Select Committee on Delegated Powers and Deregulation Second Report


The Powers


24.  Clause 3 provides the Secretary of State with powers to make orders restricting the use of the power to promote well-being. It also requires local authorities to have regard to any guidance issued by the Secretary of State before exercising the power.


25.  Clause 2 gives local authorities a wide-ranging discretionary power to promote or improve the economic, social or environmental well-being of their areas. It will allow authorities to respond more effectively to local needs by delivering and co-ordinating local services in ways that best meet those particular needs.

26.  The local government White Paper[7] made clear that there would be sensible limits to the exercise of the power, and these limits are set out on the face of the Bill:

  • subsection 3(1) prevents authorities from using the well-being power to circumvent specific prohibitions, restrictions or limitations in other legislation;
  • subsection 3(2) prevents authorities from using the well-being power to raise money. For example, it may not be used to charge for services, increase existing taxes, introduce new taxes or increase borrowing.

27.  Authorities' use of the well-being power will also be bound by the requirement on them, under s.3 of the Local Government Act 1999, to achieve best value in the discharge of their functions. In using the well-being power, local authorities will therefore have to have regard to the economy, efficiency and effectiveness of doing so.

28.  The Government believes that legislating in this way provides a sensible balance between freeing up local authorities to take a positive approach to improving the well-being of their communities while, through best value and the controls in subsections 3(1) and (2) of this Bill, protecting local tax payers and wider, national interests.

29.  It is not possible, at this stage, to be certain of every way in which authorities might choose to exercise the new well-being power. A power that encourages innovation has an inherent potential to be used in new and unforeseen ways. The Government believes that local authorities' primary accountability for the use of the well-being power should be to their electorate. It is a matter for local authorities and their local communities to determine—through the preparation of community strategies under clause 4—what action should be taken at the local level, and for local authorities to judge between different local viewpoints. Measures elsewhere in the Bill to reinvigorate local democracy will make local authorities more accountable to their local communities. There is an onus on properly accountable local authorities—not least in respect of the duty to achieve best value in all their functions—to use the power in clause 2 responsibly. The Government believes that this new framework, together with the restrictions contained in subsections 3(1) and (2), should ensure that councils use their new powers sensibly. Nevertheless, in both the economic and environmental spheres, action taken at local level can affect areas beyond a local authority's own boundaries. That is why the White Paper signalled the Government's intention to retain a reserve power to exclude particular activities where wider interests might need to be protected.

30.  Since the use of this order-making power would represent an important statement of the balance between local and wider interests, the Government believes that Parliament should have an opportunity to debate and scrutinise any proposed orders. The Government's intention is, therefore, that the power in subsection 3(3) should be subject to the draft affirmative resolution procedure, and it will bring forward an amendment to that effect.


31.   Subsection 3(4) includes a requirement on local authorities to have regard to any guidance issued by the Secretary of State before exercising the well-being power.

32.  Historically, there has always been confusion about authorities' scope for action using 'general' powers. The formulation of s.137 of the Local Government Act 1972 led the courts, on occasion, to take a narrow view of the activities that can be pursued using it. This created confusion amongst local authorities and their potential partners about the extent to which authorities can rely on their general powers to undertake certain activities. As long ago as 1986, the Widdicombe Committee Report[8] noted the many areas of doubt over the interaction between s.137 and authorities' other statutory powers. The committee noted that guidance on those areas of activity for which s.137 was most commonly used "would be welcome among local authorities", and recommended that the Government should consult the local authority associations with a view to drawing up guidance[9].

33.  The limitations placed on s.137 by s.36 of the Local Government and Housing Act 1989 have, subsequently, led local authorities to see s.137 only as a 'power of last resort' rather than a means of undertaking new or innovative activities[10]. As authorities' willingness and ability to use s.137 has declined, so too has the significance of the legal difficulties that authorities faced in using it. It is the Government's intention that authorities should be able to use their new broad power in clause 2 to engage in a wide range of activities. Given local authorities' uncertainty about the scope of s.137 prior to 1989, there may be a need for statutory guidance about the scope of the new power. In particular, the Government may want to offer guidance on:

  • the scope for local authority action under the power, providing reassurance both to authorities and their potential partners;
  • the interaction between the new power and the raft of existing statutory powers and duties, including best value;
  • the way in which authorities may exercise their new powers to enter into a range of partnerships with other bodies;
  • the requirement to have regard to the achievement of sustainable development in the UK when exercising the new power.

