Select Committee on Delegated Powers and Regulatory Reform Sixteenth Report


Part 7: Housing Finance etc.

Clause 92: Housing Revenue Accounts etc: adaptation of enactments

105.  Clause 92 inserts a new section 87A into the Local Government and Housing Act 1989 ("the 1989 Act"). The new section 87A is a broad Henry VIII power. It allows the Secretary of State and the National Assembly for Wales, by order, to amend, repeal, re-enact, disapply or modify provisions in Part 6 of, and Schedule 4 to, the 1989 Act. Schedule 4 of the 1989 Act is introduced by section 75 in Part 6 of the 1989 Act.

106.  The new section replaces the existing powers in paragraph 3 in Part 4 of Schedule 4 to that Act which enables Schedule 4 to be amended by order subject only to negative procedure. Because section 87A confers broader powers than paragraph 3 of Part 4 of Schedule 4, it was considered appropriate to make the exercise of the clause 87A powers in England subject to affirmative resolution of both Houses of Parliament. Section 87A(6) provides for this.

107.  Section 87A, unlike the current paragraph 3 of Part 4 of Schedule 4 to the 1989 Act, would also allow amendments to be made to sections 74 to 88 of the 1989 Act.

108.  Section 87A(2)(b) explicitly allows an order to confer, expand, curtail or repeal discretions conferred on the Secretary of State or National Assembly for Wales or any other person. Section 87A(3) makes clear that it could be used to amend the Secretary of State and National Assembly's powers to make directions (e.g. as to credits and debits to the Housing Revenue Account) or determinations (e.g. as to the calculation of Housing Revenue Account subsidy).

109.  The powers could be exercised differently for different cases or different authorities e.g. provisions could be modified or disapplied for some, but not all authorities.

110.  It is not possible to say exactly how these powers would be used. There are no current plans to make an order under the new section 87A. However, if these wider powers to amend Schedule 4 to the 1989 Act had been available four years ago, when the Government first committed itself to removing rent rebates from the Housing Revenue Account, then proposals could have been put to Parliament straight away, as local government and tenants groups had asked.

111.  The powers conferred by the new section 87A will enable such technical changes to the Housing Revenue Account to be made in future, subject in England to parliamentary approval, to reflect new circumstances or to improve financial arrangements for local authority housing.

112.  Given that the powers conferred by the new section 87A are very broad, it was considered appropriate that in England, they should be subject to affirmative resolution of both Houses of Parliament (see section 87A(6)). This can be contrasted with the narrower powers in paragraph 3 of Part 4 of Schedule 4 to the LGHA 1989, which they replace, which only required negative resolution procedure. In Wales, any order made under the new section 87A would be subject to the National Assembly's own scrutiny procedures in accordance with its standing orders.

Clause 93: Local housing authority houses: rents

113.  Clause 93(1) effectively repeals section 24(3) of the Housing Act 1985 in England, by limiting the effect of that section so that it applies only to Wales.

114.  Section 24(3) of the Housing Act 1985 requires local authorities in England and Wales, when setting their rents, to have regard to the principle that rents of houses of any class or description should have broadly the same proportion to private sector rents as the rents of houses of any other class or description.

115.  Since April 2002, the rent restructuring policy for the social housing sector in England has encouraged social landlords to move their rents towards a national rents formula, designed to produce a pattern of rents which is fairer and more coherent to tenants, while keeping rents affordable and well below market levels.

116.  Some authorities in England have suggested that the requirement in section 24(3) might make it difficult for them to restructure their pattern of rents in the way required in England, particularly towards the end of the restructuring period. Therefore Clause 93 (1) is required to remove this potential obstacle to achieving social rent reform.

117.  The National Assembly for Wales has not introduced a rent restructuring policy for Wales, but may decide to do so in the future. Clause 93(2) would allow the National Assembly to repeal by order section 24(3) (as amended by subsection 1) if necessary at any time in the future. This power would allow the National Assembly for Wales to remove in Wales a potential obstacle to achieving fair and transparent rent systems which deliver affordable rents. Any such order would be subject to the National Assembly's own scrutiny procedures in accordance with its standing orders.

PART 8: MISCELLANEOUS AND GENERAL

Chapter 1

Clause 95: Power to disapply section 94(1)

118.  Clause 95 provides a power for the Secretary of State or (in relation to authorities in Wales) the National Assembly for Wales, to make orders disapplying the power to charge in clause 94 either indefinitely or for a particular period in relation to:

  • particular descriptions of, or particular best value authorities;
  • the provision of particular kinds of services by all, particular or particular descriptions of best value authorities.

119.  This reserve power would only be used exceptionally where for example it emerged that authorities were exercising the power to charge in a manner that ran contrary to the intention of the provisions.

120.  An example of use might be where evidence of unfair competition emerged where an authority marketed a service that undercut local private service suppliers, especially if the authority was giving substantial numbers of people discounts on the charges. The power to charge might also be withdrawn generally for a particular service or services where it became evident that it would not be appropriate for any authorities to charge for them.

