House of Lords - Explanatory Note
Local Government Bill [H.L.] - continued          House of Lords

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Clause 31: Power to make further provision

64.     Clause 31 allows the Secretary of State by order to make such incidental, consequential, transitional or supplemental provisions as he considers necessary for the purpose of operating the provisions of Part II of the Bill. By virtue of clause 69 the Secretary of State's power to make modifications is constrained to such modifications as are necessary to give full effect to secondary legislation made under this Part.

Clause 32: Power to modify enactments

65.     Clause 32 allows the Secretary of State to make orders to modify, apply, extend, or repeal any legislation. This power is constrained to such modifications as are necessary to give full effect to Part II of the Bill.

PART III: CONDUCT OF LOCAL GOVERNMENT MEMBERS AND EMPLOYEES

Summary

66.     Part III of the Bill establishes a new ethical framework for local government. This includes the introduction of statutory codes of conduct, with a requirement for every council to adopt a code covering the behaviour of elected members and of officers, and the creation of a standards committee for each local authority.

67.     It also establishes a new non-Departmental public body (NDPB), the Standards Board; this will provide an independent process for investigating instances of unethical conduct by local authority members, including any allegations that a code of conduct has been breached.

Background

68.     At present, councillors are required, by virtue of s.83 of the Local Government Act 1972, to declare at the time of accepting office that they will be guided by the National Code of Local Government Conduct (issued as a Joint Circular under s.31 of the Local Government and Housing Act 1989). The Code deals with the treatment of non-pecuniary interests.

69.     A requirement on members to give notice of their pecuniary interests in the form of a register was introduced by regulations made under s.19 of the 1989 Act. The declaration of pecuniary interests at relevant meetings is a requirement under s.94 of the 1972 Act; s.97 of that Act enables dispensations to be granted to speak and/or vote at such meetings.

70.     However, apart from the criminal offences under section 94(2) of the 1972 Act of failure to declare a pecuniary interest or non-registration of such an interest under subsection 19(2) of the 1989 Act, the only action that can be taken against an individual member is under section 30(3A) of the Local Government Act 1974 which provides for the local government Ombudsman to be able to name a member or members where he finds that a breach of the code by an individual member constitutes maladministration.

71.     The Third Report of the Committee on Standards in Public Life on Standards of Conduct in Local Government (the Nolan Committee) in July 1997 recommended that the existing National Code of Local Government Conduct should be replaced. The Nolan Committee also recommended that local authorities should be able to discipline individual councillors, subject to a right of appeal to an independent tribunal.

72.     The Government response to the Nolan Committee's report was included in the consultation paper Modernising Local Government: a new ethical framework4. The paper set out possible arrangements for introducing such a new framework, subject to consultation. It broadly agreed with the Nolan Committee conclusions but went further in its emphasis on external independent investigation and discipline.

73.     A separate consultation paper, entitled Modernising Local Government in Wales: a new ethical framework5, was published in Wales, setting out suggested arrangements for introducing a new framework tailored to Welsh requirements.

74.     The White Paper Modern Local Government: In Touch with the People6 set out the Government's intention to legislate for a new ethical framework for local authorities. It signalled three principal components of the new framework:

  • a requirement on every council to adopt a code of conduct, based on a national model, that all members would have to sign up to;

  • a requirement for most authorities to set up a standards committee to oversee ethical issues and provide advice and guidance on the code of conduct and its implementation;

  • the establishment of an independent body, the Standards Board, with responsibility for investigating alleged breaches of the council's code of conduct.

75.     A separate White Paper, Modernising Local Government in Wales: Local Voices7, set out the intentions of the newly formed National Assembly for Wales (NAW) to implement a new ethical framework for Welsh authorities, broadly comparable to the English framework.

76.     The Government papers Local Leadership, Local Choice8 in England and A Stronger Voice for Local People9 in Wales provided further details of the framework and proposals were included in the accompanying 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.

Commentary on clauses

Clause 34: Principles governing conduct of members of relevant authorities

77.     Clause 34(1) and (2) of the Bill provide the Secretary of State in England and the NAW in Wales with a power to develop a set of general principles of conduct which will apply to all authorities covered by the new ethical framework. They are intended to provide a guide for councillors' behaviour in the execution of their duties and will underpin the model code of conduct referred to in clause 35 that these authorities will adopt for their members in England. The general principles will also be subject to approval by Parliament in respect of England, by affirmative resolution of both Houses, before the Secretary of State can introduce them (as specified in section 69(5)). In Wales, the general principles of conduct will be subject to approval by a resolution of the NAW.

