A Labour government – what does this mean for local authorities?

With Labour’s landslide victory last week, they can now begin implementing the ‘change’ that has been the slogan of the party’s election campaign. In this article we highlight some of the key elements of the Labour party manifesto relevant to local government, although we await the detail that will be required for the implementation of Labour’s policies.

Contents

• Local government financing
• Housing and planning
• Legal duty of candour
• Devolution
• Education
• Energy and water
• The New Deal

Local government financing

The financial pressure on local authorities is widely recognised. Labour plans to give local authorities multi-year funding settlements and end wasteful competitive bidding. This should provide greater certainty on spending power, enabling more effective budgeting and resource allocation. However, it is not clear whether this will lead to greater overall funding settlements for local authorities, or how many years will be covered by the settlement.

Labour has budgeted £745 million a year for prioritising frontline public service delivery and public sector capability, which will be funded by halving consultancy spend. However, the Local Government Association has identified a £6.2 billion funding gap in local government over the next two years which the incoming Government will need to grapple with.

Labour will also provide further capacity and support to local authorities. An example of this is the promise of 300 additional planning officers, which will be funded by increasing the stamp duty surcharge paid by non-UK residents, and the plans for devolution which are designed to give local authorities greater powers and to unblock decision making. 

Labour plans to replace the business rates system to raise the same revenue but in a different way (although we do not yet know what this will look like). This change is designed to create a levelling playing field between high street and online retailers, tackle empty properties and encourage entrepreneurship.

There is no mention in the manifesto of whether Labour plans to conduct a council tax revaluation, introduce new council tax bands or reform the wider local government funding system.

Housing and planning

Labour will update the National Policy Planning Framework, which includes restoring mandatory housing targets. The pledge is for 1.5 million homes to be built over the course of the parliament, with urban extensions and regeneration projects forming a part of a series of large-scale new communities across England. As part of this strategy, tough action can be expected to ensure that planning authorities have up-to-date local plans, with a presumption in favour of sustainable development. Labour has said that they will not be afraid to make use of intervention powers to build homes if necessary.

Labour will support a brownfield-first approach, which means prioritising development of previously used land and fast-tracking approval of urban brownfield sites. However, the release of grey belt and green belt land is expected. The approach will be informed by so called ‘golden rules’, which will aim to ensure development benefits communities and nature. Labour will also implement solutions to unlock the building of homes affected by nutrient neutrality without weakening environmental protections.

One of Labour’s pledges is to deliver the biggest increase in social and affordable housebuilding in a generation. Labour will strengthen planning obligations to ensure new developments provide more affordable homes. Labour will make changes to the affordable homes programme to ensure that it delivers more homes from existing funding; and support councils and housing associations to build their capacity and make a greater contribution to affordable housing supply. Labour will prioritise the building of new social rented homes and better protect existing stock by reviewing the increased right to buy discounts, introduced in 2012 and increasing protections on newly-built social housing.

Labour will also work with local authorities to help facilitate first-time buyers to buy homes. This will include introducing a permanent comprehensive mortgage guarantee scheme, which involves the government acting as a guarantor for part of a home loans to encourage lenders to offer low-deposit deals. The key change here is that the scheme will become permanent, which Labour has said will help more than 80,000 young people get on the housing ladder over the next parliament. Given the projected increase in the number of homes being built, it will be important that Labour’s proposals add enough demand-side stimuli to provide the industry with the confidence to invest.

Labour will also reform compulsory purchase compensation rules with the aim being to improve land assembly, speed up site delivery, and deliver housing, infrastructure, amenity and transport benefits in the public interest.

Separately, in order to improve the energy efficiency of British homes, Labour have pledged an additional £6.6. billion over the course of the parliament to upgrade 5 million homes.

Legal duty of candour

Labour intend to introduce a legal duty of candour on public servants and authorities through what is being labelled the ‘Hillsborough law’. This is designed to create a legal framework that mandates transparency and accountability from public authorities. It would create a legal duty to tell the truth and actively cooperate with official investigations and inquiries. This is designed to address a perceived culture of cover-ups and concealment that has marred previous public inquiries.

It is not clear whether this will become law as it will still need to pass through the Houses before receiving Royal Assent. The risk is that such a law would increase the burden on local authorities to maintain well-organised and up to date records. The process of engaging with investigations and inquiries may also require more resource and lead to greater risk for local authorities.

Devolution

Labour’s plan is to transfer power out of Westminster and into communities. This is to be achieved with landmark devolution legislation. In England, Labour will deepen devolution settlement for existing combined authorities and widen devolution to new areas. The aim is to encourage local authorities to come together and take on new powers, such as the planning powers referred to in the ‘housing and planning’ section.

Labour will review the governance arrangements for combined authorities with the intention being to unblock decision making. They will provide greater flexibility with integrated settlements for mayoral combined authorities that can show exemplary management of public money

Labour will introduce new statutory requirements for local growth plans that cover towns and cities across the country. Local leaders will need to work with major employers, universities, colleges, and industry bodies to produce long-term plans that identify growth sectors and put in place the programmes and infrastructure they need to thrive. The idea is that these plans will align with Labour’s national industrial strategy.

Education

Labour will take a community-wide approach to education, improving inclusivity and expertise in mainstream schools as well as ensuring special schools cater to those with the most complex needs. Labour plan to make sure admissions decisions account for the needs of communities. They will require all schools to cooperate with local authorities on admissions, SEND inclusion and place planning.  