34.  Moreover, local authorities have a key rôle to play in helping to deliver many of the Government's objectives on issues such as social exclusion, neighbourhood renewal, and supporting vulnerable groups. The Government may, therefore, want to use statutory guidance to set out priorities for action and the general principles that should underpin the use of the well-being power. By way of example, the guidance might be used to ensure that authorities have regard to the need to:

  • tackle national priorities such as neighbourhood renewal and social exclusion;
  • use the power in ways which do not conflict with wider national interests;
  • support and enhance existing services, rather than duplicating efforts;
  • co-operate with other authorities across regions to secure maximum benefits and avoid wasteful competition between authorities seeking new investment.

35.  Any guidance issued would have implications not only for local authorities, but also other organisations that operate at the local level. Subsection 3(4), therefore, stipulates that the Secretary of State must consult representatives of local government and any other relevant bodies on the content of any such guidance before its introduction.


36.  Clause 4 gives local authorities a power to develop community strategies with other local bodies, setting out how together they will improve the quality of life for their local communities.

37.  Subparagraph 4(2)(b) requires local authorities to have regard to any guidance issued by the Secretary of State.

38.  The White Paper made clear that the Government does not intend to "impose on councils any particular approach to this task—councils will have flexibility over the precise nature, scope and coverage of the strategy, the level of detailed action it contains and over how they go about preparing it in partnership with other organisations, the new Regional Development Agencies ... and local people".

39.  The Government sees no reason to amend that view. A number of authorities already have strategic partnerships in place which bring together councils, public sector agencies, local businesses, voluntary organisations and local communities themselves—Health Action Zones and the New Commitment to Regeneration 'pathfinders' (see paragraph 48) are good examples. The form and membership of these partnerships varies from place to place, reflecting local circumstances and needs.

40.  The Government wants to build on these existing arrangements. It follows that the Government does not believe that there is any benefit in imposing a rigid framework in statute, nor in imposing inflexible mechanisms compelling participation of other named bodies. Unlike single-issue partnerships, such as those established under s.5 and 6 of the Crime and Disorder Act 1998, there can be no standard template for the range of bodies and issues that are likely to be covered in a community strategy. Even if it were possible, the Government is not persuaded that such an approach would be beneficial. Successful community leadership and partnership working depend on co-operation and consensus, not compulsion. The onus is on authorities to demonstrate the real benefits of the process, by being open and responsive to community needs.

41.  However, the Government recognises that some guidance may be necessary and useful for local authorities and their current and potential partners, not least in respect of the links with other strategic initiatives. For example, the power to prepare community strategies complements the duty under s.27 and 28 of the Health Act 1999 for local authorities to co-operate with the NHS to secure and advance the health and welfare of the population and to participate in the preparation and review of strategies for improving the health of the population ('Health Improvement Programmes'). Local authorities will need to work closely with Health Authorities to ensure that the preparation of community strategies dovetails effectively with the Health Improvement Programme process.

42.  The Government may, therefore, want to set out in guidance some of the principles that should underpin the detailed preparation of strategies, not least so that authorities' partners and local communities themselves know what they can expect from the process. Guidance could, for instance, be used to emphasise the importance of:

  • basing community strategies on a proper assessment of local needs;
  • engaging all sections of the community in the development of strategies;
  • identifying overlaps with other bodies in service delivery and adopting methods of service delivery which better meet the needs of individuals;
  • the inter-relationship between community strategies and other statutory plans, including local performance plans prepared under best value;
  • integrating sustainable development objectives into community strategies, and links with Local Agenda 21 strategies;
  • arrangements for the preparation of strategies in two-tier areas.

43.  As with the similar provision in subsection 3(4), the Secretary of State must, by virtue of subsection 4(3), consult representatives of local government and any other relevant bodies on the content of any such guidance before its introduction.


44.  Clause 5 gives the Secretary of State the power to amend, repeal or revoke, by order, any legislative provision that he thinks prevents or obstructs authorities from exercising the new power to promote the well-being of their area.

45.  While the power for local authorities to promote well-being should go a long way towards freeing-up authorities to address the needs of their communities, they will not be permitted to circumvent prohibitions, restrictions or limitations in existing legislation.

46.  There is a raft of restrictions which Parliament has laid down over the years in legislation as a necessary check on the operation of specific functional powers granted to authorities. However, there is a growing body of opinion that the piecemeal accretion of restrictions, regulations and limitations is now placing unhelpful restraints on local authorities' effectiveness. For example, a recent Audit Commission Report[11] highlighted elements of the national framework for regeneration which local authorities find restrictive or burdensome.

