Have contacted my personal consultant on this matter
Here is the reply.
'This is not an obligation. Some authorities have a 'blanket' 20mph limit on side streets by-law. 20mph is impossible to enforce anyway. The speed guns can't differentiate speeds as accurately at that level and consequently the police refuse to enforce them. Hence the need for traffic calming, speed bumps etc.
The 20mph signing in residential areas is pretty much a nonsense. It doesn't force drivers to drive slower (unless there are accompanying speed bumps) and won't be enforced. However it is relatively low cost and makes politicians look good... even though in reality it does nothing without the traffic calming (which then increases the costs significantly).
'