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BRIEFING PAPER

Number 04724, 1 February 2016

The Sustainable Communities Act

By Mark Sandford

Inside: 1. Background 2. How the Sustainable

Communities Act works 3. Current proposals 4. The first round of proposals

Number 04724, 1 February 2016 2

Contents Summary 3

1. Background 4

2. How the Sustainable Communities Act works 5 2.1 Procedures under the 2010 Act 5 2.2 Local spending reports 6

3. Current proposals 7 3.1 Proposals since July 2013 7 3.2 The Sustainable Communities Regulations 2012 9 3.3 Parish and town councils 10

4. The first round of proposals 11 4.1 Procedures under the Act 11 4.2 Shortlisting and discussions 11

Contributing Authors: Mark Sandford

Cover page image copyright: BedZED by Tom Chance. Licensed under CC BY 2.0 / image cropped.

3 The Sustainable Communities Act

Summary The Sustainable Communities Act 2007 was introduced as a Private Member’s bill following a lengthy campaign by Local Works, a pressure group representing a range of organisations. The Act provides a channel whereby local people can ask central government, via their local authority, to take action which they consider will help improve the economic, social or environmental well-being of their area.

The first invitation to submit proposals took place in 2008. This resulted in a shortlist of 199 proposals. In 2010, the Government stated that they planned to implement or part-implement 37% of the proposals made.

The Sustainable Communities 2007 Act (Amendment) Act 2010 was passed shortly before the 2010 General Election, as no provision for a second round of proposals existed in the original legislation. A further invitation for proposals, with no deadline, was issued in December 2010. New regulations provided that proposals could be made direct to government, instead of having to go through a ‘selector’ (the LGA or NALC), as was the case under the original Act.

The power to submit proposals was extended to parish and town councils as of 14 October 2013.

A website, http://www.barrierbusting.communities.gov.uk, has also been set up to allow anyone, not just local authorities, to submit proposals. However, proposals from members of the public will have no formal status, nor will they have the right available to the ‘selector’ to ask Government to reconsider any proposals that it has rejected.

The Act extends to England and Wales only.

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1. Background The Sustainable Communities Bill was introduced into the House of Commons on 13 December 2006 as a Private Member’s Bill. The sponsoring MP was Nick Hurd, Conservative MP for Ruislip Northwood, who had come top in the ballot. Various versions of a Sustainable Communities Bill had been introduced in earlier sessions by other MPs but had made no further legislative progress. However, successive Early Day Motions expressing support for such legislation had been signed by an increasing number of Members from all parties.

The driving force behind the Bill was Local Works, a pressure group representing a sizeable coalition of organisations. The campaign began following the publication of studies by the New Economics Foundation entitled Ghost Town Britain. These highlighted, in particular, the decline in numbers of corner shops, grocers, banks, post offices and pubs which meant that communities and neighbourhoods no longer had easy access to “such essential elements of both the economy and the social fabric of the country.” Further background information is provided by the Library research paper on the Bill.1

Phil Woolas, then Local Government Minister, expressed serious reservations at Second Reading and in committee about the drafting of some parts of the Bill. However, he undertook to engage constructively in debate on it.2 The Bill attracted cross-party support and received Royal Assent on 23 October 2007.

1 The Sustainable Communities Bill, Research Paper 07/06, 15 January 2007 2 See also The Sustainable Communities Bill Committee Stage Report, Research Paper

07/54, 12 June 2007

5 The Sustainable Communities Act

2. How the Sustainable Communities Act works

The Act provides for the Secretary of State to invite local authorities to consult locally and to make proposals for enhancing economic, social or environmental well-being (including civic participation) at a local level. Proposals may cover anything from policy changes to legislative barriers. Proposals would be collected by a ‘selector’ organisation, which would decide which ones to submit to Government. The Government must then respond to the proposals, explaining which ones it will implement and which it will not, giving reasons. It must also produce an update on progress. The Act extends to England and Wales.

A post-legislative scrutiny memorandum was published in late 2012.3 The Act was debated in Westminster Hall on 6 March 2012 and 13 June 2012.

2.1 Procedures under the 2010 Act The current procedures and powers are substantially determined by the Sustainable Communities Act 2007 (Amendment) Act 2010,4 rather than the 2007 Act. The amending Act was introduced because the 2007 Act did not provide for further rounds of proposals after the first one, which concluded in 2010. New sections 5A to 5D set out a new framework, as follows:

• The Secretary of State must specify a date on which the next invitation to local authorities to submit proposals is to be made. Notice of the date must be given before 1 January 2011. An invitation was issued on 15 December 2010, with no fixed closing date;

• An authority must have regard to the matters listed in the Schedule to the 2007 Act before making a proposal. Such matters include provision of local services (banks, hospitals, post offices, schools etc), availability of local goods and services, numbers of local jobs, measures to conserve energy and reduce road traffic, the degree of social inclusion;

• Regulations may be made setting out the rules for the ongoing process. These must require the Secretary of State to consider each proposal and decide whether or not to implement it (in whole or in part). In each case, s/he must publish his decisions and give reasons. Regulations may cover such matters as local consultation by councils, petitioning arrangements, government guidance, and consultation by the Secretary of State;

• The Secretary of State may by order specify persons or classes of persons, in addition to local authorities, who may make proposals under the Act;

• In the original legislation, proposals were submitted to an appointed ‘selector’ before being passed on to the Government.

