Localism bill triggers row over budgets

A bill that aims to give an array of new powers to local communities would “mark a revolution” that would “put power back into the hands of the people”, Eric Pickles, communities secretary, said on Monday.

“The localism bill is one of the most radical pieces of legislation to be debated in this chamber for decades. It is a triumph for democracy over bureaucracy,” said Mr Pickles. “It will revitalise local democracy and put power back where it belongs – in the hands of the people,” he told MPs.

But a political row broke out as Labour claimed the changes were a “smokescreen” for unprecedented cuts to council budgets over the next four years.

Caroline Flint, shadow communities secretary, warned that the cuts of 27 per cent to local authorities’ main grant this parliament would “cripple” council services, undermining the government’s claim to being localist.

She said: “These warm words . . . ring hollow when councils are facing cuts that are deeper than almost any other Whitehall department, that fall hardest in the first year, that hit the most deprived communities the hardest.”

The coalition has insisted that its cuts need not impact on frontline services given that other revenue streams such as council tax will not fall in the coming years.

Local authorities should concentrate on cutting executive pay, merging back office functions and cutting bureaucracy, Mr Pickles went on.

But Ms Flint replied: “He doesn’t need a calculator to work out that cutting executive pay and streamlining administration won’t help a single council to avoid cutting frontline services.”

The bill paves the way for up to 12 new city mayors, a scrapping of Labour’s Infrastructure Planning Commission (IPC) and new planning laws governing housebuilding. There are also several “big society” provisions, such as one allowing charities or local groups to bid to run services currently provided by councils.

Ministers have sought to allay concerns in the property industry that the shift in regime from Labour’s top-down targets could create a hiatus. The number of planning permissions granted during last year fell between the first and third quarter.

Grant Shapps, housing minister, is introducing a financial incentive which could encourage councils to oversee the building of new homes in their areas. There will also be powers to sidestep the planning process where there is overwhelming support from locals for new homes.

Liz Peace, chief executive of the British Property Federation, dismissed the “hysterical comment” about the impact of the localism agenda on development.

Ms Peace said there were still issues to be resolved. However, she said: “We are reassured by the emphasis that the government is now placing on growth and the way in which localism is to be used as the vehicle for encouraging communities to opt, not for ‘nimbyism’, but for sustainable development.”

It is the scrapping of the IPC which has provoked much of the business concern about the bill. Mr Pickles insisted there would be no delay while powers over big new infrastructure schemes were transferred from the Labour quango to the relevant secretary of state.

Meanwhile, David Frost, director-general of the British Chambers of Commerce, said the bill could have the “unintended result” of slowing down business development.

He said that companies, and not just local people, should be allowed a vote in local referendums.

“Business is emphatic that the planning system – which is already too slow, too uncertain and too costly – is not hampered further,” he said.

“MPs must reject any efforts to introduce additional appeal rights which would have the effect of stopping business expansion in its tracks.”