House of Lords - Explanatory Note
      
House of Lords
Session 1999-2000
Publications on the internet
Other Bills before Parliament
Arrangement of Clauses (Contents)

Local Government Bill [H.L.]


 

These notes refer to the Local Government Bill [H.L.]
as introduced in the House of Lords on 25th November 1999 [HL Bill 9]

Local Government Bill [H.L.]

——————————

EXPLANATORY NOTES

INTRODUCTION

1.     These explanatory notes relate to the Local Government Bill [H.L.] as introduced in the House of Lords on 25th November 1999. They have been prepared by the Department of the Environment, Transport and the Regions (DETR) with the Office of the Secretary of State for Wales in order to assist the reader of the Bill and to help inform debate on it. They do not form part of the Bill and have not been endorsed by Parliament.

2.     The notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. So where a clause or part of a clause does not seem to require any explanation or comment, none is given.

3.     This is a six-Part Bill covering:

  • promotion of economic, social or environmental well-being (Part I);

  • arrangements with respect to executives (Part II);

  • conduct of local government members and employees (Part III);

  • elections (Part IV);

  • provisions relating to allowances and pensions for local authority members; social services functions; surcharge and advisory notices; welfare services; and the repeal of the prohibition on the promotion of homosexuality (Part V); and

  • supplemental provisions including orders and regulations; arrangements in Wales; and commencement (Part VI).

PART I: PROMOTION OF ECONOMIC, SOCIAL OR ENVIRONMENTAL WELL-BEING

Summary

4.     Part I of the Bill gives local authorities powers to take any steps which they consider are likely to promote the well-being of their area or its inhabitants. It also gives authorities a power to develop community strategies with other local bodies, setting out how together they will improve the quality of life of their local communities.

5.     Part I also enables the Secretary of State to remove statutory constraints on authorities' ability to exercise the new well-being power and on their ability to plan co-ordinated local action.

Background

6.     Local authorities are statutory corporations and operate within a framework laid down by statute. They have no powers to act other than where they are expressly authorised by law to do so. Consequently, there is a wide range of statutory duties which authorities are required to fulfil, and an even wider range of permissive powers enabling them to undertake defined activities if they so wish.

7.     In addition, local authorities have a small number of 'general' powers. The most significant of these is section 137 of the Local Government Act 1972, which permits authorities to incur expenditure that is in the interests of its area, subject to certain conditions. One of those conditions is that s.137 cannot be used for any purpose for which there is authority in other legislation, or to overcome any limitations, prohibitions or conditions in other legislation.

8.     This formulation has, on occasion, led the courts to take a restrictive view of the activities that can be pursued using s.137. In some cases, the courts have inferred from the absence of specific powers in other legislation that certain activities are prohibited and that an authority cannot, therefore, rely on its s.137 powers to overcome that prohibition. This has created uncertainty amongst local authorities and their potential partners about the extent to which authorities can rely on their general powers to undertake certain activities.

9.     The scope of s.137 is further restricted by the limit on how much authorities can spend (currently between £1.90 and £3.80 per head of population depending on the class of authority); and by the additional restrictions placed on s.137 by the Local Government and Housing Act 1989. As a result of the 1989 Act, authorities must now be able to establish that any expenditure under s.137 is of "direct" benefit to their area and is "commensurate with the expenditure to be incurred".

10.     Local authorities also have general economic development powers under s.33 to 35 of the Local Government and Housing Act 1989. Again, these powers are heavily constrained by the restrictions placed on their use.

11.     In the White Paper, Modern Local Government: In Touch with the People1, the Government set out its view that community leadership should be at the heart of the role of modern local authorities. To enable local authorities to develop that role and to respond to the needs of local communities, the White Paper argued that authorities would need the freedom to work with other local public, private and voluntary organisations to develop solutions to local problems.

12.     To provide authorities with the necessary freedoms, the White Paper proposed that local authorities' general powers should be extended; specifically, that they should be given a new discretionary power to take steps which in their view promote the economic, social and environmental well-being of those who live in, work in or visit the local area.

13.     To facilitate a more co-ordinated and coherent response to local service delivery, the White Paper also proposed that authorities should be required to develop community strategies. These strategies, developed with local people, business, public and voluntary organisations would set out how the authority and its partners would work together to promote the well-being of their local community.

