Local Authority round-up 24/04/20

Brexit

Joint statement issued on Brexit

On 15 April 2020, David Frost and Michel Barnier, the UK and EU chief negotiators on the future UK-EU relationship, held a meeting by video conference and issued a joint statement. At the meeting, they said that the technical work that had taken place since the first negotiating round on the basis of the legal texts exchanged by both sides had been useful in identifying all major areas of divergence and convergence. They agreed that they need further negotiating rounds “in order to make real, tangible progress” in the negotiations by June 2020. The next negotiating rounds will each last a full week and will take place via video conference. They will be held in the weeks commencing on 20 April 2020, 11 May 2020 and 1 June 2020 and that agendas for all negotiating rounds will be published online.

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UK and EU should not “add to uncertainty” says the IMF

Managing director of the IMF, Kristalina Georgieva, has said that because of the “unprecedented uncertainty” arising from the coronavirus pandemic, it would be “wise not to add more on top of it” by refusing to extend the period to negotiate a post-Brexit trade deal. She said that in relation to an extension to trade talks “My advice would be to seek ways in which this element of uncertainty is reduced in the interests of everybody, the UK, the EU, and the whole world.” The UK put into law a refusal to trigger provisions to extend the Brexit implementation phase beyond the end of the year.

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Customs won’t be ready for Brexit

Businesses are worried that there will be hold-ups at UK borders due to changes in custom checks following Brexit in light of the current coronavirus pandemic and the Government’s refusal to extend the transition period. Under the Government’s proposals, companies will have to complete customs declarations when exporting to or importing from the EU however the pandemic is preventing businesses from being trained and ready to deal with the changes. Ministers have set aside £34 million to help up to 250,000 companies that trade with the EU but Liam Smyth, Director of International Trade at the British Chambers of Commerce said “The funding the Government has announced so far isn’t enough. If the Government is serious they should invest more to employ and train the huge number of people needed to keep the UK trading beyond transition.” Alex Veitch, head of international policy at the Freight Trade Association, said planning for an exit from EU rules at the same time as navigating the coronavirus crisis was “not possible.” He also noted that the kinds of jobs being furloughed “are those which are crucial to managing Brexit.” However, HMRC said “The UK already has a well-established industry of customs intermediaries who serve British businesses trading outside the EU. The Government’s £34m grant scheme will support the growth of this sector to encompass EU trade after 2020.”

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Commercial

Government announces further £1.6 billion for councils

Local Government Secretary Robert Jenrick has announced that councils across England will receive another £1.6 billion in additional funding as they continue to respond to the coronavirus pandemic. The additional funding is to ensure that councils can continue to provide essential services, including adult social care and children’s services, and also to get rough sleepers off the streets. Mr Jenrick said  ”I promised local government would have the resources they need to meet this challenge and today demonstrates my commitment to doing just that. We stand shoulder to shoulder with local government and my priority is to make sure they are supported so they can continue to support their communities through this challenging time.” Councils have now received £3.2 billion in funding in response to the coronavirus pandemic. The funding will also provide an extra £300 million for the devolved administrations including £155 million for Scotland, £95 million for Wales and £50 million for Northern Ireland.

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Government announces further £50 million for the Northern Ireland Executive

Local Government Secretary Robert Jenrick has announced a further £50 million in funding for the Northern Ireland Executive as part of a funding boost for councils to help them cope with the coronavirus pandemic to ensure they can continue to provide vital services. Brandon Lewis MP, Secretary of State for Northern Ireland, said “The additional £50 million for the Northern Ireland Executive announced today will help bolster vital public services as they respond to the challenges of Coronavirus.” The Northern Ireland Executive has now received almost £1.2 billion to support its efforts to tackle coronavirus.

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£12.3 billion paid to councils for Small Business Grants Fund

The Government has now paid £12.3 billion to councils in England for payments under the business supports package including the Small Business Grants Fund and the Retail, Hospitality and Leisure Business Grants Fund. Councils are now contacting eligible businesses to arrange payments and as of 19 April 2020, £6 billion has been paid out to 484,166 business properties which is approximately half of the grant funding allocated.

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Regulatory

Councils told not to close parks

Communities secretary Robert Jenrick said it “cannot be right’ that some parks across the country have been closed.” This comes after the mayor of Middlesbrough, defied Government guidance and released a statement saying parks in the area would remain closed. Mr Jenrick has urged councils to keep parks open so that people who do not have a lot of living space can be outside. He said “People need parks. That’s why I have made it clear to councils that all parks must remain open. For the health of the nation, people should be able to safely enjoy fresh air and green space.”

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Government confirms extension to council accounts deadline

Councils will be given more time to publish their audited accounts due to the increasing demands of dealing with the coronavirus pandemic. The Government has written to all council chief executives, outlining plans to move the deadline for publishing final, audited accounts to 30 November 2020. This is an extension from 31 July for Category 1 authorities and 1 September for Category 2 authorities. The requirement for the public inspection period to include the first 10 working days of June or July has also been removed. The letter stated “This means that draft accounts must be approved by 31 August 2020 at the latest. However, they may be approved earlier, and we would encourage councils to do so wherever possible, to help manage overall pressure on audit firms towards the end of the year.”

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Planning and housing

MPs launch inquiry into local authority commercial property investment

The Public Accounts Committee (PAC) is to hold an inquiry into councils’ investment in commercial property, following what it described as a “recent step-change in the scale of activity.” Estimated commercial property purchases for 2013-14 to 2015-16 were £460 million, compared to an estimated £6.6 billion for 2016-17 to 2018-19. The move follows the National Audit Office’s ‘Local authority commercial investment’ report, which assessed whether the Ministry for Housing, Communities and Local Government had effective oversight of the risks to the financial sustainability of local authorities due to their investments in commercial property. On 11 May 2020 at 2:30 pm the PAC will question officials from the Ministry of Housing, Communities, and Local Government on gaps in commercial skills in local government, and the extent to which the Department formally monitors commercial activity and long-term exposure to risk. The committee will also ask officials about the Ministry’s response to coronavirus, and what impact the pandemic has had on local government finances.

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Number of build-to-rent homes increases

Analysis published by the British Property Federation shows there are more than 157,000 build-to-rent homes under construction, in planning or complete across the UK which is an increase of 12% in the past year. In the first three months of 2020 the number of completed homes rose by 42% compared to the same time in 2019. Ian Fletcher, director of real estate policy at the British Property Federation, said “Our statistics show that a quarter of build-to-rent delivery is now coming from major housebuilders and their support of the sector, through for example access to land, could really boost growth in this sector.”

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Calls for changes to housing market

To help the housing market recover, estate agent Knight Frank has called for five changes to the housing market which it says will bolster activity and spur economic growth following the coronavirus pandemic. The estate agent, together with Rightmove, the Royal Institution of Chartered Surveyors and the National Federation of Builders has said that there should be stamp duty holiday. The estate agent also backs the Government’s idea to extend the Help to Buy Scheme for a further year, currently set to end in April 2021. It said that the conveyancing process needs to be reviewed and for software packages to be provided to speed up the process. Knight Frank and the Home Builders Federation have said that more needs to be done to extend deadlines for existing and pending planning permissions and their needs to be more flexibility around planning obligations.

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If you have any questions about the issues raised in this update, please do not hesitate to get in touch.