3 DCLG, Sustainable Communities Act : Post-legislative scrutiny, Cm 8470, October

2012 4 For further information see the Library research paper Sustainable Communities Act

2007 (Amendment) Bill, RP 10/16, 24 February 2010.

Number 04724, 1 February 2016 6

The Local Government Association (LGA) took on this role. In the current round of proposals, the Government is accepting proposals direct from local authorities, without using a ‘selector’. However, under the 2010 Act, the selector takes on the additional role of challenging the Government on rejected proposals, and requiring the Government to reconsider specific proposals. Both the LGA and NALC (National Association of Local Councils) are selectors for this purpose.5

2.2 Local spending reports Section 6 of the 2007 Act requires the production of local spending reports (LSRs). The Secretary of State is given a good deal of discretion on the shape of these – what types of expenditure to include, the geographical areas covered and periods the covered – although s/he is required to consult.

One round of reports has been published by the Government in 2009.6 The reports bring together Government spending levels by local authority covering a wide range of public services. Since then, publication of this kind of data has fallen to local authorities under the Government’s transparency agenda.7

5 A description of NALC’s role is available on their website. 6 These can now be viewed on the National Archives website. 7 See the Local Government Group’s Local transparency: a practitioner’s guide to

publishing local spending data, 2011

7 The Sustainable Communities Act

3. Current proposals The Secretary of State issued a second invitation under the 2010 Act, via a letter on 15 December 2010. Councils were invited to refer to matters specified in the schedule to the 2007 Act, and also to:

a. Consult your communities from time to time and ask for their ideas about how their local area can be improved, or how they can become involved in Big Society projects;

b. Try to reach agreement with them about what can be done to make their ideas work – and take whatever action you see fit as a result;

c. Ask us to remove a barrier stopping you from taking that action by submitting a proposal through our new online portal at http://barrierbusting.communities.gov.uk.8

The establishment of the online portal was announced in a written ministerial statement on 15 December 2010.9 Anyone – a council or an individual – can submit a proposal via the Barrier Busting website. However, only local authorities (including parish and town councils from 14 October 2013) have the right to take a rejected proposal to the selector.

3.1 Proposals since July 2013 The rate of proposals received by the Government, as recorded on the Barrier Busting website, has slowed in recent years. The website records 21 proposals in 2014 and 13 in 2015, compared with a shortlisted total of 199 between the procedure’s inception and September 2009.10 The Government has abandoned formal ‘rounds’ of proposals in favour of responding to proposals on an ongoing basis (see section 3.2 below).

Proposals in 2014 and 2015 that have been accepted, or that will be subject to further consideration, include:

A proposal to create a separate use class in the planning system for betting shops. This would mean that, where a betting shop opened, planning permission would have to be sought for change of use. This was submitted on 26 February 2014 and supported by 68 local authorities (including all London boroughs) and the Mayor of London. The Government made this change as of 1 April 2015: planning permission is now required to change a shop’s use to a betting shop or a payday loan shop. Further details are available in the Library briefing paper Planning: change of use.11

• A proposal to exempt public toilets from business rates, from Cranleigh Parish Council on 5 January 2015. The Government’s response indicated that this will be considered as part of the

8 DCLG, Sustainable Communities Act – an invitation to inspire the Big Society, 15

December 2010 9 HCDeb 15 Dec 2010 c100-101WS 10 Local Government Association, The Sustainable Communities Act: analysis of

proposals submitted by councils, 2009, p. 2. See also deposited paper 2017/0780 11 The relevant legislation is the Town and Country Planning (General Permitted

Development) (England) Order 2015 (SI 2015/196).

Number 04724, 1 February 2016 8

ongoing review of business rates, which is to report at the March 2016 budget;

• A proposal to prevent the unregulated demolition or change of use of pubs. This was made by Norwich City Council on 12 December 2014, with support from 20 other local authorities. This was resolved via changes to the Community Right to Bid in early 2015 (see the Library briefing paper Assets of community value for further details).

