The Localism Act 2011 created the Community Right to Challenge. This gives community and voluntary sector organisations and groups of council staff the right to 'challenge' local authorities by putting forward an Expression of Interest in running local authority services, where they believe they can do so differently and better.
We (Derby City Council) must consider expressions of interest to deliver relevant services. Where an Expression of Interest is accepted, we must carry out a procurement exercise for the service. The procurement exercise will be open to others who wish to tender to run the service so the body that triggers the exercise may not eventually be the provider of the service.
The following bodies are eligible to submit expressions of interest…
- A voluntary or community body - a voluntary body is a body that is not a public or local authority, the activities of which are not carried on for profit. It can generate a surplus provided it is used for the purposes of its activities or invested in the community.
- A body of persons or a trust that is established for charitable purposes only.
- A parish council.
- Two or more employees of Derby City Council.
- Any other person or body specified by the Secretary of State by regulations.
Definition of voluntary and community bodies
The definition of a voluntary and community body includes but is not limited to the following types of organisation…
- Community benefit societies, co-operatives whose activities are primarily for the benefit of the community and community interest companies.
- Charitable incorporated organisations and other incorporated forms of body such as companies limited by guarantee or shares where the company's Memorandum and/or Articles of Association state that the company's objects are in the interest of the community, rather than to make a profit for shareholders.
The way in which groups demonstrate community benefit will vary depending on their legal form and the associated requirements. Here are some examples...
|Type of body||How community benefit is evidenced|
|A body must register with the Financial Services Authority. It must set out the society's rules, including its activities, its character and how it is organised. This is where social and community objectives should be demonstrated.
|Community benefit society
A body must register with the Financial Services Authority. Its reasons for registering must demonstrate its social objectives. It must:
Its rules must not allow profit or the society's assets to be distributed to members, but that they are used to further the society’s objectives.
- state the society's rules
- describe its activities, character and how it will be organised
- describe how its activities will benefit which communities
- describe how any surplus will be used.
|Company limited by guarantee or shares
A body for community interest registering with the 'Registrar of Companies' at Companies House must provide a memorandum of association and articles of association.
It may have an objects clause stating its aims and purpose. Although such objects may be commercial, if the business is a social enterprise, they must also relate to social and/or environmental objectives.
Bodies delivering services for us are expected to be incorporated with limited liability, to limit the risk to individual members.
If a relevant body identifies a need to incorporate in order to be capable of providing a relevant service in its expression of interest, the period between an expression of interest being accepted and a procurement exercise starting will provide an opportunity for this.
Bodies of persons or trusts established for charitable purposes only may be a voluntary or community body, but are eligible to use the right.
Employees of Derby City Council
Two or more employees of the Council are eligible to use the right. Employees are expected to form an employee-led structure to take on running services under the right.
Employees are not expected to have finalised all of their arrangements before submitting an expression of interest.
Whilst only relevant bodies are eligible to submit an expression of interest, they may do so in partnership with other relevant bodies and/or non-relevant bodies. Where a relevant body proposes to deliver a service in partnership with one or more other bodies, certain information must be provided in the expression of interest in respect of all partners.
Incorporated joint ventures (the joint venture is a body in its own right) will need to meet the definition of a relevant body to submit an expression of interest.
One or more bodies in a contractual joint venture (co-operative arrangements between two parties that keep their separate identities) must meet the definition of a relevant body.
The community right to challenge applies to all relevant services. A relevant service is a service provided by, or on behalf of, us in the exercise of its functions, except services that are excluded.
Functions and services
The right does not provide for delegation of the functions of the Council. The responsibility for the function remains with us.
The following services are excluded from the community right to challenge, either for a limited period or permanently...
- Until 1st April 2014, a relevant service commissioned in conjunction with one or more health services by the Council or by a Primary Care Trust, NHS trust or NHS foundation trust under a partnership arrangement or by a relevant authority and an NHS body or a Strategic Health Authority, acting jointly.
