House of Lords - Explanatory Note
Local Government Bill - continued          House of Lords

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Clause 111: Financial Year

330.     At present the Audit Commission's financial year, determined by paragraph 11(5) of Schedule 1 to the Audit Commission Act 1998, runs from 1st November to 31st October. Clause 111 amends paragraph 11(5) so that the Commission's financial year will run from 1st April to 31st March.

331.     Paragraph 63 of Schedule 6 to the Bill changes certain other dates mentioned in Schedule 1 to the Audit Commission Act 1998. These amendments are consequential on the change to the Commission's financial year.

Clause 112: Delegation

332.     Clause 112 inserts a new paragraph 11A in Schedule 1 to the 1998 Act, which provides that any of the Audit Commission's functions may be delegated to its committees and sub-committees and its officers and servants.

Clauses 113 to 119: Other

Clause 113: Standards Board for England: delegation

333.     This clause gives the Standards Board for England the power to delegate any of its functions to:

  • an officer or servant of the Board;

  • a committee or sub-committee of the Board; or

  • an individual member of the Board.

334.     The Standards Board is an independent body responsible for the promotion and maintenance of high standards of conduct by members and co-opted members of relevant authorities in England.

335.     The Standards Board was set up and is governed by the Local Government Act 2000. The Board has a number of functions conferred by the Act, one of which is to consider a written allegation and decide whether the allegation should be referred to an ethical standards officer for investigation.

336.     There is no provision in the Act which gives the Standards Board the ability to delegate functions. The number of complaints received by the Board and the ability to cope with the demands made by those complaints has led to the view that a power of delegation is required in order to allow Board members to fulfil their proper role of setting strategic guidance and direction.

     Clause 114: Standards committees etc

     337.     This clause enables local authority standards committees to appoint sub-committees. It also enables the monitoring officer of an authority to nominate another person to carry out duties when the monitoring officer believes he himself ought not to carry out those duties.

     338.     The Local Government Act 2000 required each relevant local authority to establish a standards committee. Standards committees have the general functions of promoting high standards of conduct, and of assisting members to observe the authority's code of conduct.

     339.     The 2000 Act also envisages that standards committees could in certain circumstances consider reports of alleged misconduct by members of the authority and subsequently take actions against members found to have breached the code of conduct. This function of considering reports into misconduct allegations is to be provided for in regulations which the Secretary of State intends to make under section 66 of the 2000 Act. In order that standards committees will be able to regulate the number of members of the committee present when considering such cases, it is necessary to provide for the creation of sub-committees.

     340.     Regulations under section 66 of the 2000 Act will also provide for the investigation of misconduct allegations to be carried out by the monitoring officer of an authority. The 2000 Act gives this duty to the monitoring officer personally. However, there may be circumstances where it would be improper for the monitoring officer to conduct the investigation - for example if he or she (as the authority's principal legal adviser) has previously given advice to the member concerned on the application of the code. This new clause will allow the monitoring officer to nominate another person to conduct the investigation. The nominated person could be another employee of the authority, or someone outside - for example the monitoring officer of a neighbouring authority.

Clause 115: Paid time off for Councillors etc not to be political donations

341.     Where any salary is paid to an employee by an employer in respect of time off taken in order to undertake duties as a local councillor, this clause ensures that the value of the salary is not classified as a political donation under the Political Parties, Elections and Referendums Act 2000 ("PPERA").

342.     Schedule 7 to the PPERA controls donations made to a person in his or her capacity as a councillor in connection with his or her political activities. It is considered that where an employee is a councillor, and is allowed paid time off work to carry out council duties, the pay for the time off is a controlled donation. This effect runs counter to the Government's intention that the provisions of the PPERA should not apply to the receipt by a councillor of paid time off for carrying out his or her duty as a councillor. This clause will ensure that the value of any salary paid to an employee by an employer in respect of time taken off in order to undertake "qualifying business" as a local councillor is not a donation for the purposes of Schedule 7 to the PPERA.

     343.     "Qualifying business" relates to the business of the authority, whether conducted by the authority itself, its executive (or any committee or member of the executive) or any of its committees or sub-committees. Qualifying business also relates to any duties that a councillor may carry out for:

  • other bodies to which the councillor has been appointed or nominated by the council of which the councillor is a member, and

  • any public bodies to which the councillor has been appointed , whoever makes the appointment.

