Local news

After some delay the Localism Bill has finally been published. It was certainly worth waiting for with its radical plans for local government incorporated within its 207 clauses, 24 schedules and over 400 pages. However, the Bill is particularly important in three respects. Firstly, the key promises in the Coalition Government’s Programme are included. Secondly, the Bill has radical provisions in the local government, planning and housing areas and thirdly, the Localism or Big Society zeal is striking, particularly for its potential in the commercial property sector.

The Bill commences with the power of general competence and provides that “a local authority has power to do anything that individuals generally may do”. The power, which is alongside the existing wellbeing arrangements, can be exercised anywhere in the UK, and includes undertaking commercial activities whether or not they benefit the authority, its area or residents.

While there are some restrictions on the exercise of the power and an overriding requirement that a local authority must act reasonably, this predicates a more active role for local authorities in commercial property development through catalysing its entrepreneurs. We should expect more innovative structures and partnerships with a desire on the part of local government to “sweat their assets” and generate income or capital at a time of financial restraint.

The most striking aspect of the Bill is the emergence of the parish or town council as the anointed localism vehicle for the future. Parish councils will not only have the power of general competence (without the best value obligations imposed on other authorities) but will also be able to exercise a range of other powers or promote activities within their area. These powers include:
- The right (with employees and voluntary bodies) to challenge through expressing an interest in providing any service run by a county, district or London borough council or any other designated public body. Such right is principally aimed at encouraging employee co-operatives but equally could enable services to be run by a parish council with its new found powers and could apply to estate surveyors offering to manage their local authority’s property portfolio.
- The right to trigger the creation of “neighbourhood development orders” requiring a simple majority of those voting at a referendum. This will enable the parish council or a neighbourhood forum to take over planning and, in conjunction with a community organisation, to exercise the “community right to build” locally supported housing and community facility scheme.  These particular powers could be supplemented by the existing public request to order disposal (PROD) provisions in the Local Government, Planning and Land Act 1980 which currently applies to land owned by a local authority.

The parish councils generally thrive in rural areas. However, powers within the Local Government and Public Involvement in Health Act 2007 now permit a comparatively small number of local government electors within a specific area to trigger a community governance review which might then lead to the establishment of new parish councils. We may find parish councils springing up in the villages of Peckham or Putney if the electors within those two areas became dissatisfied with the services being provided by Southwark or Wandsworth councils respectively.

The other areas of interest to commercial and residential property developers appear in the planning changes in Part 5 of the Bill. These changes include abolition of regional strategies and housing targets plus simplification of arrangements for local development plans and the requirement for national policy statements to be approved by the House of Commons.

Some changes to the community infrastructure levy (CIL) which is to be refined as a voluntary scheme for local authorities, indicate a more flexible approach to using CIL proceeds closer to the “roof tax” system adopted by the Milton Keynes Council.

One other issue of importance to any developer is the requirement for pre-application consultation on larger schemes.

While revised development orders will confirm the full details, the consultation must ensure publicity for any application is brought to the attention of “a majority of persons who live at, or otherwise occupy, premises in the vicinity”.  Perhaps more importantly, there will be arrangements for conducting consultation and a duty upon the developer “to have regard to responses to the consultation”. Consequently planning applications are more likely to succeed if they have been formulated with the approval of local residents.

Lastly, the Infrastructure Planning Commission will be abolished under the Public Bodies Bill and the Localism Bill sets out transitional provisions with the future handling of nationally significant infrastructure projects. On the other hand, the Homes & Community Agency has survived the quango-culling (albeit with some amended power) and the Mayor of London will have his own development corporation set in place of the LDA.

The Localism Bill poses challenges of commercial property owners, developers and local government alike, but provides a framework for all of them to take advantage of the anticipated upturn in the market. This should be further enhanced by the anticipated introduction of Tax Increment Financing or TIF in next year’s budget. This could enable local authorities to access funding on the security of the increased business rates for the purposes of kick-starting regeneration schemes.

About the author
Simon Randall is a consultant at law firm Winckworth Sherwood LLP. He can be reached by email: srandall@wslaw.co.uk. Visit www.wslaw.co.uk for more information.