Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report


Decision Maker:			Cabinet
Date of Decision:			27 July 2009
Decision Title:			Response to the consultation on "Proposed changes to the delivery of local authorities' and fire and rescue authorities' freedoms and flexibilities after the introduction of the Comprehensive Area Assessment"
Decision Reference:			803
Report From:			Chief Executive's department
Contact name:		Dave Higlett, Head of Policy Unit
Tel:	01962 847385			Email:	[email protected]

1. Executive Summary

1.1. The Government Department of Communities and Local Government is seeking views on proposals for treatment of freedoms and flexibilities for local government and fire and rescue authorities (FRAs) under the new Comprehensive Area Assessment (CAA).

1.2. The purpose of this paper is to provide an overview of the principle issues raised by the consultation proposals and provide contextual information to support the draft response. Members are asked to consider the draft response at Appendix B.

1.3. Hampshire Fire and Rescue Service are also looking at this consultation and have shared their views with the County Council so that we may align our responses where appropriate.

1.4. The deadline for responses is 28 July 2009.

2. Contextual information

2.1. Freedoms and Flexibilities serve to remove central controls which can be a barrier to improved service delivery.

2.2. In 2002 and 2003, packages of new powers and increased freedoms (for single/upper tier councils, and for District Councils respectively) were introduced, some of which were related to performance achievement under the Comprehensive Performance Assessment (CPA). The better an authority performed, the more freedoms were granted. For example, authorities who scored the maximum four stars, or excellent through CPA, were granted the additional power to charge and trade. Other freedoms included the freedom from producing certain statutory plans, less inspection, removal of ring-fencing and freedom on how to spend income from environmental fixed penalty notices. Additionally, a freedom for FRAs to trade was introduced but this freedom is due to expire in September 2009.

2.3. In April 2009, the Comprehensive Area Assessment (CAA) replaced CPA. The new Comprehensive Area Assessment (CAA) system does not include an overall performance rating on which to pin certain freedoms and flexibilities therefore the reward structure, if there is to be one, needs to be separate. CLG have therefore invited views through this consultation on how freedoms should be managed in - and be consistent with - a new era of negotiations with government via LAAs, MAAs, the power of well-being and the Sustainable Communities Act.

2.4. The full consultation document can be accessed online at: http://www.communities.gov.uk/publications/localgovernment/freedomsflexibilitiescaa

3. Consultation Proposals

3.1. CLG are minded not to impose new burdens but want to, wherever possible, extend freedoms. Proposals include:

· Extension of freedoms to trade to all local authorities;

· English FRAs to have the same access to trading powers as local authorities by way of extending the current FRA Trading Order indefinitely, i.e. applied with no time limits;

· Using the excellent rating under the old CPA regime as a baseline for granting additional freedom to FRAs to seek bespoke freedoms for innovation in service delivery (no time limit for their duration is proposed);

· Including the Supporting People programme grant in the Area Based Grant from April 2010;

· Simplifying the number of formal plans required on issues such as transport (LTPs will no longer contain mandatory performance indicators), youth justice and air quality ("achieving Plan Rationalisation");

· No longer required to produce a bus strategy;

· Changes to rights of way improvement plans (merge into local transport plans) and homelessness strategy (into Sustainable Community Strategy);

· Freedom for all councils to spend income from environmental fixed penalty notices on any of their functions; and

· Requirement for children's and young people's plan to be extended to the partnership Children's Trust Board.

3.2. CLG's view is that a new package of performance related freedoms is not required due to poor take up of the current package and potentially denying freedoms to those lower-performing authorities who may need it most.

3.3. The specific consultation questions are:

· Question 1 (paragraph 28): Do you agree to the proposed approach to handling freedoms and flexibilities under CAA?

· Question 2 (paragraph 28): Given the new local performance framework and the provisions of the Sustainable Communities Act, are there any additional specific local freedoms worth considering?

· Question 3 (paragraph 36): Do you agree that the power to trade should be extended to all local authorities?

