Localism Bill

Baroness Thornton Excerpts

Thursday 7th July 2011 Lords Chamber

Moved by

[Baroness Thornton]

136A: Clause 76, page 62, line 38, at end insert—
“( ) by a community organisation operating in the local authority area,”

[Baroness Thornton]

My Lords, given the comprehensive debate we had before the break, I intend to speak for about 30 seconds. This group of amendments is all about who should be represented on the lists to inform either consent or denial. My amendment addresses itself to the fact that it should be community organisations operating in the local authority area; other amendments have different versions of that. In a way, we just need to listen to what noble Lords have to say and then the Minister can respond. I beg to move.

[Earl Cathcart]

My Lords, I shall speak to Amendment 136B. There has been much concern that individuals will be allowed to make nominations. The argument is that if an asset is of community value, the nominations should be made by that community group, which has local connections, and not by an individual. This amendment would provide a safeguard against vexatious individuals making nominations, or individuals listing everything they can think of just to be on the safe side. This approach would complement the earlier proposal in Amendment 136ZD, tabled by my noble friend Lord Gardiner, regarding the definition, which would require local authorities to take evidence of community support for a nomination into account. It might be worth defining “voluntary and community bodies” so that it has to be more than 21 people. This is the definition being used for a neighbourhood forum and the principle is the same.

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[Baroness Hanham]

My Lords, we are not trying to make this overcomplicated. I am trying to simplify the local authority’s role in identifying a community body. One is trying to rule out a very large body which does not have any particular community interest but would like the asset, coming in through the back door and the local authority being unable to stop it. That is how the Bill stands. I hear what the noble Lord says.

[Baroness Thornton]

My Lords, I am grateful to the Minister for her response. I think she has won over the Bradfordian party in the House. We look forward to the next stage. I beg leave to withdraw the amendment.

Amendment 136A withdrawn.

--- Later in debate ---

Moved by

[Baroness Thornton]

143A: Clause 82, page 66, line 20, at end insert—
“( ) where the owner is a public body, any community interest group or groups which meet the requirements of subsection (3)(a) have been provided with the option of first refusal to purchase the asset, with regulations for this purpose specified by the appropriate authority, or”

[Baroness Thornton]

My Lords, I shall speak also to Amendment 147A. I realise that we are moving to a sensitive part of the Bill about which noble Lords have already expressed various anxieties.

There are two things that I should like to raise at this time. I understand that the Government propose that a community group should have the first right of refusal not within the moratorium period but, rather, at the end of it when the community group would compete against others on the open market. That presents a real difficulty. We all want to avoid the bureaucracy that has been a big problem in Scotland. On the other hand, we do not want to find ourselves in a position where the new community right leads to a widespread loss of assets of community value. It is a question of balance that we need to explore.

For the assets of community value in public hands, I suggest that there should be a first right of refusal for community groups. I think we all believe that it is a reasonable presumption that, where assets of community value are already being applied for public benefit, the default position should be to retain that public benefit. Only if there is no community purchaser should the asset then go on the open market. Therefore, the first right of refusal in such a case would require the introduction of mechanisms. Based on experience to date, it is possible for local authorities, with support from the Asset Transfer Unit, to devise a sensible low-cost system to agree a sale price, decide between competing community bids if applicable and establish fair arbitration mechanisms.

For assets of community value in private hands, I think everybody accepts that the right of first refusal might not be the best way forward. Again, we do not want to go down the road that has been followed in Scotland. The desire to safeguard private interests, which we have already discussed, is already resulting in a level of procedure and regulation that could stifle community efforts in some cases. That is what leads us to the idea of a simple system in which a moratorium at least provides a window for any community group to prepare a bid, rather than any complex process that will tie the community up in red tape.

That brings me to the second amendment in this group, which deals with the moratorium period. I am not alone in suggesting that the period should be a minimum of six months, which could be extended if necessary. Our experience and that of community groups across the country is that even the most capable and well established community organisations certainly need more than three months to get themselves up to speed. It often takes from six months to a year to progress to the point of purchase. Therefore, we need to find a mechanism that means, when there is willingness on all sides, the process will not be stymied by a moratorium period that has a cut-off point. Instead, if there is agreement to proceed, the moratorium period should be flexible enough to allow that to happen. I beg to move.

