Localism Bill - Changes to Local Authorities
The Government has published its Localism Bill which contains a wide range of changes to local government law, including the creation of a power of general competence, changes to governance and standards and the introduction of a duty to hold a local referendum.
General power of competence
Clause 1 proposes to introduce a general power of competence, subject to certain restrictions, under which local authorities will be able to do anything which an individual with full capacity could do. The proposed power is very wide and may be exercised “in any way whatever” and anywhere.
Any existing prohibition on local authority powers will continue to apply. Where the exercise of the general power is “overlapped” by an existing power, any restrictions imposed on the latter will apply to the general power. Arrangements for the discharge of the authority’s functions, governance and contracting out of functions are expressly excluded from the general power. Restrictions on local authority powers in future legislation will only apply to the general power where expressed to do so.
The general power is limited in relation to charging for discretionary services and trading in broadly the same terms as the current powers in ss.93 and 95, Local Government Act 2003.
The Bill proposes that the Secretary of State will reserve powers to amend, repeal, revoke or disapply a statutory provision which he thinks will prevent or restrict the exercise of the general power.
The general power of competence will replace the ‘well-being powers’ contained in Pt 1, Local Government Act 2000.
The Bill proposes to amend Pt 2, Local Government Act 2000, and specify three forms of local authority governance: executive arrangements (elected mayor and cabinet or leader and cabinet); committee system; and, arrangements prescribed by the Secretary of State. A local authority may propose arrangements for the Secretary of State to prescribe.
Where executive arrangements operate arrangements for the discharge of functions between the executive and the authority, the requirement to set up overview and scrutiny committees will apply in similar terms as under the current executive system. There is no requirement for overview and scrutiny committees where the committee system operates. The Secretary of State proposes to reserve powers to confer a “local public service function” on an elected mayor and the latter may apply to have such a function conferred.
Changes from one system of governance to another will generally require a local referendum.
The current standards regime – the Standards Board for England, standards committees of local authorities, the jurisdiction of the First Tier Tribunal over standards of conduct, and codes of conduct for councillors – will be abolished.
In its place, it is proposed that there will be a general duty to “promote and maintain high standards of conduct by members and co-opted members” of the authority. A local authority may adopt a voluntary code of conduct and arrangements for investigation of allegations of any breach as it thinks fit.
Regulations will require an authority’s monitoring officer to establish and maintain a register of members’ interests. Failure to register or disclose an interest or to take part in business of the authority to which an interest applies, without reasonable excuse, will be a criminal offence.
Clause 21 imposes on the authority a duty to prepare a senior officers’ pay policy statement for each financial year beginning 2012-2013. The statement must include policies relating to remuneration, performance related pay, bonuses, and severance packages and may include other relevant information. The exercise of this function will be the responsibility of the authority and not the executive. Authorities must have regard to any guidance issued by the Secretary of State.
The Bill proposes four changes to NNDR. First, an amendment to the Business Rates Supplement Act 2009 will require that all proposals to levy a business rates supplement will be subject to a ballot. Secondly, the Local Government Finance Act 1988 will be amended: (a) to allow authorities a wide discretion in granting NNDR relief; (b) to permit the Secretary of State, by regulations, to introduce a new small business rate relief scheme; and, (c) to permit the secretary of State, by regulations, to prescribe for the cancellation of back-dated NNDR liabilities for the years 2005-2010.
Part 4 of the Bill, entitled “Community Empowerment”, introduces a new duty to hold local referendums. A local referendum must be held: (i) where a valid petition requesting a referendum is received; (ii) on a request from one or more members of the authority; or (iii) where the authority resolves to hold one. The requirements for a valid petition include that it is signed by a minimum of 5% of the electors in the area to which the petition applies. An authority may waive the 5% requirement in an appropriate case. Where a valid petition has been received the authority must determine whether it is appropriate to hold one. An authority may only determine not to hold one on limited grounds specified in the Bill; broadly, that the action proposed is unlawful or not a local matter. Following a referendum the authority must consider what action it proposes to take and publish its decision and reasons for the action.
