Making a Community Power Act effective and exercisable everywhere

Josh Westerling, Policy Manager, Power to Change

A Community Power Act would be a transformative piece of legislation that would genuinely shift where power lies in this country, from a Westminster far from people’s lives to people’s doorsteps and the neighbourhoods that they call home. A Community Power Act would go further and be stronger than previous legislative efforts to empower communities such as the Localism Act 2011, by creating genuinely meaningful community rights alongside a neighbourhood-level power-sharing mechanism through which to exercise them.

We know that while legislation is necessary, it is not sufficient. Resources are needed alongside legislation to ensure that a Community Power Act would be as effective as possible, and that the measures included in it could be exercised by people in all parts of England, no matter where they live or their background.

A new government can achieve a lot by rewiring existing spending and reshaping inherited government programmes so that these are aligned with new community rights

At the same time, we recognise that the next government is likely to apply fiscal rules to its spending plans which – if followed – would limit the expansiveness of any public spending. This risks continuing the decline of services in our communities whilst failing to put adequate support behind ambitions to empower communities. But even within these parameters, a new government can achieve a lot by rewiring existing spending and reshaping inherited government programmes so that these are aligned with and can support new community rights as well as proposed neighbourhood governance structures (summarised below).

A Community Right to Buy: Giving communities the right of first refusal once buildings and spaces with significant community value come up for sale.

A Community Right to Shape Public Services: Encouraging greater collaboration between communities and public institutions when designing, commissioning, and delivering local services.

A Community Right to Control Investment: Increasing community control over the key spending decisions which affect local neighbourhoods.

Community Covenants: These neighbourhood-level arrangements would bring local people, community organisations and local authorities together to share power and make decisions. Covenants would be formed between local authorities and a range of partners, including parish councils, Neighbourhood Forums and community ‘anchor’ organisations. Each prospective partner would be expected to demonstrate their ability and intention to fulfil five tests of local accountability.

Creative thinking to support new rights

The recently published Community Ownership Commission report provides a good model for how to approach funding related to new community rights – in this case a Community Right to Buy – so that resources come with new powers, to help ensure communities in all parts of the country can take advantage of them.

While the Commission’s report focuses on Community Ownership Fund (COF) underspend, recent changes to the Fund, such as reducing the match funding requirement, now mean that it is due to spend out by the end of this Parliament. What we can take from the Commission’s report, however, is its approach. There have been numerous news reports of underspend from various ‘levelling up’ funding pots. Where feasible, this underspend should not simply return to the Treasury, but be identified for use in the next Parliament within DLUHC’s remit and, for example, to support the extension and expansion of COF. That the Fund is due to spend out shows the appetite that exists for greater community ownership. Given the need to ensure all groups can exercise new community rights, ringfencing a portion of the COF to support the most disadvantaged groups would be prudent.

This does not need to be solely reliant on public funds. The Commission’s report sets out how the COF can act as the core finance that can crowd in other forms of investment. Other models are available – such as a British High Street Investment Vehicle – which would use £100m of public money to leverage in £250m of private and social investment, bringing 200 strategically important high street assets into community ownership over time.

Aligning inherited programmes

The next government should also be aware of the existing programmes it will inherit and ensure the alignment of these with new community rights and supportive governance structures, so that these can also help ensure communities everywhere can take advantage of new powers. 