[Lord Mawson]

I shall speak specifically to Amendment 147A. I notice that the noble Baroness, Lady Eaton, has now joined us in the Chamber. I assure noble Lords that the Bradfordians are not pulling the wagons around in this debate.

Six months seems to be a reasonable period. We live in a very bureaucratic world. If you are a small charity or a social enterprise, without all the back-up of a local authority to get your ducks in a row and achieve the necessary permission, it can take at least six months to move forward with land or buildings. One property that my colleagues and I have been working on with a very competent group of people has taken at least two years to get through planning and to reach a point where we can do the development. That is with even the support of local neighbours and a lot of people behind us. Six months is a reasonable period; all my experience tells me that it is about right.

The noble Lord, Lord Rogers of Riverside, who has great experience in this field, is no longer here but I know he would tell us that nowadays it takes a mini-miracle to build a building or get a development going. It is very difficult to get projects off the ground. We wonder sometimes why we are not hitting the housing targets. It is because, as the noble Lord, Lord Hodgson, reminds us, there is so much red tape and treacle that you have to swim through to make any of this work.

The real test for the Bill will be whether it will be easier for those of us who develop land and buildings, whether we are business or social entrepreneurs, to do so. Will this legislation make it easier for us to do this work, or harder? This is the real practical challenge for this piece of legislation.

[Lord Howard of Rising]

My Lords, Amendment 145 seeks to place a time limit on how long a community interest group is given to purchase a community asset. Again, this amendment was tabled before the Minister deposited her paper in the Library. Having read her paper and seen that she is minded to have a window of six months, I imagine she will be falling over herself to accept this amendment.

I spoke earlier about the importance of excluding measures from the Bill that might affect the value of property. As I mentioned then, the erosion of property value is far more important to the less well-off, for whom such an asset might be all they have in the world. Uncertainty over the length of time an asset must be held while local interest groups find the necessary cash to make the purchase would very seriously damage the value of any asset. Banks and financial institutions will not lend if the sale of the asset concerned could be delayed for an unknown period. Having a fixed term in the Bill would give the measure of certainty that is needed to enable banks, mortgage companies and other financial institutions to provide the funding for the sale and purchase of the sort of asset that the Bill is aimed at.

It is no help that the time available can be altered by regulation by the Secretary of State. The Minister, when responding to my Amendment 134 earlier, commented that regulation would come before Parliament, but in practical terms this is a formality. In no way does it have the strength of having to introduce primary legislation. Who knows what some future Secretary of State might decide is an appropriate length of time? I have the utmost confidence in my right honourable friend the present Secretary of State not to do something unreasonable, but he will not be in that position for ever and it is important that the Bill does all it can to avoid creating doubts over the value of assets included in the register.

Mortgages and other forms of long-term finance usually extend over the life of more than one Government. The protection given by having a maximum period of six months for a community interest group to raise finance is essential if property values are not to be badly damaged by unreasonably hampering the ability of owners to sell their possessions. There is an argument that the Human Rights Act would prevent a community interest group having an unreasonable length of time to find funding, but this would in no way be an adequate substitute for including a time limit in the Bill. I recall that it has been Conservative Party policy to abolish the Human Rights Act.

[Baroness Thornton]

How would the noble Lord feel if a vicar leading a group to turn the local shop into a community shop run as a co-operative missed the deadline by two weeks? Is he suggesting that you have a six-month cut-off point and that is it?

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[Baroness Hanham]

My Lords, the noble Lord, Lord Greaves, is correct. The moratorium does not prevent property being put up for sale or marketed. All it does is to prevent the sale taking place before the community group has had an opportunity to consider whether it can match or beat what has been brought forward.

[Baroness Thornton]

I thank the Minister again for repeating what she has now said three times. Indeed, I believe she gave the answer to the question of the noble Lord, Lord Greaves, late on Tuesday evening.

I am quite pleased. I think we have made some progress and I beg leave to withdraw the amendment.

Amendment 143A withdrawn.