Commentary on clauses

Clauses 2 and 3: Promotion of well-being

14.     Clause 2 provides local authorities with a power to take any steps which they consider are likely to promote or improve the economic, social or environmental well-being of their local community, subject to the restrictions contained in clause 3.

15.     Together, these clauses allow local authorities to undertake a wide range of activities for the benefit of their local area and to improve the quality of life of local residents, businesses and those who commute to or visit the area. This is intended to clear up much of the uncertainty which currently exists about what authorities can do. Clauses 2 and 3 allow authorities to take any action, unless it is subject to statutory limitations, prohibitions, or conditions specifically set out in legislation. The intention is to broaden the scope for local authority action while reducing the scope for challenge on the grounds that local authorities lack specific powers.

16.     Clause 2(4) gives authorities specific authority in discharging any of their functions to work in partnership with other bodies. For example, it allows authorities to assist other statutory bodies to discharge their functions, or to exercise those functions on their behalf. This is intended to help local authorities and other statutory service providers to work together to provide services in ways which meet the needs of communities.

17.     Clause 3 prevents authorities from using the power in clause 2 to raise money. It also permits the Secretary of State to issue guidance to authorities on the exercise of the power and allows him to prevent authorities from using the power to do anything that he might specify by order that they should not do. Before issuing any guidance, the Secretary of State would have to consult local government and others.

Clause 4: Strategies for promoting well-being

18.     Clause 4 permits authorities to work together with other bodies to establish a strategy for promoting the well-being of their local communities. Such strategies are intended to allow authorities, and other bodies who provide local services, to establish common priorities and determine the steps which they would take to address them.

19.     This clause also allows the Secretary of State, following consultation with local government and others, to issue guidance on the exercise of the power.

Clauses 5, 6 and 8: Powers to modify enactments

20.     Clause 2 provides authorities with a broad power to act. Local authorities will be able to use the power except where there are specific prohibitions, restrictions or conditions in other legislation. There may, however, be statutory prohibitions, restrictions and conditions specifically set out in legislation which will be found to limit the use of the well-being power. Clause 5 allows the Secretary of State, by order, to repeal, amend or revoke any enactment which obstructs authorities from taking steps to promote the well-being of their communities.

21.     Clause 6 allows the Secretary of State to suspend, disapply or repeal any enactment which requires local authorities to prepare a plan or strategy. This power could be exercised in relation to particular local authorities. This is a deregulatory power. It might, for example, be used to remove statutory plans which no longer served a useful purpose, or to amend the requirements on specific authorities so that they could work more efficiently with their local partners to plan how they would meet common priorities.

22.     Clause 8 sets out the procedure to be followed by the Secretary of State in making orders under clauses 5 or 6. It provides for detailed scrutiny of any such orders. The Secretary of State is required to consult local government and others before laying any orders, and to make available to Parliament the results of that consultation, together with a full explanation of the purpose of the order.

Clause 7: Modification of section 137 of the Local Government Act 1972

23.     Clause 7 modifies the general power contained in s.137 of the 1972 Act, as a consequence of the introduction of the new power contained in clause 2. It removes most of the powers contained in s.137 from the authorities to whom clause 2 applies. (Those authorities are set out in clause 1 of the Bill.) It retains, for all authorities, the powers in subsection 137(3) of the 1972 Act, which permit authorities to make contributions to certain charitable funds.

PART II: ARRANGEMENTS WITH RESPECT TO EXECUTIVES

Summary

24.     Part II of the Bill requires all local authorities to make proposals for political management structures with a separate executive, and sets out three initial broad forms of executive within which local authorities' proposals must be framed. The objective of this policy is to deliver greater efficiency, transparency and accountability of local authorities. Separation of the executive is intended to ensure that decisions can be taken more quickly and efficiently than in the existing committee system, that the individuals responsible for decision-making can be more readily identified by the public, and that those decision makers can be held to account in public by overview and scrutiny committees.