(b) Council Tax referenda
Specific provision is contained in the Bill requiring major precepting and billing authorities to hold a referendum where a proposed council tax is “excessive”. The Secretary of State will determine the principles used to decide whether a basic amount of council tax is “excessive”. The principles will include a comparison between the amount proposed and that levied in the preceding year. The authority must make a substitute calculation to be implemented in the event that a referendum rejects the “excessive” amount.
Regulations will govern the conduct of referenda and will reserve power to the Secretary of State to disapply the referendum duty where it appears to him that an authority will be unable to discharge their functions or meet their financial obligations without an “excessive” council tax increase.
Specific provision is made in relation to the Greater London Authority to take account of its unique constitution.
The Community Right to Challenge
A new duty is proposed requiring a local authority to consider an “expression of interest” (“EOI”) in providing or assisting in providing a service of the authority. EOIs may be made by a voluntary or community group, charity, parish council or two or more employees of the authority. Where an EOI is accepted, the authority must conduct a procurement exercise in relation to the service. An EOI may only be modified with the agreement of the proposer. The decision to reject an EOI, with reasons, must be notified to the proposer and published.
Land of Community Value
The Bill proposes a new duty on local authorities to maintain a list of assets of community value. Whether an asset is (or is not) a community asset will be determined by regulations. A parish council (or community council in Wales) or persons specified in regulations may make nominations of land to be included in the authority’s list. Regulations will provide for the procedure to be followed on receipt of a nomination. The owner of the land will have a right to review the decision and a right to appeal. A list of unsuccessful nominations, stating the reasons for the rejection, must also be maintained by the authority.
The listing of an asset of community value will take effect as a local land charge.
London: Housing and Regeneration
Part 7 of the Bill makes specific provision in relation to the GLA’s housing and regeneration functions and governance.
The GLA is currently prohibited by section 31 of the Greater London Authority Act from incurring expenditure on housing and education services. The Bill proposes to remove that prohibition in respect of housing expenditure and permit education expenditure limited to sponsoring academies.
The Bill permits the GLA, subject to permission from the Secretary of State, compulsorily to acquire land for housing and regeneration purposes. In London, the Bill proposes to transfer the exercise of the functions of the Homes and Communities Agency under the Housing and Regeneration Act 2008 to the GLA.
The Bill proposes the abolition of the London Development Agency. The duty to prepare and publish an economic development strategy for London is transferred to the Mayor. The strategy must contain an assessment of the economic conditions and proposals for the economic development of London.
London: Mayoral development corporations
A new power, to designate any area of land as a “Mayoral development area” (“MDA”), is proposed. The power may be exercised, after consultation, where the Mayor considers a designation to be expedient for furthering the GLA’s principal purposes of promoting economic development and wealth creation, promoting social development and improving the environment.
Where an area has been designated an MDA the Secretary of State must, by order, establish a Mayoral Development Corporation (“MDC”) for the area. An MDC has the object of securing the regeneration of its area and a general power to do anything it considers appropriate for its purposes. The Mayor may give guidance and/or directions to a MDC as to the exercise of its functions and may decide that an MDC is the local planning authority for its area.
A number of changes to the detail of the GLA’s governance framework under the GLA 1999 are proposed. These include:
• a power for Ministers to delegate certain non-legislative functions to the Mayor;
• the consolidation of the current six environmental strategies into one “London Environmental Strategy” and the repeal of the duty to publish a four-yearly report on the state of the environment;
• the simplification of the consultation process in relation to the Mayor’s strategies by the removal of the obligation to consult the functional bodies and the Assembly before public consultation;
• the introduction of a power of veto over a strategy proposed by the Mayor where a two thirds majority of the Assembly oppose it;
• the extension, with modifications, of the provisions of Pt 5A, Local Government Act 1972 (access to meeting and documents), to Transport for London.