Thursday, April 5, 2012

CLG Outlines How Local Authorities Might Share the Pain

‘With great power comes great responsibility’. Those of you who’ve seen Sami Rami’s 2002 Spiderman film may remember these warning words delivered by the web slinger’s uncle shortly before his unfortunate demise. The Government must have been watching, as similar sentiments are now being voiced through the Localism Act and via a follow on consultation from the Department of Communities and Local Government (CLG) entitled ‘Proposed policy statement for Part 2 of the Localism Act 2011’.

The Localism agenda brings a dramatic shift in power from central to local Government. Under the previous Government local authorities were assigned more and more mandatory responsibilities and performance indicators until they became little more than agencies for delivering central Government policies. Late in the day the Labour Government began to reverse this trend and devolve more powers to local authorities, a process accelerated under the Localism agenda of the current coalition Government.

But this devolution of power creates something of a headache for the Government. Implementation of many international, and in particular EU, responsibilities often needs measures to be actioned at a local level. Localism means that central Government can’t simply tell local authorities what to do; so how can they make sure local authorities pull their weight?

The Government’s solution to this quandary is a provision in the Localism Act that lets them pass any fines received for non-implementation of EU law onto local authorities if they are judged to be not pulling their weight. Although the UK has never been fined by the EU in this way (a process known as infraction) other counties have and the fines can be very serious. In a French fishing case the fine amounted to a €20m lump sum and an additional €58m every six months until the case was resolved.

The first policy area where this provision may impact is air quality. The UK’s failure to meet legally binding EU limit values for the pollutant nitrogen dioxide have been well documented. Infraction action by the European Commission may start this year and could ultimately end with large fines being levied against the UK Government.

Local authorities, through the Local Government Association, have vehemently opposed this element of the Localism Act and continue to oppose its implementation. From an external observer’s perspective though the broad thrust of the argument makes sense – local authorities don’t have to do anything, but if they do not pull their weight they’ll share the pain inflicted by the European Courts. The real concerns then lie in implementation, namely will the process by fair and practicable.

This is what CLG have tried to answer in the current consultation, which sets out the proposed process for sharing the fines. Core to the process is a policy of ‘transparency and no surprises’. This involves the Government working closely in partnership with local authorities around the establishment and implementation of EU law and, crucially, does not seek to punish local authorities for (lack of) action prior to the establishment of the Localism Act.

The process of sharing fines would begin with the European Commission issuing a ‘reasoned opinion’ against the UK, the second step in the infraction process. At this point the Government would apply for a ‘designation order’ which would detail the authorities involved, the specific infraction case and the activities (powers and services) of the local authority covered by the case.

Crucially it would only be the actions (or inactions) of the local authority after the designation order had been served that would be considered in the sharing of any fines received. Essentially the designation order tells the local authority that there’s a problem and their assistance is needed to resolve it. This process would appear then to address the first concern, that the process be fair.

The consultation document then sets out the proposed process to be followed if infraction action continues to the stage of fines being levied Here an independent panel would be set up to investigate the case and hear representations from all interested parties. The panel would advise relevant Ministers who would have the final decision on the share of the fine to be levied against each of the local authorities involved.

But is this process practicable? In complex cases such as air quality it would be very difficult to judge responsibility. The Government could, for example, suggest that a local authority should have set up Low Emission Zones to drive down pollutant emissions. However the local authority could counter that in the absence of a national Low Emissions Framework (used in countries like Germany) it would be far too complex and expensive to do so. In short the web of blame and counter blame would be extremely difficult for the independent panel to unpick.

The basic facts of the air quality case though are that measures by local authorities are essential in order to provide clean, healthy air in our towns and cities, and the current Local Air Quality Management framework has not been effective in uniformly driving action across the country. Whilst there’s a big question mark over whether passing on fines is practicable it could, potentially, shake the laggard local authorities into action. But together with this ‘stick’ we also need a ‘carrot’. Could this function be filled by the new public health powers being devolved to local authorities?

The CLG consultation runs until the 22nd April, click here to see the consultation document.