Labour plans to take steps to tackle child poverty and improve early education. This includes introducing free breakfast clubs in every primary school and opening an additional 3,000 nurseries through upgrading space in primary schools. The additional nurseries will enable Labour to deliver the extension of government funded hours families are entitled to. 

Labour plans to bring forward a comprehensive strategy for post-16 education, which includes guaranteeing training, an apprenticeship or help to find work for all 18 – 21 year olds. Labour will establish Skills England to bring together business, training providers and unions with national and local government to help develop a highly trained workforce.

Labour will devolve adult skills funding to combined authorities empowering local leaders to have greater control of skills development in their areas, alongside a greater role in supporting people into work. Skills England will co-ordinate between local areas to ensure everyone can access all the opportunities available.

Labour will transform further education colleges into specialist technical excellence colleges. These colleges will work with businesses, trade unions, and local government to provide young people with better job opportunities and the highly trained workforce that local economies need.

Energy and water

Labour’s second mission is to achieve clean energy by 2030. Labour will ensure the institutional framework for policy making reflects their commitments to reach net zero and meet their carbon budgets. Moreover, a new Energy Independence Act will establish a framework for Labour’s energy and climate policies.

At the heart of Labour’s approach to achieving the clean energy mission is the green prosperity plan. As part of this plan, through the national wealth fund, Labour will work in partnership with business to invest in the industries of the future. They will also work with the private sector to double onshore wind, triple solar power and quadruple offshore wind by 2030.

Another significant part of Labour’s approach to achieving its clean energy mission is to set up Great British Energy (GBE), which will be a new publicly-owned claim energy company. Labour has pledged £8.3 billion for GBE over the next parliament, which will be funded in part by a windfall tax on big energy companies. The goal is for this to drive forward investment in clean, home-grown energy production. GBE will partner with energy companies, local authorities and co-operatives to install thousands of clean power projects, through a combination of onshore wind, solar, and hydropower projects. GBE will also partner with industry and trade unions to deliver clean power by co-investing in leading technologies; will help support capital-intensive projects; and will deploy local energy production to benefit communities across the country.

Labour identifies the national grid as the single biggest obstacle to the deployment of cheap, clean power generation and the electrification of industry. To address this, Labour will work with industry to upgrade national transmission infrastructure and rewire Britain. This will prevent important business and infrastructure being stalled or lost.

Labour plans to restore 2030 the ban on petrol and diesel car sales.

Labour will implement the warm homes plan. This involves £6.6 billion in investment over the course of the next parliament to upgrade five million homes. The warm homes plan will offer grants and low interest loans to support investment in insulation and other improvements such as solar panels, batteries and low carbon heating to cut bills. Labour will partner with combined authorities, local and devolved governments, to roll out this plan. Labour will also work with the private sector, including banks and building societies, to provide further private finance to accelerate home upgrades and low carbon heating.

Labour plans to ensure the long-term security of nuclear energy by bringing online new plants and extending the lifetime of existing plants. 

They will reward clean energy developers with a British Jobs Bonus, allocating up to £500 million per year from 2026.

Labour aims to make the UK the green finance capital of the world. As part of this, they will mandate UK-regulated financial institutions and FTSE 100 companies to develop and implement credible transition plans aligning with the 1.5°C goal of the Paris Agreement.

Labour is committed to cleaning up Britain’s waters. As part of this, Labour will put failing water companies under special measures. They will also provide regulators new powers to block payment of bonuses to executives who pollute Britain’s waterways and bring criminal charges against persistent law breakers. They will also impose automatic and severe fines for wrongdoing and ensure independent monitoring of every outlet.

Introduce a land-use framework and make environment land management schemes work for farmers and nature.

Labour will improve resilience and preparation across central government, local authorities, local communities, and emergency services. This includes formally working with all stakeholders in the Fire and Rescue services to inform policy and establish national standards.

The New Deal

Ahead of the General Election, Labour re-published its plan to deliver a New Deal for Working People. This includes a plan to introduce legislation within 100 days of entering government with a commitment to “consult fully with businesses, workers and civil society on how to put our plans into practice before legislation is passed”.

The New Deal (“Labour’s Plan To Make Work Pay”), which we should expect to see introduced in the 17 July King's Speech, is being billed as “the biggest upgrade to rights at work for a generation".  

It includes plans to increase workers’ right from day one, including automatic rights to flexible working and parental leave, and strengthening redundancy rights and protections. The role of trade unions will be enhanced with the introduction of new legislation. Local authority HR departments are likely to be under increased pressure as practices and policies will require revisiting, recruitment and dismissal may become more difficult and complex, and as employers, local authorities may face more tribunal claims. 

The New Deal will see the extension of the Freedom of Information Act to apply to private companies that hold contracts to provide public services with regard to information relevant to those contracts, and to publicly funded employers associations. Again, this will place more demand on councils’ internal resources, both in managing the requests and in a commensurate increase in the contract costs as the private sector look to pass the burden back to authorities.
 
Local authorities will also need to ensure that contractual provisions contain appropriate safeguards to ensure that confidential and sensitive information in particular is properly protected whilst ensuring that there is the right level of transparency and openness required of contractors by the new legislation. 

 

Authored by Angus Kirwood, Olivia Carter and Victoria Barman