Joint Committee on the Draft Local Government (Organisation and Standards) Bill Report


  V1. STANDARDS ISSUES

Code of Conduct

217. Part II of the draft bill relates exclusively to standards. At the core of the Government's proposals lies a statutory requirement for every council to adopt a code of conduct covering the behaviour of elected members, to which members would have to subscribe. This will replace the current arrangements whereby councillors agree to abide by the National Code of Local Government Conduct, issued as a circular by DETR.

218. The bill empowers the Secretary of State, after consultation, to prescribe by regulation general principles on conduct of members which must underpin the codes to be adopted by each authority. The Secretary of State may then, by regulation, issue a model code with mandatory and optional provisions, again following consultation during which he may invite local government representatives to propose their own proposal for model codes for different authorities or types of authority.

219. Within six months of the issuing of the model code, a local authority must adopt a code of conduct; if it does not, the model code will apply by default. Each member has a duty to comply with, and to subscribe to, the code by written declaration on pain of removal from office.

220. As the White Paper points out, the Government's view is that the precise form of an authority's code will need to reflect its political management arrangements. But we note that certain types of authority—town and parish councils and combined authorities—will be subject to uniform national codes.

221. Some witnesses questioned whether separate codes of conduct needed to be developed for different models of political structure. The LGA wrote, "Our basic approach is that questions of probity and ethical conduct ought to apply equally to all council members, whatever their position. The greater the individual's powers, the greater the necessity to ensure that probity standards are adhered to—but this is not to argue that those standards should be differentiated. So whilst not wishing to dismiss this proposal in advance of detailed consideration of the revised code, the LGA would be disappointed if separate codes were subsequently thought to be necessary".[181]

222. The Local Government Ombudsmen, while they welcomed the national model, also thought that a National Code of Conduct should be instituted, rather than each authority producing its own code.[182] There was also the danger that variation between codes could leave gaps in provision.

223. The Committee favour the idea of a National Code. The provisions in the draft bill for consultation on the principles of the model code, promulgation of principles in regulations, promulgation of a national model code in regulations, and the possibility of different models for different authorities or types of authority are confusing. Moreover we agree with witnesses that the same core standards should apply to all councillors, regardless of structure; the concept of a National Code is, after all, what local authorities are used to. We recommend that, following consultation, a National Code of Conduct be issued in the form of regulations, which all authorities must adopt with only relatively minor variations; and that the core elements of the code should be referred to in the bill.

224. The contents of the proposed model code are not specified in the bill or the White Paper. Nevertheless, witnesses had concerns about them. Although we had no evidence of it, the Ombudsmen told us of the possibility that the test of "real danger of bias" could be imported into the model. Although this test is currently applied in the courts to invalidate decisions, they considered that importing it into the code would actually lower standards. In a code of conduct the test should remain, as at present, one of avoidance of suspicion of bias. The Ombudsmen found that a "real danger of bias" "would allow for conduct which at present we think is in breach of the code".[183] The Ombudsmen also set out in some detail ways in which the new model code should clarify the handling of personal or private interests which need not preclude participation. And they thought that arrangements which allowed speaking but not voting should be abolished.

225. The order containing any model code or, as we recommend, National Code will be subject only to negative resolution procedure in Parliament. Opportunity for parliamentary scrutiny will be limited and will not allow of any modification. Nevertheless we expect the Government to take account of the representations of the Ombudsmen and other practitioners who have to operate in the context of the provisions of any code of conduct as to its contents.

226. Witnesses were also concerned about breadth of application of the code. They considered it desirable that the new code, like the present non-statutory provision, should apply to the conduct of councillors serving on outside bodies - as directors, trustees, members of unincorporated organisations.[184] We recommend that any new code of conduct should apply to the conduct of councillors serving on outside bodies.

Mechanisms of Complaint: Standards Committee, Standards Board and Adjudication Panel

227. The bill sets up an elaborate structure for securing observance of the Code of Conduct. In line with the recommendation of the Nolan Committee on Standards in Public Life, each authority must establish a standards committee of at least three members, one of whom is to be not a member of the authority and, where executive arrangements apply, the committee may include one member of the executive. The functions of the committee are to promote the observance of high standards and the authority's code of conduct, and to consider complaints referred to it by the Standards Board. The White Paper envisages that the standards committee will receive support from the authority's monitoring officer.

