the localism act - top ten
1 December 2011
The Localism Act top ten
The Localism Act is huge, both physically and in terms of
importance for public authorities. Setting the planning aspects
aside, we’ve put together a brief overview of our ‘top 10 hits’
affecting local authorities.
1. General power of competence
Heralded by the Government as the panacea to previous
limitations on local authorities acting in ways which benefit their
area, it allows local authorities to do anything that they are not
specifically prohibited from doing. So how far can local
authorities really go? The big question is how liberally it will be
interpreted by courts if challenged.
2. Commercial activity
Local authorities are being encouraged to be innovative and
improve their financial resources. Where local authorities have the
power to act under the general power of competence, this may be
done as a commercial activity which can include making a profit.
The limitations to the power are similar to the s95 trading powers
which continue to be in force and there are limitations similar to
the s93 charging power in relation to recovering the costs of a
service. For commercial activity under the act, it is still
necessary to set up a separate vehicle which means that local
authorities may continue to look at other options.
3. Standards
Standards for England’s regulatory function will shortly cease
and there will be no national model code of conduct. However after
much debate local authorities must still “promote and maintain high
standards of conduct” and adopt a code. What that will look like
and how standards will be managed is for the local authority to
decide so long as the code includes the requirements set out in the
act.
4. Governance arrangements
Local authorities now have the option to convert back to a
committee-style arrangement or to an elected mayor and cabinet
system. This second option was previously available but the manner
in which this can now be decided is considerably different. The
Government hope to encourage more local authorities to follow this
style of leadership. Who will be the next Rudy Giuliani?
5. Delegation of additional powers
County and district authorities, combined authorities and
economic prosperity boards can be delegated additional powers from
other public authorities or Ministers of the Crown if deemed
appropriate and if it will increase ‘local accountability’ and it
can be “appropriately exercised” in this way. This could end up
creating quite large differences between the remits of the larger
cities and other authorities who may be less able to take on
additional powers.
6. EU fines
In a much watered down version of the original wording, local
authorities may be required to contribute to fines imposed by the
EU if their actions have played a part in the sanction. The
Secretary of State needs to issue a policy on the procedure for
deciding to enforce this. The local authority can appeal the
decision but it has the potential to be very expensive, especially
in areas such as State aid.
7. Pay
Local authorities and fire and rescue authorities are now
required to publish a pay policy statement which sets out how
decisions are made about the salaries of the highest paid officers
and how that relates to the lowest paid jobs. The act is quite
prescriptive in what the statement must contain and it must be
approved by a resolution of the full authority.
8. Community right to challenge
This gives local organisations the opportunity to take a more
active role in the provision of services in their area. There are
obvious costs such as running more procurement exercises which
local authorities will have to take into account when looking at
any requests.
9. Community right to bid
Sometimes incorrectly called the ‘right to buy’, this requires
local authorities to keep lists of assets of ‘community value’ as
described in the act. Assets can be nominated by the community and
the local authority must consider adding them to the list. When
these assets come up for sale, community organisations must be
given the chance to put in a bid and raise finance. There are a
number of limitations to this right and it has been suggested that
community organisations will not have enough time to put together
suitable bids.
10. Housing
Local authorities are to be given considerably more freedom to
make decisions on social housing, including allocation of housing
and length of tenancy. By abolishing the Housing Revenue Account,
local authorities have the potential to release more funds to be
spent on social housing. Local authorities being able to manage
their housing budgets based on longer term financial models and
raise additional funding could be one of the biggest impacts of the
act.
The content of this bulletin is provided for the purposes of
general interest and information. It contains only brief summaries
of aspects of the subject matter and does not provide comprehensive
statements of the law. It does not constitute legal advice and does
not provide a substitute for it.