Existing programmes can be adapted to support the implementation of new community rights and help ensure they are exercised in all parts of the country by building capacity and capability. The Community Wealth Fund, for example, should target funding at the neighbourhood level and build up capacity and capability in places where it is currently latent. There is a chance that the Community Wealth Fund may not be launched before the next election. If that is the case, the next government could make some alterations to the Fund so that it can best support community rights. These include making a 10-15 year commitment to supporting the Community Wealth Fund from dormant assets to ensure the most deprived areas can build their capacity and capability to exercise community rights.[1]

The Long-Term Plan for Towns also has the potential to support the implementation of community rights in specific places. Seventy five towns will receive £20m of ‘endowment style’ funding over 10 years with a 25:75 revenue/capital split. ‘Towns Boards’ will be formed that bring together community leaders, employers, local authorities and the local MP to oversee and deliver the Long-Term Plan.[2] To ensure this supports the implementation of community rights, the next government would need to ensure that this is indeed ‘endowment style’ funding, with capacity support available, but also that community organisations have a seat at the table in developing town plans and allocating investment. In addition, the introduction of a Community Right to Buy should mean it is added to the toolkit of powers that can be exercised by the Town Board with community organisations making key decisions in relation to this.

Local economic devolution

Going beyond funding programmes, it is underappreciated that an incoming government will inherit a governance structure unlike that of any previous government. As the Institute for Government lays out: “Devolution currently covers 41% of England’s population, 49% of its economic output, and 14% of the land area. If the nine deals are implemented as planned, this will increase to 57%, 60%, and 42% respectively, meaning the majority of England’s population will be covered by a devolution deal.”[3] The powers and functions that are transferred to combined authorities are accompanied by existing funding streams in the first instance.[4] The powers available currently vary with the government’s four-level devolution framework setting out the powers available for each level. For level 2 deals and above, powers and finances are available that broadly fit under the definition of regeneration or local economic devolution funds, becoming more expansive as the level of devolution deal increases.

As such, with the introduction of a Community Right to Control Investment, where there is an accountable community level decision-making institution such as a Community Covenant, a proportion of these regeneration funds and local economic devolution funds would be controlled and invested directly by that community-level institution, working in partnership with the Combined Authority. Rather than requiring a new round of levelling up style funding – though this would be welcome – the proposals in the Community Power Act would work with the grain of the direction in which devolution is heading, but crucially ensure that funding does not move purely from Westminster to the regions, but beyond them to the community level.

Controlling a proportion of any economic regeneration budgets held at the local authority level would not be taking money away from the local authority, rather it would ensure that it is spent according to the needs of communities.

In a similar vein, we envisage the introduction of new community rights working within the context of the next government’s plans for local government. It is no secret that local government finances are in disarray, and this will need to be tackled by the next government. New community rights will not add an additional burden to this. The Right to Shape Public Services would significantly strengthen and expand the scope of the existing Community Right to Challenge, encouraging greater collaboration between communities and public institutions when designing, commissioning and delivering local services. We know that community-powered approaches can improve wellbeing, cohesion, enable prevention and generate savings.[5] Controlling a proportion of any economic regeneration budgets held at the local authority level would not be taking money away from the local authority, rather it would ensure that it is spent according to the needs of communities.

Where next?

The above is not a comprehensive answer to the question of what the next government should do to ensure that community rights are appropriately accompanied by resources. It will be up to the next government to decide what choices it wants to make in terms of the amount of money available to communities, and where those communities are. But it does sketch out some cost-effective options the next government could take that would help to ensure that as powers are passed to the community level they are accompanied by appropriate resources, so that communities in all parts of the country can take advantage of new powers.


[1] Leach, M. 2024. What next for the Community Wealth Fund?. Available:  https://communitywealthfund.org.uk/what-next-for-the-cwf/.

[2] DLUHC. 2023. Our Long-Term Plan for Towns. Available: https://www.gov.uk/government/publications/our-long-term-plan-for-towns.

[3] Institute for Government. (2023). English devolution. Available:  https://www.instituteforgovernment.org.uk/explainer/english-devolution.

[4] Sandford, M. 2019. Research Briefing: Combined authorities. Available: https://researchbriefings.files.parliament.uk/documents/SN06649/SN06649.pdf.

[5] Lent, A., Pollard, G. and Studdert, J. (2021) Community Power: The Evidence. New Local. Available: https://www.newlocal.org.uk/publications/community-power-the-evidence/.