Local bill for local people

The localism bill is published and it's all about decentralisation '“ or so we are told. It is hard to argue with the aims of the bill '“ lifting the burden of bureaucracy, empowering communities, more local control of public finance, greater public scrutiny and accountability. Equally, it is well understood that successive governments have centralised power to Whitehall, mostly to little beneficial effect. The tide has turned.

Of the 207 clauses in the bill, 50 are devoted to London '“ transferring powers to the mayor, notably in relation to housing and regeneration.

Away from London, perhaps the most important provision in the bill from a lawyer's perspective is the introduction of a 'general power of competence' for local authorities. This gives the power 'to do anything that individuals generally may do'. Over the course of six sub-sections (in clause 1 of the bill) this general power of competence is given full expression. It goes beyond the former 'well-being power' and in that sense will encourage innovation by local authorities; setting up a local bank has been mooted. For example, it covers doing things anywhere in the UK (or elsewhere), as well as authorising things that are done for a commercial purpose or for a charge.

Dos and don'ts

The bill expressly authorises doing things which are for the benefit of the authority. The well-being power could only be exercised for the benefit of the area or its inhabitants '“ prohibiting, in the LAML case, the setting up of a mutual insurance company by local authorities to save them money.

The new power of general competence is of course not unlimited. Pre-existing and future express restrictions on what a local authority may do will still be relevant and nor can the new general power be used to work around the statutory systems of local authority governance (i.e. how an authority may take its decisions).

Moreover, there are limits on the extent to which a local authority may charge for services and anything done for a commercial purpose must be done through a company (which, at first sight, leaves hanging the question of whether limited liability partnerships can be used).

Other significant features of the bill are the introduction of local referendums, a duty to publish senior pay policy, abolition of the old Standards Board regime, abolition of regional planning strategies (together with other reforms to the planning system), the introduction of elected mayors in 12 cities in England, and a community 'right-to-buy' (to save the local pub from closure).

Significantly, the bill does away with the housing revenue account subsidy system in England. Together with other reforms in social housing, this measure will enable housing authorities to retain council rents and, in theory, use those rents to fund investment in the social housing stock locally.

Power trip

So, what of the bill as a whole? Does it mark a radical shift of power, demonstrating the coalition's commitment to decentralisation? The short answer is yes, particularly when taken together with other decisions such as the removal of 'ring-fences' on local government spending '“ allowing different sources of public money to be pooled to tackle issues within a local area.

There remains a dichotomy within the bill (and the coalition agenda), between the rebuilding of strong local civic governance on the one hand and the empowerment of local communities on the other. But there's something in the bill for everyone and its central theme of decentralisation is to be welcomed.