General power of competence at heart of "ground-breaking" Localism Bill

December 13, 2010

A general power of competence that will give local authorities “the legal reassurance and confidence to innovate, and drive down costs to deliver more efficient services” is at the centre of an array of measures in the Localism Bill.

The key provisions of the Bill – published this afternoon – cover five principal areas: community empowerment; decentralisation and the strengthening of local democracy; reform of the planning system; social housing reform; and new powers for London.

Many of the proposals have been heavily trailed. They include community rights – to buy assets, challenge local authorities over the provision of a service, and build homes – as well as a significant role for neighbourhoods in the planning system, and new forms of tenure in social housing.

On the governance front, the Bill will pave the way for referendums and then elections on having mayors in 12 of England’s largest cities. There will be a major shift in relation to predetermination and bias, with provisions to ensure that councillors can take part in campaigning and express their views without fear of a legal challenge.

The legislation will also formalise the abilition of quangos such as the Tenant Services Authority and the Standards Board.

Communities Secretary Eric Pickles claimed the Bill would herald a “ground-breaking shift in power to councils and communities, overturning decades of central government control and starting a new era of people power”.

He said: "It is the centrepiece of what this government is trying to do to fundamentally shake up the balance of power in this country. For too long, everything has been controlled from the centre – and look where it's got us. Central government has kept local government on a tight leash, strangling the life out of councils in the belief that bureaucrats know best.

"By getting out of the way and letting councils and communities run their own affairs we can restore civic pride, democratic accountability and economic growth – and build a stronger, fairer Britain. It's the end of the era of big government: laying the foundations for the Big Society."

Decentralisation Minister Greg Clark added: "This Bill will provide the enduring legislative foundation for a new, decentralised Britain, where power is returned to the people to which it belongs. We believe that communities should have the freedom to manage their own affairs in their way, and be empowered, not suppressed, by Government.

“The Bill will enact new rights allowing local people to shape and influence the places where they live, revolutionising the planning process by passing power down to those who know best about their neighbourhoods."

Responding to the Bill, Baroness Margaret Eaton, chairman of the Local Government Association, said it was essential that councils were freed from the bureaucracy imposed on them by Whitehall “so that they can get on with the job of serving their local areas”.

She said: “The Local Government Association is pleased that the government has taken on board its proposal to introduce a general power of competence which will let councils innovate and address local issues without having to seek new legislation first.

“Locally elected councillors and residents know their areas best and giving them control of planning and housing will help ensure our towns, cities and villages can flourish in a way which meets the needs and aspirations of the people who live there.”

Baroness Eaton added that the LGA would work with ministers on putting residents and councillors in control of their local areas, and ensuring that the Bill “does not create any unintended new burdens”.

THE LOCALISM BILL: KEY ELEMENTS

Community empowerment

Right to veto excessive council tax rises: The public will be given the power to approve or veto excessive council tax rises. Where any local authority – including police and fire authorities, and larger parishes – sets an increase above a ceiling set by the Secretary of State and approved by the House of Commons, a referendum of all registered electors in their area will be triggered.
Community Right to Challenge: Voluntary and community groups, social enterprises, parish councils and local authority employees delivering a service will have the right to challenge a local authority, by expressing an interest in running any service for which they are responsible. A local authority will be required to consider and respond to this challenge. The challenge could lead to a procurement exercise in which the challenging organisations – and other interested parties – could take part
Community Right to Buy: local authorities will be required to maintain a list of public or private assets of community value and put it forward for consideration by communities. As and when listed assets come up for disposal (either the freehold or a long leasehold), communities will be given the chance to develop a bid and raise the capital to buy the asset
Local Referendums: local people, councillors and councils will have the power to instigate a local referendum on any local issue. The results will be non-binding, but local authorities and other public bodies will be required to take the outcome into account in their decision-making

Decentralisation and the strengthening of local democracy

General Power of Competence: Local authorities, including certain parish councils, will have “all the same powers that an individual generally has, which will enable them to do anything apart from that which is specifically prohibited”. The government said this would mean that local councils have new freedoms to run services “free from Whitehall diktat”, and more freedom to innovate and work together with others to drive down costs. It said councils could use the power to “set up banks, develop property, run new services and own assets”
Local Authority Governance: Councils, “regardless of their size”, will be free to return to the committee system of governance, should they wish
Directly Elected Mayors: The government said it is committed to creating directly elected mayors in 12 English cities – Birmingham, Bradford, Bristol, Coventry, Leeds, Leicester, Liverpool, Manchester, Newcastle upon Tyne, Nottingham, Sheffield and Wakefield. Mayoral referendums will be held on local election day in May 2012, with mayoral elections being held in May 2013. Mayors will have a four-year term. More information will come out on their status and powers during the parliamentary process
Predetermination: The Localism Bill will make it clear that the normal activities of a councillor – such as campaigning, talking with constituents, expressing views on local matters and seeking to gain support for those views – “should not lead to an unjust accusation of having a closed mind on an issue that can lead to a legal challenge”
Standards Board abolition: this will see the model code of conduct for councillors revoked, the need for a local authority to have a statutory standards committee scrapped and the Standards Board for England abolished. The government will legislate to make it a criminal offence to deliberately withhold or misrepresent a personal interest
Pay Accountability: The Bill includes provisions requiring local authorities and fire and rescue authorities to approve and publish annually at Full Council (for FRAs, a meeting of members), a senior pay policy statement. They will have to follow this when setting senior pay and if they depart from the policy, they will have to refer the issue back to full council, or a meeting of members in the case of a FRA
Bin Taxes: sections 71 to 75 of, and Schedule 5 to, the Climate Change Act 2008 will be repealed so that so-called 'bin tax' schemes – allowing councils to charge residents for household rubbish collections or fine families for having a full bin – cannot be introduced

