Authority Alert: The advent of localism

The long-awaited Localism Bill has finally been introduced into Parliament. Over the past weeks, Ministers have emulated the traditional Advent Calendar, opening a new window each day to reveal the enticing chocolate inside in the form of further proposals to be included in the Bill. But there were still some surprises when Eric Pickles opened the final window and presented the complete Bill to Parliament yesterday, although much of the detail remains to be implemented by subsequent regulations.

The Localism Bill aims to free local authorities from central government controls and give local people the freedom to run their lives and neighbourhoods in their own way - but in some areas the Bill makes it clear that their way must be the Pickles way.

The reforms cover four broad areas: 

• strengthening local democracy; 
• community empowerment;
• reform of the planning system; and
• social housing reform.

Strengthening local democracy

The Bill gives local authorities new freedoms and flexibilities to act in the best interests of their area, including: 

• a General Power of Competence that will give local authorities all the same powers that an individual generally has, and so enable them to do anything apart from that which is specifically prohibited. The Government hopes that this will encourage councils to innovate and work together with others to drive down costs and to diversify, e.g. by setting up banks or running new services. In practice, there was no great gap in local authority powers and it is hard to identify examples of what an authority can now do which it could not do yesterday. But there are real gaps in the powers of other public bodies to collaborate with local authorities and the Bill contains no new powers for such other public bodies; 
• any authority, whatever its size, will be able to return to the pre-2000 Act committee system. However, this will only come into force once every authority has been forced to go in the opposite direction by adopting either a directly elected Mayor or a statutory Strong Leader executive; 
• a new power to create directly elected mayors in 12 cities: Birmingham, Bradford, Bristol, Coventry, Leeds, Leicester, Liverpool, Manchester, Newcastle upon Tyne, Nottingham, Sheffield and Wakefield. The Leaders in those cities will become shadow mayors, and mayoral referendums will be held in May 2012 followed by mayoral elections in May 2013. So the democratic innovation of a “confirmatory referendum” has been dropped, but the 12 Leaders will look a bit like Mayors before a referendum is held. Mayors will be elected for four year terms and have the status and power to make their city a success, but their full powers will only be revealed later – although the Secretary of State is given a broad power to transfer to a Mayor any “public service function”. A provision has been sneaked in specifying that directly elected Mayors are to be the Chief Executive, and the authority has a duty to adopt such an arrangement, unless two-thirds of the members vote against such proposal;
• revocation of the Members’ Code of Conduct, and abolition of the Standards Board for England and the requirement for local authorities to have a standards committee; instead, it will be a criminal offence to fail to register or withdraw for a personal interest (the scope of which awaits regulations). Local authorities may still adopt a non-statutory Code and will have a duty to consider allegations of breach of such a code, but there are no statutory sanctions against an offending member. So there will no longer be a power to suspend or disqualify councillors who bully, are rude, disclose confidential information or bring their own authorities and local government generally into disrepute. Provided they do not commit a criminal offence, they will remain in office until the electorate have a chance to remove them at the next election. Proposals for electoral recall, to allow the removal of councillors mid-term on evidence of serious misconduct, are not included in the Bill; 
• the requirements for petition schemes are to be repealed, with the proposal published just a month after every local authority was required to buy an on-line petition facility; 
• clarification of the rules on pre-determination and bias: the Bill provides that an indication by a councillor that he takes a particular view on a matter is not to be taken as evidence of a closed mind. The intention is 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. The Government claims that that this will give councillors the assurance that they can campaign, discuss and vote on issues with confidence and so encourage more people to stand in local elections. In practice, the Court of Appeal has already asserted that such activities will not preclude participation in decision-making, unless the councillor is so committed that they are not even prepared to listen to the evidence, but courts may fret that, where a councillor says that he has a closed mind on a matter, the court cannot take this assertion into evidence;  
• councillors will also have to approve and publish a senior pay policy statement which authorities will be required to follow when setting senior pay.  Where councils want to depart from the pay policy, these would need to be referred back to Full Council. As Chief Executives must already be appointed by resolution of Council, and councillors can already set terms and conditions, including pay scales for Chief Officers and Heads of Service, this is unlikely to be a major change.

