Is the Localism Act 2011 the law of unintended consequences?

This entry looks at how the localist powers in the Localism Act 2011 are being used.

The Localism Act 2011, as well as making some tweaks to the Planning Act 2008, introduced a number of miscellaneous provisions to give more power to local people. How are they getting on (the powers rather than the people)? The following ragbag of anecdotal evidence suggests that there are more unintended consequences than intended ones.

General power of competence

The first section of the Act introduces a general power of competence (inevitably, 'GPC') for local authorities. It was prompted by the 'LAML' case, where despite having a general power introduced in an act of 2000, councils were forbidden by the courts from creating a mutual insurance scheme. The introduction of the GPC in February 2012 was hastened by the courts preventing a town council's holding of prayers before its meetings. So how has it fared?

The GPC has been used a little - Hertfordshire has set up a mortgage scheme, for example, with echoes of the LAML case - but not a great deal. Cash-strapped councils are reluctant to be innovative when they might get slapped down for it. There have been a few quirkly developments, though.

Rutland County Council decided that since it could do anything an individual could do (according to the wording of the GPC), it could sue for defamation, something previously forbidden by the courts. Not just anyone, but some of its own councillors. The jury is still out on that, though (literally), because although the council got legal advice that it could sue, it backed down in the end. Not uncoincidentally, justice minister Lord McNally had just reported to the House of Lords that government legal advice was that the GPC did not extend that far.

You might think that the ability to publish a council newspaper would be something a generally competent local authority could do, but the days of such publications are numbered (probably to four a year) following the recent enactment of the Local Audit and Accountability Act 2014. This will allow the government to enforce a code of practice on local authority publicity ('Town hall Pravdas', according to the Secretary of State for Communities and Local Government, Eric Pickles MP). The GPC can thus be undermined by other laws encroaching on powers the government doesn't like.

Finally, the ability of the GPC to overturn primary legislation is being considered for the first time, and somewhat unexpectedly this is to allow the first stage of this year's Tour de France to end in Harrogate. This use of a so-called Henry VIII power (i.e. a general power to repeal primary legislation with secondary legislation) has just been consulted upon) as provisions in the Harrogate Strays Act 1985 will have to be waived to allow encroachment on the open space of that name for a couple of weeks this summar (and also the landing of aircraft - some confusion over Raleigh choppers perhaps?).

I'm not sure that 'hosting the Tour de France' is something 'that individuals generally may do', but perhaps some rich landowners could. This also has echoes of the use of Epping Forest by the police during the 2012 Olympics, which was effected by using a 'legislative reform order'.

Community right to bid

The 'community right to bid' was introduced to prevent the loss of local assets such as village pubs and post offices. A community could ask for an asset to be put on a list of 'assets of community value' (ACVs) and if the building in question was sold, there had to be a delay so that the community could try to bid for the asset. It was a fairly weak power since a delay is a long way from guaranteeing that the asset would be saved.

There are no records of how many buildings have been listed in this way, but it appears that quite a lot have. Supporters of both Manchester United and Blackburn Rovers have managed to get their football grounds listed as ACVs to make it more difficult for their owners to sell them. The skateboarding area of the South Bank Centre in London has also been listed as an ACV. An application to declare it a village green was unsuccessful (probably the least green and least villagey place you can think of), although this is the subject of a judicial review to be heard shortly.

One interesting repercussion is that listing as an ACV has started to be used successfully to challenge planning applications for change of use of the asset. Government guidance suggests that councils could decide that ACV status is a material consideration in such cases. This happened in the reasonably well-known example of Kensal Rise library in west London. The library wasn't being sold, but converted into flats. The officers' report can be found here. You could say that the community right to bid has thus extended its asset-saving power into other areas.

Neighbourhood planning

As has previously been reported, the take-up of neighbourhood planning has been much slower than predicted. The impact assessment estimated that there would be 380 neighbourhood plans per year, so we should be up to about 700 by now, but only eight have made it all the way through the process of adoption (it was only three back in October).

One curious effect comes from the phrasing of the legislation when creating a neighbourhood forum. Neighbourhood planning areas are parish council areas if there are parishes, but if not, typically in urban areas, a 'neighbourhood forum' must be created first. A community proposes one, the local council considers it (or councils, if it crosses a local authority boundary), but even if they don't agree with the proposed boundary, they must create 'a' neighbourhood forum out of part of the proposed one. They can't just not create anything. Thus a neighbourhood forum is bound to be created but no-one may want it. This happened in the case of the Brickfields neighbourhood forum in Hammersmith and Fulham in London - the council disagreed with the community's proposals but had to create a smaller forum. See the officers' report here.

There is currently a pending judicial review of the Tattenhall neighbourhood plan in Cheshire, which seeks to limit new developments to no more than 30 houses each. Housebuilders have challenged this on two grounds: whether a neighbourhood plan can be created when there is no (post-2004) local plan in place and whether the neighbourhood plan has to undergo Strategic Enviromental Assessment (especially in that circumstance). The case is likely to be heard in late March. This is the one where the examiner referred to the 'existential' question of conformity with a plan that did not exist, and the holding of a rave to encourage feedback on the plan.

This impending litigation has had a delaying effect on at least one other neighbourhood plan examination - see here.

Community right to challenge

The 'community right to challenge' (CRC) is an echo of the concept of 'market testing' from the 1990s, a form of potential privatisation of council services. Local authorities must set a window within which community groups may bid to run council services. If a bid is made and accepted, the council doesn't just hand over its service to the community group, though, it has to undergo a full procurement exercise. It is therefore quite likely that a major national outsourcing company will win the procurement and take over the service rather than the community group that made the challenge. I have previously described this power as a Trojan horse.

Like neighbourhood planning, this has had a very low take-up compared with estimates. The impact assessment assumed around 500 bids a year, 300 of which would be accepted. After a brief search, I have spotted one in progress: a bid to take over tenancy services in the London Borough of Brent by charity Advice4Renters. The council has accepted the bid and is now undergoing a procurement exercise that will end in a contract award in April. As far as I am aware this is the furthest advanced challenge - it will be interesting to see who wins.

Another interesting area is the range with which councils have approached the setting of a window for bids. Birmingham, for example, has a window of two months per year, whereas the London Borough of Bexley has an all-year-round window. Bradford has a three-month window, but particular services are only eligible for bids within this window every three years, i.e. they are only challengeable 1/12th of the time.

Final thoughts

One thing I have noticed in compiling this blog entry is the lack of centrally collected information about these powers. Planning magazine has been doing a sterling job on neighbourhood planning (and the Community Infrastructure Levy, for that matter), but there is nothing on ACV, GPC or CRC. The government probably doesn't want to publish data given the low take-up of most of the powers (except ACV, it seems). The 'my community rights' website has some case studies but no data - it's more like, say, a council newspaper. There may not be much localism, but what there is is difficult to find.