344.     The time off for which pay will not count as a political donation is time off for a widely defined range of duties, including the doing of anything for carrying out the functions of the council to which a councillor has been elected and the doing of anything for carrying out any functions of another council where that other council has delegated the discharge of those functions to the councillor's council.

     345.     The clause will apply retrospectively, so that any pay for time off which may have been granted to councillors since 16th February 2001, when the requirements of Schedule 7 to the PPERA came into force, will no longer be considered a political donation.

     346.     The clause will extend (see clause 128(5)) to England and Wales, and also to Northern Ireland and Scotland, but only partially in the latter case. For, although the clause amends an existing enactment that extends throughout the United Kingdom, a similar amendment has been made in Scotland by section 42 of the Local Government in Scotland Act 2003, which received Royal Assent on 11th February 2003. However, this Scottish Act is able to amend the existing enactment only so far as it is part of the law of Scotland that can be amended by the Scottish Parliament. In particular, the Scottish Parliament cannot amend the law of Scotland to confer or remove functions exercisable otherwise than in or as regards Scotland. The existing enactment, though, affects conduct throughout the United Kingdom. The clause therefore amends the existing enactment, to the extent that it is part of the law of Scotland, only so far as the Scottish Parliament could not amend it. This will enable the existing enactment to be fully amended throughout the United Kingdom.

Clause 116: Overview and scrutiny committees: voting rights of co-opted members

347.     Clause 116 and paragraph 76 of Schedule 6 modify the Local Government Act 2000 so as to provide local authorities in England with a power to grant voting rights to members of overview and scrutiny committees who are not members of the authority. The purpose of the change is to meet a commitment given in the Local Government White Paper of December 2001 (Strong Local Leadership - Quality Public Services).

348.     Clause 116 inserts three paragraphs into Schedule 1 to the Local Government Act 2000.

349.     Paragraph 12 to be inserted into Schedule 1 to the Local Government Act 2000 allows a local authority to permit co-opted members of an overview and scrutiny committee, being members of the committee who are not members of the authority, to vote at meetings of that committee. Such a permission may only be given in accordance with a scheme made by the local authority. Such a scheme may include provision for the maximum or minimum numbers of co-opted members with voting rights.

350.     Paragraph 13 to be inserted into Schedule 1 to the Local Government Act 2000 grants the Secretary of State power to make regulations in relation to the exercise by authorities of the power to grant voting rights to co-opted members. It gives the Secretary of State:-

  • the power to make regulations requiring authorities to include certain provisions within their schemes;

  • the power to make regulations requiring local authorities to notify the Secretary of State of the making, variation or revocation of schemes relating to the grant of voting rights; and the power to direct a local authority to vary its scheme.

351.     Paragraph 14 to be inserted into Schedule 1 to the Local Government Act 2000 requires an authority to make copies of its scheme available for inspection by members of the public at its principal office. An authority must also publish a notice recording the making or variation of the scheme, the details of the scheme, and details of how the scheme may be inspected by the public, in one or more local newspapers. If the scheme is revoked an authority must publish a note of the fact.

352.     Paragraph 76 of Schedule 6 amends section 21(10) of the Local Government Act 2000 so that the provision in that section that members of an overview and scrutiny committee who are not members of the local authority may not vote is subject to paragraphs 12 to 14 of Schedule 1 to the Act, which are inserted by clause 116.

Clause 117: Local Polls

353.     This clause confirms, by creation of an express power, the right of a local authority to conduct an advisory poll. There is no obligation on a local authority to hold such a poll, nor any requirement to act in accordance with the result of such a poll.

354.     The extent of this express power is broadly drawn, allowing the local authority to hold a poll on any matter relating to the services for which it is responsible (including where these may be delivered by a third party), or the finance that it commits to those services, or any other matter that is one relating to the authority's power under section 2 of the Local Government Act 2000 (authority's power to promote well-being of its area).

355.     The clause also provides express freedom to a local authority in determining, for any poll it proposes to hold, who to poll and how the poll is to be conducted.

Clause 118: Appropriate sum under section 137(4) of the Local Government Act 1972

356.     Clause 118 amends section 137(4) of the Local Government Act 1972. Section 137 permits parish and town councils in England, and community councils in Wales, to spend up to a given amount in a financial year on items that are of direct benefit to their area in relation to which no other powers of expenditure exist. The amount is found by multiplying the appropriate sum by the relevant population of the authority's area. The appropriate sum in England, which was set by section 137(4AA)(c), is £3.50 per elector, but this is due to be increased in advance of the Bill, by statutory instrument, to £5.00 per elector in time for the financial year 2003/04. The appropriate sum in Wales is already £5.00 per elector and this was set by the Local Authorities (Discretionary Expenditure Limits)(Wales) Order 2000 (SI 2000/990).

