Communities and Local Government Secretary, Eric Pickles, has unveiled a draft plan which aims to create a shift in power to councils and communities and overturn decades of central government control.
The government said the Localism Bill, presented in Parliament on Monday, contains a package of reforms that will "establish powerful new rights for communities, revolutionise the planning system, and give communities control over housing decisions".
The new legislation is also being introduced to help build the Big Society agenda, which is being articulated by Prime Minister David Cameron and aims at creating better neighbourhoods across the UK.
Pickles said: "It is the centrepiece of what this Government is trying to do to fundamentally shake up the balance of power in this country. For too long, everything has been controlled from the centre – and look where it's got us. Central government has kept local government on a tight leash, strangling the life out of councils in the belief that bureaucrats know best.
"By getting out of the way and letting councils and communities run their own affairs we can restore civic pride, democratic accountability and economic growth – and build a stronger, fairer Britain. It's the end of the era of big government: laying the foundations for the Big Society."
The Government said part of the Localism Bill will involve:
- Delegating significant new powers to councils – Councillors will no longer be prevented from voting on campaign issues; and there will be a new power to create directly elected mayors in 12 cities giving residents a say in a strong democratically elected leader
- Establishing powerful new rights for local people and communities – Local people and communities' will have a bigger say over their area through a new right to challenge to take over services; a new right to bid to buy local assets such as libraries, pubs and shops; a new right to veto excessive council tax rises through a referendum. Bin tax laws repealed
- Radically reforming planning – The Bill aims to restore democratic and local control over planning by replacing the Infrastructure Planning Commission with an efficient and democratically accountable system for major infrastructure. The Bill will enable regional planning to be swept away and in its place neighbourhood plans will become the new building blocks of the planning system where communities have the power to grant planning permission if a local majority are in favour
- Making housing fairer and more democratic – The Bill aims to return decision-making powers on housing to local councils and communities by giving freedom communities need in order to come together to build new homes and amenities in their towns and villages. Home Information Packs will be formally scrapped. The Bill will put councils in charge of allocation and tenure of social housing, giving councils the flexibility to use their social housing stock to the maximum effect and reduce waiting lists. The Government said it will be easier for social tenants to relocate through a new National Homeswap scheme, and councils will be able to offer flexible solutions to people at risk of homelessness
- Creating powerful incentives for economic growth – The Bill will allow local authorities to grant discretionary business rate discounts; make small business tax breaks easier to take advantage of; give affected businesses a greater say in rate supplements and cancelling certain backdated business rates including port taxes
In the wake of the publication of the Localism Bill, the British Property Federation has welcomed greater community involvement in planning, but warned it must be introduced carefully so as not to put a leash on economic growth.
Liz Peace, chief executive of the BPF, said: "We support the broad objectives of the Localism Bill. As one of the most centralised countries in Europe a good dose of localism is needed to redress the balance.
"But the government has to perform a delicate balancing act between promoting greater community engagement and unleashing nimbyist tendencies that could hold back economic growth.
"One of the keys to getting the balance right will depend on whether the government can successfully complement the new emphasis on neighbourhoods with greater incentives to local authorities to back development. The introduction of a presumption in favour of sustainable development should be helpful as long as it is not so hedged around with caveats and exemptions as to be totally meaningless.
"It is also crucial that the government presses ahead with plans to allow local authorities to retain business rates generated in their areas so that they are directly rewarded for backing new commercial development. The New Homes Bonus that will reward authorities for providing new housing can help, too, but this has to be backed up with a clear obligation on local authorities to define and meet the housing needs of their communities.
"Getting the level of neighbourhood involvement envisaged in the Bill will be very difficult. Questions remain about, who will contribute to and work up the proposed neighbourhood plans, what status they will have, how such plans will relate to wider local authority plans and how neighbourhoods will be defined. For example, will businesses also have their voice heard?
"It is essential that neighbourhood plans do not simply add another level of bureaucracy. The neighbourhood plan pilot schemes planned by Government whilst the Bill is going through will be crucial in finding solutions to these issues."
Shelagh McNerney, managing director of DPP Shape, adds: "The Big Society and localism bring opportunities to re-define the relationship between local/national government and local communities and has democracy at its heart.
"My time working to deliver regeneration over the last 25 years means I have seen some of the very worst and very best practice including when markets were buoyant and the public funding was readily available.
"The house building, construction and investment market will recover, of course, but for me it's a matter of when. The issue we face is the potential damage in the meantime to our confidence and partnerships and the rate at which we're able to physically bring projects to fruition with adequate quality design.
