Transparency International UK has serious concerns about aspects of the Localism Bill. We believe that it could seriously undermine the oversight structures that have helped to reduce corruption in local government and as an unintended consequence, create an environment that greatly increases the risk of corruption.

7 June 2011 - We are urging the Government to reconsider the proposed abolition of Standards for England and to assess the implications more thoroughly.

TI-UK notes:
The coalition Government’s Localism Bill seeks to change significantly the governance arrangements in English local government.  One of its key features is the dismantling of the standards framework under section 3 of the Local Government Act: SfE is to be abolished; the local government code of conduct will be made voluntary instead of statutory; and local standards committees will also be voluntary and stripped of their statutory duties.

The replacement of a statutory code by a voluntary code has attracted strong criticism from the Committee on Standards in Public Life which has suggested that “it is unrealistic to believe that in the absence of a code people will always be clear about the proper boundaries of conduct in public life.”  The Localism Bill creates inconsistencies between England and the rest of the UK and will also lead to increased pressures on local government ombudsmen.

TI-UK concludes:
There is a danger that hasty institutional changes and cuts in specific areas of government expenditure may, as an unintended consequence, create an environment that greatly increases the risk of corruption.

TI-UK recommends:

1. The Government should stop dismantling anti-corruption oversight structures until it has properly examined the potential impact in terms of corruption, economic loss and discrimination against those that most need access to fair institutions. Any future accountability mechanisms must be designed to guard against corruption risk
   2. TI-UK believes that the proposed abolition of Standards for England and introduction of a voluntary code of conduct for local government could have serious adverse consequences for ethical standards in English local government.  TI-UK urges the Government to reconsider this aspect of the Localism Bill and assess its full implications more thoroughly.
2. A related concern is the abolition of the Audit Commission and that plans for its replacement seem ill thought-through.  When put together with the changes in the Localism Bill this could have severe adverse consequences.  This should be put on hold until there has been proper consultation and a thorough assessment of alternative options for the auditing of local government and the NHS.   Any future auditing mechanisms must be designed to guard against corruption risks.

On 15th June 2011 Transparency International UK is publishing the findings of a series of studies into corruption in the UK. The report touches on issues relevant to the Localism Bill, from which our conclusions and recommendations above have been derived.