357.     Clause 118 provides for the appropriate sum to be determined in accordance with a new Schedule 12B to the 1972 Act.

358.     The Schedule states that the appropriate sum for the financial year in which the Act comes into force, will be £5.00. It also specifies that the sum will automatically be increased for each financial year thereafter in line with the annual change in the retail prices index. This is achieved by multiplying the appropriate sum for the preceding financial year by the ratio between the retail prices index for September of the preceding financial year and the corresponding figure a year earlier.

359.     The Schedule also permits the Secretary of State to specify, by order, an alternative appropriate sum to that calculated with reference to changes in the retail prices index for parish and town councils in England; and for the National Assembly for Wales to specify an alternative appropriate sum for community councils in Wales.

Clause 119: Use of fixed penalties for leaving litter and dog fouling offences.

360.     Clause 119 makes provision in response to the commitment made in the Local Government White Paper of December 2001 (Strong Local Leadership - Quality Public Services). Subsection (1) of clause 119 allows local authorities to retain any sums which they receive from fixed penalties for leaving litter and dog faeces; these fixed penalty receipts will no longer have to be paid to the Secretary of State (in relation to England) or the National Assembly for Wales (in relation to Wales). Under subsections (2) and (3)(a) & (b) of this clause an authority will be able to use its fixed penalty receipts to pay for its statutory functions relating to litter and dog faeces, including the function of giving fixed penalty notices for leaving litter and failing to remove dog faeces.

361.     The Secretary of State and the National Assembly for Wales are given the power to make regulations adding to the activities which an authority may finance using its fixed penalty receipts (see subsection (3)(c) of clause 119). So, for example, an authority could be given the ability to spend its fixed penalty receipts on specified activities related to improving the local environment which are not carried out under the provisions mentioned in subsections (3)(a) and (b). However, the new regulation making power will be sufficiently wide to give an authority complete freedom as to how its spends its receipts (see subsection (4) of clause 119). Note that the regulation making power is referred to in subsection (2)(f) of clause 101 (exercise of powers by reference to English authorities' performance categories).

Clause 120: Fire brigade establishment schemes etc

     362.     Clause 120 will repeal section 19(3) to (8) of the Fire Services Act 1947 ("FSA 1947") and paragraph (a) of section 7(2) of the Fire Services Act 1959 ("FSA 1959") in respect of England and Wales. Section 19(3) requires a fire authority to provide annual information to the Secretary of State on the establishment scheme for its fire brigade. (Section 19(1) requires a fire authority to make a scheme determining the establishment of members of its fire brigade of different descriptions and ranks, and of fire stations and equipment.) Section 19(4) requires the fire authority to obtain the Secretary of State's approval before closing a fire station or reducing the number of fire appliances or firefighting posts; section 19(5) and (6) provide the Secretary of State with powers in relation to the making of establishment schemes; and section 19(8) provides the Secretary of State with powers to order public local inquiries for the purposes of his functions under section 19. (Section 19(7) was repealed by the FSA 1959). Section 7(2)(a) of the FSA 1959 applies section 19 to combined fire authorities newly created by combination scheme orders made under sections 5 and 6 of the FSA 1947. Part 1 of Schedule 7 details the extent of the repeals in the FSA 1947 and the FSA 1959.

     363.     Section 19(3) is unnecessary as fire authorities provide information on their establishments by a number of other means. The repeal of sections 19(4), (5) and (6) will leave decisions on an establishment scheme to be taken locally by the fire authority. The Secretary of State's power under section 19(8) to hold a public local inquiry is unnecessary; he retains the power to hold a public local inquiry under section 33(1) of the FSA 1947. (Section 19(1) and (2) of the FSA 1947 remain in force). The repeal of section 7(2)(a) of the FSA 1959 is consistent with the proposal that decisions of this nature should be taken locally by the fire authority.

     364.     The repeal of section 19(3) to (8) of the FSA 1947 and section 7(2)(a) of the FSA 1959 is consistent with the approach on the removal of unnecessary requirements for consents set out in the Local Government White Paper "Strong Local Leadership - Quality Public Services" published in December 2001; and with the recommendation of the Independent Review of the Fire Service chaired by Professor Sir George Bain published in December 2002.