47.  The Government has already taken action elsewhere to remove restrictions that prevent effective local action to improve the quality of life. The Health Act 1999 (s.29 to 31), for example, includes new, wider powers for the NHS to transfer monies to local authorities for health-related services. There is a reciprocal power for local authorities. There are also provisions allowing the use of new 'flexibilities' to improve services:

  • pooled budgets, which will allow health and local authorities to bring resources together into a single 'pot' which could then be used at the discretion of the pooled budget manager;
  • lead commissioning, where one authority can delegate functions and transfer funding to the other to take responsibility and manage budgets for commissioning both health and local authority services; and
  • integrated provision, which will make it possible to provide a wide range of health and local authority health-related services from within a single management structure.

48.  Building on this approach, the Government is taking action on other fronts to identify restrictions that prevent local authorities and other agencies from providing services more effectively at the local level, and from tackling issues which cut across traditional boundaries, such as social exclusion and neighbourhood renewal. For example:

  • Health Action Zones aim to identify the public health needs of the local area, and seek to address these needs by identifying new ways of tackling health inequalities, and by increasing the effectiveness, efficiency and responsiveness of health-related services[12].
  • The Local Government Association's New Commitment to Regeneration (NCR) initiative, which the Government is supporting, aims to develop local regeneration strategies that harness central and local government resources more effectively[13]. The Government is committed to working with the Local Government Association to identify and remove barriers to effective delivery of local projects to tackle social exclusion and promote regeneration. An independent evaluation of the 'pathfinders' will be completed in April 2001.

49.  Over time, as these initiatives progress and modernised authorities begin to use the well-being power to develop innovative approaches to service delivery with their partners, it is likely that other restrictions will be identified as being unnecessarily obstructive, preventing sensible initiatives to promote community well-being. The power for the Secretary of State to amend, repeal or revoke restrictions that obstruct the use of the well-being power provides a means by which the Government could respond quickly and effectively to developing circumstances, something that is not possible by means of primary legislation alone. The scarcity of Parliamentary time forces Governments to concentrate on major programme bills, with the inevitable result that the potential benefits of small-scale legislative change are often deferred, sometimes for many years. There is a danger that the legislative framework will be unable to keep pace with best practice—for instance in relation to the use of information technology to deliver public services—and may become a brake on progress. To prevent this a more flexible and responsive approach is needed.

50.  In seeking to improve the quality of public services, the Government has established a series of pilot schemes, such as those outlined in paragraph 48, ONE[14] (which aims to provide more streamlined and efficient benefits and employment services), and the best value pilots. Piloting initiatives in this way is a sensible and pragmatic approach to securing change. It allows measured experimentation. The benefits and difficulties associated with new approaches can be assessed in practice, and the optimum approach identified before widespread change takes place. The Government sees merit in adopting a similar approach to the use of the order-making powers in clause 5. The Government may, therefore, wish to bring forward an amendment to introduce a similar provision to that contained in subsection 6(4).

51.  A power that could be operated in this way would enable the Government to respond in a considered and constructive way to the issues identified by these local initiatives, before rolling-out successful approaches across all authorities. This should allow the scope of the new power in clause 2 to be developed incrementally, in the light of experience.

52.  The Government recognises that this is a very broad power, and that Parliament will rightly expect it to be subject to rigorous scrutiny procedures. Whether the power is used to remove restrictions from all authorities or to pilot a new approach, the Government believes that it would be appropriate for each proposal to be considered, scrutinised, and debated separately by Parliament at the time. The legislation will, therefore, adopt the same procedures as those contained in the Local Government Act 1999 to deal with a similar broad power to remove obstacles to the achievement of best value[15]. These enhanced provisions are explained in detail under clause 8.


53.  Subsection 6(1) provides a power for the Secretary of State to amend, repeal or disapply any provision which requires authorities to prepare, produce or publish any plan or strategy.

54.  There is emerging evidence that the sheer number of plans that authorities have to produce can sometimes obstruct their efforts to integrate services. For example, evidence from the Health Action Zones (HAZs) has identified the planning burden as one of the key elements frustrating the successful partnership working. One HAZ has identified over 60 different strategic deadlines that have to be met by the various partners.

55.  The Government has identified two distinct areas where it might wish to take action to deal with planning requirements that inhibit the promotion of well-being and act as an unnecessary burden on local authorities' efforts to join up local services:

  • removal of redundant plans, or parts thereof, which no longer serve a useful purpose;
  • streamlining or rationalising statutory planning requirements.

