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Localism Act Briefing

The Localism Bill, introduced in December 2010, received Royal Assent on 16 November 2011. The Act sets out plans it says will give communities and local government greater powers and freedom from Whitehall. The Government estimates that many of the measures will come into effect in April 2012.This briefing summarises the main features in the Act, which was subjected to a number of changes during its passage through Parliament.

Urban Forum's briefing on the original Bill can be found here and our briefing on Amendments as of July 2011 here.

The five key measures in the Localism Act intended to decentralise power are:
 Community Rights
 Neighbourhood planning
 Housing
 General power of competence
 Empowering cities and other local areas

According to Government, the effect of the Act will be to:
 Give more freedom and flexibility to local government.
 Give new rights and powers to local communities, making it easier for them to improve local services and save important local facilities.
 Reform the planning system, putting more power in local peoples' hands.
 Ensure that housing decisions are taken locally.

The Act requires local authorities to take account of statutory guidance and this is expected to be published in advance of the Rights coming into force in April.

Community Rights

The community rights enshrined in the Localism Act are intended to allow communities to have a fairer chance to bid to take over services and bid to buy land and buildings of community value. These are the Community Right to Challenge, Right to Bid (for assets of community value), and Right to Build (which is discussed under planning).

The Community Right to Challenge allows voluntary and community bodies, parish councils or two or more members of council staff to express an interest in running a local authority run service. Where the expression of interest is accepted, the local authority must run a competitive procurement exercise for the contract to deliver that service.
• Issues raised in the Lords at the Committee Stage on the Right to Challenge revolved around specific definitions of ‘voluntary and community bodies', allowing social enterprises to be included in the definition; issues surrounding procurement exercises and management of contracts; and powers given to the Secretary of State to provide support.
• DCLG also consulted on whether the Right should be extended to other services which were not run by the local authority, time periods and other information to be included in regulations.

The Community Right to Bid (Assets of Community Value) was originally referred to as the ‘community right to buy' in the Localism Bill. This allows communities to nominate buildings and land that they consider to be of value to the community, to be included on a local authority maintained list. If any of the assets on the register are put up for sale, the community is given a window of opportunity to express an interest in purchasing the asset, and another window of opportunity to bid.
• Issues which arose during the Bill's passage through Parliament included determining clarity over compensation for land owners, issues of land that spans two local authority areas, and other ways to limit the burden on local authorities and protect land owners' rights.


The Localism Act contains provisions intended to simplify and clarify the planning system, including the abolition of regional strategies, a duty to cooperate (for neighbouring local authorities over planning issues), neighbourhood planning and the community right to build.
Neighbourhood planning: This will allow communities to form a neighbourhood forum (along similar lines to a Parish Council) and determine what new houses, businesses and shops should be built in their area.
o Several Amendments address what should happen if/when a neighbourhood forum fails to meet its requirements (such as not having enough members), allowing local authorities to take away its official ‘neighbourhood forum' designation. Guidance will specify that local authorities may only do this after raising its concerns with the forum and giving it a chance to address them. Any proposals which have been put forward by a forum which has been de-designated may be suspended.
o Other Amendments introduce ‘business neighbourhoods' - areas wholly or predominantly business orientated. In these areas the power to vote in neighbourhood planning referenda will be extended to local businesses. The designation of a business neighbourhood would be determined by the local planning authority (that is the local authority), considering factors such as the ratio between business rate-payers and local residents.
• The Community Right to Build allows local people to hold a referendum to approve small local developments (up to 20 houses), without the need to go through the normal requirement for planning permission. This should come into force in April 2012.
• In addition, the Act contains a requirement for developers to consult local communities before submitting certain planning applications in order to give people a chance to have a say when there is still genuine scope for changes to be made.


Provisions in the Localism Act aim to make decisions concerning housing policy to be taken at a more local level. These include:
• giving local authorities greater freedom to set priorities and criteria for social housing waiting lists.
• reforming tenure on social housing so that lifetime tenancy is no longer guaranteed.
• the flexibility for local authorities to meet their homelessness duty by offering private rented accommodation to homeless people.
• reform of council housing finance, to allow councils to keep social housing rent instead of returning this to central government.

General power of competence

The general power of competence gives local authorities the power to do anything not specifically forbidden by law (rather than the current system that allows them only to do things that are specifically allowed by law). This is intended to help councils to work more innovatively together to improve services, decrease costs and make decisions that will benefit their local area. This should come into force in April 2012.

Empowering cities and other local areas

Directly Elected Mayors: councils will be able to return to the committee system, and there will also be referenda held in major cities to decide whether or not to elect a mayor. (The provision requiring city councils to appoint shadow mayors, prior to referenda on whether to convert council leaders to executive mayors, has been scrapped.)

Local Referenda
Council Tax Referendums (which are required to be held if the local authority wishes to raise council tax above a certain amount) will not need to be held if the item of expenditure which increases council tax is one which was approved in a local referendum. Note: The measure contained within the original Bill which would have allowed citizens to hold a non-binding referendum on any local issue has been removed from the Localism Act. After undergoing several Amendments to address concerns over the cost to local authorities of holding referenda, it was decided in the House of Lords to remove the measure altogether.

Further information
A plain English guide to the Localism Act

Amendments made to the Localism Bill during the Lords Committee

Community Right to Challenge policy statement

Assets of Community Value policy statement

Neighbourhood planning: Questions and answers

For all of Urban Forum's recent work on the Localism Bill, please go to our Localism Bill policy page,

Caitlin McMullin
December 2011


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Monday, 12 December 2011
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