Clause 121: Repeal of prohibition on promotion of homosexuality

365.     Clause 119 repeals section 2A of the Local Government Act 1986 which prohibited local authorities from intentionally promoting homosexuality or publishing material with the intention of doing so or from promoting teaching in schools of the acceptability of homosexuality. A series of consequential provisions are also included in the Bill to repeal provisions in other legislation that refer to section 2A.

     General

Clause 127: Commencement

366.     Subsections (1) to (4) make express provision about the commencement of some of the provisions of the Bill. Subsection (5) provides for every remaining provision of the Bill to be brought into force, so far as relating to England, by a commencement order made by the Secretary of State and, so far as relating to Wales, by a commencement order made by the National Assembly for Wales.

PUBLIC SECTOR FINANCIAL COST AND PUBLIC SECTOR MANPOWER

367.     Two provisions in the Bill are considered to have direct and quantifiable cost implications on public funds. These are the council tax revaluation and best value grants to parishes. Depending on the approach taken to council tax revaluation and including the costs of handling appeals, the cost could be in the region of £200 million, spread over six years, starting in 2003/04. The estimated cost of best value grants to parishes is £1.2 million per year, the first full financial year this could start is 2004/05 but it may be possible to pay grants sooner.

368.     The establishment of the Valuation Tribunal Service as a non-departmental public body will also have direct and quantifiable cost implications on public funds, but it is likely that this will be funded from within existing resources for the Valuation Tribunal Services. The 160 Valuation Tribunal staff will transfer to the new body. Their employment rights will be protected through the existing employment legislation (TUPE) but there is additional explicit protection of redundancy rights.

REGULATORY IMPACT ASSESSMENT

369.     The Regulatory Impact Assessment prepared for the Local Government Bill covers the following elements which affect businesses, charities or the voluntary sector and reaches the following conclusions:

  • Part 4: Business Improvement Districts - the proposals are intended to provide businesses with the opportunity to work with local authorities and other partners to improve their local area and to contribute to those improvements by way of a levy. This measure is not expected to have any significant effect on competition.

  • Part 5: small business relief; calculation of the non-domestic multiplier; transitional relief; rating of meters; exemptions for agricultural buildings; removal of power to prescribe rateable values; and provision of information - this covers a variety of proposals for changes to business rates, but none are expected to raise any competition concerns in any market.

  • Part 6: billing authorities' power to reduce the council tax discount on second and empty homes - This primarily affects domestic property. There is the potential for impact on businesses that have empty properties used for holiday lets but these will only be affected if the property is let for less than 140 days a year.

  • Part 8: charging for discretionary services; trading; contracting out (staff transfer matters) - Empowering local authorities to charge and trade does have the potential to impact on businesses but is likely to be both positive and negative in different contexts. The impact on competition of the provisions about staff transfer matters where services are contracted out is likely to be negligible.

EUROPEAN CONVENTION ON HUMAN RIGHTS

370.     The Local Government Bill is considered to be compatible with the European Convention on Human Rights. In summary:

  • Parts 4 and 5 - the Convention could be relevant to the Business Improvement Districts and business rates provisions in the Bill, but there are grounds for considering each of these objectively and reasonably justified.

  • Part 6 - all tax proposals touch on property rights protected under the Convention. Provisions giving authorities discretion over council tax discounts in their areas could mean persons in otherwise similar circumstances but living in different areas paying different amounts (possibly discrimination within Article 14). However, the proposals are justified in the public interest and proportionate to policy aims.

  • Part 6 - clause 86 allowing council tax data sharing for empty homes purposes, touches on the right to respect for family and private life. However, it is not considered to constitute an interference with that right and even if it does, it is justified and proportionate to policy aims relating to the economic well-being of the country.

  • Part 8 - the Convention touches on the provisions for charging and trading. These are considered to be proportionate and justified in the wider public interest because they will enable authorities to make better use of their assets and improve the delivery of public services.

  • Part 8 - if Valuation Tribunals are held to determine civil rights, the provisions in the Bill that make the administrative support systems independent of Office of the Deputy Prime Minister will improve the compatibility of the Valuation Tribunals with Article 6 of the Convention.

371.     Section 19 of the Human Rights Act 1998 requires the Minister in charge of a Bill in either House of Parliament to make a statement, before Second Reading, about the compatibility of the provisions of the Bill with the Convention rights (as defined in section 1 of that Act). The Lord Rooker has made the following statement:-

         "In my view, the provisions of the Local Government Bill are compatible with the Convention rights."

 
 
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Prepared: 13 March 2003