78.     Clause 34(3) and (4) place a duty on the Secretary of State and the NAW to consult various bodies in developing the general principles of conduct. They include representatives of local government, the Audit Commission and the Commissions for Local Administration in England and Wales (the local government Ombudsmen).

79.     Clause 34(5) sets out the authorities in England and Wales whose members' conduct is to be governed by the general principles of conduct.

Clause 35: Model code of conduct

80.     Clause 35(1) and (2) enable the Secretary of State or the NAW to issue a model code of conduct for members of authorities listed in clause 34(5). The model code will give practical effect, in terms of councillors' behaviour, to the general principles. In England, parliamentary approval of the national model code is required by the negative resolution procedure (see clause 69(4)). The code replaces a number of statutory instruments implemented in an ad hoc fashion over time. Once councillors have signed up to a locally adopted version of this code, they will be expected to abide by it. If they do not, they will become subject to investigation by the new Standards Board, and to possible subsequent disciplinary action under clause 52.

81.     The clause specifies that the model code must be consistent with the general principles. A code may include mandatory and optional provisions. Once again, the Secretary of State and the NAW would be required to consult representatives of local government and other persons or organisations before introducing model codes. The Secretary of State may invite these organisations to draw up a draft model code. In addition, this clause allows for different model codes, or different provisions within a model code, to be drawn up for different authorities. In this way it would be possible for a single model code to contain separate provisions e.g. for police authorities and for fire authorities. Alternatively it would enable separate model codes to be drawn up for different groups. In Wales the NAW may invite the Partnership Council (set up under the Government of Wales Act 1998) to provide a model code that will apply to all relevant authorities in Wales. The model code for Wales will require the approval of the NAW.

Clauses 36 and 37: Duties

82.     Clause 36 places a duty upon the authorities listed in clause 34(5) to adopt a code of conduct within six months of the new model code coming into force. Where an authority already has a code of conduct in place, it will be only required to change it if it is not consistent with the new model code. An authority's code of conduct must include any mandatory provisions of the model code that applies to the authority. However, the authority has discretion to incorporate in its code any optional or additional provisions it wishes to include, providing they are not contrary to any within the model code of conduct.

83.     This clause also makes provision that if an authority fails to adopt a code of conduct within the specified period, the mandatory provisions of the model code relevant to the authority will apply to it by default until it adopts its own code. Once an authority has adopted or revised its code of conduct, it must publish the fact, make the code of conduct available for public inspection, and send a copy to the Standards Board (see clause 40 below).

84.     Clause 37 places a duty upon each member of an authority listed in clause 34 to comply with any code of conduct adopted by the authority under these provisions. This is in contrast with the current system whereby, under s.83 of the Local Government Act 1972, the declaration made by councillors includes an undertaking to be guided by the National Code of Local Government Conduct in the performance of their functions. s.83 applies only to county, district, London borough and parish councils. However, the requirements in this clause extend also to the other 'relevant' authorities listed in clause 34 which are required to develop codes of conduct (such as police and fire authorities).

85.     Where an authority adopts a new code or revises an existing code of conduct, every member of the authority must make a written declaration that he or she will observe the code. Any member who does not make a declaration to this effect within two months of the code coming into effect will cease to be a member of the authority. Once a member has made the declaration to observe the code, the procedures set out in Part III of the Bill may be followed in relation to any breaches of the code by that member.

Clauses 38 and 39: Standards committees

86.     Clause 38 places a duty upon particular local authorities to establish a standards committee. In England, the duty applies to county councils and district councils, London borough councils, the Greater London Authority, the Common Council of the City of London and the Council of the Isles of Scilly. In Wales, all county councils and county borough councils are covered.

87.     This clause also specifies various details of the composition of an authority's standards committee. Whilst the authority has discretion over the overall number of members of the standards committee, it must have at least three members—two who are elected members of the authority and one of whom is an independent member (i.e. not a member of that or any other authority). In an authority that operates under the executive arrangements set out in Part II of the Bill, a standards committee must not include a directly-elected mayor or executive leader, and may not be chaired by a member of the executive.

