in planning since the election have largely focused on proposals to increase housing supply. The LGiU briefing gives details and can be found here. Three bills announced in the Queen’s Speech potentially have major planning implications – the Housing Bill, the Energy Bill and the Cities and Local Government Devolution Bill. The Queen’s Speech set out what the Bill will cover, including simplifying neighbourhood planning and establishing a statutory register of brownfield land to help achieve the government’s target of getting approved housing development on 90 per cent of suitable brownfield land by 2020, estimated to be around 200,000 housing plots.

Changes to determining wind energy planning applications for local planning authorities came into effect on 18 June, where councils should only grant planning permission if the development site is in an area identified as suitable for wind energy development in a local or neighbourhood plan and following consultation, and it can be demonstrated that the planning impacts identified by affected local communities have been fully addressed and therefore the proposal has their backing.

‘Fixing the Foundations: Creating a more prosperous nation’published by the Treasury just after the budgetcontained a number of proposed planning reforms, including intervention by the Secretary of State over the production of local plans where local authorities are judged to be too slow, a zonal system for brownfield land creating automatic permission for housing and a tighter planning performance regime designed to encourage faster planning application processing times. See LGiU briefing for details.

Education and childcare

The Government published in early June the Education and Adoption Bill in the Commons and the Childcare Bill in the Lords. Although both bills are on course to receive Royal Assent before the end of the calendar year, there has not been a repeat of the swift action that got the Academies Act on the statute book in 2010 before the summer recess.

The Education and Adoption Bill allows for initial, and subsequent swifter, action on local authority maintained schools when they present as a cause for concern, a new category of school causing concern is created, namely a “coasting” school based on pupil performance data alone, a duty to “academise” all schools which Ofsted find inadequate, and a power to regionalise adoption agencies. The Bill received 10 sessions in Commons Committee where the Minister defended the text of the bill without exception, although requests for evidence to support the government’s case were frequently made and, though answered occasionally, often gave rise to further questions as to the objectives of Government policy.

Ministerial responses, in keeping with the Government’s manifesto, did provide for local authority maintained schools which cause concern but which produce a robust action plans to remain local authority maintained. However, this may be one of the reasons why the Prime Minister in his article in the Daily Telegraph of 15 August wrote several paragraphs on “giving great headteachers the freedom to run their own schools with the ability to set their own curriculum and pay their staff properly. Academy schools were created to do exactly that” under a front page news article headed “Make every school an academy”. This coincided with the publication of a tender for £12 million for three years to support the Regional Schools Commissioners who will act on behalf of the Secretary of State in the eight designated regions (which bear no resemblance to any other regional structure). It is expected that the bill will receive its report and remaining stages in the Commons in September, reach the Lords towards the end of October and receive Royal Assent before the end of the year.

The Childcare Bill, which enables the government to achieve its manifesto commitment of ensuring working parents of three and four-year-olds have access to free childcare for 30 hours a week for 38 weeks a year, completed its Committee stage in the Lords in early July. It is expected that the Report stage will occur after the completion of the cross departmental taskforce on childcare and its funding which is due to report in October. During the committee stage, the Bill was heavily criticised for the lack of detail and extremely wide ranging powers given to the Secretary of State to implement the manifesto including a power including, unthinkable as it might be, to enact secondary legislation to imprison people for up to two years who the government believes might be obstructing this manifesto commitment. There was no clarity on the role of the local authority to secure the ‘additional’ 15 hours a week, and on testing whether a parent is ‘working’. Again, this bill is expected to receive Royal assent before the end of the calendar year.

Employment and trade unions

One of the key announcements in the budget was the introduction of the new national living wage for workers aged 25 and above, by introducing a premium on top of the national minimum wage. From April 2016, the new NLW will be set at £7.20 (a rise of 70p relative to the current NMW rate), and 50p above the NMW increase coming into effect in October 2015. Although largely welcomed, the IFS and other independent analysts have said that it cannot compensate for the proposed big cuts to child tax credits.