Select Committee on Delegated Powers and Regulatory Reform Sixteenth Report



1.  This eight-part bill covers a number of different aspects of local government in England and Wales, many of which concern financial arrangements. It is necessarily complex and we make no criticism of that.


2.  The bill includes a number of delegated powers and the Office of the Deputy Prime Minister (ODPM) has provided a memorandum for the Committee which explains these powers. The memorandum is printed at Annex 1 to this Report.

3.  The delegated powers are conferred on the Secretary of State and/or the National Assembly for Wales ("the Assembly"). The Assembly's own procedures will apply to powers conferred on them; in the case of the Secretary of State, the majority of powers are subject to negative procedure, though there are powers subject to affirmative procedure at clauses 66, 78, 92, 98 and 101. The bill contains a number of Henry VIII powers. There is also an extension of an existing delegated power to be found at clause 72, and some of the functions conferred on billing authorities in connection with business improvement districts might be considered legislative in character.


4.  There are Henry VIII powers at clauses 13(9), 49(5), 58(2), 73(4) (new paragraph 5G), 84(2), 92(1) (new section 87A(1) and (4)), 93(2), 98(1) and (2), 122(1) and 126(3). Clause 118(2) contains (new Schedule 12B, paragraph 4) a power which might be considered a Henry VIII power. We draw to the attention of the House those powers which cause us concern.

Clause 49(5)

5.  Clause 49(5) allows regulations under clause 49(4), making provision for the business improvement district (BID) Revenue Account, to amend any Act, including future Acts. The negative procedure is applied (for regulations by the Secretary of State). The ODPM's memorandum provides no explanation of the need for this provision and states, at paragraph 48, that it has no current intention to use it. In the absence of an explanation and given the Henry VIII power contained in clause 58 to make further provision in relation to any provision (including clause 49) made by or under Part 4 of the bill (see paragraph 6 below), we conclude that clause 49(5) is an inappropriate delegation of power.

Clause 58

6.  Clause 58 is a power (limited to Part 4 of the bill) to make not only consequential provision, but also supplementary, incidental or transitional provision. It includes power (clause 58(2)) to amend Acts, including future Acts. The bill provides for negative procedure for regulations made by the Secretary of State. The Committee considers that the affirmative procedure is appropriate for amendments of Acts in the exercise of this power.

Clause 73(4)

7.  Clause 73(4) inserts new paragraphs into Schedule 9 to the Local Government Finance Act 1988. It replaces the existing system of criminal penalties for failure to provide information with a system of civil penalties. New paragraph 5A provides penalties of £100 (initial failure), £100 (further failure) and £20 (continuing failure daily amount). By paragraph 5G, the penalty may be increased or decreased by order made by the Secretary of State (subject to negative procedure) in relation to England and by the Assembly in relation to Wales. The bill does not set out criteria to be applied in determining an increase or decrease. The Committee considers that the delegation in paragraph 5G would be appropriate if the provision included criteria for an increase or decrease in the amount of civil penalty under paragraph 5A or specified a maximum penalty which could be set by the order. If, however, the House accepts the provision in paragraph 5G, we consider that the affirmative procedure should apply, recognising that this would affect orders by the Secretary of State only and would not apply to orders made by the Assembly.

Clause 92

8.  Part 6 of the Local Government and Housing Act 1989, which is amended by Part 7 of the bill, contains provision for Housing Finance, including Housing Revenue Accounts (HRA). Clause 92(1) inserts a new section 87A in Part 6 of the 1989 Act, which enables the Secretary of State/the Assembly to amend, repeal or re-enact any provisions of Part 6 and to make incidental and similar provision (including amendments of Acts). Orders by the Secretary of State are subject to affirmative procedure. There is no limitation or indication in the bill as to the purposes for which the power is to be used. The reason given for the provision in the Explanatory Notes accompanying the bill, paragraph 241, is that it will "provide a mechanism whereby … changes to the HRA may be made as and when required to reflect new circumstances or to improve the financial arrangements for local authority housing". The ODPM's memorandum provides little further explanation (paragraphs 110 and 111). The Committee considers that this delegation is too wide and that it would be appropriate only if its extent were limited on the face of the bill to specific provisions in Part 6.

Clause 98

9.  Clause 94(1) gives local authorities new power to charge by agreement for discretionary services. But by clause 94(2), this does not apply where there is an existing power to charge or a prohibition on charging. There is also new provision in clause 96 about commercial activities by local authorities.

10.  Clause 98(1) allows the Secretary of State by order to amend or repeal enactments (including future enactments) that prevent or obstruct best value authorities from charging or doing things for commercial purposes. Clause 98(2) gives the Secretary of State a further power to amend, repeal or revoke any enactment (other than clause 94) which makes provision for or in connection with a best value authority's power to charge for a discretionary service. It could be used, for example, to repeal a limited power, which would have the effect that the wider power in clause 94(1) would apply, because clause 94(2) would not then prevent it from doing so.

