Power to the People

Simon Tiernan examines the Government’s Localism Bill

When every government, no matter what its political make-up, trumpets the idea of handing power back to communities, it is easy to see why the Coalition’s Localism Bill has not attracted much attention. There is, understandably, a degree of scepticism about the gap between words and change on the ground. But this time, it could be very different.

Indeed, the Bill, now going through Parliament, has the potential to be one of the most radical and far-reaching pieces of legislation in recent years. The fact that its details were long delayed highlights the nervousness about its impact in both Downing Street and Whitehall.

The immediate response on its publication was, unsurprisingly, positive. It is difficult to argue in principle against local people being given more power over their own lives.  The New Local Government Network heralded it as, “one of the most important pieces of legislation for local government in a generation”. The British Retail Consortium added that it would help to “rebalance the economy, so it is more entrepreneurial and attracts local business”.

Nor was the Labour Party likely to oppose the idea of empowering local people to run their local facilities and services. It was, after all, the previous Labour government which devolved power through the creation of the Scottish Parliament, Welsh Assembly and Regional Assemblies. In many respects, the Coalition is just accelerating the direction of reform, which has also helped to give much-needed substance to its ‘Big Society’ concept.

There is, however, nothing lightweight about the Localism Bill. Its policies are real, seem certain to prove controversial when put into action and will have a significant impact on the population, Government and potentially the economy. So, what is in the Bill and how might it affect you?

First, it will put into law the Conservatives’ fierce opposition to the previous Government’s Regional Strategies, which imposed strict targets for local authorities on house building and other development. These are scrapped under the Localism Bill. In its place will be a bottom-up ‘Community Right to Build’ initiative, which will allow local people to decide themselves what homes and amenities should be built in their towns and villages.

There are fears that this initiative will lead to ill-thought out planning schemes or, for example, to a lack of affordable house building in more affluent areas. This is why the Government is being pressed by planning experts to water down the change.

But even if this campaign succeeds, it is clear that the power over planning and development will be shifted towards local people. The Bill gives communities the right, for the first time, to state the types of shops, facilities and housing they want to see in their neighbourhood.

More broadly, residents are to be given an opportunity to call a referendum on any local issue which may affect them. Though the result will not be legally binding on councillors, it will be difficult for elected representatives to ignore clearly expressed local opinion.

This could have a big impact, for example, on local planning issues. A poll could be called on plans for a new estate or a supermarket.

Businesses and developers will need to engage with the community much earlier and more actively than often happens today. By the time a referendum is called, it might be too late. At the very least, early consultation will be crucial given the fact that councillors will, for the first time be able to campaign on local planning issues during election periods. This change will require businesses to pro-actively build supporter relationships and encourage them to lobby local politicians.

This early engagement with local communities will become a legal requirement for those behind large-scale developers. They will be required to demonstrate that they have consulted properly with local people before submitting a planning application. Although this is only meant to apply to major projects such as new football stadiums, it is likely to spread over time to other developments.

The Bill also devolves a significant number of new powers to local councils.

They are, for example, to be given the right to grant discretionary business rate discounts. This provides a powerful new reason to build good relations with those councils keen to promote employment in their area.

But it also comes at a time when councils are seeing their central government funding slashed. For the next few years at least, few will feel they have much flexibility over revenue.

Twelve English cities will also be given the chance to have elected mayors thanks to the Localism Bill with similar powers given to that of the Mayor of London.

However with no additional funding for such elections or indeed any of the provisions of the Localism Bill, councils are among those least enthusiastic about its provisions. They may not be saying so too loudly yet, but there is a widespread feeling within many councils that the Localism Bill is, rather ironically, imposing decisions from the top rather than being developed at grass-roots level.

These doubts, however, are not going to hold back the Localism Bill. Businesses now need to start preparing how they are going to react to the new opportunities and threats it might bring.

Simon Tiernan is a member of Portland’s Public Affairs team.