English push ahead with localism

DTA News briefing – 13 December 2010

On 13 December 2010, the Government introduced the Decentralisation and Localism Bill to parliament. The new legislation outlines a set of new powers and measures designed to shift power from central government and into the hands of individuals, communities and local councils.

In particular, the new Bill plans to ‘lift the burden of bureaucracy, empower communities to do things their way, increase local control of public finance, diversify the supply of public services, open up government to public scrutiny, and strengthen accountability to local people’.

Of particular relevance to the community sector, the Bill is set to enact:

A Community Right to Buy

This will require local authorities to maintain a list of public or private assets of “community value”. There will be a mechanism for community groups to put forward land or buildings for consideration. When listed assets come up for disposal (either the freehold or a long leasehold), there will be a moratorium preventing immediate sale, allowing communities time to develop a bid and raise the capital to buy the asset. The local authority will be able to determine how long the moratorium will be. At the end of the moratorium the listed asset would come onto the open market (and therefore community organisations may need to compete against private bidders).

Over the last few years DTA has been arguing for a community right to buy to be introduced in England, following the experience of Scotland. The Scottish mechanism goes further by allowing community organisations a right of first refusal during the moratorium period. However it is also excessively cumbersome, so much so that in Scotland only ten Community Right to Buy applications have succeeded in six years. This new right for England does not swing the balance in favour of community groups as strongly as in Scotland, but because it should be much simpler for community groups to use, it might have a much bigger impact. A key consideration is the length of the moratorium period: DTA has argued it should be at least six months, and we will lobby to have that stipulated in the legislation or regulation.

Overall, the Community Right to Buy is an important symbolic step forward, and it could become an important mechanism for development trusts and other community groups to acquire their own assets whilst increasing their independence and capacity to deliver local services. However as will all forms of community asset development this will not be free from risks and many community organisations will need support to do this successfully. The Asset Transfer Unit (www.atu.org.uk) in the last 18 months alone has provided hands on support to over 100 asset transfer projects and provided guidance and advice to hundreds more; we would hope both central and local government can find ways to ensure such support mechanisms continue to be made available wherever asset transfers are being considered.

A Community Right to Build

This measure 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 through a referendum. Originally the requirement was 90% support, so this is a considerable reduction, following lobbying by DTA and others.

A Community Right to Challenge

A right for voluntary and community groups, social enterprises, parish councils and local authority employees delivering a service, to challenge a local authority, by expressing an interest in running any service for which they are responsible. A local authority must consider and respond to this challenge. The challenge may trigger a procurement exercise for that service, which the challenging organisation could then bid in, alongside others. In principle, this is very welcome, and is broadly what the DTA and others have suggested, as it creates an important opportunity for community organisations to make the case to take over the running of a service themselves. But there is no guarantee of success, and they may still have to compete in a tendering process, in some cases against private sector competition.

Community Infrastructure Levy

The Community Infrastructure Levy is a tax on commercial developers (charities are exempt from the tax). This Bill will require local authorities to allocate a proportion of Community Infrastructure Levy revenues back to the neighbourhood from which it was raised. This might become an important new source of local finance for local community projects.

Neighbourhood Planning

The Bill will introduce a new right for communities to ”shape their local areas”. Neighbourhood plans will enable communities to permit development without the need for planning applications. Also the Bill will introduce a new requirement for prospective developers to consult local communities before submitting planning applications for very large developments.

Local Referendums

This measure will give local residents, councillors and councils the power to instigate a local referendum on any local issue. Although these referendums will be non-binding, local authorities and other public authorities will be required to take the outcomes into account in decision making.

For more details read Decentralisation and the Localism Bill: an essential guide http://www.communities.gov.uk/documents/localgovernment/pdf/1793908.pdf

The full details of the Bill are available on: http://services.parliament.uk/bills/2010-11/localism/documents.html