228. All investigation of complaints of breach of the code will be undertaken by the Standards Board for England and Standards Board for Wales, bodies corporate appointed by the Secretary of State/National Assembly. The Boards will mostly be composed of ethical standards officers (ESOs) to whom any allegation will be assigned for investigation. Provisions set out the procedure for investigations, the right of access to persons and papers, and the right of the person investigated to comment on the allegation made. Failure to provide information can result in a fine. An investigation may decide that there is no evidence of a breach of the code; that there is no need to take action (whether or not the code was breached); that the matter should be referred to the local standards committee to be dealt with; or that a report should be made to the Adjudication Panel for determination.

229. The ESO must produce a report and send it to the local standards committee, the subject of the investigation and, as appropriate, the Adjudication Panel for determination; where no breach has taken place or where no action is required, a summary of the report is to be published in the local press. The ESO may issue an interim report suspending the person being investigated, if in the public interest, for up to six months pending determination by the Adjudication Panel, and distribute it as above. The local authority must comply. An appeal lies to the High Court against such a suspension.

230. The bill establishes Adjudication Panels for England and Wales for the purpose of separating adjudication of cases involving breaches of the code from the investigative role of the Standards Boards. For the purposes of adjudication on matters referred by the Standards Boards, case panels will be set up by the Chairman from amongst the Adjudication Panel membership. The person being investigated may appear before a Case Panel in person or be represented. Failure to assist in an inquiry can result in a fine.

231. The Case Panel must adjudicate in each case whether or not the Code of Conduct has been complied with. Where a person is found not to have complied, the relevant local standards committee must be informed; the person may be suspended from being a member of the authority for up to one year, or disqualified for up to five years. The local authority must comply with the decision of the Case Panel. The Standards Board and the subject of investigation must be informed and the notice of decision published in the local press. An appeal against the decision lies to the High Court.

232. As officials explained to us, this investigative structure has in large measure been devised to implement findings of the Nolan Committee which recommended statutory codes, standards committees in local authorities, and independent national tribunals to hear appeals from local standards committees.[185] On the whole, witnesses approved the system put in place by this part of the bill. They were content with the establishment of the local standards committees and with the removal of investigating and adjudicating functions into nationally constituted arenas. But there were fears that the system might prove too elaborate and cumbersome and vulnerable to the vexatious complainant; a view that more use could be made of local standards committees generally; a fear of overlap with other "jurisdictions"; and even a sense amongst some that proceedings might not always be entirely fair to councillors under investigation. With these principal concerns in mind, we turn first to the local standards committee.

Standards Committees

233. Witnesses undoubtedly felt that the provisions relating to local standards committees were the weakest part of the enforcement system. It was felt that the provisions on membership were unsatisfactory. ACSeS felt that members of the executive should not sit or at least not vote on the committee, especially in dealing with complaints of breaches of the code by the executive; and that member substitution should be expressly forbidden.[186] The Civic Trust thought that "both its role and membership are far too narrowly drawn. Too much is proposed for the National Standards Board, reflecting the over-centralising tendencies of the whole set of proposals. It would be much more effective to devolve more responsibility to the local level, but then ensure that the Standards Committee has a majority of independent members, including an independent chairman ".[187] Interestingly Hammersmith and Fulham had come to a similar view and favoured "an approach already being taken by some authorities, of local standards committees made up entirely of people outside the council to which they applied. They might well include serving councillors from neighbouring councils, who would bring to bear the necessary experience but who would be independent of the immediate scene. The model proposed in the draft bill, and particularly the provision that allows for the inclusion of one executive councillor, seems likely to create inbuilt conflicts of interest".[188] In Herefordshire, Professor Stewart told us, the Standards Committee was entirely independent and includes the Bishop and Lord Lieutenant.[189]

234. Some witnesses thought that the local standards committees should be capable of doing a lot more, especially with a more robust and independent membership. First and foremost, they should be capable of dealing with "more than insignificant or trivial complaints".[190] But it was essential that the committee be given some kind of sanction which it can impose on members who have transgressed the code. At present, no sanctions except for reprimand are available to it.[191] And we note that it is by no means clear what a standards committee is meant to do with regard to any matter referred to it by the Standards Board.

235. ACSeS had the interesting idea that, with an independent element in its membership, the standards committees could consider matters that went wider than observance of the code, and into other regulatory issues including oversight of the information flow process within the council and monitoring the council's rules governing the relationship between the full council, the executive, and the scrutiny committees.[192]

236. One authority informed us that, in the interests of pooling expertise and saving costs, London boroughs in the West London Alliance had discussed the possibility of setting up joint standards committees.[193]

237. Unfortunately, the standards committees as at present conceived are probably unsuited to anything other than a modest and rather ill-defined role. When we asked the Minister how to limit the number of trivial or vexatious complaints which might be made, she took the view that the standards committees, being committees of the council, would not be seen as sufficiently impartial by complainants.[194] In such circumstances, the National Standards Board would itself filter complaints and inquire only into those that warranted inquiry.