121.  Clause 95 could be used to withdraw the power to charge for discretionary services should an authority not comply with the various requirements placed on the power in clause 94 of the Bill. In particular authorities are under a "duty to secure that, taking one year with another, the income from charges… does not exceed the costs of provision". If it became clear that an authority was not complying with this duty in clause 94(3) and effectively undertaking unauthorised trading activities, clause 95 would enable the power to charge to be withdrawn.

122.  It is appropriate that the Secretary of State has this reserve power to deal with particular circumstances as they arise. The negative resolution procedure is appropriate, as the powers might have to be exercised rapidly.

Clause 96: Power to trade in function-related activities

123.  Clause 96 provides a power for the Secretary of State, or (in relation to authorities in Wales) the National Assembly for Wales, to make an order enabling best value authorities (with the exception of Police Authorities and the London Development Agency) to trade in any of their ordinary functions. An order under this provision may be made in relation to all, particular or particular descriptions of best value authorities.

124.  It may also relate to all activities in relation to a function, particular activities, or descriptions of activity. It is therefore intended that the powers will enable best value authorities to enter into trading agreements or arrangements with any person for the provision of goods and materials, staff, accommodation and services.

125.  The approach of granting this power through delegated legislation is so as to provide maximum flexibility and thus enable the scope of the trading power to be related to an authority's performance categorisation where appropriate, in accordance with clauses 100(4) and 101(1) and (2)(e)). This is consistent with proposals in the White Paper - Strong Local Leadership - Quality Public Services- that the freedom to trade on a wider basis should only be available to authorities that have a strong record on performance. The operation of the trading power by authorities with reference to their description, may alter from time to time depending on their performance categorisation. Accordingly it is considered appropriate to grant this power by order, rather than on the face of the Bill so as to facilitate selectivity and flexibility as authorities circumstances change over time.

126.  Clause 96 is subject to the negative resolution procedure which we consider is an appropriate level of Parliamentary scrutiny given that the exercise of the power by local authorities will be dependant on an order made under clauses 100(4) and 101(2)(e) (exercise of powers by reference to authorities performance categories) which is also subject to the negative resolution procedure.

Clause 97: Regulation of trading powers

127.  Clause 97 provides a general power to impose conditions on the exercise of any trading power by a best value authority, including where the trading activity is undertaken through a company. Best value authorities are required to have regard to any guidance that may be issued about the exercise of their trading powers. Guidance may address certain matters that authorities will need to have regard to when exercising trading powers, including potential implications arising from competition and EC legislation.

128.  An order made under this provision may apply to all, particular or particular descriptions of best value authorities. It is intended that an order under clause 96 will include clause 97 conditions. With the power to set conditions in this context, we wish to ensure that any trading arrangements will not expose public funding to unacceptable risk, or give authorities undue advantage in the market place. An example of the kind of safeguard we have in mind might include requiring authorities to undertake a risk assessment as part of a business case to be prepared in advance of any proposed trading activity to ensure that the exercise of the power is justified.

129.  Clause 97 is subject to the negative resolution procedure. It is largely likely to be used in the context of clause 96, where we would propose to impose conditions and it is also linked to orders made under the performance categorisation provisions which are themselves subject to the negative resolution procedure. There is no immediate intention of making a clause 97 order imposing conditions in relation to trading powers other than those granted under clause 96. However were a situation to arise warranting such measures it is likely to be in response to a case requiring the swift imposition of conditions in order to regulate certain trading activities. The negative resolution procedure would facilitate rapid action in such cases.

Clause 98: Power to modify enactments in connection with charging or trading

130.  Clause 98 confers powers that would enable the Secretary of State to make an order which amends, repeals, revokes or disapplies any enactment that:

  • prevents or obstructs a best value authority's ability to charge for the provision of a discretionary service or carry out trading in its functions; or
  • Confers power on a best value authority to charge for a discretionary service. The effect of disapplying such a power would be to substitute, for the specific provision in question, the general power to charge under clause 94.

131.  An order under clause 98 may be made in respect of all, particular or particular descriptions of best value authority.

132.  This Henry VIII power to modify enactments is precedented in the Local Government Acts 1999 (section 16) and 2000 (sections 5 and 6). Apart from subsection (10) clause 98 is closely modelled on section 5 of the 2000 Act.

133.  It is envisaged that these powers would be used in circumstances where, once authorities' began to use the new powers proposed at clauses 94, 96 and 97 of this Bill, it became apparent that the requirements placed on them by earlier legislation in some way conflicted with those placed on them by the new powers to charge or trade. This power might also be used to rectify circumstances where other legislation in some way prevented or restricted authorities' ability to make use of the powers to charge and to trade.

134.  By virtue of clause 94(2), clause 94(1) will not apply where there is an existing power to charge or a prohibition on charging. However it may be acknowledged that an existing charging regime in respect of specific services may be so restrictive or cumbersome that authorities are discouraged from providing the discretionary service in question. It may also be acknowledged in the future as appropriate for authorities to be allowed to charge for a service where there is a prohibition on charging. In such circumstances an order might be made under the power proposed at clause 98 to substitute the existing charging regime with the charging power under clause 94(1); or to remove a prohibition on charging thereby substituting it with the power under clause 94(1).

