Responding to COVID-19: insight, support and guidance

Local government

It is a matter of much debate whether the influence the EU has on other areas, such as procurement, state aid, devolution and environment, is beneficial to local services. Many practitioners working within local government have defended the EU’s influence on local government. Core Cities is a group representing the eight largest city economies outside of London. When announcing their position in 2016, they claimed it was because the EU has created 63,000 jobs and protected at least 16,800 jobs across Birmingham, Bristol, Cardiff, Glasgow, Leeds, Liverpool Manchester, Newcastle, Nottingham and Sheffield.

However, not all councils take the same stance as the Core Cities. In January, Havering Council became the first in Britain to vote to leave the European Union. The symbolic gesture was made because some councillors felt EU rules and regulations have significant cost implications for local government. In turn, they also felt being part of the EU puts the area at risk of having to accommodate more migrants. 

However, it is a matter of much debate whether the influence the EU has on other areas, such as procurement, state aid, devolution and environment, is beneficial to local services.

Immigration 

The increase in population due to immigration is seen to increase pressure on local authorities. In 2008, even before the refugee crisis, the Government claimed local areas are experiencing ‘transitional impacts due to the pace of population change’. 

According to the IPPR (the Institute of Public Policy Research) the rate of population change is set only to increase. In 2015, IPPR claimed that by 2061 the ethnic minority share of the UK population is projected to be 30%. They also suggested that ‘local authorities need to be far better prepared than they are at present’ to deal with these issues. 

Regional experiences of immigration vary as some areas have higher levels of pressure due to the current migrant crisis. The Home Office claimed in 2013 that there are 26 local authorities that are experiencing high migration. 

A briefing issued by Vote Leave in 2016, argued that the EU is significantly responsible for the high levels of immigration. The campaign group claimed that if the UK were to leave the EU then the government would be able to stop people entering the country who are unable to contribute to the economy. Instead, more funds would be available to accommodate other immigrants: 

"The pressure that this large inward-migration has put on our schools and hospitals means that we are now forced to block people from non-European countries who could contribute to the UK from coming here. This is an immoral, expensive, and out of control system."

Vote Leave also suggested that the EU has made the Syrian crisis worse by the Charter of Fundamental Rights. The European Union Charter sets out a range of civil, social and political rights. According to Vote Leave this prevents member states from "halting the flow of boats across the Mediterranean". 

Many countries within the EU are dealing with the effects of the Syrian crisis and member states are working together to try and co-ordinate an adequate response. These initiatives dictate local government procedure. 

Central government’s dispersal policy is that refugees are spread fairly across the country, so that no individual local authority ‘bears a disproportionate share of the burden’.

Despite this, the perceived amount of pressure in southeast England is higher. In January 2015, Kent County Council stated that vulnerable children are being placed outside of their home county as they grapple the influx of child asylum seekers. 

The Government has not yet responded with a clear plan on how to ensure equitable distribution of Syrian refugees. Although in October 2015 they stated that they will be identifying the resettlement capacity of local authorities by talking to councils and other partners. 

Although decisions over logistics rest with central government, councils, such as York and Ealing, have opened discussions with local partners to co-ordinate efforts.

Procurement 

According to figures released by the Department of Local Government and Communities in 2014, local government spends around £45bn – over a quarter of its annual expenditure – on procuring goods and services from third parties. 

This significant level of spending is subject to EU procurement rules, which were made to ensure transparency and free access on competition across member states. The UK parliament does not have total sovereignty to amend or totally repeal procurement regulations for local authorities. 

The regulations mean that UK suppliers do not get priority for tender opportunities in the UK. By the same token, they are on equal-footing with other EU companies when tendering to provide goods and services to local public bodies in other member states. England, Wales and Northern Ireland have implemented these directives into national law, Scotland is in the process of doing so. 

Before these rules were in place, local authorities were able to follow their own internal procedure rules and financial regulations. If the UK were to leave the EU, there is a possibility that authorities could implement localised procurement policies.

State aid 

EU rules on state aid cover the use of taxpayer funded resources to provide assistance to one or more organisations in a way that gives an advantage over others that could distort competition. Local authorities need to consider regulations when awarding discretionary relief.