"The machinery of the planning system is in need of an overhaul however that should not be seen as excusing inertia over recent years. Neighbourhood approaches to planning decisions have long been rehearsed in our best regeneration initiatives and it is the right way to go. That said I do not believe it's that easy. The new neighbourhood development orders suggest that neighbourhood boundaries and definitions are decided by residents, that by simple majority voting they will lead to decisions about planning consents and that new neighbourhood plans will comply with national and local policies. In this scenario – my inner "planner" wants to know: who grants the planning consent? What happens if local neighbourhood plans come up with non compliant proposals? How do disputes get resolved?
"A big part of the changes is the question of how difficult it will be for developers to get planning consent. Of course, this is very much dependent on where a project is and what is being proposed. Certainly in relation to partnerships with the local authority, local people will be a vital component but they always have been. The problem is that in some deprived towns and cities which have been hit economically on a number of fronts, any sort of investment is welcomed and local opposition will need the knowledge and systems to resolve disputes, possibly in new ways to speed up receipt of a final decision. This is obviously very different in an affluent town or village which is more mobilised as to what it wants to see built although housing minister, Grant Shapps, says that he is going to reward places that go for growth.
"If the private sector needs confidence to invest again in building urban communities and democracy is the driver for the overall policy then we do need to re-invent our planning system but please can we do quickly."
Ed Cox, director of IPPR North, said: "Real localism will only be achieved by reforming local taxation so that Council Tax is replaced by a fairer mix of income and properties taxes.
"Currently, local councils get 80% of their funds in the forms of grants, making them over-dependent on central government. In other countries, the percentage of funds raised locally is 50% or higher – that is where we should be moving to if we really want local devolution in this country, not lipstick localism.
"While the idea of 'people power' is appealing, and neighbourhood powers – especially planning – are a positive step, the unfortunate reality of this Bill is that many local councils may end up being only too happy to offer voters the chance to fund and run services that they can no longer afford to support.
"The real risk is that already deprived areas will slip further behind as people with limited resources struggle to meet the complex needs of their neighbourhoods. We have argued that social justice must sit at the heart of the drive for localism. To achieve this, central government should set a broad framework of national entitlements and then allow local decision-makers to design and deliver services which are more tailored to their own local needs."
Stephen Bell, director of planning, development and regeneration at GVA Grimley's Manchester office, said: "The Localism Bill calls for new Neighbourhood Plans to be established in each locality, which reflect local views and are approved by the community. But unless communities take a wider view and are sensible and realistic about accommodating new development and change to their area, Neighbourhood Plans could be difficult to get approved or worse still place blanket restrictions on development and cause conflict across communities. In the meantime, the lack of a Plan could create delays to the planning system. What will be crucial will be the relationship between such Plans and policy provided at higher levels through Local Development Plans and the National Planning Framework.
"While "Big Society" rhetoric has wide approval, in practice it will require local people, so village, town and parish councils across the region, to have understanding of complex technical planning issues. Local authorities will need increased, specialist resources. Developers will also need to commit even more resources to the planning process to demonstrate community support – not just consultation – prior to a planning application being lodged.
"While the Localism Bill refers to new local incentives, such as the New Homes Bonus, given the scale of cut-backs following the comprehensive spending review and draw back of regeneration initiatives in many areas within the North West, such a 'bonus' may only replace funds being lost. A valid question is to what degree the New Homes Bonus, and indeed the Community Infrastructure Levy, will encourage local authorities and their communities to accept growth and new development. Will the residents of our towns and villages, and their elected representatives, really see the bigger picture and take a pragmatic and pro-active stance to development?
"There is now an increasing appetite amongst developers to deliver, but faced with ongoing financial challenges, every decision to invest is a difficult one. Most of all, developers need transparency and certainty from the planning system. While the outlined reforms are put into practice, it is vital that the coalition Government does everything it can to put effective arrangements in place to address the current policy vacuum; the present uncertainty is already delaying schemes."
Steve Edgeller, director of planning at GL Hearn, said: "On the abolition of regional strategies, this has been heavily trailed and is one of the cornerstones of the Bill, despite the recent High Court challenges by Cala Homes. Inevitably, however, housing figures will be given back to local authorities, and those who desire development and regeneration will be in a position to deliver, whilst those who wish to restrict greenfield growth, such as the rural authorities in the north and south of the Region will have the means available to do so.
"The Government wishes to create directly elected mayors in 12 English cities following Royal Assent, including in Manchester, where there has been a long period of political stability and so a prospect of strong and consistent leadership. In Liverpool, however, where leadership of the Council has changed frequently with long periods of no overall control, the prospect of continuity of control is less certain."