- Until 1st April 2014, a relevant service commissioned by a NHS body on behalf of a relevant authority.
- Permanently - A relevant service commissioned or provided by the Council in respect of a named person with complex individual health or social care needs.
Services that are commissioned and managed by individuals or their representatives using direct payments do not fall within the scope of the community right to challenge.
Submitting expressions of interest
Expressions of interest can be made to us between the 1st May and 31st July, this started in 2013.
If the expression of interest is submitted outside of this period, it will be rejected.
Expressions of interest should be made in writing using the application Form which may be sent by e-mail to firstname.lastname@example.org or by post to us.
Information required in an Expression of Interest
- Where the relevant body proposes to deliver the relevant service as part of a consortium or to use a sub-contractor for delivery of any part of the relevant service, the information in paragraphs 2 and 3 must be given in respect of each member of the consortium and each sub-contractor as appropriate.
- Information about the financial resources of the relevant body submitting the expression of interest.
- Evidence that demonstrates that by the time of any procurement exercise the relevant body submitting the expression of interest will be capable of providing or assisting in providing the relevant service.
- Information about the relevant service sufficient to identify it and the geographical area to which the expression of interest relates.
- Information about the outcomes to be achieved by the relevant body or, where appropriate, the consortium of which it is a part, in providing or assisting in the provision of the relevant service, in particular:
- how the provision or assistance will promote or improve the social, economic or environmental well-being of the relevant authority's area
- how it will meet the needs of the users of the relevant service.
- Where the relevant body consists of employees of the relevant authority, details of how that relevant body proposes to engage other employees of the relevant authority who are affected by the expression of interest.
Promoting or improving the social, economic or environmental wellbeing
Expressions of interest should demonstrate how the proposal might offer the social, economic or environmental benefits to the community and take into account social considerations, over and above the provision of the service.
Service user needs
Proposals in expressions of interest must demonstrate how they will deliver outcomes that meet the needs of users of the relevant service. References may be made to evidence such as needs assessments prepared by us, or other sources. It could also include a survey of service users conducted by the relevant body itself.
The level of engagement is expected to be appropriate to the size and nature of the service and the number of employees directly affected by the expression of interest.
There is no requirement for a ballot to demonstrate support for a proposal.
Grounds whereby an Expression of Interest may be rejected
- The expression of interest does not comply with any of the requirements specified.
- The relevant body provides information in the expression of interest which in our opinion is in a material particular inadequate or inaccurate.
- We consider, based on the information in the expression of interest, that the relevant body or, where applicable (a) any member of the consortium of which it is a part, or (b) any sub-contractor referred to in the expression of interest is not suitable to provide or assist in providing the relevant service.
- The expression of interest relates to a relevant service where a decision, evidenced in writing, has been taken by the relevant authority to stop providing that service.
- The expression of interest relates to a relevant service (a) provided, in whole or in part, by or on behalf of the relevant authority to persons who are also in receipt of a service provided or arranged by an NHS body which is integrated with the relevant service; and (b) the continued integration of such services is, in the opinion of the relevant authority, critical to the well-being of those persons.
- The relevant service is already the subject of a procurement exercise.
- We have entered into negotiations with a third party for provision of the service, which negotiations are at least in part conducted in writing.
- We have published our intention to consider the provision of the relevant service by a body that two or more specified employees of that authority propose to establish.
- We consider that the expression of interest is frivolous or vexatious.
- We consider that acceptance of the expression of interest is likely to lead to contravention of an enactment or other rule of law or a breach of statutory duty.
Notifying decisions on expressions of interest
The Council will notify the relevant body in writing of its decision on an expression of interest and publish details on our website 30 days after the close of the period for expressing interests.
The procurement exercise
When we accept one or more expressions of interest for a relevant service, it will carry out a procurement exercise for the service using our existing Contract Procedure Rules.