Redundant plans

56.  While statutory plans are not introduced without good reason, it is inevitable that over time some will be seen to have served their original purpose or to have been superseded by other policy priorities. One such example, again highlighted in the recent Audit Commission Report, is the requirement on local authorities to prepare an 'Economic Development Plan[16]. As the report makes clear, this requirement has encouraged local authorities to "take a short-term and narrow approach to economic development and regeneration, through focusing on single-year, single department plans"[17]. The Government is repealing the requirement to produce Economic Development Plans through clause 71 and Schedule 4 of the Bill. However, it is certain that in the future other examples will become apparent. The power would enable the Government to remove redundant planning requirements from all authorities.

Streamlining planning

57.  It is not just the number of plans that can present a problem. Another clear message coming out of the HAZs is that the complexity and sometimes contradictory nature of the statutory planning requirements placed on local areas by central government can impede effective working. This is backed up by research carried out by the Department of the Environment, Transport and the Regions[18] which identified burdens on local authorities as a result of duplicative planning structures and the requirement to respond through very different regimes and requirements though for similar purposes. The Audit Commission has also identified the potential problems of 'planning proliferation'[19].

58.  Policy Action Team (PAT) 17, which is looking at the rôle of local strategies as part of the Social Exclusion Unit's work on neighbourhood renewal[20], has identified the number and nature of these plans as a potential barrier to the creation of joined-up local strategies and action on neighbourhood renewal. Their report will be published next year.

59.  A power to remove obstacles identified by these initiatives will enable the Government to respond to these findings. In the short term, the Government might want to use the power to pilot different approaches to streamlined planning in particular authorities—such as those involved in HAZs or the NCR—where local strategic partnerships are already established. The proposed power will enable the Government to suspend or disapply particular restrictions for a fixed period (subsection 6(4)), providing the necessary flexibility to enable different tiers of local authorities and their partners to pilot different approaches to streamlining planning within a 'controlled environment'. In the longer term, where such approaches proved successful, the Government will look to use the power to 'roll-out' the new arrangements to all authorities or to relevant classes of authority.

60.  Again, the Government recognises that, of necessity, the power is framed in a way that is potentially very broad. As with the order-making power provided under clause 5, this power will be subject to the additional scrutiny procedures set out in clause 8.


61.  Clause 8 sets out the procedure to be followed by the Secretary of State in making orders under clauses 5 or 6. By virtue of subsection 69(5), all orders brought forward under clauses 5 or 6 will be subject to scrutiny under the draft affirmative resolution procedure by both Houses of Parliament in England.

62.  Additionally, clause 8 provides for detailed scrutiny of any such proposed orders before they are laid. By virtue of subsection 8(1), the Secretary of State will be required to consult local government and others before preparing an order. Subsequently, subsection 8(2) requires the Secretary of State to bring before Parliament a document which explains the proposals, sets them out in the form of a draft order, and gives details of the consultation. Only after 60 days can an order be laid before Parliament, under subsection 8(3). The Secretary of State must take account of any representations made during that period (subsection 8(5)) and any order must—by virtue of subsection 8(6)—be accompanied by a statement giving details of any such representations, and any changes made to the proposals.

63.  The Government believes that these additional procedures, in combination with affirmative resolution, will ensure that Parliament has available to it sufficient information before approving any order made under clauses 5 or 6.

7   Modern Local Government: In Touch with the People. Cm 4014, July 1998. Back

8   The Conduct of Local Authority Business: Report of the Committee of Inquiry into the Conduct of Local Authority Business. Cm 9797, 1986. Back

9   ibid. Recommendation 8.35. Back

10   Local Authority Activity under section 137, Local Government Act 1972. DETR. February 1999. Back

11   A Life's Work: Local Authorities, Economic Development and Economic Regeneration. Audit Commission. 1999. Back

12   Press Notice 98/120. Department of Health, March 1998. Back

13   For further details see: New Commitment to Regeneration - Working Together to Improve our Communities. Local Government Association, 1999. Back

14   Press Notice 295/99. Department for Education and Employment, June 1999. Back

15   Local Government Act 1999, s.16 and 17. Back

16   Local Government and Housing Act 1989, s.35(3)(a). Back

17   A Life's Work: Local Authorities, Economic Development and Economic Regeneration. Paragraph 119. Back

18   Cross-cutting Issues Affecting Local Government. M Stewart et al. DETR, 1999. Back

19   Planning to Succeed - Service and Financial Planning in Local Government. The Audit Commission, 1999. Back

20   Bringing Britain Together: A National Strategy for Neighbourhood Renewal. Report by the Social Exclusion Unit. Cm 4045, 1999. Back

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