135.  Authorities may develop innovative approaches to trading activity that may lead to the identification of restrictions that obstruct or prevent sensible initiatives. The power would provide a means to respond quickly in developing circumstances, which may not be possible if reliance was placed on primary legislation alone. Scarcity of Parliamentary time to deal with changes to primary legislation highlights the need for a more flexible and responsive approach.

136.  Where the Secretary of State proposes to make an order under this provision which has effect in Wales, he may not do so without first consulting the National Assembly for Wales (NAW). Neither may the Secretary of State make provision under clause 98 which affects legislation made by the NAW without the consent of the Assembly. The NAW may submit their own proposals to the Secretary of State as to how any proposed order under clause 98 should be exercised in relation to Wales.

137.  We recognise that this is a very broad power and that Parliament will rightly expect it to be subject to rigorous scrutiny procedures. Accordingly such close scrutiny will be facilitated by the enhanced affirmative resolution procedure explained in detail under clause 99.

138.  Clause 98(10) makes provision about the parliamentary procedure applicable to orders that amend earlier orders made under this provision just for the purpose of causing them to apply, or not apply, in relation to particular authorities or authorities of a particular description. Orders amending earlier orders in this manner are to be subject to the negative resolution procedure in either Houses of Parliament. We consider that this level of scrutiny is appropriate given the narrow and specific nature of the changes proposed.

Clause 99: Procedure for orders under section 98

139.  Clause 99 sets out the draft affirmative resolution procedure to be followed by the Secretary of State in making orders under clause 98. Additionally, clause 99 provides for the detailed scrutiny of any such proposed orders before they are laid. By virtue of subsection 99(1), the Secretary of State is required to consult best value authorities and others before making an order. Subsequently, subsection 99(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, including the views of the NAW, where the proposals affect Wales. Only after 60 days can an order be laid before Parliament under subsection 99(3). The Secretary of State must take account of any representations made during that period (subsection 99(5)) and any order must by virtue of subsection 99(6) be accompanied by a statement giving details of any such representations, and any changes made to the proposals.

140.  The Government believes that these additional procedures, in combination with the affirmative resolution, will ensure that Parliament has available to it sufficient information before approving any order made under clause 98.

Clause 100: Categorisation of local authorities by reference to performance

141.  This clause provides for the Secretary of State to make an Order reflecting the audit commissions' categorisation of local authorities. The Secretary of State can only make an order which reflects the Audit Commissions findings as reported to him. He has no discretion to alter the findings of the Commission as reported to him (other than to correct typographical or clerical errors). The power is exercisable by negative resolution. This is because there will be no direct effect on an authority as a result of the order. The purpose of this order is merely to provide a reference point by which other legislative mechanisms (for example regulatory reform orders) may be used to modify the law in relation to categories of authority based upon performance.

Clause 101 and Schedule 3: Exercise of powers by reference to authorities' performance categories

142.  Clause 101(1) makes it clear that the powers listed in 101(2) may be exercised differentially and in relation to the categories of authority set out by the Secretary of State by order under 100(4).

143.  Clause 101(3) provides that Schedule 3 has effect. Schedule 3 amends various powers in order that they can inter alia be applied differentially to categories of authority. The powers that are so amended are; sections 4,5,16 and 19 of the Local Government Act 1999 and section 3 of the Local Government Act 2000.

144.  Clauses 101(4) and (5) provide that other existing powers may be amended in order that they can be applied differentially to authorities. The power is limited to amending powers to allow this differentiation and does not allow any other amendment to existing powers. This power is exercisable by affirmative resolution procedure.

145.  Schedule 3 also makes a slight modification to the procedure for making orders under sections 16 and 19 of the Local Government Act 1999 and under section 3 of the Local Government Act 2000. The modification provides that where one of these orders is required to be amended merely to extend its provisions to another authority or category or to make provisions cease to apply to a particular authority or category that this can be done by negative resolution order. The rationale for this is that Parliament will already have considered the substance of the order by way of debate in both Houses and a less cumbersome procedure is therefore adequate merely for adding or deleting an authority or category from the order.

Clause 102: Staff transfer matters: general

146.  This allows for the Secretary of State, the National Assembly for Wales and Scottish Ministers to issue directions to require best value authorities, in contracting with other persons for the provision of services or in circumstances where a contracted-out service is brought back into the public sector on the termination of a contract, to deal with staff transfer matters (employment or pensions) in accordance with any directions made. The clause also requires authorities to have regard to guidance on staff matters issued by the Secretary of State or the Assembly.

147.  The background to this is the commitment made as part of a package of workforce measures, following the review of Best Value, to legislate to make statutory within local government the provisions in the Cabinet Office Statement of Practice on Staff Transfers in the Public Sector and the Annex to it, A Fair Deal for Staff pensions ("COSOP").