A small number of the rejected proposals have achieved broader support and some profile within the local government and community sectors. These include:

• A proposal to reduce the maximum stake on Fixed Odds Betting Terminals (FOBTs) from £100 to £2. This was submitted by the London Borough of Newham on 28 October 2014, with support from 93 local authorities.12 The Government rejected this proposal on 22 July 2015, saying:

…the previous Government announced action in this area with a number of measures which came into force in April this year. This included measures to give more powers to local communities by requiring planning applications to be submitted to local authorities for new betting shops, and to require players of B2 gaming machines who want to stake more than £50 in one play to interact with staff over the counter or register a customer account card.

However, the Government currently does not support calls set out in the submission for a reduction in stake size on B2 gaming machines. We are not convinced that local authorities have yet made the most of the powers that are already available to them under either planning or gambling law.13

• A proposal for a share of business rate revenue to be made available to parish and town councils. This was submitted by Sevenoaks Town Council on 11 February 2014, and then resubmitted by NALC in its capacity as a selector on 8 January 2015. The Government rejected the proposal on 26 October 2015:

…all of this funding is required to help deliver the services for which the principal local authorities and major precepting authorities are responsible. If there were to be a reduction in the amount of the local share of business rates to be retained by principal authorities (by allowing parish and town councils to keep a share), then this would result either in a cut in local services or an increase in council tax, or potentially a combination of both. Similarly, a reduction in the national share would reduce the funding available to central government to fund revenue support grant for principal authorities, thereby impacting on service delivery.14

• A proposal to impose a ‘supermarket levy’ – in effect, a higher multiplier in the business rates system for properties of more than a given rateable value. The proposal was submitted by Derby City

12 See also HLDeb 24 Feb 2015 c1629 13 See the Barrier Busting website. See also the response of the Campaign for Fairer

Gambling to the Government’s announcement 14 See the Barrier Busting website.

9 The Sustainable Communities Act

Council on 25 July 2014, calling for a ‘levy’ of up to 8.5% ‘of the rate’. The Government rejected this proposal in a letter to Derby City Council on 25 October 2014.

An early report on the Act from the New Local Government Network had anticipated that the Act might lead to fewer legislative changes than initially anticipated:

What we might find, as the Act progresses, is that the need for additional powers is actually over-estimated. Discussions with private sector solicitors suggest that there is considerable scope within existing legislation to do more at the local level. In many instances it is actually a lack of imagination and/or a timidity and fear of central interference that prevents more ambitious local action. The Act might highlight these instances, with the LGA returning those proposals that are already achievable, and consequently encouraging local authorities to try new things.15

3.2 The Sustainable Communities Regulations 2012

Greg Clark, Minister for Decentralisation, announced a consultation on new “light-touch” regulations on 29 March 2011.16 The accompanying Written Statement announced that there would be no fixed deadline for the second round of proposals. It was proposed that it would also be possible for the selector to challenge the Government when it refuses to remove a specific barrier, and to resubmit the relevant proposal to the Secretary of State. In a debate on 28 March 2011, Mr Clark said that the Government would be assisted by an advisory panel, which included Local Works, NALC, and the LGA.17

The Government published a response to the consultation on 14 June 2012, announcing its intention to go ahead with the majority of the proposals in the consultation.18 The Sustainable Communities Regulations 2012 (SI 2012/1523) were published on 15 June 2012. The main elements of the Regulations are as follows:

• There is a requirement for local authorities, before making a proposal, to consult and try to reach agreement about the proposal with representatives of interested local persons, and to have regard to guidance issued by the Secretary of State. This requirement will also apply to parish and town councils;

• The Secretary of State must consider each proposal, and publish the decision, giving reasons, and the action to be taken if the proposal is to be implemented;

• A selector would be appointed, to consider the resubmission of proposals from local authorities which have been rejected by the Secretary of State. As noted, LGA and NALC have been appointed as selectors. The selectors must decide whether to resubmit

15 Anthony Brand, Sustainable Communities Act: the key that finally unlocks local

potential, NLGN, 2008, p. 12 16 DCLG, Sustainable Communities Act 2007: Inspiring the Big Society: a consultation

on regulations under the Sustainable Communities Act, March 2011. See also the written statement at HCDeb 29 Mar 2011 c7WS.

17 HC Deb 28 March 2011 c149 18 DCLG, Sustainable Communities Act consultation on regulations–Summary of

Responses and Government Response, 2012

Number 04724, 1 February 2016 10

proposals to the Secretary of State for reconsideration, giving reasons. They must appoint an advisory panel to assist them in deciding whether these proposals should be submitted for reconsideration;

• The Secretary of State must publish proposals resubmitted by the selector with its reasons. The Secretary of State must then consult and try to reach agreement with the selector, before publishing the subsequent decision and giving reasons.

• The Secretary of State must specify the action to be taken if the proposal is to be implemented, together with an update after a maximum of one year.

