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| Local Government Bill [H.L.] |
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These notes refer to the Local Government Bill [H.L.] Local Government Bill [H.L.]——————————
EXPLANATORY NOTESINTRODUCTION1. These explanatory notes relate to the Local Government Bill [H.L] as brought from the House of Lords on 13 March 2000. They have been prepared by the Department of the Environment, Transport and the Regions (DETR) with the Office of the Secretary of State for Wales in order to assist the reader of the Bill and to help inform debate on it. They do not form part of the Bill and have not been endorsed by Parliament.
2. The notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. So where a clause or part of a clause does not seem to require any explanation or comment, none is given.
3. The Bill covers various aspects of local authorities and is in six Parts:
PART I: PROMOTION OF ECONOMIC, SOCIAL OR ENVIRONMENTAL WELL-BEINGSummary4. Part I of the Bill gives local authorities powers to take any steps which they consider are likely to promote the well-being of their area or their inhabitants. It also gives authorities a power to develop community strategies with other local bodies, setting out how together they will improve the quality of life of their local communities.
5. Part I also enables the Secretary of State to remove statutory constraints on authorities' ability to exercise the new well-being power and on their ability to plan co-ordinated local action.
Background6. Local authorities are statutory corporations and operate within a framework laid down by statute. They have no powers to act other than where they are expressly authorised by law to do so. There is a wide range of statutory duties which authorities are required to fulfil, and an even wider range of permissive powers enabling them to undertake defined activities if they so wish.
7. In addition, local authorities have a small number of 'general' powers. The most significant of these is section 137 of the Local Government Act 1972, which permits authorities to incur expenditure that is in the interests of their area, subject to certain conditions. One of those conditions is that s.137 cannot be used for any purpose for which there is authority in other legislation, or to overcome any limitations, prohibitions or conditions in other legislation.
8. This formulation has, on occasion, led the courts to take a restrictive view of the activities that can be pursued using s.137. In some cases, the courts have inferred from the absence of specific powers in other legislation that certain activities are prohibited and that an authority cannot, therefore, rely on its s.137 powers to overcome that prohibition. This has created uncertainty amongst local authorities and their potential partners about the extent to which authorities can rely on their general powers to undertake certain activities.
9. The scope of s.137 is further restricted by the limit on how much authorities can spend (currently between £1.90 and £3.80 per head of population depending on the class of authority); and by the additional restrictions placed on s.137 by the Local Government and Housing Act 1989. As a result of the 1989 Act, authorities must now be able to establish that any expenditure under s.137 is of "direct" benefit to their area and is "commensurate with the expenditure to be incurred".
10. Local authorities also have general economic development powers under s.33 to 35 of the Local Government and Housing Act 1989. Again, these powers are heavily constrained by the restrictions placed on their use.
11. In the White Paper, Modern Local Government: In Touch with the People1, the Government set out its view that community leadership should be at the heart of the role of modern local authorities. To enable local authorities to develop that role and to respond to the needs of local communities, the White Paper argued that authorities would need the freedom to work with other local public, private and voluntary organisations to develop solutions to local problems.
12. To provide authorities with the necessary freedoms, the White Paper proposed that local authorities' general powers should be extended; specifically, that they should be given a new discretionary power to take steps which in their view promote the economic, social and environmental well-being of those who live in, work in or visit the local area.
13. To facilitate a more co-ordinated and coherent response to local service delivery, the White Paper also proposed that authorities should be required to develop community strategies. These strategies, developed with local people, business, public and voluntary organisations would set out how the authority and its partners would work together to promote the well-being of their local community.
Commentary on clausesClauses 2 and 3: Promotion of well-being14. Clause 2 provides local authorities with a power to take any steps which they consider are likely to promote or improve the economic, social or environmental well-being of their local community, subject to the restrictions contained in clause 3.
15. Together, these clauses allow local authorities to undertake a wide range of activities for the benefit of their local area and to improve the quality of life of local residents, businesses and those who commute to or visit the area. This is intended to clear up much of the uncertainty which currently exists about what authorities can do. Clauses 2 and 3 allow authorities to take any action, unless it is subject to statutory limitations, prohibitions, or conditions specifically set out in legislation. The intention is to broaden the scope for local authority action while reducing the scope for challenge on the grounds that local authorities lack specific powers.