238. We think that much more use could be made of local standards committees in the screening of complaints at local level. But for this to be possible, the committees should be seen to be independent of the executive whose decisions will, in the main, be those complained of. And they should have a greater number of independent members.

239. We recommend that

    (i)  members of the executive should not sit on the standards committee;

    (ii)  standards committees should contain more, or even a majority of, independent members;

    (iii)  to enable standards committees to fulfil a sifting role a procedure should be established whereby a complaint about a breach of the Code should be considered first by the standards committee and certified by the monitoring officer before forwarding to the Standards Board.

240. If a standards committee, as constituted above, is to have responsibilities for minor breaches of the code, and if it is to act in respect of any matter remitted to it by the Standards Board, it must have some powers of sanction. We therefore recommend that a power of temporary exclusion of members of the authority—perhaps for a period of up to four weeks—be given to the local standards committee.

241. We consider that some authorities might well wish to pool resources and set up joint standards committees. Indeed, their impartiality could well be enhanced by such a move. We recommend that the bill should provide for joint standards committees to be set up wherever authorities may so desire.

Standards Board and Adjudication Panel

242. We received, chiefly from representatives of officers and other practitioners, a wide range of evidence on the practical arrangements whereby the Board and the Panel would work. Possibly the most important point made was the danger of overload by vexatious and trivial complaints. This we have already touched upon in the context of our discussion of the role of local standards committees.

243. Thus a number of witnesses sought a refinement in Board procedures to allow for a rapid sifting out of trivial complaints.[195] It was pointed out to us that the draft bill does not appear to allow the Standards Board or an ethical standards officer any discretion as to whether or not to undertake an investigation into an allegation. Unlike the discretion given to the Local Government Ombudsmen by the Local Government Act 1974 "the ethical standards officer must publish a report of each investigation however trivial and unfounded the allegation. If the Standards Board is to avoid becoming bogged down with numerous mischievous or frivolous complaints the ethical standards officers should have the same wide discretion as an Ombudsman".[196] SOLACE wrote that "There will need to be some interpretation and judgment involved in pursuing issues to a Standards Committee which ensure that it becomes and remains an effective device".[197]

244. Notwithstanding our recommendations that the local standards committee should exercise a sifting role in respect of applications to the Standards Board, we think it essential that the Standards Boards also have mechanisms that enable them to sift complaints. It was clear that the Minister expected them to do this. In view of that, we recommend that Standards Boards and ethical standards officers have the same discretion as the Ombudsmen as to whether to initiate, continue or discontinue a complaint and that the bill should be amended with that effect.

Suspension

245. The draft bill in its present state gives powers of suspension of up to six months to an ethical standards officer on an interim basis pending a determination by the Adjudication Panel. The Adjudication Panel, on determination, may suspend a councillor for up to one year or disqualify him or her for up to five years. In both cases appeal lies to the High Court.

246. A few witnesses made representations to us about the propriety of the ethical standards officers having powers of suspension. It was suggested that suspension should be a matter for the Adjudication Panel after consideration of an application by the ethical standards officer.[198] Given that the bill has gone to great lengths to separate out the investigative function and the adjudication function, this power appears to be misplaced. We recommend that power of suspension of councillors be reserved to the Adjudication Panel, where appropriate on application from the ethical standards officer.

247. It was also pointed out that the bill did not specify whether or not a councillor would, after suspension or disqualification, remain suspended or disqualified during the course of an appeal to the High Court. This could be important for a council that was finely balanced politically. We agree that the position should be clarified beyond doubt. We recommend that the bill should specify whether or not a council member would remain suspended or disqualified during the course of an appeal to the High Court.

Overlapping jurisdiction

248. The procedures set up by the bill to investigate breaches of the Code of Conduct are elaborate and they constitute a new mechanism for ensuring high standards of ethical behaviour among councillors. But other avenues of complaint already exist in the form of the Commissions for Local Administration in England and Wales (the Ombudsmen), and the Audit Commission. The Ombudsmen wanted legislative provision to allow co-operation between the Commissions for Local Administration and the Standards Boards in cases where the same complaint was being pursued in both arenas.[199] ACSeS also raised the possibility of a further overlap with criminal proceedings at such time as the proposed offence of misuse of public office may be instituted.[200]

249. There is clearly an issue here which requires resolution, either by legislative means or by some form of concordat between the various bodies to prevent simultaneous consideration of the same issue. We recommend that legislative or other provision be made to prevent simultaneous consideration of the same complaint in respect of standards by more than one statutory body.