· Question 4 (paragraph 39): Should `excellent' CPA rated FRAs, have access to bespoke freedoms and flexibilities for innovation in service delivery? Approval would be subject to clearance by ministers within 12 months of this consultation ending. As bespoke freedoms need to be innovative, we do not propose to impose a time-limit for their duration.

· Question 5 (paragraph 47): Should the power to trade be extended to permit all fire and rescue authorities to trade in all of their services?

· Question 6 (paragraph 47): If there is no agreement on question 5, should the FRA trading order be extended indefinitely?

· Question 7 (paragraph 50): Should the freedom on how to spend fixed penalty notices from environmental crimes including litter, graffiti and fly-posting, and dog control order offences be extended to all local authorities?

· Question 8 (paragraph 58): Are there any ways in which you think local air quality management under Part 4 of the Environment Act 1995 can be further simplified?

3.4. Draft answers to these questions are at Appendix B.

3.5. The deadline for responses returned to CLG is 28 July 2009.

4. Issues Arising

4.1. As a four star authority Hampshire has been able to make use of its freedoms and flexibilities for a number of years. Over recent years, there have been many changes to the local government performance regime against a background of widespread improvement across the local government sector. It now appears to make sense that the freedoms and flexibilities on offer under the CPA, however much they have been used by local government or not to date, should be extended to all councils as a tool for improvement.

4.2. This consultation is an opportunity to give the County Council's opinions of freedoms and flexibilities and our experiences of the new local government landscape of MAAs, LAAs, power of well-being and the Sustainable Communities Act.

4.3. Our response is also an opportunity to suggest some other freedoms and flexibilities which could aid the County Council. For example, we could request government to review the rules governing inter-local authority trading and Trading Companies. This argument is described in answer to question 3 in the draft response at Appendix B.

4.4. Some of the proposals were already known. For example, it has been known for some time that the Supporting People programme grant will be brought within the Area Based Grant. The requirement for a Youth Justice Plan was introduced in July 2008 and links to CAA are already in place.

4.5. Separate consultations have already been issued by the Department of Transport into the removal of the requirement to produce a separate bus strategy, proposal to merge rights of way improvement plans into Local Transport Plans and the removal of the requirement for Local Transport Plans to be completed every five years. The County Council has responded to issues here under these consultations. The County Council has not yet commented on the freedom not to prepare a LTP so the salient points are raised in this response.

4.6. Hampshire Fire and Rescue Service are also looking at this consultation document and have shared their views with the County Council to enable our two responses to align where appropriate.

4.7. Regarding freedoms and flexibilities for FRAs, further clarity needs to be sought from the Government on their definition of an `excellent' FRA, particularly if these conditions may or may not allow FRAs to seek bespoke freedoms. Under CPA in 2005, only two FRAs were labelled as `excellent', Kent and Merseyside. There have been widespread improvements across the sector since that time and the proposals should take account of continuous improvement since these CPA scores were granted.

5. Recommendation(s)

5.1. That Cabinet comment on the draft response to the consultation at Appendix B.

5.2. Subject to any agreed amendments, that the Leader approve the final response for submission by 28 July.

CORPORATE OR LEGAL INFORMATION

Links to the Corporate Strategy


Hampshire safer and more secure for all:	yes
Corporate Business plan link number (if appropriate):
Maximising well-being:	yes
Corporate Business plan link number (if appropriate):
Enhancing our quality of place:	yes
Corporate Business plan link number (if appropriate):

Other Significant Links


Links to previous Member decisions:
Title	Reference	Date


Direct links to specific legislation or Government Directives
Title		Date


Section 100 D - Local Government Act 1972 - background documents

The following documents discuss facts or matters on which this report, or an important part of it, is based and have been relied upon to a material extent in the preparation of this report. (NB: the list excludes published works and any documents which disclose exempt or confidential information as defined in the Act.)