In accordance to the EU’s de minimis regulations (1407/2013), discretionary relief can be compliant with state aid regulations if it does not exceed the €200,000 limit over a three year period. Before granting aid, local authorities must inform businesses of the de minimis regulation and ensure that the ceiling hasn’t already been reached.

This means local authorities can be restricted when trying to incentivise large businesses to set up in their area. For instance, they would be unable to grant business rates ‘holidays’ for a significant period to avoid exceeding the €200,000 limit.

Staying on top of whether the state aid limit has been exceeded can sometimes be complicated. For example, if business rates relief is granted to a retail business then local authorities would need to know if other branches across the country have also received the same amount of relief to ensure they do not reach the limit.

Devolution

Devolution is significantly reliant on the economic growth of local authorities. Being in the EU has financial advantages and disadvantages for councils, which then indirectly affect the economics behind devolution. Core cities, such as Manchester, Leeds and Bristol, have been campaigning to stay in the EU, arguing membership cultivates growth, which ensures the success of devolved economies.

As well as growth, the EU’s structural funding scheme was seen as important to devolution by the practitioners surveyed. According to the government, the UK will receive £5.3bn in structural funds for 2014–2020.

In 2016, the IFS highlighted that, on average, the UK receives less in structural funding that other member states. They estimated that in 2014 the UK received around €109 per person, whereas across member states this was €254.46.

Going forward, IFS predicted that the UK’s net would be over £8bn, with West Wales and Cornwall the only two net beneficiaries. This means, that areas in the UK that have low disposable income per capita may lose out.

It is a matter of much debate whether the EU hinders or encourages devolution, with no clear answer, but what is clear is that the momentum towards it is one way.

Environment

It is the duty of local authorities to care for the wellbeing and quality of life of its communities. Environmental laws, such as the Environment Act 1995, give responsibilities to local authorities to meet national targets which are often set at EU level.

The EU has also interwoven environmental objectives into legislation. For instance, EU procurement directives mean local authorities need to ensure their contracts contain environmental criteria.

In 2016, Mary Creagh, Labour’s shadow environment secretary and Chair of the Environment Select Committee, argued that evidence given to the Committee demonstrates that the EU improves the UK’s local environments. Citing the EU’s policies on clean beaches, pollution and protected nature zones, she claimed local economies have greatly benefited from this influence.

In 2014, the Environment agency suggested the UK has gained financially from EU policies. For instance, they estimated that the EU Water Framework Directive has given England and Wales a net benefit of £9bn by 2027.

Social housing

The EU’s free movement policy has regularly been referred to by those campaigning for a ‘Brexit’ as having a significant negative effect on social housing. In a speech in December 2012, Theresa May claimed that more than a third of all new housing demand in Britain was caused by immigration.

Although the statement didn’t specifically refer to migration inside the EU but all migration, it mirrors a common trope when debating the housing crisis: the idea that it is exaggerated by migration resulting from the EU freedom of movement policy, and that without EU migration, Britain would have less need for more housing.

Research does dispute this claim. A 2011 survey by the London School of Economics shows that new arrivals, including those from the EU, tend to live in denser households and take up less space. Furthermore, according to the Oxford Migration Observatory, migrants are more likely to rent in the private sector, as opposed to buying homes or living in social housing.

In 2011,  the London School of Economics linked two thirds of the demand on social housing not to migration, but to a number of reasons including a lack of social housing stock and an increase in life expectancy. Yet, a common perception still prevails that migrants receive positive discrimination when it comes to social housing.

Figures from housing associations disprove this. Of all housing association lettings made in the last three years, only 5% went to those from accession EU countries and 4% to migrants from other member states and countries outside of the EU. This means 91% went to UK nationals. The proportional spread of nationalities in housing association homes is largely reflective of the distribution of nationalities in the wider UK population. 

Official evidence from the government indicates that the UK’s membership in the EU has little impact upon demand for social housing. Official statistics on social housing lettings in England show that between April 2014 and March 2015 the vast majority of lettings (91%) were made to UK nationals. 

However, evidence from the Chartered Institute of Building (CIB) claims that the EU’s free movement policy does affect supply as it provides skilled workers for labour.

The CIB research suggests, caps on immigration will also potentially harm housebuilding rates, as not enough British-born nationals are trained or interested in construction careers and migrants have been filling the gap.

Practitioners from the housing sector in our survey also expressed the value the free movement policy when it comes to the portability of skilled labourers.

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