The Localism Bill was introduced as the Coalition Government’s Bill that will "shift power... back into the hands of individuals". It has already passed through the Commons and is about to proceed to the final reading in the House of Lords on 31 October 2011.

The local referendum provision was described by parliament as providing "community empowerment with powers to enable people to instigate local referendums on any issue". The withdrawal of the provision means that the general power of the electorate and local communities to trigger a referendum has now been removed, subject to a number of limited exceptions

"We have listened to the concerns [over] expense and have decided with regard to towns that the local referendums do not need to have a place within this Bill," Baroness Hanham, Parliamentary Under Secretary of State said.

However, Hanham added that referendums have not been totally abandoned and still exist for council tax, right-to-build and neighbourhood planning, a cornerstone of the Bill.

During the Bill's passage through the Lords, where its first reading was held on 19 May 2011, concerns were raised that local authorities might find themselves having to hold referendums which could be “inordinately costly or inappropriate”.

The decision to remove the general local referendum provision from the Bill follows previous amendments that watered down the power to instigate such referendums.

Amendments were agreed in June that allowed councils to refuse a referendum if the its officers thought it was too expensive to hold, the topic had already been the subject of a similar referendum in the last four years or if there was another process available for consultation, appeal or review of the matter in question.

“The referendum process had already lost most of its relevance to planning after it was watered down by earlier revisions. Dropping it entirely allows Council planners, developers and local communities to focus on making good decisions on development proposals against a backdrop of sound local and neighbourhood planning policy, without the potential distraction of a single-issue lobby group going off on a tangent with a referendum, ” said Jon Riley, planning law expert at Pinsent Masons, the law firm behind Out-Law.com.