Localism Act 2011 (Consequential Amendments) Order 2012

Wednesday 21st March 2012 Grand Committee

Considered in Grand Committee

16:39

Moved by

[Baroness Hanham]

That the Grand Committee do report to the House that it has considered the Localism Act 2011 (Consequential Amendments) Order 2012.

Relevant document: 41st Report from the Joint Committee on Statutory Instruments

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

My Lords, the consequential provisions order makes amendments to existing legislation in relation to policies implemented through the Localism Act relating to the general power of competence, compulsory acquisition of land and neighbourhood planning.

The parish councils order, which I will also speak to, sets out the conditions that parish councils will need to fulfil in order to be eligible to use the general power of competence.

The Localism Act (Consequential Provisions) Order 2012, as implied by the title, will make consequential amendments to particular provisions in existing primary and secondary legislation following the enactment of the Localism Act 2011.

The order provides for amendments in three specific policy areas, each of which has its own schedule. These are: the general power of competence; compensation for compulsory acquisition of land; and neighbourhood planning. I will consider each of these schedules in turn. The amendments in Schedule 1, Article 2, deal with the insertion of text referring to the general power of competence into various pieces of legislation, such as the Industrial and Provident Societies Act 1965. References to the well-being power are, however, being retained in two particular circumstances. First, the well-being power is being retained in Wales because Welsh Ministers were offered the opportunity to have the general power of competence but they decided against it. Secondly, it is retained to deal with the historical exercise of the well-being power by English councils—for example, where bodies such as ALMOs were established using those powers.

Schedule 2, Article 3, covers the compensation arrangements for compulsory acquisitions of land. The amendments in Schedule 2 are necessary to fully implement changes brought about through Section 232 of the Localism Act. This section of the 2011 Act reformed the planning assumptions for compulsory purchase compensation and, in doing so, replaced Sections 14 to 16 of the Land Compensation Act 1961 with new Sections 14 and 15 only.

As a consequence, this means that references to Section 16 elsewhere in statute must be removed. This is achieved by paragraphs 1(2) and 3(2) of the schedule. The remainder of paragraphs 1 and 3 are transitional provisions to align with those in the commencement order and interpretation provisions. Section 232 also replaced Sections 17 and 18 of the 1961 Act with new Sections 17 and 18. These make provision for the issuing of certificates of appropriate alternative development.

Paragraph 2 of Schedule 2 amends paragraph 55 of Schedule 2 to the Local Government Act 1972 to reflect these changes. Paragraph 55 deals with any necessary consultation arrangements between county and district planning authorities. The amendments set out in Schedule 3, Article 4, of the order cover neighbourhood planning. Part 2 of Schedule 9 to the Localism Act amends the Planning and Compulsory Purchase Act 2004 to provide for a new category of development plan—a neighbourhood development plan. These plans will be made by local planning authorities on the initiative of parish councils or neighbourhood forums.

The amendments in paragraph 1 of Schedule 3 to the order amend Schedule 8 to the Planning and Compulsory Purchase Act 2004, which makes transitional provision in relation to old plans and policies. To ensure continuity of a plan-led system, the transitional provisions allow for the life of local plan policies to be extended and saved until replaced. Local planning authorities replace the saved polices with new policies in stages as new development plan documents are adopted.

Paragraph 5 of Schedule 8 to the Planning and Compulsory Purchase Act 2004 defines a new policy as one contained in certain planning documents. The amendments to Schedule 8 to the 2004 Act will both extend the types of planning documents that new policies are contained in to include a neighbourhood development plan, and also set out when a new neighbourhood planning policy is published for the purposes of transitional arrangements.

While the amendments contained in this order are in the main technical and, in some cases, quite hard to follow, they are vital to ensuring that the provisions contained in the Localism Act 2011 work as intended. I commend this order to the Committee.

16:45

I turn to the second order under consideration, the Parish Councils (General Power of Competence) (Prescribed Conditions) Order 2012. The new general power of competence provided for local authorities in the Localism Act 2011 is an important part of the Government’s decentralisation agenda. It is intended to provide English councils, including certain parish councils, with confidence in their legal capacity to act for their communities and in their own financial interests to innovate and generate efficiencies. As discussed earlier, it replaces the well-being power in the Local Government Act 2000.

