This is the fifth instalment of a special series of five insights on the English Devolution and Community Empowerment Act 2026. Navigate to the other insights in this series below:

• Devolution and Local Empowerment: the changing roles of Mayors and Combined Authorities
• The English Devolution and Community Empowerment Bill becomes an Act: what happens now?
• Ban on upwards-only rent reviews: what it means for local authorities
• Mayors can now appoint Commissioners: what does that mean and what are their powers?

Since the English Devolution and Community Empowerment Act 2026 (the Act) received Royal Assent on 29 April, we have discussed at length the devolution aspect of the new legislation – from the new powers and functions it gives Mayors to the milestones that local authorities should look out for and the new role of Commissioners. We have also considered the ban on upwards-only rent reviews. But what about the community empowerment provisions within the Act?

The new legislation introduces a significant spread of community empowerment measures aimed at bringing decision-making closer to residents and giving communities greater influence over the places and assets that matter to them. While many of the changes are not yet in force and await further regulations, local authorities should start considering how the new neighbourhood governance duty and Community Right to Buy could affect their services, governance arrangements and asset management strategies.

Neighbourhood governance: a new duty for local authorities

Neighbourhood governance is not a new concept. Local authorities already work with communities through different types of formal and informal arrangements, including parish and town councils, neighbourhood forums, neighbourhood or area management committees and other local engagement structures.

For example, there are currently around 9,000 town or parish councils in England. These can be established following a community governance review undertaken by a principal council pursuant to Section 82 of the Local Democracy, Economy and Construction Act 2009, and they are often responsible for smaller local services such as allotments, parks and community centres and may provide other services with the agreement of the county or district council. They may also lead on the neighbourhood planning process in their areas.

Government’s objective is to strengthen these neighbourhood governance arrangements and move decision-making closer to residents, enabling those with the best understanding of local needs to shape the services and priorities. It also considered that developing neighbourhood-based approaches will provide opportunities to organise public services to meet local needs better.

Section 62 of the Act provides that “local authorities in England must make appropriate arrangements to secure the effective governance of any area of a specified description that falls within the authority's area”.

However, this provision has not yet come into force and is subject to further Regulations being bought forward. Government has said it will be undertaking a review as to the best way to achieve their aims, including speaking to the sector.

In the meantime, local authorities can still set up town and parish councils as well as establish other informal arrangements to promote neighbourhood governance.

Town and parish councils that currently exist will also continue in their role. It is anticipated that the upcoming guidance will outline how neighbourhood governance structures can work well with town and parish councils.

Once in force, local authorities which have town and parish councils will be under a duty to engage with the parish council or councils about parish representation under those arrangements.

Neighbourhood governance: what are considered “appropriate arrangements”?

The Secretary of State will detail in the forthcoming Regulations what “appropriate arrangements” entails under Section 62. These Regulations could include provisions:

• requiring the establishment and maintenance by local authorities of specified organisational structures for the governance of neighbourhood areas (or for the use of specified existing organisational structures for that purpose);
• about the number, membership, funding and review of such structures;
• about the functions that may or must be carried out by such structures for the purpose of ensuring the effective governance of neighbourhood areas (including for the structures to carry out functions on behalf of the local authority);
• requiring the carrying out of such activities for the purpose of ensuring local engagement with the neighbourhood area as may be specified.

The Regulations may also make provision for the membership of such structures to include parish representation. They may also confer a function, including a function involving the exercise of a discretion, on any person and provide for exceptions.

The Local Government Association has commented that they would like to see a requirement for the involvement of health, police, fire services and education providers in neighbourhood structures.

Neighbourhood governance is also going to be particularly important to consider as part of any local government reorganisation to ensure local and community engagement is maintained.

Community Right to Buy: replacing the Right to Bid

Section 67 of the Act introduces a new Community Right to Buy, which will replace the Community Right to Bid regime established under the Localism Act 2011 (by inserting a new Chapter 2A into the Localism Act 2011) – again, this has not yet come into force, and further Regulations are required to bring this new measure forward.