3.3 Parish and town councils Although town and parish councils, community groups and individuals could submit proposals to remove barriers to the Barrier Busting Portal, they did not initially have powers under the Sustainable Communities Act 2007 to submit proposals under the formal procedures of the Act. The Government launched a consultation in 2012 on extending the powers to parish and town councils.19 The consultation showed very strong support for doing so,20 and this was consequently done via the Sustainable Communities (Parish Councils) Order 2013 (SI 2013/2275).

The Society of Local Council Clerks produced guidance emphasising the need to involve the local community in any proposals:

2) If a council chooses to use the Act by submitting proposals, they must involve the local community. They must not just consult them, but also try to reach agreement with them on the proposals the council will submit. How you do this is up to you but you will need to demonstrate that you have had a dialogue with members of the community. For example, you may wish to invite representatives of community groups to your parish meeting to discuss and reach agreement on the issue, or write to those you consider would be interested in the proposal to ask if they agree with you putting it forward.21

19 DCLG, Proposals from town and parish councils under the Sustainable Communities

Act 2007: Second Round Invitation, 2012 20 DCLG, Sustainable Communities Act 2007: government response to consultation on

proposal for extending powers to town and parish councils, 2013 21 Local Works / SLCC, Using the Sustainable Communities Act: A Guide for Town and

Parish Councils

11 The Sustainable Communities Act

4. The first round of proposals The then Secretary of State, Hazel Blears, issued the Government’s formal invitation under the Act on 14 October 2008.22 Councils were given until 31 July 2009 to put forward proposals to the selector (the LGA).

4.1 Procedures under the Act The procedures for submitting a proposal were set out in sections 2 to 5 of the 2007 Act and in accompanying regulations and guidance:

• The Secretary of State must invite local authorities to make proposals which will contribute to promoting the sustainability of local communities;

• Before proposals can be made, local authorities were required to establish or recognise a consultative panel of local representatives, and try to reach agreement with that panel on proposals;

• An authority must have regard to the matters listed in the schedule to the Act before making a proposal;

• The Secretary of State had to appoint a “selector” who represents the interests of local authorities. The selector’s role was to draw up a short-list of proposals in co-operation with the Secretary of State. The latter must decide which of the proposals on the short-list should be implemented. In doing so, s/he must consult the selector and try to reach agreement;

• The Secretary of State must publish his/her decisions (with reasons) on the proposals to be implemented. Each decision must be accompanied by a statement on how it is to be implemented (an ‘action plan’). Reports on progress in relation to action plans must be published and laid before Parliament annually.

Regulations covered the basic steps to be taken by a local authority and the selector with regard to proposals.23 The local authority must establish or recognise a panel which (in the opinion of the authority) is representative of local opinion. It must consult that panel and try to reach agreement on proposals. The selector must prepare a written report on proposals received and give reasons for its decisions on both selection and rejection. Guidance was published as an annex to the statutory guidance on the Local Government and Public Involvement in Health Act 2007.24

4.2 Shortlisting and discussions The Local Government Association agreed to act as the national selector. This function was carried out by a panel of councillors drawn from the four party groups in the LGA.

22 DCLG, Secretary of State’s formal invitation to local authorities to submit proposals

under the Sustainable Communities Act 2007, 14 October 2008 23 See the Sustainable Communities Regulations 2008 (SI 2008/2694) 24 DCLG, Creating strong, safe and prosperous communities: statutory guidance, July

2008, Annex

Number 04724, 1 February 2016 12

100 local authorities submitted proposals by the 31 July 2009 deadline.25 There were 90 lead authorities and a further 10 included in joint proposals. In all, the first round generated 301 proposals.26 The LGA shortlisted 199 of these proposals.

On 6 April 2010, John Denham, then Communities Secretary, announced that consideration of proposals was still ongoing but that action would be, or was being, taken in respect of a number of proposals which were listed in the statement.27

Following the 2010 general election, Greg Clark, the new Minister for Decentralisation, published the decision document on 15 December 2010. He said that all requests for assistance within the proposals had been examined “in the light of the spending review and the coalition agreement” and had been discussed with the selector. He continued:

I am pleased that the Government will take action to implement, or implement in part, 37% of requests. We will also work with councils on 25% of requests to explore the issues more closely, or explain how existing powers can achieve the desired outcome.28

The decision document can be found on the DCLG website.29 An update report, as required by the 2007 Act, was published in July 2013.30

25 HC Deb 12 October 2009 c375W 26 HC Deb 1 December 2009 c648W 27 HC Deb 6 April 2010 cc128-130WS 28 HC Deb 15 December 2010 cc100-101WS 29 DCLG, Sustainable Communities Act 2007: decisions on proposals submitted

following the 2008 invitation, December 2010 30 DCLG, Sustainable Communities Act 2007: Update Report on First Invitation

Proposals, 2013

BRIEFING PAPER Number 04724, 1 February 2016

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