148.  It is intended to use the direction making powers to ensure that contracting exercises are conducted either on the basis that TUPE will apply or, in circumstances where TUPE does not apply, that staff involved should be treated no less favourably than had the Regulations applied, unless there are exceptional circumstances. The power may be used in relation to terms and conditions and pensions provision for transferring staff.

149.  The direction making powers will allow the Secretary of State to make the principles of COSOP applicable to best value authorities.

150.  It was felt that a direction making power was the most appropriate way to apply the principals of COSOP to local authorities. In particular COSOP refers to exceptional circumstances which are cases when TUPE does not apply and where we would not want it to apply. These may change over time and it was felt that the more flexible power to give directions would allow a greater flexibility than might be the case with other forms of delegated powers. The power is deliberately drawn narrowly so as not to allow the Secretary of State, in exercising it, to stray into unrelated areas of employment law. Clause 102 is a discretionary power and allows the Secretary of State to exercise his discretion to give directions to any or all best value authorities.

151.  Clause 103 provides that the direction making power contained in 102 shall (i.e. it is not discretionary) be exercised by the Secretary of State in certain cases. The power must be used in relation to staff transferring from a local authority with the protection of the TUPE regulations. The clause requires that in respect of these people the Secretary of State must make provision ensuring that their pension rights are protected. The reason for this is that the TUPE Regulations specifically do not include occupational pensions.

Clauses 104 and 105: Power to change the date of local elections in England and Wales,

152.  The order which would be enabled by Clause 104 would allow the Secretary of State to move the date of the local elections in England and the Greater London Authority (GLA) elections in 2004 so that they can take place at the same time as the European Parliamentary elections, planned for 10 June 2004. The Secretary of State would be able to move all local elections and GLA elections in 2004, including parish council elections, or just elections to principal councils and the GLA.

153.  The order-making power would also enable the Secretary of State to make certain specified changes to primary legislation and is likely to be used in conjunction with the power in clause 122 to make incidental, supplementary and consequential changes. The Secretary of State will use these powers where he believes these are necessary to ensure the smooth running of elections in 2004 and to ensure consistency and clarity in the conduct of local authority business where the occurrence of other matters is governed by reference to local election dates.

154.  Clause 104(5) requires the Secretary of State to undertake consultation, both with the Electoral Commission and such other bodies as he considers appropriate, before making an order. The ODPM and the Lord Chancellor's Department undertook a consultation exercise on this proposal, which closed on 31st January 2003. The Government intends this exercise to fulfil the requirement to consult in subclause 5. It is for this reason that the Bill includes a provision at subclause 6 allowing consultation which takes place in advance of Royal Assent to satisfy the requirement.

155.  The Government is currently considering the responses to the consultation and intends to announce in due course, having taken into account the responses to consultation, whether it is still minded, subject to the passage of the Local Government Bill, to move local and GLA elections in 2004 to coincide with the European Parliamentary elections.

156.  The Government has not yet decided what further modifications to primary legislation it would be minded to propose in any order which it brought forward. This decision will be informed by the detailed analysis of responses to consultation recently completed and further discussions, including with the Electoral Commission. Given previous experience of changes to primary legislation that were required when local elections were moved and combined with the General Election in 2001, clause 104 allows the Secretary of State to make certain modifications to primary legislation which may be desirable in the event that the date of local and GLA elections is moved. In particular:

  • subclause 2(a) contains a power to amend Section 89 of the Local Government Act 1972 in order to move, if he so elects, any by-elections to fill casual vacancies in the office of councillor for a principal local authority or a parish council;
  • subclause 2(b), together with subclause 3, contain a power to allow the Secretary of State to disapply section 16(1) of the Representation of the People Act 1985 which postpones for three weeks the poll at an election of parish councillors where the date of the poll at a European Parliamentary general election and the ordinary day of election for councillors in England and Wales are the same;
  • sub-clause 2(c) contains a power to allow the Secretary of State if he thinks it fit to move, until after the date of the European Parliamentary elections, the annual meetings of authorities where there are no ordinary elections in 2004 but where there might be by-elections. (The annual meetings will automatically be postponed where there are ordinary elections);
  • sub-clause 4 contains a power to allow the Secretary of State to make any consequential provision which may be needed if the National Assembly for Wales opt to move the date of their local elections to 2004. (This is a technical provision to deal with the fact that existing legislation is framed on the basis that there is one and the same "ordinary day" of elections in England and Wales and if the National Assembly move their elections and the Secretary of State does not move the elections in England, these references will need to be modified.)

157.  The need for other changes to existing legislation may become clear when the results of the consultation are analysed. The Government intends to use the power to make consequential provisions in section 122 to make any such changes.