Community empowerment

These provisions provide the basic framework for the Government’s vision for a Big Society. Communities will have more power and a bigger say over their area through: 

• a Right to Challenge to take over services: voluntary and community groups, social enterprises, parish councils and local authority employees will be able to express an interest in running any service for which the authority is responsible, and the authority will then have to consider whether they can provide it better. However, the public procurement regime means that the authority cannot simply award the contract or franchise to the challenging organisation, but that organisation would have to bid in a procurement exercise for that service alongside others; 
• a Right to Buy local assets such as libraries, pubs and shops: local authorities will have to maintain a list of public or private assets of "community value", for which communities may make suggestions. If such an asset is then threatened with closure, communities will be then given an opportunity to develop a bid and raise the capital to buy the asset when it comes on the open market. This is likely to be controversial as a considerable infringement of the current owner’s right to close or sell the asset as he thinks fit; 
• a right to veto excessive council tax rises through a local referendum, if a local authority (including police and fire authorities) or larger parish proposes to set an increase above a prescribed ceiling; and 
• the 'bin tax' schemes introduced by the Climate Change Act 2008, which would have allowed councils to charge residents for household rubbish collections or fine families for having a full bin, are to be prohibited. But will it prevent authorities increasing Council Tax and offering discounts to households who reduce their waste?

Planning

The Bill constitutes a major shake-up of the planning system, aiming to restore democratic and local control over planning through a radical structuring of the planning system: 

• changes to Local Plans, removing the ability of the Planning Inspectorate to re-write local plans and also removing procedures on timetabling and monitoring. Local authorities will be able to suggest changes during the examination and withdraw development plan documents before their adoption, without seeking clearance from central Government. The hope is that this will overcome some of the rigidities which  mean that plans are so often out of date by the time that they are adopted; 
• Regional Strategies are to be abolished and replaced with a duty to cooperate in relation to the planning of sustainable development. Instead of top-down specification of new housing targets, authorities will receive financial incentives to permit more houses and commercial development; 
• neighbourhood planning will allow communities to define specific developments or types of development that will have automatic planning permission without the need for any application to the local authority. For more complex cases they will be able to grant outline permission so that the right to develop would be established and only the details would need to be approved; 
• the Community Right to Build will give local communities 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 per cent support of the community (reduced from an earlier proposal for 75 per cent) through a local referendum. Communities will have to identify suitable land, sources of finance and secure support for their proposals, with DCLG’s help and guidance; 
• changes to the Community Infrastructure Levy: regulations will require some of these funds to be passed to neighbourhoods where the development has taken place; funds can be spent on the ongoing costs of infrastructure, as well as the initial costs of new infrastructure; and local authorities will have greater control over setting their charging levels; and 
• the Infrastructure Planning Commission will be replaced by a new body in the search for an efficient and democratically accountable system for major infrastructure.

Social housing reform

The Bill will return decision-making powers on housing to local councils and communities: 

• it gives councils greater discretion over allocation and tenure of social housing. Local authorities will have greater discretion to set waiting list policies that are appropriate to their local area, and tenants who are not in housing need will be treated separately from those who are on the waiting list and in housing need, so that they are not continually out-scored by those in housing need; 
• the Housing Revenue Account Subsidy System is to be replaced with a new system that requires each council to apply its own rental income and to maintain its own homes, without inter-authority pooling. The Bill provides for a one-off payment between Government and each council to enable authorities which currently have high levels of debt on HRA to support their stock and housing debt from their own rental income in future; 
• local authority landlords will be able to grant flexible tenancies for a fixed length of two years or more; they will also retain the power to grant lifetimes tenancies; and 
• local authorities will be able to bring the homelessness duty to an individual to an end with an offer of suitable accommodation in the private rented sector without requiring the household’s agreement.

The Bill also facilitates the National Homeswap Scheme, reforms social housing regulation, and formally abolishes Home Information Packs.

Six essential actions

Alongside the Bill, DCLG has published a guide to Decentralisation and the Localism Bill that makes the case for a radical shift of power from the centralised state to local communities, and describes the six essential actions required to deliver decentralisation down through every level of government to every citizen. These include “Lift the burden of bureaucracy” and “Empower communities to do things their way”. The LGA has stated that it supports these principles and it will work with government to ensure that they are reflected in the Bill.

A first reading of the Bill’s 207 clauses and 24 schedules betrays signs of hurried drafting. We hope that the Government allows sufficient Parliamentary time to improve some of the more obscure provisions.