16. Amongst other things, clause 2(4) makes clear that the power in clause 2(1) enables authorities to work in partnership with other bodies. For example, it allows authorities to assist other statutory bodies to discharge their functions, or to exercise those functions on their behalf. This is intended to help local authorities and other statutory service providers to work together to provide services in ways which meet the needs of communities.
17. Clause 3 prevents authorities from using the power in clause 2 to raise money. It also permits the Secretary of State, and in Wales the National Assembly for Wales (NAW), to issue guidance to authorities on the exercise of the power. It also allows the Secretary of State and the NAW to prevent authorities from using the power to do anything that they might specify by order that they should not do. Before issuing any guidance, the Secretary of State and the NAW would have to consult local government and others.
Clause 4: Strategies for promoting well-being18. Clause 4 permits authorities to work together with other bodies to establish a strategy for promoting the well-being of their local communities. Such strategies are intended to allow authorities, and other bodies who provide local services, to establish common priorities and determine the steps which they would take to address them.
19. This clause also allows the Secretary of State, following consultation with local government and others, to issue guidance on the exercise of the power.
Clauses 5, 6 and 8: Powers to modify enactments20. Clause 2 provides authorities with a broad power to act. Local authorities will be able to use the power except where there are specific prohibitions, restrictions or conditions in other legislation. There may, however, be statutory prohibitions, restrictions and conditions specifically set out in legislation which will be found to limit the use of the well-being power. Clause 5 allows the Secretary of State, by order, to amend, repeal, revoke or disapply any enactment which obstructs authorities from taking steps to promote the well-being of their communities. This power could be exercised in relation to particular local authorities.
21. Clause 6 allows the Secretary of State to amend, repeal, revoke or disapply any enactment which requires local authorities to prepare a plan or strategy. This power could be exercised in relation to particular local authorities. This is a deregulatory power. It might, for example, be used to remove requirements for statutory plans which no longer served a useful purpose, or to amend the requirements on specific authorities so that they could work more efficiently with their local partners to plan how they would meet common priorities.
22. Clause 8 sets out the procedure to be followed by the Secretary of State in making orders under clauses 5 or 6. It provides for detailed scrutiny of any such orders. Before laying any orders, the Secretary of State is required to consult local government and others, including, where the proposals would affect Welsh local authorities, the NAW. He must make available to Parliament the results of that consultation, together with a full explanation of the purpose of the order.
Clause 7: Modification of section 137 of the Local Government Act 197223. Clause 7 modifies the general power contained in s.137 of the 1972 Act, as a consequence of the introduction of the new power contained in clause 2. It removes most of the powers contained in s.137 from the authorities to whom clause 2 applies. (Those authorities are set out in clause 1 of the Bill.) It retains, for all authorities, the powers in clause 137(3) of the 1972 Act, which permit authorities to make contributions to certain charitable funds.
PART II: ARRANGEMENTS WITH RESPECT TO EXECUTIVESSummary24. Part II of the Bill contains proposals for political management structures with a separate executive, and sets out three initial broad forms of executive within which local authorities' proposals must be framed. The objective of this policy is to deliver greater efficiency, transparency and accountability of local authorities. Separation of the executive is intended to ensure that decisions can be taken more quickly and efficiently than in the existing committee system, that the individuals responsible for decision-making can be more readily identified by the public, and that those decision makers can be held to account in public by overview and scrutiny committees.
25. The Bill allows the Secretary of State to add further forms of executive at a later date. It requires local authorities to hold a referendum:
Background26. At present, council business is carried out under a committee system. Decisions which are not delegated to officers, area committees, joint arrangements or to other authorities, or contracted out, must be taken either in full council or by committees or sub-committees which reflect the political balance of the council
27. The Government believes that this system is in need of reform. Part II, which applies to England and Wales, aims to make the decision-making structures within a council more transparent and to allow councillors to spend less time in committee meetings—and more time representing their communities. Part II introduces a new decision-making framework in which there is a separation of decision-making and scrutiny of those decisions.
