Devolution or revolution? – a brief guide to the changes proposed by the English Devolution and Community Empowerment Bill

The English Devolution and Community Empowerment Bill (“the Bill”) published in July, is a landmark legislative initiative which, if implemented, will radically reform the way in which local government is structured and how local services are delivered. The Bill is comprehensive, and while we cannot cover every detail in a single article, we’ve picked out some of the key changes to give you an overview of what may be introduced.

The Bill is structured around three main themes:

• Devolution to the regions – establishing new governance structures transferring central government powers to a local level (Strategic Authorities)
• Local Government – reforming governance models and accountability mechanisms
• Communities – enhances the provisions as to Assets of Community Value (ACV) and minor lease reforms

Devolution to the regions

The Bill formally establishes Strategic Authorities, and these include:

• Combined Authorities (e.g. Greater Manchester)
• Combined County Authorities (e.g. East Midlands)
• The Greater London Authority
• In some cases, single councils

Strategic Authorities are categorised into three levels, Foundation (non-mayoral), Mayoral and Established Mayoral, with the latter having access to the broadest range of devolved powers and functions.

Strategic Authorities will not replace local councils but will take responsibility for regional issues including transport, housing, and economic development – they will effectively fulfil a halfway-house between central and local government taking powers from each. Strategic Authorities are not new, but what is new is the comprehensive approach to their establishment. Rather than their creation being ad hoc (i.e. central government agrees to devolve central government powers to a local area), Strategic Authorities will be established across the country and in each Strategic Authority area will be responsible for:

• Transport: i.e. be the Local Transport Authority, manage networks, and set traffic reduction targets
• Skills and employment: administer the Adult Skills Fund for adult education
• Housing and planning: be given powers similar to the Mayor of London, including Mayoral Development Orders and Community Infrastructure Levy
• Economic growth: develop Local Growth Plans and collaborate with Local Government Pension Schemes
• Health and public Services: must consider health impacts in decision-making
• Public safety: Mayors may assume Police and Crime Commissioner and Fire Authority roles

Local Government

Local Government Reorganisation

As part of its broader devolution agenda, the UK Government is aiming to simplify local government structures across England by encouraging a shift toward unitary authorities, i.e. single-tier councils responsible for all local government functions. This would replace the current two-tier system in some areas, where responsibilities are split between county and district councils. To achieve this the Bill will give to the Secretary of State the following powers:

• Power to direct councils in two-tier areas to submit proposals for reorganisation into unitary authorities. While this power lapsed in 2008, its reintroduction is intended to support the Government’s goal of achieving more streamlined and efficient local governance
• Power to invite or direct existing unitary authorities to consider merging. This option is particularly relevant for councils that believe structural change could help them operate more effectively in the long term
• Power to abolish a Combined Authority in cases where Local Government Reorganisation affects the geography of a Combined Authority or Combined County Authority. For example, if a new unitary authority covers the entire area of a Combined Authority or Combined County Authority. This power is expected to be used sparingly and only where necessary, with careful consideration of the implications for devolution

Governance models

In a move to simplify governance arrangements, the Bill prevents the creation of any new local authority Mayors and abolishes the committee system. Instead, all councils (except those with existing elected mayors) will have a Leader and Cabinet model.

Audit Reform

A new Local Audit Office will be established to address systemic issues in local audit, including backlogs and oversight fragmentation. This sounds like a reinvention of the role of the Audit Commission and the National Audit Office as it originally applied to local government.

Communities

Community Right to Buy and Sporting Assets of Community Value 

The Bill updates the Asset of Community Value (ACV) regime through the introduction of the Community Right to Buy and Sporting Assets of Community Value.

The position of community groups in purchasing ACVs is significantly strengthened through the introduction of the Community Right to Buy. This new right gives community groups the first opportunity to purchase ACVs. Additionally, community groups will be given more time to raise funds to acquire the ACV as the Bill extends the moratorium period to 12 months (from 6 months).  

A new type of ACV will be established by the Bill, namely the Sporting Asset of Community Value (SACVs). All eligible sports grounds will be automatically designated as SACVs, with indefinite protection and first-refusal rights for communities exercising their Community Right to Buy. A high status is afforded to SACVs and, as such supporting facilities (e.g. car parks) which are essential to the ground’s effective operation may also qualify for SACV listing.

Neighbourhood governance

All local authorities will be required to establish neighbourhood governance structures to bring decision-making closer to residents. The details of the obligations on local authorities will be set out in regulations that will be made after the Bill is in force.

Commercial lease reform

The Bill bans upward only rent review clauses in new commercial leases, aiming to reduce rent inflation and support small businesses.

Conclusion

As ever, the devil is in the detail, but on the face of it the new Bill offers the prospect of a radical transfer of powers from Central Government to the regions, whilst at the same time radically overhauling local government. The changes, if fully implemented, represent as profound a change, and if not more so, as those in the Local Government Act 1972.