Charities should keep an eye on the Localism Bill

Nicola Evans, senior associate at Bircham Dyson Bell, says the bill could be a blessing and a curse

Nicola Evans
Nicola Evans

When Eric Pickles, the communities secretary, launched the Localism Bill last month, he said the proposed legislation would lay the foundations for the government's big society agenda.

The provisions in the bill would devolve certain powers from central to local government and boost the powers of local community groups.

On first reading, the bill features provisions that might be useful to charities, but could also be used against them.

The first change introduced by the bill is a power for local authorities "to do anything that individuals generally do" - in effect reversing the existing default position. This might change the way authorities deal with other bodies, including charities.

But having the power is one thing - exercising it is another; authorities will remain responsible for how they use such a power.

One theme of the bill is "community empowerment", including the "community right to challenge". This would enable charities or voluntary and community bodies to challenge an authority's service provision by submitting to the authority an expression of interest in providing (or assisting in providing) the service.

The authority would either accept or reject a challenge. If it was accepted, a procurement exercise would be triggered, enabling the challenging organisation to bid for the contract.

As set out in the Communities and Local Government department's guide to the bill, the right to challenge aims to increase diversity of service provision, "particularly from those in the voluntary sector".

Its precise workings remain unclear at this stage. For example, the grounds upon which a challenge can be rejected are not in the bill but will be defined in subsequent regulations. Even if greater opportunities to bid for services arise, the procurement process itself, which can be expensive and laborious, would be unchanged.

There is also no guarantee that the successful challenger would win the contract. It might find it has succeeded only in handing that opportunity to a competitor.

Contracts between charities and authorities are not themselves immune from challenge under this right, and it remains unclear what protections will be laid down for the incumbent service provider when a challenge is accepted. Presumably this too will be a matter for regulation. Greater opportunities will also bring with them greater uncertainty.

The government wants the bill to enhance opportunities for local groups to save land or buildings of "community value". Owners wishing to dispose of community-value property with vacant possession will have to wait for a (yet to be prescribed) period designed to enable "community interest groups" to put together potential bids; they will then have to compete with other bidders.

The meanings of "community value" and "community interest group" are left for subsequent regulations. It seems, however, that charities could find their property designated as community value property, which could inhibit potential disposals.

Another innovation is the prospect of local referendums when a valid petition is received from 5 per cent of local electors or one or more members of the local authority. This could be a new avenue for local campaigning (although it is not clear how authorities facing cuts in their spending will pay for local referendums). Authorities would not be bound by the results, but would have to give reasons for not giving effect to them.

The bill is only just starting its passage through parliament, so it is too early to judge whether it will provide genuine new opportunities for the sector.

There is no doubt, however, that the bill is seen as a centrepiece of government policy. It should be hoped that a bill designed to open up the big society will provide as many opportunities as possible for the sector.

Charities should watch its progress.

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