It was the Government’s view that, while the well-being power was intended to be a broad power of first resort, it fell short of a truly general power; for instance, it did not allow local authorities to participate in mutual insurance arrangements or to act solely in their own financial interests.

The general power of competence provides local authorities with the same power to act as an individual. It has been designed to give councils more freedom to work in new ways with others to drive down costs and to give them increased confidence to do creative things. It was brought into effect for all principal authorities in England on 18 February in response to the High Court judgment against Bideford Town Council.

The order will enable parish councils that meet the conditions set out in the schedule to resolve to use the general power of competence. This power will equip them to take on the expanded role that we envisage them playing in our decentralisation agenda and let them to do things that they have been unable to do previously. We have been clear that extension of this power to parish councils is conditional. Parish councils vary greatly in their ability and capacity to take on the enhanced role and responsibility of an authority with a general power of competence.

A draft of the order before your Lordships today was placed in the House Library before debate began in Committee on the then Localism Bill. While this order is not identical to the draft placed in the House Library, the differences are drafting amendments to aid clarity.

The order under consideration requires parish councils to resolve at a full meeting of the council that they meet two key conditions to access the general power of competence. These are that at least two-thirds of the councillors must hold office as a result of standing for election, rather than being co-opted, and that the clerk to the council must have obtained relevant training.

Once the order is in force, the general power of competence provisions in the 2011 Act will be in place for the full range of local authorities intended. At present, the Parish Councils (Power to Promote Well-being) (Prescribed Conditions) Order 2008 requires parish councils to fulfil four conditions to be able to use the well-being power. We are no longer asking that at least 80 per cent of councillors be trained in use of the power, nor are we asking parish councils to produce a statement of community intent as to community engagement. The reduction in the number of conditions that a parish council must meet to be able to use the power, together with the new ability to resolve to use the power for the first time following a by-election rather than having to wait until the next ordinary election, provides the right balance between democratic accountability and understanding to enable parish councils to make best use of the power.

Once a resolution to use the power has been passed, a parish council remains eligible until the next annual meeting in a year of ordinary elections—up to four years—whether or not the conditions relating to electoral mandate and qualified clerk continue to be met. While we are keen for parish councils to strive to continue to meet these reasonable conditions of use, there will be circumstances where, through the loss of a clerk or elected councillor, the conditions are no longer met. It would clearly be impractical for eligibility to be assessed on a day-to-day basis. The order also provides for circumstances where a parish council cannot pass a further resolution at its next relevant annual meeting or decides that it does not wish to continue to use the power for whatever reason. Article 3 of the order will enable activity using the power that has been started but not completed to be continued.

It is important that parish councillors are provided with appropriate advice in taking on the enhanced role that the general power of competence will enable. We are therefore keen to make sure that the parish clerk has the right knowledge, skills and competencies. The qualifications that a clerk must hold for the purposes of this order are based on the approved training for parish council clerks set out in the quality parish council scheme run by the National Association of Local Councils. The order also makes provision in case the qualifications themselves are changed or updated.

The clerk must have completed the relevant training in the use of the power. As agreed with my department and the National Association of Local Councils, the Society of Local Council Clerks is currently updating the training material so that, once the order is in place, parish clerks will be able to undertake the appropriate training or update their existing qualifications in line with the requirements of the order.

The order will complete the Government’s coalition promise to provide a general power of competence for English local authorities. It will allow parish councils to meet two conditions to use the new power and it is an important step along the way towards the devolution of power from the centre to the most local tier of local government closest to their communities. I commend the order to the Committee.

[Lord Shipley]

My Lords, I thank my noble friend the Minister for the explanation of these two orders. I will speak to them both because, substantially, I have only one point to make.

I am particularly happy with the general power of competence applying to parish councils. It is absolutely right that clerks should be qualified and that there is a clear democratic mandate for the parish to undertake the general power of competence. But I have one question that relates to the duty to co-operate. I seek confirmation that there will be an application of the duty to co-operate.