25.     The Bill allows the Secretary of State to add further forms of executive at a later date. It requires local authorities to hold a referendum:

  • where their proposal includes a directly-elected mayor;

  • where 5% or more of the council's electorate petition for a directly-elected mayor; or

  • where the Secretary of State requires an authority to hold a referendum on one of the forms of executive available under the Bill.

Background

26.     At present, council business is carried out under a committee system. Decisions which are not delegated to officers or to other authorities, or contracted out, must be taken either in full council or by committees or sub-committees which reflect the political balance of the council.

27.     The Government believes that this system is in need of reform. Part II, which applies to England and Wales, aims to make the decision-making structures within a council more transparent and to allow councillors to spend less time in committee meetings and more time representing their communities. Part II introduces a new decision-making framework in which there is a separation of decision-making and scrutiny of those decisions.

28.     The Government paper Local Leadership, Local Choice2 provided further details of these proposals and included a draft Local Government (Organisation and Standards) Bill which was submitted to the scrutiny of a Parliamentary Joint Committee of MPs and Peers in May 1999. This built on proposals in the White Paper Modern Local Government: In Touch with the People3.

Commentary on clauses

29.     Clause 70 (Wales) provides that powers under Part II exercised by the Secretary of State in England will be exercisable by the National Assembly (NAW) in Wales, except in respect of clause 29 (power to make provision about elections) since the conduct of elections is a non-devolved matter where the powers will be exercised in respect of both England and Wales by the Home Secretary. It also provides that the Parliamentary procedures set out in clause 69(4) to (6) for orders and regulations do not apply to the NAW, which has its own procedures for scrutinising secondary legislation.

Clause 9: Executive arrangements

* Executive arrangements are arrangements for the setting up and operation by a local authority of an executive, which has responsibility for the executive functions of the authority.

Clause 10: Local authority executives

30.     Clause 10 specifies three possible forms of executive:

  • a directly-elected mayor who appoints an executive of two or more councillors;

  • a council leader, elected by the full council, who then either appoints an executive drawn from the council or heads an executive appointed by and drawn from the council;

  • a directly-elected mayor, with an officer of the authority, appointed by the council, as a council manager.

31.     The clause also allows the Secretary of State to determine further structures in regulations at a later date.

32.     Clause 10 excludes the chair or vice-chair of the authority from being a member of the executive, in order to maintain his/her independence from the executive. The clause also limits the number of councillors who can be on the executive to ten councillors, although this limit can be lowered by regulations made by the Secretary of State.

Clause 11: Executive functions

33.     Clause 11 provides for the division of local authority functions between the executive and the council. The clause allows the Secretary of State to make regulations to specify those functions which may, but need not, be the responsibility of the executive, and those functions which may not be. Certain functions, such as licensing functions, will need to be carried out by the council as a whole, a committee of the council, or a council officer (usually under s.101 of the Local Government Act 1972). Otherwise, the presumption is that all functions should be carried out by the executive unless otherwise determined by the Secretary of State.

Clauses 12 to 14: Provisions with respect to executive arrangements

34.     These clauses set out in greater detail how decision-making within each form of executive should work. Clause 12 relates to the elected mayor/executive framework. It provides for the mayor to determine how executive functions should be carried out either by the full executive, single members of the executive (including the mayor) acting alone, committees of the executive or officers, and for some further sub-delegation within the executive or to officers.

35.     Clause 13 relates to the council leader/executive framework. It allows for executive functions either to be delegated by the council leader—in a way similar to the framework under clause 12—or to be discharged as determined by the council and set out in the executive arrangements agreed by the authority.

36.     Clause 14 relates to the elected mayor/council manager framework. It allows executive functions to be carried out either by the executive, the council manager, or a nominated officer.

Clause 15: Overview and scrutiny committees

37.     Clause 15 requires authorities to set up overview and scrutiny committees, the purpose of which is to hold the executive to account; members of the executive will therefore not be able to sit on an overview and scrutiny committee.

38.     Clause 15 allows an overview and scrutiny committee to require officers and members of the executive to appear before it. It is also allowed to invite any other person to appear before it. An overview and scrutiny committee will be able to make reports and recommendations relating to any of the authority's functions or other matters of local concern, to the executive or council as appropriate. The Secretary of State will have powers to make regulations about the operation and functions of overview and scrutiny committees.

