Community Right to Challenge: A ‘right’ for the community?

1. Community Right to Challenge:A ‘right’ for the community? Alan Waters, Learning & Development Manager, LGIU

2. ‘Your Community Rights’: CRtC

3. Community Rights: CRTC “It enables communities to challenge to take over local service that they think they can run differently and better. The Right to Challenge could be used to run a wide range of local services”. (Your Community Rights)

4. Community Rights:CRtC • Minister announces £30m Community Rights funding • Andrew Stunell, Communities Minister, announced on Friday 6 July that there will be £30m available to help local communities use the Community Rights, including the £11.5 million Community Right to Challenge programme. Communities with good ideas for how they can run local public services and want to use the Community Right to Challenge, can access advice and support to develop their skills to be able to bid for and run excellent local services.* (Your Community Rights Website) *No information about how to apply for these grants.

5. CRtC – Statutory Guidance • A shift of power from Whitehall back to communities • ‘Creative authorities welcome innovative ideas from communities about how services can be run’. • CRtC ‘may act as a springboard for radical reshaping of services’ Andrew Stunell – Ministerial foreword

6. ‘Localism’ & Decentralisation Grant Shapps : Central Government isn’t giving power to councils to then see it recentralised locally Localism Act: new right of contestability to allow organisations to challenge councils to consider new ways of working

7. Community Right to Challenge • Only applies to England – though devolved administrations can introduce similar legislation • CRTC provides ‘genuine freedom’ for local people to choose the services they want. Reality – heavily proscribed by the Secretary of State through use of reserve powers.

8. CRtC: Overview Came into force 27th June: • In essence: local authorities must consider expressions of interest in providing a service, and where they accept an expression of interest, must carry out a procurement exercise for the service.

9. CRtC: Overview • Two sets of regulations - Requirements for making an expression of interest and specifies services excluded from the Right - Specifies grounds on which an expression of interest may be rejected.

10. CRtC: ‘relevant authorities and relevant bodies’. • Relevant authorities (all principle local councils and fire and rescue authorities) must consider expressions of interest by relevant bodies: - voluntary and community bodies; - organisations set up for charitable purposes; - parish councils, and by two or more employees of the local authority. Aim is to cover a wide range of civil society organisations.

11. Which services will be covered by CRTC? • A distinction is made between local authority ‘functions’ – where the decision-making process resides (e.g. Waste Strategy) which is outside CRTC and service delivery (e.g. waste collection) which would be subject to CRTC. • Secretary of State has the power to exclude (or include) certain functions

12. DCLG Consultation February 2011

13. The Language of ‘community’ Two tests of CRtC - Will it meet the realistic expectations of community groups and ‘civil society’ organisations? - Local authorities to deliver services on the basis of Best Value and in the interests of local people?

14. Working with the Voluntary Sector • Unhappiness that EO1usually triggers a full procurement process. • Local authorities must work with the VS to help them understand full implications of making an EOI. Important that the council isn’t seen as the problem rather than the legislation.

15. Community Right to Challenge • ‘Two or more employees’ eligible to exercise the right are expected to form an employee-led structure to take on the running of the proposed service. • ‘Relevant bodies’ through ‘partnership working’ or ‘joint ventures’ can submit an ‘expression of interest’ with ‘non relevant bodies’.

16. Community Right to Challenge: Who will be the winners? Eric Pickles assurances, according to the local government press - “that large multi-national companies and big conglomerates cannot use the right”. He would “ come down hard on private firms that that abuse the new community right”. But in reality firms can bid legitimately in partnership with local ‘relevant bodies’.

17. Moving Goal posts:Henry VIII Clauses • These allow a Minister to use regulations to create new laws which have the same force as Acts of Parliament but which don’t undergo the same rigorous process. • Localism Bill peppered with HVIII clauses.

18. Moving the goalposts “The Secretary of State may by regulations – (a) Amend or repeal any of paragraphs (a) to (d) of subsection (6); amend or repeal any of subsections (7) to (9); make other amendments to this Chapter (including amendments to any power to make regulations).

19. Preparing for an ‘Expression of interest’ Either judging which services are likely to be open to expressions of interest OR Football ‘transfer window’ approach – specifying periods during which expressions of interest can be submitted. Separate timetable for contracts coming to an end?

20. Requirements • Submissions within the specified period • Definition of a relevant body • Information to demonstrate financial robustness; capable of delivering the service • Community well-being and meeting the needs of service users • Impact on remaining employees of the local authority. • Timetable and modification of ‘expressions of interest’ before going into a full procurement.

21. Grounds for refusal Essentially practical in nature. • Failure to comply with statutory requirements • Inadequate or inaccuracy of information • Unsuitability of organisation or sub-contractors • Decision to stop service already been made • Integrated packages with the NHS • Procurement process/ negotiations already underway in writing with a third party. • Employee bid • Vexatious or frivolous expression of interest

22. Community Right to Challenge: ability to protect public services? • Local authority must accept or reject an ‘expression of interest’ and give grounds for doing so. • Local authority in coming to a judgement must “ consider how it might promote or improve the social economic or environmental well-being of the authority’s area” -Section 83 (8) of the Act. The Guidance encourages the use of social clauses in contracts (subject to EU rules)

23. Best Value Parliamentary Answer 14th June about the compatibility of BV duty and the CRtC. Confirmed that it doesn’t change any aspect of the duty of Best Value.

24. In-house bids • No guidance in the final regulations • But an ‘In-house’ team is not a legal entity, so cannot enter into a contract with the council • Possible risk of challenge • Best Value comparator using In-house service (s) as a measure may be the determining factor?

25. Community Right to Challenge • Unknown number and scale of challenges and subsequent procurement processes • Fragmentation of service delivery • Cost • Democratic deficit • ‘Trojan Horse’ for major private sector contractors to secure more of the local government services market. • Several routes in for the private sector to take over Local Authority contracts. • Impact on the workforce where services contracted out to new providers.

26. Concluding remarks • Will CRTC be a ‘damp squib’? • Fragmentation of services and costly and complex service delivery: negative political consequences: but for whom? • Full implications of ‘Localism’ not yet really understood by local government. • Privatised public services funded by the tax payer – taking some reputational hits: • Opportunity to argue the case for the value of in-house public services, run by accountable and democratically elected bodies.

27. Community Right to Challenge:A ‘right’ for the community?