28. Under the proposed executive arrangements, the council's policy framework and budget would be agreed by the full council following proposals from the executive. The executive would then be charged with implementing the agreed policy framework. Overview and scrutiny committees, which may co-opt people who are not councillors onto their committees, would be charged with holding the executive accountable for that implementation. Such committees would also be able to advise the executive and council on policy development.
29. The Government paper Local Leadership, Local Choice2 provided further details of these proposals and included a draft Local Government (Organisation and Standards) Bill which was submitted to the scrutiny of a Parliamentary Joint Committee of MPs and Peers in May 1999. This built on proposals in the White Paper Modern Local Government: In Touch with the People3.
Commentary on clauses30. By virtue of clause 93 the powers under Part II exercised by the Secretary of State in England will be exercisable by the National Assembly (NAW) in Wales, except in respect of clause 40 (power to make provision about elections) since the conduct of elections is a non-devolved matter where the powers will be exercised in respect of both England and Wales by the Home Secretary. The Parliamentary procedures set out in clause 92(4) to (6) for orders and regulations do not apply to the NAW, which has its own procedures for scrutinising secondary legislation.
Clauses 9 and 10: Executive arrangements31. Clause 9 provides that an authority may make executive arrangements for discharging certain functions but that nothing in Part II has effect in respect of a local authority not making executive arrangements.
32. It is provided in clause 10 that executive arrangements are arrangements for the setting up and operation by a local authority of an executive, which has responsibility for the executive functions of the authority.
Clause 11: Local authority executives33. Clause 11 specifies three possible forms of executive:
34. The clause also allows the Secretary of State to determine further structures in regulations at a later date, including a form of executive with members who are directly elected. It also enables a local authority to devise executive arrangements which it considers will enhance decision-making, meet the principles of transparency, accountability and efficiency and be appropriate to local circumstances.
35. Clause 11 excludes the chair or vice-chair of the authority from being a member of the executive, in order to maintain his/her independence from the executive. The clause also limits the number of councillors who can be on the executive to ten councillors, although this limit can be lowered by regulations made by the Secretary of State.
Clause 12: Executive functions36. Clause 12 provides the mechanism for determining which local authority functions are functions which are the responsibility of the executive. The clause allows the Secretary of State to make regulations to specify those functions which may, but need not, be the responsibility of the executive, and those functions which must not be. Certain functions, such as licensing functions, will need to be carried out by the authority as a whole, a committee of the authority, or a council officer (usually under s.101 of the Local Government Act 1972). Otherwise, the presumption is that all functions should be carried out by the executive.
37. The clause also enables regulations which specify that certain functions are, to some extent, the responsibility of the executive and to another extent not the responsibility of the executive. For example, regulations may specify that the executive is responsible for preparing a draft budget but that the council is responsible for approving the budget.
38. Section 101 of the Local Government Act 1972 may, in the regulations, be disapplied from any functions which must not be the responsibility of the executive.
Clauses 13 to 19: Provisions with respect to executive arrangements39. These clauses set out in greater detail how decision-making within each form of executive should work. Clause 13 relates to the mayor and cabinet executive. It provides for the mayor to determine how executive functions should be carried out either by the full executive, single members of the executive (including the mayor) acting alone, committees of the executive or officers, and for some further sub-delegation within the executive or to officers.
40. Clause 14 relates to the leader and cabinet executive. It allows for executive functions either to be delegated by the council leader—in a way similar to the framework under clause 13—or to be discharged as set out in the executive arrangements drawn up by the local authority, or for a mixture of the two.
41. Clause 15 relates to the mayor and council manager executive. It allows executive functions to be carried out either by the executive, the council manager, or a nominated officer.
42. Clause 16 enables the Secretary of State to make regulations on how functions may be discharged in any new form of executive defined in regulations under clause 11(6).
