Community Rights - Communities and Local Government Committee Contents

4  The Community Right to Challenge


43. The Community Right to Challenge empowers voluntary and community groups, parish councils and employees of local authorities to express an interest in taking over a local authority service:

·  the expression of interest (EOI) must explain how the proposal will meet the needs of those who will use the service, and show that the group is suitable to run it;[97]

·  the local authority must either accept (with or without modification) or reject the expression of interest; and

·  if the proposal is accepted, a normal tendering process must take place and other bodies, including private sector organisations, will be permitted to bid.[98]

Evidence of awareness and use

44. According to a survey conducted by Locality, which provides support to groups interested in the Community Rights, awareness of the Right to Challenge "appears to be high amongst relevant bodies […] The vast majority felt they either knew fully (42%) or mostly (38%) how the legislation works".[99] DCLG does not formally monitor uptake of the Community Right to Challenge or require local authorities to report the number of challenges, but some 216 groups have received financial assistance to develop their capacity to bid.[100] And DCLG has informally collated responses from follow-up surveys of users of its support programme and other sources which show 50 EOIs as of December 2014. Seven have been accepted and three contracts awarded.[101] It is unclear whether the 216 groups provided with financial assistance have taken their proposals any further. The fate of the other EOIs is also unclear, including, if they have been unsuccessful, the reasons why. We were told by SIB that take-up of the Right "should not necessarily be the measure of success" by DCLG; the objective had not been to "force community groups to exercise the Right to Challenge if that was not appropriate for the relationship they had with the local authority".[102]

45. Evidence suggested three reasons why community groups were not submitting EOIs or going through the Right to Challenge procurement process. First, groups have used the Right more productively as a negotiating tactic, in preference to submitting an official EOI.[103] Tony Armstrong, from Locality, said the Right "has either deliberately led to a conversation or the local authority's behaviour has changed as a result, which is a very positive move".[104] Second, but less positively, some groups felt the Right was adversarial. The National Association for Voluntary and Community Action (NAVCA) called it the "nuclear option": once used the group mounting the challenge could not go back as relations with the local authority were likely to be "severely damaged".[105] Third, the challenge process itself was a cause for concern. The Plunkett Foundation told us, "the carrot (potential community involvement in service delivery) does not outweigh the stick as the challenge triggers a contracting procedure that anyone can bid for, and the community has no protected period to bid unlike with the Community Right to Bid."[106] Community organisations in Cornwall who used it found the Right to be an "overly bureaucratic process". They had to commit "substantial resources" to the EOIs and procurement stages.[107]

46. Community groups have not taken up the Community Right to Challenge in significant numbers. This may not necessarily mean the Right is not fit for purpose, as in certain cases it may have prompted communities and local authorities to enter into constructive discussions and working arrangements that, prior to the Right's introduction, might not have occurred. It is unclear what has happened to those groups that have received financial assistance, and to the majority of those that made expressions of interest (EOI). An analysis of what stage they have reached, including whether the EOIs have been successful and if not, why not, would no doubt be useful in helping to understand the effectiveness of the Right. Other groups have been put off using the Right in the first place, however, because of its adversarial connotations or because of the resultant procurement process, which can pit community groups against larger, more established service providers. We recommend that the Government find out what has happened to groups receiving capacity-building assistance and to those that have made EOIs under the Right to Challenge process.

How the right might be reformed

47. Witnesses suggested a number of ways to make the challenge process more favourable to community groups. First, Social Investment Business (SIB) said more community groups might use the Right if the perception that it was confrontational was challenged.[108] To that end Barney Mynott, from NAVCA, said the name Right to Challenge "could be changed", as "the idea of [a] challenge does not suit the times".[109] The Minister, Stephen Williams MP, accepted that the language of the Right might not lead a council to want to collaborate with the challenging body, and said the Government would "undoubtedly" review this in 2015.[110] Locality proposed renaming it as the "right to reshape services", and added that this should give communities greater power over the design as well as the delivery of local services.[111] On this point, however, the Minister said he hoped a good local authority would collaborate with its citizens anyway and not need the Government to tell it do so.[112]

