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General power of competence
Local authorities' powers and responsibilities are defined by legislation. The Localism Act includes a 'general power of competence'. It gives local authorities the legal capacity to do anything that an individual can do that is not specifically prohibited; they will not, for example, be able to impose new taxes, as an individual has no power to tax.
The new, general power gives councils more freedom to work together with others in new ways to drive down costs. It gives us increased confidence to do creative, innovative things in order to meet local people's needs.
Abolition of the Standards Board
Councillors play a crucial role in local life. The people who elect them have the right to expect the highest standards of behaviour. The Government thinks it is important to have safeguards to prevent the abuse of power and misuse of public money. Prior to the Act, all local authorities must have had, by law, to adopt a national code of conduct and a standards committee to oversee the behaviour of their councillors and receive complaints.
Through the Localism Act, the Government has abolished the Standards Board regime. Instead, local authorities will draw up their own codes, and it will become a criminal offence for councillors to deliberately withhold or misrepresent a financial interest.
Clarifying the rules on predetermination
In parallel with the abolition of the Standards Board, the Government has used the Localism Act to clarify the rules on 'predetermination'. These rules were developed to ensure that councillors came to council discussions - on, for example, planning applications - with an open mind. In practice, however, these rules had been interpreted in such a way as to reduce the quality of local debate and stifle valid discussion. In some cases councillors were warned off doing such things as campaigning, talking with constituents, or publicly expressing views on local issues, for fear of being accused of bias or facing legal challenge.
The Localism Act makes it clear that it is proper for councillors to play an active part in local discussions, and that they should not be liable to legal challenge as a result. This will help them better represent their constituents and enrich local democratic debate.
Greater local control over business rates
One of the most important things that councils can do to improve local life is to support the local economy. The Localism Act gives councils more freedom to offer business rate discounts - to help attract firms, investment and jobs. Whilst councils would need to meet the cost of any discount from local resources, they may decide that the immediate cost of the discount is outweighed by the long-term benefit of attracting growth and jobs to their area.
Empowering cities and other local areas
The Act also enables Ministers to transfer local public functions from central government and remote quangos to local authorities, combined authorities and economic prosperity boards - in order to improve local accountability or promote economic growth. Authorities will be encouraged to come forward with innovative proposals.
Other freedoms for councils
The Government thinks that there are currently too many centrally-set rules about how councils organise themselves and run their affairs. The Localism Act will remove several of these rules, freeing councils to go about their business in a way that suits their local circumstances.
For example - many councils choose to run area committees, bringing decision making closer to those affected. In the future, councils will have greater freedom over how they set up these area committees, so that committees can cover wider or larger geographic areas to suit what local people want and need.
Similarly, council overview and scrutiny committees play a crucial role in examining the work of local public bodies, helping make sure they offer a good service to residents. In the future, committees will have greater flexibility about how they carry out this scrutiny role.
Finally, the Act also offers real choice for councils and local people to decide how their council should be governed. This includes allowing councils, where they wish, to move away from an executive form of governance (i.e. a leader or a mayor) to a committee system. The Act also removes previous constraints around the timing of when councils can change their governance models, so they can take these decisions when it best suits the needs of the council and the people they represent.