Document	Location
None

Draft response to the consultation "Proposed changes to the delivery of local authorities' and fire and rescue authorities' freedoms and flexibilities after the introduction of the Comprehensive Area Assessment"

General Comments

The County Council welcomes this consultation which seeks to tidy up the remnants of the CPA regime.

We hope that government realise that the CPA freedoms and flexibilities period were a missed opportunity. The rewards were not substantial enough and freedoms too `technical' - as opposed to freedoms `in reality' - to make any more than marginal impact. There was disappointment in the local government sector that these freedoms and flexibilities failed to empower local authorities and that these rewards were never an effective incentive to stimulate improvement. For example, the freedom not to produce an Local Transport Plan (LTP) was, in reality, not available to County Councils because in order to maximise the amount of LTP funding received, DfT required Highway Authorities to have an LTP. In our view, an LTP provides an opportunity for the County Council to set out its transport strategy and implementation plan. The freedom to not have this anchor document has never been exercised for these reasons.

We hope that government now seize this opportunity to give freedoms and flexibilities that enhance the ability of local authorities to deliver high performing, value for money services in innovative ways.

Comments to the consultation questions

1.	Do you agree to the proposed approach to handling freedoms and flexibilities under CAA?
	The County Council agrees in principle with the proposed approach and is happy to support the extension of freedoms and flexibilities to all. The suggested freedoms and flexibilities should be extended to all local authorities. Although the Comprehensive Area Assessment (CAA) organisational assessment (linked to the Use of Resources) could be used as the basis for granting freedoms and flexibilities, if not handled carefully, this emphasis could distract local government from partnership working. This would introduce perverse incentives to over focus on the areas of the business which are scored, to the detriment of wider areas of the business which are not. In addition to the proposed freedoms and flexibilities being extended to all we think that control mechanisms should be introduced to control any new burdens and requirements from government (e.g. if new legislation was introduced). Local government should be provided with an influential channel to challenge, query and appeal to government regarding issues of emerging restrictions on freedoms, flexibilities or significant increases in burden imposed by central government. The County Council wishes to urge government to think more ambitiously. We want freedoms and flexibilities which go further than just the `technical'. New freedoms should include financial freedoms if they are to have a much greater influence than the Corporate Performance Assessment (CPA) and should seek to substantially reduce burdens on local government in general. Overall, we advocate strongly that the principle of proportionality should be introduced back into the performance framework. Whilst there needs to be appropriate assurance, check and challenge, CAA ought to look less frequently and less in depth with high performing authorities so that inspectorates can spend more time with poorer performing authorities. As well as ensuring more support is given to those that need it, this would free those Councils who have proven competence and high ambition to focus on driving improvement, innovation and service transformation.
2.	Given the new local performance framework and the provisions of the Sustainable Communities Act, are there any additional specific local freedoms worth considering?
	Yes, there are other additional specific local freedoms worthy of consideration. Local freedoms which would be of interest to Hampshire County Council include: _ Financial freedoms: For instance, freedom to sets local charges for the administration of Blue Badges. _ Strategic planning powers: Particularly in relation to the transfer of strategic planning powers back to the county level to enable greater place shaping, regeneration and environmental wellbeing. _ Council tax capping: Lifting the restriction on Council Tax rises. This is arbitrary and takes no account of the base position or the prudential level of a given authority. _ Data use and sharing: Relaxing the restrictions on the use of data within organisations and the sharing of data between public sector organisations. The sector should be seen as one entity made up of professional organisations who take data protection controls seriously but have greater freedom to make use of the data to improve engagement, services and safeguarding. _ Local business rates: Allowing the retention of local business rate increases (tax incremental funding). _ Inspection and assessment: Applying risk-based proportionality to reduce the burden of inspection. _ PFI credits: Revising the PFI credit system to enable more equitable access and terms. _ Ring-fencing: Including reductions in the ring-fencing of the direct schools grant. _ Capital allocations: Creating a level playing field in capital allocations. _ Trading companies: Please see response to question 3. Freedoms regarding the production of plans and strategies etc, should also be broadened with a view