Community Right to Challenge now in force
The community right to challenge contained in the Localism Act 2011 was brought into force on 27 June 2012. The community right to challenge gives voluntary and community groups the power to express an interest to their local authorities in taking over the running of a particular local service.
It means that if a local voluntary group feels that it can offer a particular service in a better way than the local authority, such as by offering the service at better value for money, or by tailoring the service more specifically and appropriately to local communit`s needs, it can submit a formal expression of interest to the local authority.
The community right to challenge refers to two sets of bodies -
The first is the Relevant Authorities (i.e. local authorities) which must consider an expression of interest and then respond. Such authorities also include county councils and district councils.
The second is the Relevant Bodies, who submit the expression of interest to the Relevant Authority (i.e. local authority) to deliver a particular service.
The types of Relevant Bodies that can express an interest, include -
1. A voluntary or community body;
2. A body of persons or a trust which is established for charitable purposes only;
3. A parish council;
4. Two or more employees of the Relevant Authority (i.e. local authority); or
5. Any other person or body specified by the Secretary of State by regulations.
Voluntary bodies must not be a public or local authority, and their activities should not carried be carried on for profit. Community bodies must also not be a public or local authority, and their activities must be primarily for the benefit of the community. These definitions are intended to cover a wide range of organisations including -
a) Community benefit societies;
b) Co-operatives whose activities are primarily for the benefit of the community;
c) Community interest companies; and
d) Charitable incorporated organisations (when this legal structure becomes available).
Charitable bodies are persons or trusts that are established for charitable purposes only.
If two or more employees of the relevant authority express an interest, they are expected to form an employee-led structure to take on running services under the right to challenge.
A Relevant Body (i.e. voluntary or community group) may submit an expression of interest in partnership with another Relevant Body or a Non-Relevant Body. Certain information must then be provided in respect of all partners.
A Relevant Service is a service provided by, or on behalf of, a Relevant Authority (i.e. local authority). The community right to challenge only applies to the provision of Relevant Services as defined in the regulations. It does not provide for delegation of the functions of a local authority. The community right to challenge can apply to services that are currently contracted or supplied by private or voluntary providers as well as those still provided directly by the local authority. Services which currently fall outside the scope of the right include specified NHS services.
An example of a Relevant Service could be a library which has been threatened with closure but currently remains open. A local community group may wish to bid to take on the library if it believes that the library can be run at a lower cost and if the regulations are adhered to.
What is the process of an expression of interest? How will it work?
Relevant Authorities (i.e. local authorities) may choose to specify periods during which expressions of interest in relation to a particular service can be submitted by Relevant Bodies (i.e. local community and voluntary groups). If such periods are chosen, the Relevant Bodies should be given sufficient time to prepare and submit expressions of interest; the local authorities should have regard to the nature, scale and complexity of the Relevant Service; and regard should be had to the timescale for any existing commissioning cycle relevant to the service.
The requirements for making an expression of interest are detailed in the statutory guidance. For example, expressions of interest must demonstrate how the social, economic or environmental well-being of the community would be improved. If the local authority accepts the expression of interest it must run a procurement exercise in which the organisation that made the challenge as well as other bidders (which may include private companies), can bid to take over the running of the service. If a time period has been chosen by a local authority and a Relevant Body makes an expression of interest outside the timeframe, the local authority may refuse to consider it.
An expression of interest may only be rejected if one or more of the grounds specified in the regulations apply. For example, if the local authority believes information in the expression of interest to be inadequate or inaccurate. A local authority must give reasons for rejecting an expression of interest.
What are the potential drawbacks?
One potential drawback is that if a local community group successfully submits an expression of interest, the regulations and procurement rules mean that the local authority will carry out a procurement exercise. The local authority is not obliged to offer the running of the service to the local community group that submitted the expression of interest or only to negotiate with the local community group to the exclusion of all others. Therefore, a private services company rather than the local community group may ultimately take on the running of the service.
Although there is some supplementary guidance to some of the grounds for rejection, such grounds as an expression of interest being frivolous or vexatious still leave a lack of clarity.
Therefore, the community right to challenge is a scheme to be encouraged amongst local community and voluntary groups, as it could help to reduce the costs of local services, as well as enable the services to be more tailored to the local community. However, until expressions of interest begin to be made, it is unclear how responsive local authorities will be to expressions of interest from Relevant Bodies and what proportion of these will ultimately be successful.
This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.