158.  There are two further provisions which the Government will consider using in bringing forward any order.

  • Clause 126 will allow the Secretary of State to make changes to primary legislation consequential on any provision in the Bill when enacted, including clause 104. This is unlikely to be used in view of the power available in clause122, but in view of the need to make any order under clause 104 shortly after commencement, could be used to pick up any changes which are subsequently identified as necessary.
  • Paragraph 7 of Schedule 6 inserts a new subsection 5A into Section 15 of the Representation of the People Act 1985 (combination of polls) to allow the Secretary of State to make provision in relation to combined elections which modifies any enactment relating to election of members of the European Parliament or any instrument made under any such enactment or under the Representation of the People Acts.

159.  The Committee should note that the rules for the conduct of a combined poll will need to be updated and that existing rule-making powers will be used in order to do this.

160.  The Secretary of State will consider as part of the response to consultation whether, in the event that clauses122, 126 and paragraph 7 of Schedule 6 are enacted, whether further consequential amendments are required to be made in the order moving the date of local elections.

161.  Clause 105 has a similar effect to Clause 104, allowing the National Assembly for Wales to move local elections for which they are responsible. The Clause, in conjunction with clause 117, makes similar provision for the National Assembly of Wales to make equivalent related and consequential and amendments in Wales as the Secretary of State has in England. The power in clause 126 to amend primary legislation other than in an order moving the elections is not available to the National Assembly, but the Secretary of State would use it in respect of Wales, where necessary and with the agreement of the Assembly. Use of the order-making power in Clause 105 is entirely a matter for the Assembly, who have informed the Office of the Deputy Prime Minister that they have no intention of using the power at present.

162.  The negative resolution procedure applies to both of these powers. We consider that this is appropriate and necessary, because:

  • Parliament will have had sufficient opportunity to consider the issues of principle when considering the Bill clauses,
  • the scope of the powers is relatively narrow and specific; and if it is decided to proceed it will be necessary to make the order as soon as possible, to allow electoral administrators maximum time to prepare for the June 2004 combined elections. We have been heavily criticised in the past for agreeing late changes, and believe we should provide as much time as possible between changes being made and the date of the elections themselves, particularly given the complexities of combining European Parliamentary elections with local elections in London. The Government believes that, in the event it decides in principle to use the power which Parliament is currently considering during the passage of the Bill, electoral administrators should be allowed the maximum time possible for preparations to ensure the smooth running of elections in 2004.

163.  The Committee will also wish to note that regulations under section 85 of the Local Government Act 2000, which allow the Secretary of State to move the dates of council elections as part of a change to a new electoral cycle, are subject to the negative resolution procedure.

Clause 106 and Schedule 4: The Valuation Tribunal Service

164.  Clause 106(9) provides that Schedule 4 has effect. Schedule 4 deals with the constitution of the Valuation Tribunal Service including disqualification from membership at paragraph 2. Paragraph 2(1)(b) provides that a person shall be disqualified from being appointed a member of the Service if he is subject to a bankruptcy restrictions order or interim order. Bankruptcy restrictions orders will be made under Schedule 4A to the Insolvency Act 1986 (inserted by Schedule 20 to the Enterprise Act 2002.) Schedule 4A extends to England and Wales by virtue of section 280(1) of the Enterprise Act 2002.

165.  Under section 268 of the Enterprise Act 2002, the Secretary of State may by order amend pre-8th November 2002 legislation that imposes bankruptcy related disqualifications. Orders under that section may remove disqualifications or extend them to, or replace them with disqualifications of, persons subject to a bankruptcy restriction regime and may also provide for disqualifications to be applied at a specified person's discretion.

166.  Paragraph 25 of Schedule 4 provides that paragraphs 2(1)(c), (2) and (3) of Schedule 4 (disqualification of bankrupts in Northern Ireland or Scotland) will be treated as though they were pre-8th November 2002 legislation for the purposes of section 268 of the Enterprise Act 2002. An order under that section will be able to modify those paragraphs should bankruptcy restrictions orders, or a similar regime, be introduced in Northern Ireland or Scotland.

167.  Paragraph 25(2)(a) provides that there will be no power in relation to the identified paragraphs of Schedule 4 to make the application of a disqualification provision subject to a person's discretion, i.e. the power contained in section 268(5)(d), (6) to (8) and (15) is omitted. As that power is omitted, and as the provisions on which the power will operate are identified by paragraph 25, we consider that the negative resolution procedure is appropriate.

Clause 110: Registered social landlords

168.  Clause 110 amends the Audit Commission Act 1998 to give the Audit Commission the power to inspect Registered Social Landlords. The clause inserts into the Audit Commission Act 1998 a new section 41B which includes an order-making power exercisable by the Secretary of State, or in the case of Wales the National Assembly for Wales (the relevant person).

169.  In relation to England, the power allows the Secretary of State to make an Order allowing the Audit Commission to charge registered social landlords for inspections. The power is exercisable by negative resolution but only after consultation with the Audit Commission, the Housing Corporation and persons appearing to represent registered social landlords effected.

170.  It was felt that negative resolution is appropriate in this case. The power is tightly drawn and its use is subject to specific consultation requirements.