88.     Clause 38 also gives each of the Secretary of State and the NAW power to make regulations on the appointment of the independent member, the size of standards committees, and the way in which standards committees conduct their business. It provides the independent members on the committee with voting rights, and requires the authority to provide the Standards Board with a copy of the standards committee's terms of reference.

89.     Clause 39 sets out the functions of a standards committee. The general functions are to promote and maintain high standards of conduct within the local authority and to assist members of the authority to observe the authority's code of conduct.

90.     This clause also outlines a range of specific functions. These are to:

  • advise the authority on the adoption or revision of a local code of conduct;

  • monitor the operation of the authority's code, for instance, making recommendations to the authority about changes to keep the code up to date;

  • advise members of the authority on matters relating their code of conduct. This might include providing or arranging for training of members;

  • considering matters referred back to it by the Standards Board following an investigation by an ethical standards officer resulting in a finding as set out in clause 47(2)(b).

91.     Clause 39 enables the Secretary of State and the NAW to issue further regulations in respect of the functions of the standards committee although it is intended that these powers be held in reserve. It also allows the Standards Board to issue guidance on the matter. There may be further functions that individual standards committees might take on (for example, considering general staffing issues and disseminating good practice etc). It is likely that the Standards Board will want to lead on disseminating good practice on these issues.

Clause 40 and Schedule 3: Standards Boards

92.     Clause 40 provides for the creation of two new independent bodies, the Standards Board for England and the Standards Board for Wales or Bwrdd Safonau Cymru. The Secretary of State is given the power to appoint members of the Standards Board for England and the NAW will appoint the Standards Board for Wales. Each Standards Board is to have at least three members.

93.     The functions of each Standards Board are:

  • to appoint employees known as ethical standards officers (ESOs);

  • to issue guidance to local authorities in relation to the conduct of their members;

  • such other functions as may be conferred on each Standards Board by order, made by the Secretary of State with regard to the Standards Board for England and by the NAW with regard to the Standards Board for Wales.

94.     Schedule 3 covers the status and general powers of the Standards Board. It sets out the grounds for disqualification for being appointed as a member of the Standards Board. It requires the Secretary of State or the NAW to appoint the chairman and deputy chairman of the Standards Board. It makes provision for the Secretary of State to determine and pay any remuneration and allowances for members of the Standards Board. This Schedule also enables the Standards Board to appoint (and pay) staff to carry out its functions and includes provision for the employment of staff to support the Adjudication Panel and case tribunals in the exercise of their functions. It provides that staff cannot support both the ethical standards officers and the Adjudication Panel or case tribunals.

95.     Schedule 3 also covers:

  • the proceedings of the Standards Board;

  • declaration of members' interests;

  • provision of finance;

  • submission of accounts;

  • annual reporting arrangements;

  • the application of seal and evidence;

  • Parliamentary disqualification for any member of the Standards Board.

Clause 41: Written allegations

96.     Clause 41 provides that a person may make a written allegation to either Standards Board that a member or members of a relevant authority has failed or may have failed to comply with the authority's code of conduct. If either Board considers that such an allegation should be investigated it must refer the case to its ethical standards officers.

Clause 42: Functions of ethical standards officers

97.     Clause 42 specifies the functions of ethical standards officers. Their main function will be to investigate allegations that a member (or members) of an authority has breached its code of conduct. Ethical standards officers may also investigate any associated cases that have come to their attention as a result of undertaking an investigation into a written allegation.

98.     This clause also states that the purpose of an investigation by an ethical standards officer is to find:

  • that there is no evidence of a failure to comply with a code of conduct; or

  • that there is no need to take action on the matter investigated (whether or not there was a breach of the code); or

  • that the matter should be referred back to the standards committee of the authority to deal with; or

  • that the matters which are subject of the investigation should be referred to the president of the Adjudication Panel.

Clauses 43 to 45: Investigations

99.     Clause 43 enables ethical standards officers to investigate allegations even if the person concerned is no longer a member of the authority, thus preventing a councillor from evading an investigation by resigning. An investigation into a member of an authority may not be carried out by an ethical standards officer who has been a member of that authority (or any of its committees) at any time within the last five years. Ethical standards officers are also placed under a duty to declare to the Standards Board any direct or indirect interest in any matters referred to them and to take no further part in any investigation of such a matter.