Reform of the planning system

Abolition of Regional Strategies: the Bill will see the removal of the primary legislation which sets the basis for Regional Strategies
Community Infrastructure Levy: there will be three changes to the CIL, which allows local authorities to set charges which developers must pay when bringing forward new development in order to contribute to new infrastructure. These are provisions to: make regulations requiring some of the funds to be passed to neighbourhoods where the development has taken place; make clear that funds can be spent on the ongoing costs of infrastructure, as well as the initial costs of new infrastructure; give councils greater control over setting charging levels (independent examiners will still consider whether the charging schedule is unreasonable, but it will be for the authority to decide how to make it reasonable)
Local Plan Reform: the ability of the Planning Inspectorate to re-write local plans will be removed. Procedures on timetabling and monitoring, which many authorities have found bureaucratic, will also be removed. “Planning inspectors will continue to assess local plans at a public examination, and authorities will only be able to adopt plans judged ‘sound’ by the inspector, but inspectors will only be able to suggest changes at the request of the local authority”. The Bill will also allow councils to suggest changes during the examination and withdraw development plan documents before their adoption, without having to seek clearance from central government. Local authorities will be required to publish up to date information direct to the public on what planning documents they are preparing, while central government powers to direct changes will be more limited
Neighbourhood Planning: communities will have a new right for communities to shape their local areas. Neighbourhood plans will enable communities to permit development – in full or in outline – without the need for planning applications
Community Right to Build: local communities will have the power to take forward development in their area without the need to apply for planning permission, subject to meeting certain safeguards and securing 50% support of the community through a referendum
Duty to cooperate: local authorities and public bodies will have a duty cooperate with each other
Pre-application consultation: Prospective developers will be required to consult local communities before submitting planning applications for very large developments. Developers will then be required to have regard to any opinions raised during this consultation when deciding whether to make any changes before submitting their planning applications
Enforcement: the Bill will tackle abuses “like making deliberately misleading planning applications and running retrospective planning applications and enforcement appeals simultaneously”
Nationally Significant Infrastructure Projects: the Infrastructure Planning Commission will be replaced “with an efficient and democratically accountable system that provides a fast-track process for major infrastructure projects and ensures Parliamentary approval of National Policy Statements (National Policy Statements) before they can be designated”. The government said decisions on applications for major infrastructure projects should be taken by ministers, who are democratically accountable, rather than by an unelected quango. Steps will be taken to ensure that National Policy Statements are as robust as possible, and minimise the risk of successful judicial review. This will see NPSs approved by Parliament

Social Housing Reform

Social housing allocations reform: local authorities will be handed back the freedom to determine who should qualify to go on their housing waiting list. Rules on eligibility will still be set centrally. The Bill will make it easier for tenants to move within the social sector, “by removing transferring tenants who are not in housing need from the scope of the allocation rules – they will no longer have to compete with those on the waiting list in housing need”. Councils will be able to set waiting list policies that are appropriate to their local area
Reform of homelessness legislation: local authorities will be given the flexibility to bring the homelessness duty to an end with an offer of suitable accommodation in the private rented sector without requiring the household’s agreement. However, this will be subject to certain safeguards: an offer of private sector housing will only bring the duty to an end if the accommodation is suitable for the whole household (this reflects the current position); the private sector tenancy will have to be for a minimum fixed term of 12 months; and the duty will recur if, within two years, the applicant becomes homeless again through no fault of his or her own (and continues to be eligible for assistance)
Social housing tenure reform: Local authority landlords will be able to grant tenancies for a fixed length. The minimum length will be two years, although landlords will still retain the power to grant lifetimes tenancies if they so desire
Reform of council housing finance: The annual centralised system for subsidising council housing will be replaced with a locally run system. Councils will be able to keep their rental income and use it locally to maintain their homes. The Bill will see a one-off payment between Government and each council, in a move designed to put all councils in a position where they can support their stock and housing debt from their own income in future
National Homeswap Scheme: there will be a power to set – via the social housing regulator – a standard on mutual exchange, where parties move into their exchange partner's property. Landlords would be required to participate in web-based mutual exchange services
Reform of Social Housing Regulation: the Bill will reform the regulatory system for social housing, with the abolition of the Tenant Services Authority and the transfer of its functions to the Homes and Communities Agency. The Ombudsman regime applicable to social housing complaints will also be changed, with the creation of a single Ombudsman to specialise in complaints about social housing. These reforms will see amendments to the Housing and Regeneration Act 2008, the Housing Act 1996 and the Local Government Act 1974.
Facilitating moves out of the social rented sector: housing association tenants who are also members (e.g. share holders) of their landlord organisation will be allowed to take up incentive schemes which facilitate moves out of the social rented sector into owner occupation
Home Information Packs: abolition of HIPs will be formalised.

London

A range of powers will be put in place to strengthen London's governance. These include:

Executive powers over housing investment: these will be devolved from the Homes and Communities Agency to the Greater London Authority to ensure alignment with the Mayor of London's own funding pot and the London Housing Strategy
Abolition of the London Development Agency: The LDA’s city-wide roles on regeneration and management of European funding will be transferred to the Greater London Authority
Regeneration powers: The Mayor of London will have new powers to create Mayoral Development Corporations to focus regeneration
Planning decisions: Boroughs will be given control over more of the major local planning decisions that affect their local communities. The Mayor will only consider the largest planning applications in future
Streamlined consultation on Mayoral strategies: for example, so there is a single environmental strategy. The Assembly will also have a new power to reject the Mayor's final strategies by a two-thirds majority.