Time to take stock

The passage of the Localism Bill through Parliament kicks off again next week. Julie Muscroft and Richard Auton look at its progress so far.

With the House of Lords now in summer recess, it is a good time to sit back and take stock of where they got to in debating the Localism Bill at Committee stage. As they were trying to get the Bill through Committee before they went into recess, it is clear from the Hansard debates that the peers did not have time to discuss all the issues they wanted to. Since Parliament went into recess more than a month ago, we have been seeing a steady stream of further amendments that the Lords want to discuss at Report stage, when they reconvene this month. So it is a case of watch this space, but it is still worth looking at how the Bill is shaping up.

Elected mayors

The Government has backed down over its controversial proposals to make elected mayors also chief executives of the local authority but interestingly, the clause disqualifying holders of certain posts (such as head of paid service, monitoring officer, director of children's services) from becoming an elected mayor has also been deleted, meaning that one individual could still be both mayor and head of paid service.

The Secretary of State's power to require a local authority to start operating a mayor and cabinet executive system has been watered down so that instead he can only require that the local authority hold a referendum on the issue. The provisions that automatically made executive leaders into shadow mayors have also gone. A referendum on elected mayors will still be held on 3 May 2012 in Birmingham, Bradford, Bristol, Coventry, Leeds, Liverpool, Manchester, Newcastle, Nottingham, Sheffield and Wakefield.

Pay Accountability

In light of Will Hutton's recommendations, clause 22 has been amended so that each council has to prepare a pay policy statement each year that sets out the remuneration of its chief officers (as before), and now also the remuneration of its lowest-paid employees and the relationship between the remuneration of its chief officers and the rest of its staff. Hutton recommended that there is value in ensuring that decisions about senior pay are taken in the context of similar decisions on lower-paid staff.

Referenda

Many local authorities expressed concerns about the costs involved in holding a local referendum. A local authority must consider whether to hold a referendum if it receives a petition signed by more than 5% of electors in the area (and where the petition is to the GLA relating to a London-wide issue, it must be signed by 5% of electors in total and 1% of electors in each borough).

The Lords have removed the Secretary of State's power to specify matters on which a referendum can be held; a move that councils have welcomed. They have also introduced a new clause 48 dealing with "special case petitions". These (as Lord Greaves commented) misleadingly-named petitions are those where the local authority has a discretion as to whether or not to hold a referendum. They are:

• Where the cost of holding a referendum would be more than 5% of the council's council tax requirement for that year
• Where the question has been the subject of at least one local or other referendum held in the last four years in that area
• Where there is another statutory process that covers it (this would include planning applications).

These new provisions allow councils to decline to hold referenda in these circumstances. There is still concern that this is Whitehall dictating from the centre what councils must do and this issue may well come up again at Report stage.

Assets of Community Value

There are to be further amendments to this at Report stage but for now the main change is that a new clause 86 requires the owner of the land to be notified if a community interest group puts in a written request to be treated as a potential bidder during the interim moratorium period.

The results of the consultation on how the assets of community value provisions will work in practice have been published and it seems the Lords had sight of this before the rest of us and are taking the responses into consideration in putting forward their amendments.

Neighbourhood Development

A neighbourhood area (over which a neighbourhood development order is made) can now be designated as a business area if it is wholly or predominantly business in nature. In that case, two referenda on the making of a neighbourhood development order/plan must be held: one of the residents and one of the non-domestic ratepayers in the area. If in one referendum (but not the other) more than half of the voters vote in favour, the local planning authority "may (but need not)" make a neighbourhood development plan/order. It will be interesting to see which side an authority takes: the view of the local businesses or of the local residents.

There is also power for a local planning authority to withdraw a body's designation as a neighbourhood forum if it is no longer meeting relevant criteria.

Planning

There have been a few changes to planning enforcement. A planning enforcement order can now only be made if there has been deliberate concealment of a breach, rather than just inaction. There is also a "get-out" allowing a local planning authority to write an assurance to anyone served with an enforcement notice that they do not intend to prosecute (see clause 113). The Lords admitted that, in the words of Lord McKenzie of Luton, this was "rather a bizarre solution to an issue which I accept has to be dealt with", but wanted a way of reassuring landowners who were not responsible for breaches of planning control on their land that they were not in danger of prosecution.

There are a few minor changes to the provisions on nationally significant infrastructure projects to streamline the regime.

Housing

Extra wording has been added regarding flexible tenancies and exempting buildings controlled or managed by a co-operative society from the Houses in Multiple Occupation licensing regime, but from reading the Hansard reports, this was not discussed in Committee (it was the last day Parliament was sitting) and so this is likely to be further developed at Report stage.

Julie Muscroft is a Partner and Richard Auton is a Director in the Public Sector and Projects team at Walker Morris. More information on the Localism Bill is available on Walker Morris' free know-how and update service, reach…®