100.     Clause 44 concerns the procedure for conducting an investigation. There is specific provision that the person being investigated must have an opportunity to comment on the allegation. Other than that, the clause gives wide scope for an ethical standards officer to conduct an investigation as he sees fit. There is specific provision allowing ethical standards officers to reimburse the costs of the people from whom they seek information. The clause also provides that the conduct of an investigation should not affect the ability of the local authority to take action in respect of the matters being investigated.

101.     Clause 45 gives the ethical standards officer rights of access to the information or documents necessary to the investigation. These powers are also conferred upon any person the ethical standards officer authorises to assist with an investigation. Any person from whom the ethical standards officer makes enquiries or seeks information or explanations is obliged to co-operate. The duty to provide information extends to communications with Government departments, including those that would ordinarily not be disclosed. The duty does not, however, extend to the Parliamentary Commissioner, a Local Commissioner, or the Health Service Commissioner. Ethical standards officers are to be able to obtain advice during an investigation and to pay for its provision.

102.     Finally, clause 45(11) introduces a new offence of failing to provide the ethical standards officer with such information, documentation or other evidence he requires as part of his investigation. Any person convicted would be liable to a fine of level 3 on the standard scale (currently £1,000).

Clause 46: Restrictions on the disclosure of information

103.     Clause 46 provides that information may only be disclosed if at least one of the following conditions is met:

  • the disclosure is for the purposes of any functions of the Standards Board, ethical standards officer or a case tribunal;

  • the person to whom the information relates has consented to its disclosure;

  • the information has previously been disclosed to the public with lawful authority;

  • the disclosure is for the purposes of criminal proceedings in any part of the UK. (Note that, however, information and witness statements taken by the ethical standards officer may not be passed to the Police. This is to comply with requirements under the Human Rights Act 1998);

  • the disclosure is made to the Audit Commission for the purposes of any functions of the Commission or an auditor under the Audit Commission Act 1998.

104.     Clause 46(2) to (4) provide that the Secretary of State, the NAW or a relevant authority may prevent the disclosure of documents or information if disclosure would be contrary to the public interest.

105.     Clause 46(5) introduces a new offence of disclosing information in contravention of the restriction on disclosure. Any person on summary conviction would be liable to a term of imprisonment of up to six months. Any person on conviction on indictment would be liable to a term of imprisonment not exceeding two years, or to a fine, or both.

Clauses 47 and 48: Reports

106.     Clause 47 provides that where an ethical standards officer concludes that there is no evidence of any failure to comply with the code of conduct of the relevant authority concerned or where no action needs to be taken in respect of the matters which are the subject of the investigation he may produce a report and may provide a summary of the report to any newspapers circulating in the area. If a report is produced, a copy must be sent to the Monitoring Officer of the relevant authority. (The Monitoring Officer of an authority is appointed under section 5 of the Local Government and Housing Act 1989.) If the ethical standards officer does not produce a report, he must inform the Monitoring Officer of the relevant authority of the outcome of the investigation.

107.     Clause 47(2) and (3) place a duty on the ethical standards officer to produce a report when he concludes that the matters which are the subject of an investigation should be either referred to the standards committee of the relevant authority or referred to the president of the Adjudication Panel for adjudication. Copies of the reports must be sent to the Monitoring Officer of the authority concerned, to the standards committee of the relevant authority or, as the case may be, to the president of the Adjudication Panel. A report may cover more than one investigation.

108.     The Standards Board must on the conclusion of all investigations give notice to any member of the relevant authority concerned who is the subject of the investigation and must take reasonable steps to inform the person who made the original allegation about the outcome of the investigation.

109.     Clause 48 provides the ethical standards officer with the power to issue an interim report if, during an investigation, he considers that it would be in the public interest to do so (this is only likely to arise in the case of particularly serious allegations). Such reports can conclude that the person being investigated should be suspended from being a member of the authority or any of its committees or sub-committees. In such cases the local authority is under a duty to comply with the notice.