Clause 16 and Schedule 1: Executive arrangements: further provision

39.     Schedule 1 sets out further details of the working of the three frameworks.

40.     For the mayor/executive framework, the arrangements must allow the mayor to determine the size of the executive (subject to restrictions in clause 10(8)). The arrangements must also allow the mayor to appoint his or her own deputy from amongst the executive. Such arrangements will allow the mayor to determine how best to run the executive to deliver his or her agenda.

41.     For the council leader/executive framework, the Schedule allows either the authority or the leader to determine the size of the executive, subject to restrictions in clause 10(8).

42.     For the mayor/council manager framework, the proposals must allow the mayor to appoint a deputy from amongst the councillors, who cannot be the chairman or vice-chairman of the authority or be on an overview and scrutiny committee; this is to preserve independence between the three arms of the council. The Schedule entitles the council manager to attend and speak at council meetings and committee meetings. This allows him to carry out his duties, to advise the council and to be open to scrutiny. He will not, however, be allowed to vote as he will not be an elected council member. Schedule 1 also provides that the post of council manager is a politically restricted post, and that the post cannot be combined with that of chief finance officer or monitoring officer.

* Politically restricted posts are dealt with in Part I of the Local Government and Housing Act 1989, in particular sections 1 to 3.

43.     The Schedule also allows advisory committees to be set up to advise the executive under this third model. This will ensure that the executive has access to advice and that policy-making can be properly informed. The schedule allows such advisory committees not to be politically balanced, reflecting the provisions for the executive as a whole set out in clause 17.

44.     The Schedule permits executive arrangements to cover such matters as appointment and terms of office of executive members, how its meetings are held, and similar matters in relation to committees of the executive.

Clause 17: Absence of requirement for political balance

45.     Clause 17 allows executives and executive committees to be exempt from the requirement for committees to reflect the political balance of the authority.

Clause 18 to 20: Procedure with respect to operation of executive arrangements

46.     Clause 18 requires every local authority to draw up proposals for moving to executive arrangements. These proposals must set out the form of executive which the authority intends to adopt, which functions would be the responsibility of the executive, what overview and scrutiny committee(s) would be established, a timetable for implementation of the proposal, and details of any transitional arrangements that will be put into place. An authority must consult widely with the local community on the proposals. This consultation should include local electors, but also other interested parties. The aim of this clause is to ensure that the executive arrangements adopted by an authority reflect the aspirations of the community and are appropriate to that authority.

47.     Clause 19 requires a local authority to hold a referendum where its proposal is for adoption of a framework which includes a directly-elected mayor. The referendum decision would be binding on the authority. Where such a proposal is rejected, the authority may draw up a different proposal based on either the same or a different form of local governance. However, if this alternative proposal also involves an elected mayor, the proposal must once again be put to a referendum and the provisions on the outcome of the vote will once more apply. Clause 30(1) prevents an authority from holding another referendum within five years.

48.     Clause 20 requires a resolution of the full council to adopt executive arrangements. Once adopted, details of the arrangements must be made available to the public and be widely publicised in the area of the authority. Such publicity should include the main features of how the arrangements will work and a date on which the arrangements enter into force.

49.     The clause also makes clear that once an authority has adopted executive arrangements, it cannot revert to arrangements which are not based on a separate executive.

Clause 21: Revised executive arrangements

50.     A local authority that has already adopted executive arrangements under clause 20 may draw up proposals to revise its executive arrangements. Clause 21 sets out the procedure that must be followed. The clause mirrors the provisions of clauses 18 and 19 in respect of, for example, consultation on the proposals, what must be included in the proposals, and the circumstances in which a referendum is required.

51.     Where a local authority is operating executive arrangements which include a directly-elected mayor and is seeking to revise those arrangements without changing the form of the executive, the consent of the mayor is required before the authority can implement the changes. However, the mayor's consent is not required where the revised arrangements only concern the operation and functions of overview and scrutiny committees.

52.     Where an authority is proposing to move to, or away from, one of the forms of executive that includes a directly-elected mayor, the authority must hold a referendum on the proposals. However, where an authority is seeking to move from an executive which includes a directly-elected mayor to one which does not, and a referendum has approved those proposals, the local authority may not implement the revised executive arrangements before the term of office of the current directly-elected mayor has ended.