to reducing burdens in general and in line with the recommendations of the Lifting the Burdens Reviews. At present the menu of mechanisms to seek local freedoms mentioned in this consultation is weak and is heavily biased towards unitary councils and large cities. The ultimate success and credibility of the new menu of negotiating freedoms and flexibilities with government - including Local Area Agreements (LAAs), Multi-Area Agreements (MAAs), and the Sustainable Communities Act - rest on government committing to and changing their behaviour. For local government to be truly innovative and ambitious then negotiations must be transparent, two-way, actioned and must be allowed to go against the national policy grain if it can be proven that the sustainability of a local area will be improved. Far too often the experience of local government in negotiating freedoms is one-way, sidelined by government or dismissed without discussion. When negotiating the Hampshire LAA the County Council sought a freedom from government but was turned down without the option of negotiation. Similarly, our experience in the South Hampshire MAA has shown that government departments are not quick to enact their commitments. Even when targets are agreed, our experience is that monitoring and reporting requirements can be onerous. This experience appears to undermine the rationale of LAAs and MAAs as freedoms and flexibilities. We would also like to point out that if government were taking the Sustainable Communities Act seriously then a rolling programme of invitations or a proposal to scrap time limits on applications would be introduced. Hampshire County Council are not convinced about the legal viability of the power of wellbeing, and support the LGA's position that the power should be amended to allow for innovations within the local government sector. We would also like to see a general power of competence introduced enabling local government and Fire and Rescue Authorities (FRAs) to act in the best interests of residents. The power should include carrying out or undertaking lawful works and activities, operating lawful business and entering into lawful transaction.
3.	Do you agree that the power to trade should be extended to all local authorities?
	The County Council welcomes the proposal to extend the power to trade to all authorities. In addition to this extension the County Council would like to see legislative changes which facilitate local authorities entering into shared service arrangements. The County Council is the lead authority for Improvement and Efficiency South East's (IESE) construction and asset management work stream. Our Property Services Department has a team of over 350 professional staff and it already has a number of shared service arrangements with other authorities. Whilst the County Council is able to provide services to local authorities by virtue of the Local Authorities (Goods and Services) Act 1970, a barrier exists because the amount of services that can be received by those authorities is limited by the public procurement rules. We are proposing to set up a Trading Company with those authorities, who will then will be able to take services from the Trading Company by taking advantage of the `Teckal' exemption. At a time when authorities are seeking to achieve efficiencies through shared working, this process is cumbersome and time-consuming. It would be helpful if the rules around trading between authorities could be reviewed to make it easier for resources of one authority to be shared with other authorities.
4.	Should `excellent' CPA rated FRAs, have access to bespoke freedoms and flexibilities for innovation in service delivery? Approval would be subject to clearance by ministers within 12 months of this consultation ending. As bespoke freedoms need to be innovative, we do not propose to impose a time-limit for their duration.
	Further clarity is sought from the Department for Communities and Local Government on their definition of an `excellent' FRA, particularly if these conditions may or may not allow FRAs to seek bespoke freedoms. There have been widespread improvements across the sector since the CPA scores were granted and the proposals should take account of continuous improvement.
5.	Should the power to trade be extended to permit all fire and rescue authorities to trade in all of their services?
	All FRAs (including combined FRAs) should have powers to trade in any services which they are not under a duty to provide. This option would provide FRAs with the same scope of access to trading powers as local authorities and maintain maximum flexibility for future developments.
6.	If there is no agreement on question 5, should the FRA trading order be extended indefinitely?
	Yes.
7.	Should the freedom on how to spend fixed penalty notices from environmental crimes including litter, graffiti and fly-posting, and dog control order offences be extended to all local authorities?
	Yes, the County Council supports the freedom to spend fixed penalty notice income.
8.	Are there any ways in which you think local air quality management under Part 4 of the Environment Act 1995 can be further simplified?
	The County Council is happy with the existing quantitative approach and structures but because air quality management is a district council function we will support Hampshire district councils should they have strong views on this.

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