Joint Committee on Statutory Instruments Sixth Report


Memorandum by the Department of the Environment, Transport and the Regions


  1. The Department understands from Counsel to the Lord Chairman of Committees that the Joint Committee would welcome an explanation of the exercise in this Order of the power conferred by section 2(5) of the Local Government Act 1999 (c.27) ("the 1999 Act"). Section 2(5) provides that a best value authority of a description specified in an Order is not to be subject to certain duties "in relation to such functions as may be specified". The Order is drafted so as to provide that the authorities concerned are not subject to any of the "best value" duties in relation to any of their functions.

  2. The Department considers that as a matter of vires there is nothing in section 2(5) (or elsewhere in the 1999 Act) which prevents an Order from specifying all of the functions or duties of an authority or description of authority (either by an exhaustive list of specific functions or a generic description such as "all" or "any"). It does, however, appreciate that there may be concerns as to whether use of the powers in this way might be unusual or unexpected. In this respect, it might assist the Committee to have an explanation of the purpose and origins of this draft Order.

  3. The authorities to which the Order applies are the majority of parish councils (i.e. those parish councils with budgets of less than £500,000 per annum). It is considered that the administrative and other costs of subjecting these authorities at all to any of the "best value" duties would be disproportionate to the benefits. This was why, in its consultation documents and White Paper proposals in 1998, the Government suggested a general "de minimis" cut-off level of £500,000.

  4. During the passage through Parliament of the Bill which became the 1999 Act, there was a certain amount of debate about, in particular, the future section 2(5) and, in general, the question of a cut-off point for small authorities. (Official reports: House of Commons Standing Committee B—Tuesday 26 January 1999, columns 12,13,18, 28; Thursday 28 January 1999, columns 47-56; House of Lords, Official Report, volume 6000 No.79, Monday 10 May CWH 1-3, 17-18). Copies of the relevant extracts of proceedings are being made available with this Memorandum [not printed]. In addition, the Department's memorandum to the House of Lords Select Committee on Delegated Powers and Deregulation (which dealt with the Local Government Bill in its Twelfth Report for Session 1998/99) mentions, at paragraphs 26 to 29, the Government's intention to exempt smaller bodies such as parish councils by applying a financial threshold below which the best value duty would not apply, in addition to the possibility of exempting certain functions only in relation to other types of authority.

  5. The Department believes that it is sufficiently clear from the Parliamentary proceedings that one possible use which might be made of the powers conferred by section 2(5) was to provide a general cut-off point for small authorities, which would exclude them from the best value regime altogether (e.g. the Minister for Local Government and Housing at column 55 of the House of Commons proceedings "the Bill provides for the de minimis level to be set by order and that will happen"). The Department hopes that the Joint Committee would agree, in these circumstances, that the use proposed to be made of the relevant powers by the draft order is one which is contemplated by the 1999 Act.

14 January 2000

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