48. Second, on the challenge process itself and the idea of a protected period in which to bid, Seb Elsworth, from SIB, said it was complicated for groups that have never run a local service to understand the procurement and bidding processes and regulations, and more time would help them to do so.[113] Third, on the challenge process and the idea of reforming procurement criteria, Barney Mynott cited new EU procurement legislation, which enables commissioners of services to reserve certain contracts for public sector spinouts, mutuals and not-for-profit organisations. He said this might be brought within the Right to Challenge.[114] Cornwall Council cited a "more positive and practical" Request for Quote (RFQ) model, adding that a Right to Challenge using the RFQ model would be exempt from the full rigour of an EU procurement exercise and "mean Cornish community organisations delivering valued services to the people of Cornwall".[115]

49. Witnesses pointed to a need to reform procurement practice in general, however. Local commissioners' skills in engaging with community groups needed to be improved;[116] there needed to be a presumption that contracts could be tendered locally and on a small scale;[117] and more focus was required on community and service user involvement in the planning and evaluation phases of commissioning.[118] In our report on Local Government Procurement, we urged the Government to consider extending the provisions of the Public Services (Social Value) Act 2012 so that local authorities have to consider the potential for a contract of any value to deliver social benefits.[119] This might allow community groups to bid for contracts more competitively.

50. The adversarial elements of this Right could be diluted if it were rebadged as something other than a Right to Challenge, though without the removal of the right to trigger a tendering exercise for local services. We are not convinced that communities require a formal right to design services. This should happen as a result of a community group's discussions with its local authority or, if this is ineffective, as a result of raising the prospect of expressing an interest in tendering for a service. Recourse to the Right should not be the first step. Instead, local authority procurement processes need to change. Specifically, commissioning services need to involve the community more as a matter of routine. An extension of the Social Value Act might allow for this. Certain services might also be reserved for, or made more accessible to, smaller organisations, using EU procurement rules or the Request for Quote model suggested by witnesses. Ultimately this might result in more successful bids by community groups, using either more responsive commissioning processes or through a revamped Right to tender for local authority services. We recommend that the Government work with local authority commissioners of services to involve communities routinely in the design of services; consider whether certain services might be reserved for community enterprises using either a normal tendering route or a Community Right process; and rename the Right to Challenge in order to reduce the perception that it is confrontational.

97   Department for Communities and Local Government, You've got the power: a quick and simple guide to community rights, September 2013, p 16  Back

98   Community Right to Challenge, Standard Note, SN06365, House of Commons Library, April 2014, p 3. Local authorities may require certain information to be included in the expression of interest: for example, the challenging body's financial resources; evidence that they could provide the service; information about proposed sub-contractors; evidence identifying which services are the subject of the challenge and what outcomes would be achieved. The EOI must also demonstrate what economic, social and environmental benefits would arise from the challenger providing the service. The local authority can reject it on various grounds-including not enough information provided, service is stopping, procurement is already underway. Back

99   Locality (CRS 040), para 3.6. The survey was of community organisations and non-enquirers to its advice service.  Back

100   Department for Communities and Local Government, (CRS 046), p 1  Back

101   Department for Communities and Local Government, (CRS 046), p 1. On the three contracts awarded, written evidence to this inquiry referred to one successful procurement exercise-in North Norfolk. Further research revealed another: Buckinghamshire and Milton Keynes Fire and Rescue Service transferred its business fire training service to two employees in August 2014. The third is not known.  Back

102   Q197 Back

103   See for example Locality (CRS 040), para 3.7 Back

104   Q195 Back

105   NAVCA (CRS 027), p 2. See also the Community Development Foundation (CRS 015), para 2(v)  Back

106   Plunkett Foundation (CRS 011), para 17  Back

107   Cornwall Council (CRS 008), p 5. Social Investment Business also described the tender process as "complex" (CRS 041), p 1  Back

108   Social Investment Business (CRS 041), p 7  Back

109   Q123 Back

110   Q233 Back

111   Locality (CRS 040), para 5.1 Back

112   Q238 Back

113   Q198 Back

114   Q122 Back

115   Cornwall Council (CRS 008), p 6 Back

116   Qq198 [Seb Elsworth], 195 [Tony Armstrong] Back

117   Q196 [Tony Armstrong] Back

118   NAVCA (CRS 027), p 3 Back

119   Communities and Local Government Committee, Sixth Report of Session 2013-14, Local Government Procurement, HC 712, para 48  Back

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Prepared 3 February 2015