One of the issues that arose when we discussed the Localism Bill was that neighbourhood planning had been addressed from a rural rather than an urban perspective. Of course it applies in both. Albeit that 1973 is a long time ago, the consequences of the policy in those days are broadly with us today. In rural areas, some parish councils were created to lie within what are now urban areas. My concern relates to a failure of a duty to co-operate between parish councils and the areas around them.

There could, for example, be a situation in which parishes have a neighbourhood plan but the adjacent non-parish area does not have a neighbourhood forum, or where a parish does not have a plan and the adjacent neighbourhood forum has been created and it does. Or there could be a situation where both the parish council and the adjacent neighbourhood forum could be contiguous and the plan of one would impact on the other. It is very important that where they both want to have a plan there is clear co-operation between the two.

There is a whole set of issues around whether urban neighbourhood councils or parish councils should be extended. That is for others to decide. But it is important, particularly in the context of the community infrastructure levy potentially applying, that a clear duty to co-operate should be imposed on parish councils and on other councils in exactly the same way that there is a duty to co-operate between neighbouring district councils.

In short, with a general power of competence, it is important that there is a general duty to co-operate as well. I simply seek the Minister's assurance that that is what is planned.

[Lord Beecham]

My Lords, I am pleased to join two fellow north-easterners in the Minister and the noble Lord, Lord Shipley, in reviewing these revisions. I certainly endorse their commending the extension of the general power of competence to parish councils.

I do, however, have questions about the detail of the proposals. I confine myself to the second instrument that the Minister proposes. My first question relates to the provision about the resolution, which will allow a council to proceed with the exercise of the general power. The council, having passed such a resolution, is able to continue to exercise that power until the next relevant annual meeting—even if, for example, it loses its clerk at some point during that period. I hesitate to say so, but parish councils do not have the highest reputation for stability in relationships between their own members or between members and clerks. They have been the source of vast numbers of complaints to the now abolished standards board. It is conceivable that a clerk, perhaps because of a disagreement or perhaps simply because he or she moves, leaves a parish council for the greater part of a four-year period. Yet the council could continue to exercise its general powers without the benefit of the kind of advice which, very sensibly, as the Minister outlined, can be secured through qualifications and training. Is it wise to allow for such a potentially long period?

There is also a transitional provision safeguarding those who have to deal with the parish council in those circumstances. I understand this. The Explanatory Memorandum states that the provision would ensure that councils,

“do not lose the incentive to continue to meet the conditions once they have initially become eligible. It also provides certainty for third parties in their dealings with parish councils as to the extent of a particular council’s powers”.

That is the point. It would seem to apply to not just existing projects but new projects to which a parish council, in between the appointment of clerks or resolutions, might embark upon. Is it all that sensible to make that provision? On similar lines, the Explanatory Memorandum points out that if a council does not pass at the “next relevant annual meeting”, for whatever reason, a resolution, either because it does not qualify through having a qualified clerk or because it changes its mind, an,

“activity that has been begun but not completed may be continued”.

I can see the logic of that, but I wonder about the word “completed”. Let us suppose, for example, that a parish council decides to undertake the maintenance of playing fields or provide a facility—it could be anything from a public convenience to meeting rooms or something of that kind. In that example, what does completing that project actually mean? If it is a contract, I can understand it; if it is not, I do not quite understand how it could be judged to be completed. Therefore, it would potentially seem that something could just continue indefinitely, even though the council has either become ineligible or does not pass a further resolution. There is a possibility for difficulties there.

The Explanatory Memorandum says:

“The Government’s expectation is that eligible parish councils will strive to fulfil the conditions at all times”.

That is in the motherhood-and-apple-pie part of the Explanatory Memorandum. If anything, what do the Government have in mind, preferably in conjunction with the National Association of Local Councils, to see that that expectation is fulfilled? I would hope that the national association would be helpful in supporting the Government’s expectation. Of course, not all councils are members of the national association; some have deliberately absented themselves from it, including some of the larger ones—unless they have rejoined since my time, when I was engaged with them on behalf of the LGA. So there is potentially an issue there as well.