Common and shared services

250. In the interests of economy, suggestions have been made by the Government for placing the standards boards and adjudication panel within a common organisation.[201] The Government said that they would consult the Council on tribunals and others "with the intention of establishing arrangements which achieve this whilst still being demonstrably fair and just". The Council on Tribunals told us that they did not like the idea. "It could be damaging to the perception of the independence of the two bodies from each other if they were brought within one organisation", they wrote.[202]

251. The suggestion made by the Government in respect of Wales was that the office of the Commission for Local Administration take on the role of the Standards Board. The Commissioner, while he saw some advantages, saw many disadvantages too.[203]

252. The Committee are sensible of the need for cost-effective use of public funds and they recognise that the Government's proposals will be expensive. But we share witnesses' unease at what is being proposed. We recommend that, in deciding the question of accommodating the Standards Boards and Adjudication Panels in England and Wales the Government abide by the advice of the Council on Tribunals in England and the Commission for Local Administration in Wales.

A fast-track procedure

253. Some witnesses expressed considerable disquiet as to the time which the complaints process might take. It is, for example, nowhere set out how proceedings before the ethical standards officer, acting for the Standards Board, and the Case Panel, acting for the Adjudication Panel will relate to each other. One witness saw the ESO "prosecuting" the case before the Case Panel. The Welsh Ombudsmen speculated as to how much of the ESO's investigation and report would be re-worked before the Case Panel. "Is there a complete re-hearing of the evidence?", he asked, with possible loss of anonymity by the complainant. The problem was "keeping a balance between the efficiency of the investigation and the length of the investigation and fairness to the councillor who is in peril of being disqualified from office".[204] ACSeS, extrapolating from the time taken to determine cases by the Ombudsmen, thought that proceedings under the draft bill could take up to eighteen months. "Lengthy process is frustrating to the complainant, debilitating to the Council concerned and potentially unfair to the member who is alleged to have transgressed".[205]

254. The Committee consider that there is no reason to suppose that proceedings under the bill as drafted will be speedy, particularly if no action is taken on our recommendations on filtering out and discretion not to act upon trivial or vexatious matters. For these reasons and for reasons of fairness, it may be necessary to institute some form of expedited, fast-track procedure for the more serious allegations which have the potential for suspension or disqualification of a councillor. We invite the Government to consider under what circumstances for serious cases of breach of the Code relating to standards an expedited procedure might be instituted .

Abolition of surcharge

255. In their White Paper, "Modern Local Government: In Touch with the People",[206] the Government stated their intention to repeal the Auditor's power of surcharge, while retaining some means of ensuring that any improper financial gain at the taxpayers' expense would be returned to the council. The White paper, "Local Leadership, Local Choice", which accompanies the draft bill says that "The means for achieving this are being considered alongside work on the proposed new offence of misuse of public office".[207] There is, however, nothing on this in the draft bill.

256. Local Government witnesses were anxious that the Government proceed quickly with the abolition of surcharge.[208] Indeed, the introduction of executive arrangements as proposed in the bill could have the effect of making the incidence of any surcharge on an elected mayor or member of the executive very heavy indeed. Although not currently part of the draft bill and not widely canvassed by other witnesses, the Committee think that to pave the way for executive arrangements surcharge should be abolished by the Bill.

257. The Committee also take the view that the procedures established by Part II of the bill, in particular the separation of investigation and adjudication, could have implications for some aspects of the procedures of the Auditor. We invite the Government to consider whether the principles in Part II should be applied to the investigative procedures of the Auditor.


181  App29 Back

182  Q489; App11 Back

183  Q487 Back

184  App29 LG; App1 ACSeS Back

185  Q77 Back

186  App1 ACSeS Back

187  App62 Back

188  App22 Back

189  Q683 Back

190  App1 ACSeS; see also App51 UNISON Back

191  App12 Commission for Local Administration in Wales; see also App71 Harrogate Borough Council; App62 The Civic Trust; App21 London Borough of Hammersmith and Fulham Back

192  App1 Back

193  App22 Hammersmith and Fulham Back

194  Q762 Back

195  App 62 The Civic Trust; App 1 ACSeS; App 71 Harrogate Borough Council Back

196  App 12; QQ 453, 467, 497, 498 Back

197  App45 Back

198  App12 Welsh Ombusdman Back

199  App11 Back

200  App1 Back

201  Cm 4298 paragraph 4.25 Back

202  App63 Back

203  Q454; App12 Welsh Ombudsman Back

204  Q501 Back

205  App1 Back

206  Cm4014 Back

207  Cm 4298, p 50 Back

208  Q156 LGA Back


 
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Prepared 3 August 1999