11.   These are wide powers, which is acknowledged in the "super-affirmative" procedure[2] provided by clauses 98(9) and 99. The Committee is persuaded that, in the light of the procedure provided, the powers are generally appropriate. However, we would not consider it appropriate for the power in clause 98(1) to be used to repeal clause 94(2) or 96(2), and recommend that there should be a specific exclusion similar to that which is included in clause 98(2) for section 94.

12.  Clauses 98(10) and 99(7) provide for negative procedure, instead of super-affirmative procedure, where the order merely alters the category of best value authorities to which an earlier order applies. Similar provision is made at Schedule 3 paragraphs 8(6), 9, 13 and 14(3) for sections 16 and 17 of the Local Government Act 1999 and sections 5, 6 and 9 of the Local Government Act 2000 ("the 2000 Act"). The Committee accepts this for orders which disapply the provisions of an earlier order. But some extensions of earlier orders could be of considerable significance. The Committee considers that ordinary affirmative procedure, but not negative procedure, is appropriate for orders which extend earlier orders to additional authorities or descriptions of authority.

Clause 122(1)

13.  Clause 122(1) enables orders and regulations made under other provisions of the bill to include incidental, supplementary, consequential or transitional provision which can include amendments to Acts. Under clause 122(5), most instruments made by the Secretary of State under the bill are subject to negative procedure only, whether or not the instrument also relies on clause 122(1). The Committee considers (as with clause 58) that any amendment to an Act in the exercise by the Secretary of State of power in the bill to make supplementary or incidental provision should be subject to affirmative procedure, even if this means that it must be made in a separate instrument.


14.  There are several other significant powers to which the Committee wishes to draw the attention of the House.

Clauses 47 and 48

15.  Clauses 47 and 48 concern BID levy. The manner in which BID levy is to be calculated, and those who are liable to pay it, are set out in the BID arrangements made by a billing authority. Although non-domestic ratepayers in the district have the opportunity to vote in a ballot on the proposals for the arrangements, those arrangements have the effect of imposing requirements to pay on all the relevant ratepayers in the district, regardless of whether or not they voted for the proposals. In those circumstances, the power to make BID arrangements has some of the characteristics of a power to legislate. The Committee acknowledges that the essence of BID arrangements is that they are local to particular districts, but draws these important provisions to the attention of the House.

Clause 56(4)

16.  Under clauses 51 and 52, BID arrangements have to be the subject of a proposal which must be approved in a ballot. If the proposals are not approved, they do not come into force. Clause 56(4) enables the Secretary of State to make provision "as to the alteration of BID arrangements". This would appear to enable the Secretary of State to change (or allow billing authorities to change) arrangements approved in a ballot to arrangements which may not have been approved had they been set out in the original proposal. Paragraph 54 of the memorandum suggests that it is not envisaged that unilateral alteration would be permitted. We suggest that the House may wish to invite the Government to explain why the provision goes wider than appears necessary from the intended use described in the memorandum. In the absence of a satisfactory explanation, the Committee considers that the delegation would be appropriate only if limited so as to prevent unilateral action contrary to the ballot. Alternatively, if the power is not limited on the face of the bill, then the affirmative procedure should apply to regulations by the Secretary of State. (For Wales, Assembly procedures apply.)

Clause 57

17.  Clause 57 enables the Secretary of State by regulations (subject to negative procedure) to make provision for the ballot. This is unexceptional in most respects and is well-precedented in arrangements under the 2000 Act for elections for mayors and for referendums on new executive arrangements. But in those cases the Act itself says who is to be entitled to vote. The Committee recommends that regulations by the Secretary of State prescribing who shall be entitled to vote (clause 57(2)(b)) should be subject to affirmative procedure. (For Wales, Assembly procedures apply.)

Clause 104

18.  This clause enables the Secretary of State by order to change the dates of local government elections in 2004 to coincide with the European Parliamentary election. Clause 104(5) requires the Secretary of State to consult the Electoral Commission and other bodies as he considers appropriate prior to making an order. Paragraph 155 of the memorandum suggests that an order-making power is needed because no final decision has been taken and paragraph 162 states that one of the reasons for the negative procedure provided is that Parliament will have an opportunity to consider the issues of principle as the Bill progresses. On the assumption that all the relevant material (regarding the consultation) will at that time be available, we find this reasoning acceptable. The House may wish to seek reassurance from the Government that this will be the case.


19.  We draw to the attention of the House the recommendations in paragraphs 5, 6, 7, 8, 11, 12, 16 and 17 above, and the point raised in paragraph 18. There is nothing else in the delegated powers in the bill to which the Committee wishes to draw the attention of the House.

2   The "super-affirmative" procedure involves laying a proposal before Parliament for a first-stage scrutiny before the draft order itself (subject to affirmative procedure) is laid, and resembles the procedure under the Regulatory Reform Act 2001. There are precedents in sections 16 and 17 of the Local Government Act 1999 and sections 5, 6 and 9 of the Local Government Act, though in the former case future enactments are not expressly covered. Back

previous page contents next page

House of Lords home page Parliament home page House of Commons home page search page enquiries index

© Parliamentary copyright 2003