LLG Submits New Burdens Statement to the Ministry

Publish date: 27/03/2019

LLG has submitted a third paper to the Ministry, this time on New Burdens. This article sets out the position statement which was considered by the EU Exit Advisory Panel

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LLG's Position Statement on New Burdens.

This policy position note has been prepared by Lawyers in Local Government (LLG). It does not constitute legal advice and should not be relied upon in that capacity. It sets out the position of LLG as a membership organisation representing lawyers in local government in relation to New Burdens resulting from Brexit.

1. New Burdens Doctrine

1.1 A New Burden is defined as "any policy or initiative which increases the cost of providing local authority services". The New Burdens Doctrine states that "new burdens on local authorities must be properly assessed and fully funded by the relevant department". Further, that "the department leading on the policy giving rise to the new burden is responsible for ensuring that this is done, and that the necessary resource transfer is made". The assessment of funds must include "the overall costs to local government; any one-off implementation costs/setup/transition costs and the recurring costs for a minimum of the first three years" [1].

2. Funding

2.1 LLG has concerns about the length of time required to implement new burdens and we strongly assert that all local authorities require funding to cope with additional costs directly flowing from Brexit. Our previous position paper on vulnerability highlights the areas in which greater demands will be placed on local authorities and the third sector and calls on the government to underwrite the additional financial burden flowing from the increased numbers of vulnerable people.

3. Aggravating Factors

3.1 Whilst all local authorities will require additional funding, (not least to replace the funding previously received from the EU), some authorities, due to their location, composition, statutory function and/or external influences will require further dedicated financial support. LLG have identified the two most distinct influencing elements which it considers will necessitate a higher level of financial assistance from the government*. These are port authorities and authorities affected by the withdrawal of large employing companies. LLG would urge the government to consider provision of a second tier of funding for these local authorities.

4. Port Authorities

4.1 LLG notes that additional checks at ports which predominately receive goods from EU countries will rise dramatically as they will no longer be able to rely on checks carried out by the EU country of origin. The additional resource burden on trading standards will be tremendous. It should also be noted (and preferably mapped) that differing ports receive varying goods. Liverpool, for example, receive large imports of animal feed, grain and cars. In consequence, the port is far more specialised in these areas. If goods are re-routed to other ports, there will be a lack of specialism for the specific good in question which could further delay process and create resource issues owing to recruitment and training needs particularly in respect of certain food, animal and chemical products.

4.2 LLG knows that some port authorities have already identified and requested additional funding to cope with this but that others may not yet be able to know the impact from rerouting. Whilst Felixstowe at present receives far more trade from non-EU countries than say Dover, this might not continue to be the case. Further, there are serious concerns around how smaller UK ports will cope with goods from non-EU countries following transfer from large ships to smaller vessels in EU ports or indeed how they will resource provision to ensure contraband goods are not passed through the port.

4.3 Port demands do not just restrict themselves to inspection of goods. Highways, transport and infrastructure demands will require capital funding to reinforce roads due to increased traffic flows and management of HGV traffic. Additional financial burdens will also be generated by the need for CCTV, staffing support, border teams, accommodation, ICT infrastructure and out of hours provision.

5. Employer Withdrawal

5.1 The government will be aware from the Sahaviriya Steel Industries plant closure in Redcar, Teesside, that the closure of a major employer can have a dramatic ripple effect across the entire community.

5.2 In the Redcar example, to redress the effect of closure the government announced a package of support for people who had lost their jobs. The package, (worth £80 million) included funding for affected workers to train at local further education colleges with tailored support for them via Jobcentre Plus. It also covered finance to assist workers who wanted to start up their own business and for local small businesses to grow and create jobs. The South Tees Development Corporation (STDC) was launched in August 2017 which later published the South Tees Regeneration Master Plan (with the aim of creating 20,000 skilled jobs). The development of a 'Special Economic Area' was supported by the government in the 2018 Budget to further support the area.

5.3 Of notable concern presently is the closure of Honda in Swindon which will see 3,500 direct job losses. The impact however will not be restricted to that figure as there are thousands more employees working at subsidiary companies who will also be affected by the closure of the plant. Jaguar Land Rover have already announced redundancies in the West Midlands and Panasonic have moved its headquarters out of the UK. Dyson have announced they will relocate following Brexit as have Sony. One of Wales' biggest employers, Airbus, has stated it could pull out of the UK and concerns are being raised by other employers such as Burberry and Haribo in West Yorkshire.

5.4 Large community job losses will increase numbers of vulnerable persons and impact directly upon the demand for services provided by local authorities and the third sector. The list is extensive; hardship funds, social services, children services, housing and homelessness, mental health services, food provision, drug and alcohol services and public health are all effected.

5.5 LLG would urge the government to consider both port authorities and major employer withdrawal as an aggravating factor constituting the need for additional financial support above that already determined or indeed being so determined for Brexit generally.

6. Removal of Specific Areas of Work Provided for in the Doctrine

6.1 One way of complying with the new burdens procedure according to the doctrine "is to identify specific areas of work which local authorities would stop undertaking in order to fund the additional work either through deregulation or a change to legislation. This should not include a general assumption about re-prioritising or efficiency savings. Any savings used to offset costs must be clearly additional to the annual savings that authorities are expected to make"

6.2 The additional funding and resource cost of Brexit will not be capable of being covered by additional efficiency savings identified within local authorities due to the existing burdens and budgetary constraints currently in place, in any event, the New Burdens Doctrine specifically prevents against this.

6.3 It is worth considering however, the very careful steps local authorities need to take when wishing to make changes to services or bring about a change of policy. Even where a statutory function prescribed by law is amended, it will remain a function of the council until otherwise amended or revoked with due process and indeed, definitions of what constitutes a mandatory or discretionary service is often complex and far from clear. Service users and stakeholders are required to be properly consulted and communicated with regarding any changes the council wishes to make to existing provision, Fair warning also needs to be provided to prevent an unexpected fall in resource or support.

6.4 Before a decision-making process can commence, whether by statutory requirement or good practice, local authorities need to consult with local persons and/or service users and stakeholders. There is also a duty under the Equality Act 2010 to remove or minimise disadvantages suffered by people who share a relevant protected characteristic[2], and to advance equality of opportunity. This is normally achieved through Equality Impact Assessments. There is no statutory time provision for consultation, but it is generally considered to be 12 weeks (although subsequent consultation on proposals can be reduced to 6 weeks). Longer periods of consultation should be considered where it is sensible to do so. It is important to note that the Public Sector Equality Duty in particular, renders any proposed change in service provision vulnerable to public law challenge if not fully considered. The overall time scale required for a change in service provision can vary immensely on the facts. Complex, far reaching proposals might require a period of 6 months as a minimum timescale.

7. Summary Position

7.1 All local authorities require new burdens funding to cope with additional costs directly flowing from Brexit.

7.2 Specific local authorities should receive additional funding for aggravating factors. LLG identifies port authorities and local authority areas experiencing large employer withdrawal as particular factors.

7.3 Consultation periods and the Public Sector Equality Duty require time to effect lawful changes in service provision and avoid legal challenge.

Helen McGrath , Head of Public Affairs

Deborah Evans, Chief Executive

Lawyers in Local Government

[1] Communities and Local Government: New Burdens Doctrine: Guidance for government departments

* Aggravating factors are not limited by LLG in this paper.

[2] S149 Equality Act 2010