Clause 114: Standards committees and monitoring officers

171.  Section 53 of the Local Government Act 2000 provides that every relevant authority in England and Wales must establish a standards committee. An authority's standards committee has the general function of promoting and maintaining high standards of conduct by members and co-opted members and of assisting them in their observation of the authority's code of conduct.

172.  Clause 114 makes provision for a standards committee to appoint one or more sub-committees from among its members for the discharge of any of its functions. This will enable, for example, a standards committee to appoint a sub-committee of a smaller and more suitable size to hear allegations of breaches of the authority's code of conduct.

173.  There are currently powers under section 53(6) of the Local Government Act 2000 for the Secretary of State to make provision by regulation in respect of standards committees of relevant authorities in England and police authorities in Wales. The National Assembly of Wales may make similar provision in respect of relevant authorities in Wales, other that police authorities, under the powers currently available under section 53(11) of the Local Government Act 2000.

174.  This clause provides that regulations made under section 53(6)(a) and (c) to (g) or section 53(11) of the Local Government Act 2000 may also make provision in relation to any sub-committee appointed by a standards committee. This draws the sub-committees into the ambit of the existing regulation making power under which regulations can be made, and have been made, in respect of standards committees.

175.  As regards relevant authorities in England and police authorities in Wales the regulation making power in respect of sub-committees does not extend to making provision for the appointment to sub-committees of an "independent" member, that is a person who is not a member or officer of that authority or any other relevant authority. The composition of the standards committee, from which the sub-committee will be drawn, will already include at least one "independent" member, as required by section 53(4)(b) of the Local Government Act 2000. It is not felt necessary to make any further provision as to the appointment of "independent" members to sub-committees.

176.  As regards relevant authorities in Wales other than police authorities, the regulation making power in respect of Wales in this clause includes the power to regulate in respect of the appointment of "independent" members to the sub-committee. There is currently no statutory requirement that there be such a person on standards committees in relevant authorities in Wales. The issue of regulation in respect of standards committees (including the appointment or otherwise of "independent" members) is a matter left to the National Assembly for Wales under the Local Government Act 2000. This clause reproduces that position in respect of sub-committees.

177.  The current procedure for regulating in respect of standards committees is by the negative resolution procedure. As this clause seeks to draw sub-committees of standards committees into the ambit of that regulation making power, the negative resolution procedure is felt to be the appropriate procedure.

Clause 116: Voting rights on overview and scrutiny committees

178.  Clause 116 inserts new paragraphs (paragraph 12 to 14) in Schedule 1 of the Local Government Act 2000. Under this new provision a local authority in England may establish a scheme under which it may permit a co-opted member of its overview and scrutiny committee to vote at meetings of the committee.

179.  The Government believes that giving authorities the ability to grant voting rights to co-optees on overview and scrutiny committees will allow them to strengthen the role that these committees play in holding the authority, and where appropriate the executive, to account for its decisions. It will be for local authorities to decide whether to adopt a voting rights scheme and, if they do, to decide how it will operate. The Government wants local authorities to be locally accountable for any voting right scheme they adopt. It is for this reason that the provision will require authorities to publicise any schemes, or any changes or revocations to schemes. Consequently where there is conflict over the nature of a voting rights scheme, the Government believes that this will be settled through local debate.

180.  Clause 116 does however include reserve power for the Secretary of State to regulate such schemes. This reserve power is to be found at paragraph 13 of the provision to be inserted into Schedule 1 of the Local Government Act 2000. The Secretary of State would only wish to exercise this power where there was concern that local choice was being abused, for example if there was evidence that local authorities were undermining the role of overview and scrutiny committees through the co-option of voting members. There are no proposals to make use of this power in the absence of evidence of any abuse.

181.  Any regulations made by the Secretary of State would be subject to the negative resolution procedure which is considered appropriate given the nature of the power.

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

182.  Clause 118 amends section 137(4) of the Local Government Act 1972. The clause affects parish and town councils in England and community councils in Wales. It provides for the 'ceiling' on their 'section 137' expenditure to be determined in accordance with a new schedule to the 1972 Act. The Schedule states that the 'ceiling' for the financial year in which the Act comes into force, will be £5.00 per elector and that it will automatically be increased for each financial year thereafter in line with the annual change in the retail prices index.

183.  The Schedule also permits the Secretary of State to specify, by order, an alternative 'ceiling'. The Order making power is exercisable by negative resolution. It was felt that this procedure is appropriate as it replicates the current position as found in section 137 of the 1972 Act. Having introduced the inflationary rise then it is now much more unlikely that the power will in fact be used. The likelihood is that it will be used only in exceptional circumstances (where for example the economy has taken a very unexpected turn and the inflationary rise is effected in an undesirable manner).

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

184.  Clause 119 repeals the statutory requirement that local authorities pay to the Secretary of State (or in Wales, the National Assembly) any receipts from fixed penalties for leaving litter and dog mess. These receipts may in future be retained and used to finance authorities' statutory litter and dog mess functions. This clause gives the Secretary of State (or in Wales, the National Assembly) the power to make regulations adding to the types of function which a local authority may finance using its fixed penalty receipts.

