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A Bill's progress

The Localism Bill continues to make its way through Parliament. Julie Muscroft and Richard Auton analyse the latest developments.

It is hard to believe that it is six months since the Localism Bill was published. In that time, the Bill has passed through the House of Commons, had its second reading in the House of Lords (on 7 June) and is currently being debated, line by line, in Committee by the Lords. Despite a great deal of debate, the government's majority ensured that the Bill passed to the Lords with relatively few changes. Here we report on the main changes made to the original Bill so far.

General power of competence

Clause 5(1) gives the Secretary of State the power to make an order to amend, repeal, revoke or disapply any statutory provision that he thinks prevents or restricts local authorities from exercising the general power of competence (the "power to do anything that individuals generally may do").  A new clause 6 in the Bill puts limits on the Secretary of State's powers in clause 5(1) so he can only exercise them if he considers that the following conditions, where relevant, are satisfied:

  • the effect of the provision (i.e. the Secretary of State's order) is proportionate to the policy objective it is intended to secure
  • the provision, taken as a whole, strikes a fair balance between the public interest and the interests of any person adversely affected by it
  • the provision does not remove any necessary protection
  • the provision does not prevent any person from continuing to exercise any right or freedom which they might reasonably expect to continue to exercise
  • the provision is not constitutionally significant. The Explanatory Notes say that this would allow orders to amend constitutionally significant legislation as long as the amendments themselves are not constitutionally significant.

Also, any orders made under clause 5(1) may not provide for the delegation or transfer of any function of legislating, nor abolish or vary any tax.

It's a nice debate as to whether these conditions are restricting the extension of the general power of competence, or restricting the Secretary of State's discretion to ride roughshod over existing legislation that in his opinion might conflict with the general power.

Application to Wales

Fire and rescue authorities in Wales are now given the same new powers as the English fire and rescue authorities. As a general point of interest, the House of Lords Explanatory Notes contain a useful territorial table at the end. Most provisions of the Bill apply to England only, but, as well as the fire and rescue provisions, the following also apply to Wales:

  • clause 14 – predetermination
  • clauses 22-27 - pay accountability
  • clauses 38-39 - non-domestic rates
  • clauses 74-93 - assets of community value
  • clauses 99-100 - community infrastructure levy
  • most of Chapter 6 – nationally significant infrastructure projects
  • clauses 124-125 - other planning matters (including the controversial clause 124)
  • clauses 129-130 - duties to homeless persons
  • clause 144 - repairing obligations in leases seven years or more
  • clause 161 - the abolition of HIPs

The new standards regime in Part 1, Chapter 5 also applies to Welsh police authorities.

Codes of conduct

Not much has changed in Part 1, Chapter 5 (Local Government – Standards) other than if a local authority chooses to adopt a voluntary code of conduct, or revises or withdraws it, then it must (rather than may) publicise it in such manner it considers is likely to bring it to the attention of persons who live in its area (clause 17).

EU fines

The wording has been expanded to take into account the situation where the European Court of Justice can impose periodic penalty payments in respect of continuing breaches of its judgments, for example daily or monthly fines. Interestingly, the definition of "infraction of EU law" (which would trigger the EU financial sanction) is amended from a failure by the UK to comply with a treaty obligation, to a failure to comply with a judgment of the European Court of Justice that the UK has failed to comply with a treaty obligation. This imposes two extra steps before a fine can be imposed, so that the UK must have breached a treaty obligation and the ECJ makes a judgment to this effect and the UK fails to comply with that judgment.

Also interesting is that the 'local or public authority' from whom a Minister can require payment cannot be either a House of Parliament, a Minister of the Crown or a UK government department, nor a court or tribunal. We assume that either they will be directly responsible for their own breaches, or (unlikely but you never know) they will be immune from fines.

Local referendums – what is a 'local matter'?

One of the grounds for a local authority refusing to hold a local referendum is that it thinks the matter to which the referendum relates is not a 'local matter'. The only change to Part 4, Chapter 1 is that the Secretary of State can no longer determine what is not to be treated as a 'local matter'. This makes sense and is in keeping with the principles behind the Localism Bill: local matters should be decided by local people, not central government.

Advice and assistance

There are four new clauses authorising the Secretary of State to provide advice and assistance (including financial assistance) in relation to:

  • the community right to challenge (clause 73)
  • assets of community value (clauses 88 and 89, for England and Wales respectively)
  • neighbourhood planning (clause 105)

All are broadly similar and the aim is to help community groups with the practicalities of exercising these new rights. The advice and assistance includes training or education and financial assistance can be by any means including a loan, guarantee or indemnity.

Neighbourhood forums

Areas that do not have a parish council (65% of the population as the Bishop of Norwich pointed out in recent debate) can form a neighbourhood forum to decide on local planning issues. The requirements for a neighbourhood forum in Schedule 9 have been changed so that it now must be established either to further the social, economic and environmental well-being of individuals living in the area, or to promote the carrying on of trades, professions or other businesses in the area (this latter part is new). Membership is open to individuals who work (as well as those who live) in the area, plus elected council members, and the membership must include at least 21 individuals, with at least one from each category (resident, worker, elected member). The broadening of the criteria that a body must satisfy to be designated a neighbourhood forum is presumably an attempt to ensure that local planning matters are not controlled by a tight-knit cabal of those with a vested interest.

Planning permission - local finance considerations

Clause 124 is arguably the most controversial of the amended Bill. It amends section 70 of the Town and Country Planning Act 1990 which sets out the considerations to which a local planning authority is required to have regard when considering an application for planning permission, including the development plan and 'any other material considerations'. The new wording adds 'any local finance considerations' to this list, and goes on to define these as including a Community Infrastructure Levy payment or a government grant (such as the New Homes Bonus).

The latest Explanatory Notes suggest that this additional requirement to have regard to local finance considerations is not intended to change the current position about what lawfully can or must be taken into account in the determination of a planning application, and is not intended to ascribe any particular weight to 'local finance considerations' (although peers disagreed with this in debates).

There has been widespread opposition to this requirement to have regard to 'local finance considerations'. It is being referred to as the 'Cash for permissions' provision with accusations being made that this is an attempt to legalise planning decisions made on the basis of financial reward which could lead to a system in which planning permissions could be bought and sold.

Giving such undue prominence to financial considerations as a material consideration is seen as a fundamental threat to the planning system, and several bodies, including the Royal Town and Planning Institute, are calling for this provision to be removed.

Tax

As a final note, it would seem that the government maybe did not initially think through the various taxation issues that the measures in the Bill would present, and so as well as various references to taxation in the document (the new clause 6 being a case in point) we now have a whole new schedule, Schedule 24, dealing with tax provisions in relation to the various transfers of property, rights and liabilities between government departments.

Next stages

The Bill will continue to be debated in Committee of the House of Lords through much of July; then with Parliamentary recess it is unlikely to become law before the autumn at the very earliest.  We will report again on the Bill once it has had its third reading in the Lords.

Julie Muscroft is a Partner and Richard Auton is a Director in the Public Sector and Projects team at Walker Morris. They regularly contribute articles and updates to reach…®, the free Walker Morris knowledge database and alerter service.