53.     Any requirement to hold a referendum under this clause will be subject to the constraint in subsection 30(1) that a referendum on executive arrangements may not be held more than once in any five years. If a referendum held under this clause rejects the authority's proposals, the authority may not implement them. In these circumstances, a local authority may draw up further revised executive arrangements.

Clauses 22 and 23: Referendums

54.     Clause 22 gives the Secretary of State a power to make regulations concerning public petitions in relation to whether or not a local authority should have a directly-elected mayor. It provides that regulations made under this clause could require a local authority to hold a referendum where it has received a petition, signed by at least 5% of local electors. Regulations may specify matters such as the form of petitions, their verification, the timing of referendums, and the action to be taken by a local authority on receipt of a petition. Regulations may also amend the threshold for petitions.

55.     Clause 23 gives the Secretary of State a power to make regulations which enables him to require a local authority to hold a referendum on whether it should adopt executive arrangements which takes one of the three forms set down in clause 10. The regulations will specify the circumstances in which the Secretary of State will be able to invoke this power, and include provisions for the timing of a referendum and the action to be taken by the authority.

56.     Any requirement to hold a referendum arising under these clauses will be subject to the constraint in clause 30(1) that a referendum on executive arrangements may not be held more than once in any five years.

Clause 24: Guidance

57.     Clause 24 requires local authorities to have regard to any guidance issued by the Secretary of State in relation to Part II of the Bill. The guidance may, in particular, deal with timing for drawing up and implementing proposals, publicity, and arrangements for overview and scrutiny.

Clauses 25 to 29 and Schedule 2: Elected mayors

58.     Clause 25 provides for a directly-elected mayor to be an individual elected to that post by the local government electors in the authority's area. The normal term of office for an elected mayor will be four years, except as otherwise provided for in regulations made by the Secretary of State under clause 26. Clause 26 also enables the Secretary of State to make regulations providing for the dates, years, and intervals at which mayoral elections can take place. This enables the Secretary of State, for example, to provide for mayoral elections which are consistent with the different electoral cycles operated by local authorities, and could allow initial terms of office for elected mayors of greater or less than four years so that the mayoral cycle can be brought into step with the normal electoral cycle.

59.     Clause 27 describes the method for electing a directly-elected mayor. This will normally be the supplementary vote system (SV), unless there are less than three candidates, in which case the simple majority system is used.

60.     Under the SV system, the elector has two votes—a first preference vote cast for the elector's preferred candidate, and a second vote cast for the elector's second preference from among the remaining candidates. Schedule 2 specifies the procedure for returning an elected mayor under the SV system. If any candidate receives more than half of the first preference votes cast, that candidate is the winner. Otherwise, all but the two candidates who received the greatest number of first preference votes are eliminated. Any second preference votes among the votes for the eliminated candidates which have been cast for the two remaining candidates are then added to those candidates' total votes, and the candidate with the highest number of votes overall is elected mayor. Schedule 2 also provides procedures for dealing with an equality of votes at any stage of the process.

61.     Clause 29 provides the Secretary of State with a power to make regulations regarding the conduct of mayoral elections. This includes a power to apply or modify any statutory provisions relating to the conduct of elections. This will allow the Secretary of State to ensure that the existing statutory framework for the conduct of elections can be applied to mayoral elections appropriately.

Clause 30: Provisions with respect to referendums

62.     Clause 30 provides that a local authority may hold only one referendum on proposals for executive arrangements in any five-year period. This includes referendums triggered by a public petition under clause 22, or required by the Secretary of State under clause 23. The people eligible to vote in a referendum will be those people who would normally be entitled to vote at local government elections in the authority conducting the referendum.

63.     Clause 30 also provides for the Secretary of State to make regulations on the conduct of referendums, and to provide for the application of electoral legislation to the holding of referendums.

1Cm 4014, July 1998. Available from The Stationery Office (telephone: 0345 023474) or on the DETR website (www.detr.gov.uk). Back

2Cm 4298, March 1999. Back

3Cm 4014, July 1998. Back

 
contents continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search Page enquiries

© Parliamentary copyright 1999
Prepared: 26 November 1999