The current system of Community Right to Bid, which has been in force since 2012, enables community groups to nominate any building or land that has an important social purpose for the community as Assets of Community Value (ACVs). If the owner put an ACV up for sale, then a six-month moratorium period gave community groups time to prepare a bid to buy the asset to protect it for community use. However, at the end of this period, it was up to the owner to decide to whom it would sell the asset.

Government has concluded that this does not go far enough to protect valued community assets. It wanted to give stronger powers to the community and has done so with the new Community Right to Buy.

The new regime creates a right of first refusal, granting community groups greater powers to purchase ACVs at a negotiated or market value price within a moratorium period from the point of listing for sale.

Community Right to Buy: expanded protection for community assets

The new legislation also broadens the definition of ACVs to protect a wider range of assets. Under the new framework, assets may qualify where they enhance the social or economic interests of a community. This represents an expansion from the previous focus on social wellbeing or social interests of the local community and could bring a wider range of properties within scope, including local shops, pubs and community centres.

The Act also creates a new type of ACV – the “sporting asset of community value”. Land of community value is considered a Sporting Asset of Community Value if it is land which comprises a sports ground within the meaning of Section 17 of the Safety of Sports Grounds Act 1975. Land which supports the use of other land as a Sporting Asset of Community Value will also be land of community value, which therefore covers ancillary features such as car parks.

As with the previous regime, local authorities will be required to maintain a list of land in its area that is Land of Community Value, and this will be known as its List of Assets of Community Value. The list should contain separate categories for the new Sporting Assets of Community Value and any land of community value that are assets supporting sporting assets such as car parks.

Once an entry is made on the list, this shall remain on the list:

• for a period of ten years in relation to land of community value which is not a sporting assets (which is an increase from the previous five-year period under the Community Right to Bid); and
• indefinitely in relation to sporting assets of community value and those assets which support it.

Community Right to Buy: how does it work?

First, assets must be listed on the List of Assets of Community Value. Sporting Assets of Community Value are automatically registered, and the local authority must review the list at least every five years. But other land of community value can be added to the list in response to a community nomination, where permitted by regulations made by the Secretary of State, or where a local authority is required to do so.

When land has been included on the list, the owner of the land cannot enter into a relevant disposal unless the disposal is made in accordance with legislative procedure (there is, however, no general power to force a sale of land included in the list).

First, notice of a proposed relevant disposal must be given by the owner to the authority. The authority will then notify the nominator community group, local MPs and councillors of the proposed disposal. The authority will also need to put notices at the property.

Following the issue of the notice, community groups will have an initial six-week interim moratorium period whereby they will need to express an interest in purchasing the land. The owner of the land cannot sell during this period. If a community group expresses an interest within the initial six-week period, a 12-month full moratorium will apply, double the period available under the previous regime.

During that 12-month period:

• community groups can develop proposals and raise funding;
• authorities must, where reasonably practicable, facilitate discussions between owners and community purchasers;
• parties can negotiate a sale price; and
• where agreement cannot be reached, an independent open-market valuation process may be used.

If a community group agrees to purchase the asset at the independently determined market value, the owner must offer it to that group before accepting a higher offer elsewhere.

If no community group agrees to buy within the 12 months, the owner can then try to sell on the land at the open market within a restricted period of 18 months from the expiry of the moratorium. If a sale does not occur during that period, then the process starts again.

Conclusion

While the neighbourhood governance and Community Right to Buy provisions are not yet in force, they signal a greater role for communities in shaping local decision-making and safeguarding valued local assets. Much will depend on the detail of the forthcoming Regulations, particularly around the structures councils will be expected to establish and the practical operation of the new asset protection regime.

For local authorities, these changes are likely to have implications for governance, community engagement and asset management. They will be particularly relevant in the context of local government reorganisation, where maintaining a strong connection between councils and the communities they serve will remain an important consideration.

How Capsticks can help

To discuss anything relating to the contents of this insight or how the new Act’s community empowerment provisions will impact your organisation, contact our Head of Local Government Tiffany Cloynes, Legal Director Rebecca Gilbert or Principal Associate Megan Tam to find out more about how Capsticks can help.