There are two other points on which I seek clarification of the present position, or on whether the Government might be interested in pursuing them. The first, in a sense following the point made by the noble Lord, Lord Shipley, is whether the general power extends to councils combining for particular purposes. Would the power extend to allowing two neighbouring parish councils to set up something jointly in the way that councils in, for example, Greater Manchester have come together to do things together across the piece, serving a wider area than the individual parish? I assume that it is intended, but it would be as well perhaps to have that on the record.

17:00

The final question is whether the Government, through the good offices of the national association, would encourage peer review of parish councils. It does not have to be an elaborate process, but I think that it would be helpful. We have certainly found it very helpful in local government generally, as the noble Lord will confirm. Indeed, as we speak, our own authority is undergoing a process of peer review—that does not mean by Members of your Lordships’ House; it means, of course, by other comparable authorities. If that could be encouraged, I think that it would be helpful to parish councils, their members and their clerks. Again, without seeking to impose any duty in that respect, it would be helpful if the Government could indicate that they thought it desirable and might enter into some discussions with the national association.

There is one other matter that I need to raise. In the impact assessment for general powers of competence published with the Localism Bill—now, of course, the Localism Act—is the following passage:

“However, local authorities would continue to be obliged to follow the law of the land”.

That is a perfectly straightforward statement. The impact assessment continues:

“As an example; our proposals will not enable local councillors to wage thermonuclear war due to existing preventative legislation including: the Nuclear Materials (Offences) Act 1983, the Nuclear Safeguards Act 2000 and the Environmental Permitting (England and Wales) Regulations 2010”.

I seek an assurance from the Minister that those restrictions will also apply to parish councils, without which I really fear for the safety of the world.

[Baroness Hanham]

My Lords, I thank both noble Lords for their comments and their questions. With regard to the last point raised by the noble Lord, Lord Beecham, it would probably be proper that parish councils should be associated with those regulations as well. It conjures up all sorts of possible things that might happen, but it would be appropriate that they were covered.

First, on the point raised by the noble Lord, Lord Shipley, regarding parish councils and their neighbouring area, the power would work only provided that they both had powers to do so. So in perhaps part of a parish, if the neighbourhood did not have that power because it either was not a parish council or it was not a neighbourhood forum, that would not work; but as long as it does have that power, they are able to and, indeed, ought to co-operate, because it seems very clear to me that that should be what is required. I thank the noble Lord, Lord Shipley, for his support on that point.

With regard to what happens when the department of a clerk or one of the councillors gives up, it is correct that they would be eligible and able to carry on using their power until the next election. That was the case also with the well-being power; there was always an assumption that they could continue. However, they will have to continue doing it under their own mandate to ensure that they do not breach any of the other laws. The order recognises that, if there are longer-term projects in train, they can carry on. The noble Lord asked, “How long is a piece of string?”, and I take his point, but the string is as long as making sure that the project comes to a conclusion. It might be a contract; it might be that a council is deciding whether to make a playground or to ask for the listing of a piece of land; but they can properly do that and cannot be challenged for it. A council is eligible to complete a project for up to four years if that is the time between elections.

I was asked about peer review. Peer review at the moment is voluntary, being carried out by the Local Government Association. With parish councils, I suspect that it would have to be with the co-operation of the National Association of Local Councils—I cannot see anything to stop that happening. As with other local authorities, peer review is often helpful and often produces some very useful results. However, there is no legislation to say that it should happen. If a council wishes to do it, and someone in the local associations feels that it is appropriate, it can happen.

[Lord Beecham]

Would the Minister feel able, in the language that government use these days, perhaps to nudge the association into suggesting such an idea to its members?

[Baroness Hanham]

The most that I can do is to record the fact that we see the value of it at the moment and it would seem appropriate, therefore, for people to consider doing it subsequently. I think that I have covered most of the points raised.

[Lord Beecham]

Could you comment on the scope for authorities to act jointly?

[Baroness Hanham]

Under the general well-being power, they would be able to act together, but, as I said to the noble Lord, Lord Shipley, that would be as long as they both had the power to co-operate.

I hope that I have covered the points made. That concludes our work on the order.

Motion agreed.