185.  The Secretary of State envisages that in due course her regulation making power will be exercised to expand the range of environmental functions which may be financed using fixed penalty receipts. High performing authorities may be given complete freedom as to how they spend their receipts. These matters have been left to delegated legislation, because we wish to ensure that the often neglected problems of litter and dog mess are being tackled before local authorities are allowed to spend their receipts from fixed penalties on other functions. The regulation-making power provides the Secretary of State with the flexibility to keep matters under review and to act where she sees that particular environmental problems are being starved of finance.

186.  Regulations made by the Secretary of State or the National Assembly may also cover what a local authority is to do with its receipts pending their being used. Regulations may set a deadline by which time a local authority must spend its receipts, and make clear what the authority must do with the receipts if this deadline is missed. The powers of the Secretary of State are sufficiently wide to provide for receipts to be paid to her where authorities do not spend their receipts within a reasonable time (the National Assembly has corresponding powers for Wales). If necessary (to safeguard the receipts) regulations may set out accounting arrangements. For similar reasons, the clause confers on the Secretary of State and the Assembly an information gathering power.

187.  The Secretary of State's regulation making powers are subject to the negative resolution procedure. We consider that this is an appropriate level of Parliamentary scrutiny given the nature of the power. The powers might have to be exercised rapidly if, for example, there is any evidence that urgent steps need to be taken to ensure proper use of public money.

Chapter 2

Clauses 122, 126 and 127: Orders and regulations, minor and consequential amendments and repeals and commencement

188.  Clause 122 makes general provision for orders or regulations made under the Act. It does not apply to commencement orders made under clause 127 (see clause 122(7)). Clause 122(1) provides that the power to make orders or regulations includes power to make different provision for different cases or areas (in particular different provision for different local authorities or descriptions of local authorities) and provision to make incidental, supplementary, consequential or transitional provisions or savings (including provision amending or repealing any enactment or instrument made under any enactment). The power is necessary to ensure that the Bill, which deals with complex matters, many of which are financial measures, is properly implemented to give full effect to Parliament's intention. To the extent that clause 122(1) confers a Henry VIII power, it is limited in scope to the making of the incidental etc. provision (and, of course, is also limited in scope by the particular order or regulation-making power).

189.  Clause 126(1) and (2) gives effect to Schedules 6 and 7 (minor and consequential amendments, repeals and revocations). A large number of amendments and repeals are included in those Schedules, but given the size and complexity of the Bill and the complex subject-matter of the legislation it amends, it is likely that some necessary consequential measures will have been overlooked. Clause 126(3) therefore empowers the Secretary of State, by order, to make consequential provision by amending, repealing or revoking enactments or instruments made under enactments. To the extent that this confers a Henry VIII power, it is limited in scope to the making of consequential amendments.

190.  Clause 127(3) to (5) empower the Secretary of State, National Assembly for Wales or Scottish Ministers as appropriate, to commence certain provisions by order. Clause 127(9) provides that the power to make a commencement order includes a power to make such transitional provision or saving as the Secretary of State etc. considers necessary or expedient for the purposes of commencement. It does not include a Henry VIII power. The wide-ranging nature of the Bill and the likely complexities of implementation mean that it is appropriate to give the Secretary of State etc. flexibility as to when the provisions are to be introduced.

191.  These provisions are standard and are necessary for the reasons set out above. They are all subject to the negative resolution procedure which we consider is an appropriate level of Parliamentary scrutiny as the powers are limited in scope - they would only be used for limited purposes to give effect to the policy that Parliament has approved when passing the legislation. This follows the precedent of previous local government legislation, including section 194 and 195 of the Local Government and Housing Act 1989 and section 114 of the Local Government Finance Act 1992.

Clause 124: Application to the Isles of Scilly

192.  This clause provides that Part 1 and sections 25 to 28 apply to the Isles of Scilly subject to such exceptions, adaptations and modifications as the Secretary of State may by order provide. This delegated power is desirable so that the particular characteristics of the Isles of Scilly can be taken account of in applying Parts 1 and 2. This follows the precedent of section 193 of the Local Government and Housing Act 1989 and section 25 of the Local Government Act 1992.

Schedule 6

193.  Paragraphs 36 and 37 of Schedule 6 make minor amendments to existing powers of the Secretary of State to make orders, in sections 140B and 140C of the Social Security Administration Act 1992, relating to the payment of rent rebate subsidy, rent allowance subsidy and council tax benefit subsidy. Orders made under sections 140B and 140C of the SSAA 1992, as amended by paragraphs 36 and 37 of Schedule 6, will be subject to negative resolution procedure, and to the Treasury's consent in accordance with sections 190(3) and 189(8) of that Act.

194.  Paragraph 36(a) of Schedule 6 repeals the second sentence of section 140B(2) of the Social Security Administration Act 1992 ("the SSAA 1992") to allow the Secretary of State to take into account, in making an order providing for the calculation of rent rebate subsidy, rent rebates which had been debited to the HRA in earlier years. Paragraph 36(b) of Schedule 6 repeals subsection (7) of section 140B of the SSAA 1992 in order to clarify the existing broad powers in that section. It is considered that subsection (7) did not confer any additional power on the Secretary of State, and made the true extent of the Secretary of State's powers under section 140B unclear.

