Localism Act 2011

Background

The Localism Act 2011 was introduced as part of the Coalition government’s ‘Big Society’ initiative, which was predicated on a drive towards the integration of the free market within a theory of social solidarity based on increased decentralization and a greater emphasis on localism and voluntariness.

Statutory Purpose

The stated summary given within the Localism Act 2011 itself provides that the purpose of the Act is, amongst other ‘general purposes’, to make provision for the functions and procedures of local and certain other public authorities; to make provisions regarding the functioning of the Local Commission for Administration in England; to enable the recovery of financial sanctions imposed by the Court of Justice of the European Union on the United Kingdom from local and public authorities; to make provision for local government financing; to make provision for town and country planning and the Community Infrastructure Levy; the authorisation of infrastructure projects of national significance; to make provision for social and other housing and finally, to make provision about regeneration in London. In keeping with the political background noted above, the focus of the aforementioned aims is very much upon facilitating the devolution of decision-making powers to local communities and encouraging the decentralization of central authority and government control.

Statutory Approach

The key aspects of the Localism Act 2011 are those which relate most directly to the statutory aims noted above, although the Act itself is a significant piece of legislation and covers a wide range of areas, some of which bear little relation to the principal aim of further and more efficient decentralization. That being said, a core concept introduced by the Localism Act is the ‘general power of competence’ newly conferred upon local authorities, which permits such a body to enter into certain transactions that would otherwise have been ultra vires, such as charging and trading. The extent of this power is, however, analogous to that of an individual with capacity which thus implies certain restrictions upon its exercise.

The Localism Act 2011 also simplifies the process by which councils and other local public authorities can alter their systems of governance, which may be amended by the passing of a resolution at a meeting of the Council to introduce the stated changes at the next annual meeting. In practice, depending upon when the initial resolution was passed, the entire process might take as little as four months.

Key Provisions

Part 1, Chapter 1

Chapter 1, Part 1 of the Localism Act 2011 contains the most important provision of the Act, as it provides for a power of competence allowing local authorities “to do anything that individuals may generally do”. This power is extensive in scope and exercisable by local authorities anywhere within the United Kingdom, for commercial or other purposes for the benefit (or otherwise) of the local authority and its residents, or those visiting the area. Sections 5 and 6 do, however, allow the Secretary of State to fetter the exercise of the power by introducing regulations limiting the ability of local authorities to do anything specified in the order.

Sections 21-24

Sections 21-24 of the Localism Act 2011 are largely governance provisions and make amendments, both major and consequential, to the Local Government Act 2000. The essence of these provisions is that they endow local authorities with greater flexibility with respect to their governance and executive arrangements, including detailed provisions relating to, amongst other things, the ability to return to a committee structure, the sharing of services, the joint exercise of functions and the creation of oversight and scrutiny commissions.

Section 25

Section 25 is designed to address the difficulties encountered by local authority elected members, particularly following several legal decisions, such as Condron v National Assembly for Wales [2007] GR 87, which suggested that decisions of such members may be construed as predetermined when made with respect to constituency campaigns that they themselves had participated in. Section 25 states that a local authority member is not to be assumed to have a closed mind, or the appearance thereof, solely because said member had done something, directly or indirectly, in relation to subject-matter relevant to the decision required.

Section 38

Section 38 addresses concerns over levels of public sector pay by obliging local authorities to prepare a policy statement for each financial year, beginning with the year 2012/2013, in relation to senior pay packages. This statement must set out the policies of each authority with respect to the remuneration of chief officers, including factors such as performance-indexed bay and the use of bonus structures.