110.     The maximum period of suspension is six months, though this can be extended by the ethical standards officer by issuing further notices. The period of suspension cannot last longer than the remainder of the member's term of office, nor can it extend beyond the date on which the case tribunal concludes its consideration of a full report. A copy of any interim report by the ethical standards officer must be sent to the person who is the subject of the report and the Monitoring Officer of that person's authority. The ethical standards officer must also take reasonable steps to inform the person who made the allegation. A person suspended following an interim report by the ethical standards officer can appeal to the High Court either against the suspension itself or the period of suspension.

Clause 49: Adjudication Panels

111.     Clause 49 makes provision for two Panels of persons known as the Adjudication Panel for England and the Adjudication Panel for Wales or Panel Dyfarnu Cymru.

112.     The members of the Adjudication Panel for England are to be appointed by the Secretary of State and he may identify a president and deputy president from among those members. The NAW will appoint members of the Adjudication Panel for Wales and the Assembly may also identify a president and deputy president from among them.

113.     The president and deputy president of each Panel are to be responsible for:

  • training the members of their Adjudication Panel;

  • issuing guidance on how case tribunals will reach decisions.

Clauses 50 to 52: Case tribunals and adjudications

114.     Clause 50 provides for adjudications to be conducted by case tribunals consisting of not less than three members of the Adjudication Panel appointed by the president or deputy president, both of whom themselves can be case tribunal members. A case tribunal may conduct a single adjudication in relation to two or more matters which are referred to the president for adjudication. A member of the Adjudication Panel cannot be a member of a case tribunal constituted to look into a matter if he/she has been a member of the authority or a member of a committee of the authority concerned in the previous five years. Finally, this clause makes provision for the Secretary of State and the NAW to issue guidance in respect of the composition of case tribunals. Schedule 4 places each case tribunal under the supervision of the Council on Tribunals.

115.     Clause 51 enables a person who is the subject of a tribunal hearing either to appear before the case tribunal in person or to be represented by a third party. This clause also makes provision for the Secretary of State to make such further regulations covering the process of adjudication as is considered necessary. Such regulations might cover:

  • requiring people to attend to give evidence to the case tribunal;

  • requiring them to make relevant documents relating to the investigation available to the panel;

  • prescribing the procedure to be followed by a case tribunal, for example, to ensure fairness in the proceedings;

  • provision enabling the president or deputy president to settle the procedure to be followed in relation to matters specified in the regulations;

  • awarding or settling costs or expenses;

  • the registration and proof of decisions and awards of case tribunals.

116.     Clause 51 also introduces a new offence of failing to comply with any requirement imposed by the case tribunal in considering a case. It is similar to the offence introduced by clause 45 and also has the penalty of a level 3 fine (£1,000 at present).

117.     Clause 52 covers the outcome of the case tribunal's findings. It places a duty on the case tribunal to decide on any case before it, whether or not there has been a breach of the code of conduct, and to notify the standards committee of the authority concerned. Where the case tribunal decides that a person has failed to comply with the code of conduct, this clause places the case tribunal under a duty to decide whether the nature of the failure is such that the person should be suspended from being a member of the authority (or any of its committees or sub-committees) or disqualified from being elected or being a member of that or any other authority. Suspension can be for a period of up to 1 year, although this must not extend beyond the person's term of office. Disqualification may be for up to 5 years.

118.     In any case where the case tribunal decides that a person has failed to comply with a code of conduct, this clause requires the case tribunal to issue a notice to the standards committee of the authority concerned and specify the details of the failure. The case tribunal must also state whether it has decided that a member should be suspended or disqualified. This clause also places a duty on the authority to comply with any notice from the case tribunal to its standards committee. The case tribunal is required to send a copy of any notice issued to the Standards Board and to anyone who is the subject of the notice, and also to take reasonable steps to inform the person who made the initial allegation of the outcome of the tribunal's adjudication. Notices are to be published in the authority's local newspaper(s). Finally this clause introduces a right of appeal to the High Court for a person that a case tribunal decides has failed to comply with the code of conduct.

4Published April 1998, DETR. Back

5Published June 1998, Welsh Office. Back

6Cm 4014, July 1998. Back

7Cm 4028, July 1998. Back

8Cm 4298, March 1999. Back

9Published April 1998, Welsh Office. Back

 
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Prepared: 26 November 1999