195.  Paragraph 37 of Schedule 6 inserts a new subsection (1A) into section 140C of the SSAA 1992, which expands the kind of information which authorities can be required to supply by a condition in an order made by the Secretary of State under section 140C(1), to include information necessary for the Secretary of State to carry out any of his functions relating to subsidy, including making an order setting out how subsidy will be calculated as well as calculating the subsidy payable under an order. We anticipate that conditions will be imposed under subsections 140C(1) and (1A) requiring authorities to supply information for the purposes of providing for a rent rebate subsidy limitation scheme in the order under which subsidy will be paid.

196.  Paragraphs 43, 45 and 52(2) of Schedule 6 amend regulation making powers in sections 21 and 24, and paragraph 8 of Schedule 2 to the Local Government Finance Act 1992 ("the LGFA 1992"), in consequence of clause 78 which provides for a statutory council tax revaluation cycle. All regulations made for England, by the Secretary of State, under these amended enabling powers would, like regulations made under the existing powers be subject to the negative resolution procedure, provided by section 113(1) of the LGFA 1992. In Wales the regulations would be made by the National Assembly in accordance with its standing orders.

197.  Paragraph 43 of Schedule 6 inserts into section 21 of the LGFA 1992 a new subsection (2A)(b)(ii) allowing the Secretary of State (in Wales the National Assembly for Wales) to make regulations providing for dwellings to be valued as at a date less than two years before the date on which the new council tax valuation lists are compiled. New computerised revaluation techniques may speed subsequent council tax revaluations, allowing the use of more up to date house values.

198.  Paragraph 45 of Schedule 6 makes a consequential amendment to section 24(9)(b) of the LGFA 1992, so that the Secretary of State (in Wales the National Assembly for Wales) can make regulations about the circumstances in which new lists deposited under section 22B(10) (inserted by clause 78), can be altered.

199.  Paragraph 51 of Schedule 6 adds to the list of statutory instruments in section 113(3) of the LGFA 1992 which are not in England subject to negative resolution procedure, orders under the new section 22B(3)(a) (inserted by clause 77) bringing forward English council tax revaluations from the 10 year cycle. Paragraph 51 also amends section 113 to provide that any power of the National Assembly for Wales to make orders or regulations under the LGFA 1992 shall be exercisable by statutory instrument.

200.  Paragraph 52(2) of Schedule 6 amends paragraph 8 of Schedule 2 to the LGFA 1992 to enable regulations to be made requiring billing authorities to notify owners of exempt dwellings of the valuation band the property has been assigned to in the new lists, and proposed new lists, prepared under section 22B.

201.  Paragraph 52(3) of Schedule 6 inserts a new paragraph 21 into Schedule 2 to the LGFA 1992, in consequence of clause 77. Paragraph 21(2) will allow regulations to be made providing that a dwelling falling within a class of case for which the authority has determined that council tax liability shall be nil, shall be treated as exempt for council tax administration purposes (e.g. so the billing authority could be required to notify the person who'd otherwise be liable of the council tax band and amount which would otherwise be payable). Paragraph 21(3)will allow regulations to be made providing that a dwelling falling within a class for which the authority has determined that council tax liability shall be reduced other than to nil, shall be treated for council tax administration purposes of as if it were subject to a discount under section 11 or section 12 of that Act (e.g. so the billing authority could be required the to take reasonable steps to ascertain the applicability of any such reductions, notify the liable person of assumptions made by it as to reductions made in calculating the council tax bill.) Any regulations made under the new paragraph 21 of Schedule 2, like any other regulations made under Schedule 2 to the LGFA 1992, would be made by negative resolution procedure in accordance with section 113(3) of the LGFA 1992.

202.  Paragraph 53 of Schedule 6 amends Schedule 4 to the LGFA 1992 to make clear that "prescribed amounts" referred to in subsections (2) and (3) of clause 81, which can be included in the attachment of earnings order, are to be prescribed in regulations made by the Secretary of State, in relation to England, and by the NAW in relation to Wales (as this is a new power which has not already been devolved to the NAW under the National Assembly for Wales (Transfer of Functions) Order 1998 (S.I. 1998/672).

203.  Paragraph 58 of Schedule 6 makes a "missed" consequential amendment to section 122(4) of the Housing Act 1996, following amendments made by the Social Security Administration (Fraud) Act 1997 to section 140B of the Social Security Administration Act 1992. Section 122(4) of the Housing Act 1996 permits the Secretary of State to include certain provision in an order made (by negative resolution procedure) under section 140B of the SSAA 1992. The amendment to section 122(4) made by paragraph 58 will mean that readers will no longer have to rely on section 17(2)(a) of the Interpretation Act 1978 to interpret section 122(4).

12 March 2003


 
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