The Localism Act 2011

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13 February 2012

The Localism Act was enacted in November 2011, following a lengthy and at times controversial period of debate in Westminster and beyond.

As a central part of the Coalition Government's "localism agenda" the Act will bring about a series of significant changes to various aspects of Local Government.  One of the initiatives most relevant to charities and voluntary organisations is the Community Right to Challenge.

Community Right to Challenge

The Community Right to Challenge enables voluntary and community bodies (including charities), to express an interest (or right to challenge) in running local authority services, and to put forward proposals on how it could run the services better.

The right to challenge will apply only to "services" provided by "relevant authorities", and not their statutory "functions".  The example the Government uses is that the determining of planning applications by the local authority is a statutory function that cannot be subject to a right to challenge, whereas refuse collection is a service that could be provided by a community group or charity should it be successful in the procurement process.  Other examples include the running of libraries, public parks and social care.

"Relevant authorities" currently comprise district and county councils and London Borough councils and it is only services provided by these bodies that will be subject to the Right to Challenge provisions.  However, the Government has indicated that it will extend the provisions to include Fire and Rescue Authorities.  Where services are provided by a relevant authority in conjunction with a non-relevant authority, the community right to challenge will still apply.

Where an expression of interest is registered, the authority must then undertake a procurement exercise for that service.  For services with a value of over £150,000 existing procurement rules will apply, but authorities will be free to operate the procurement process in the manner they see fit for services with a value below this figure.

The Government proposes that expressions of interest will need to be lodged during prescribed periods determined by the relevant authority.  The duration of these time periods are due to be set out in secondary legislation.  Expressions of interest are expected to include information on both the organisation submitting the expression of interest (including financial information) and why it thinks it can deliver the service.  It is also expected that the organisation will set out the "social value" of its proposal, i.e. how it will promote or improve the social, economic or environmental well-being of the area and deliver good value for money.

The Community Right to Challenge will enable charities to bid to operate services that are currently run by or on behalf of the local authorities.  The Government's hope is that charities will be able to use this new power to achieve their own aims, as well as resulting in improved services for the local community.  The corollary to this is that where a charity already operates services on behalf of a relevant authority, it may find itself being subject to challenge from other organisations.

The Community Right to Challenge provisions are expected to be introduced later this year.

For further information please contact Gary Soloman on 0117 9022791 or gary.soloman@burges-salmon.com.

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