43. Clauses 17 to 19 provide powers for the Secretary of State to make regulations enabling arrangements to be made for functions which are the responsibility of the executive:
These powers are intended to enable more flexibility in the way that functions which are the responsibility of the executive are discharged.
Clause 20: Overview and scrutiny committees44. Clause 20 requires authorities to set up overview and scrutiny committees, the main purpose of which is to hold the executive to account; members of the executive will therefore not be able to sit on an overview and scrutiny committee.
45. Clause 20 also gives power to overview and scrutiny committees to make reports and recommendations, either to the executive or to the authority, on any aspect of council business. They also have the power to make reports and recommendations on other matters which affect the authority's area or their inhabitants. Clause 20 allows an overview and scrutiny committee to require officers and members of the executive to appear before it. It is also allowed to invite any other person to appear before it. The clause gives the committees power to review or scrutinise any executive decisions which have been made and recommend that they are reconsidered by the executive member responsible or else to arrange for the authority to review the decision and, where necessary, ask the executive to reconsider. Any member of an overview and scrutiny committee will be able to ensure that any relevant matter is put on the agenda and discussed at a meeting of the committee.
46. Overview and scrutiny committees are able to co-opt onto their committees people who are not members of the authority. However such co-optees will not have voting rights, with the exception of church and parent governor representatives co-opted onto overview and scrutiny committees where the committees' functions relate wholly or partly to any education functions which are the responsibility of the authority's executive, in accordance with provisions set out in paragraphs 6 to 8 of Schedule 1 of the Bill.
Clause 21: Access to information etc.47. Clause 21 provides that it is for the local authority executive to decide which of its meetings, or meetings of its sub-committees, are to be open to the public and which held in private. Written records of prescribed decisions made at meetings of the executive held in private or by individual members of the executive must be kept, including reasons for the decisions. These records, together with such reports and background papers etc as may be prescribed must be made available to the public. Regulations would be able to ensure that failure by the executive to cause to have such a record made and failure by the proper officer of the authority to make the record public would be criminal offences. The Secretary of State may make more detailed provisions around these key principles. Such regulations would be able to apply, without or without modifications, provisions of Part VA of the Local Government Act 1972 to meetings of the executive and its committees, whether held in public or in private. Regulations may also make provisions about access to meetings of joint committees which are discharging functions which are the responsibility of the executive.
Clause 22 and Schedule 1: Executive arrangements: further provision48. Schedule 1 sets out further details of the working of the executive arrangements and makes provision about the education functions of the overview and scrutiny committees.
49. For the mayor and cabinet executive, the arrangements must allow the mayor to determine the size of the executive (subject to restrictions in clause 11(9)). The arrangements must also allow the mayor to appoint his or her own deputy from amongst the executive.
50. For the leader and cabinet executive, either the authority or the leader can determine the size of the executive, subject to restrictions in clause 11(9).
51. For the mayor and council manager executive, the arrangements must allow the mayor to appoint a deputy from amongst the members of the authority, who cannot be the chairman or vice-chairman of the authority or be on an overview and scrutiny committee; this is to preserve independence between the three arms of the council. The council manager is entitled to attend and speak at council meetings and committee meetings. This allows him to carry out his duties, to advise the council and to be open to scrutiny. He will not, however, be allowed to vote as he will not be an elected member of the authority. Schedule 1 also provides that the post of council manager is a politically restricted post, and that the post cannot be combined with that of chief finance officer or monitoring officer. Politically restricted posts are dealt with in Part I of the Local Government and Housing Act 1989, in particular sections 1 to 3.
52. The Schedule also allows advisory committees to be set up to advise the executive in the mayor and council manager executive. This will ensure that the executive has access to advice and that policy-making can be properly informed. The Schedule allows such advisory committees not to be politically balanced, reflecting the provisions for the executive as a whole set out in clause 23.
53. The Schedule permits executive arrangements to cover such matters as appointment and terms of office of executive members, how its meetings are held, and similar matters in relation to committees of the executive. It also enables the Secretary of State to make regulations for appointment of an assistant for the mayor.
54. The Schedule also makes detailed provision about the appointment of church and parent governor representatives to overview and scrutiny committees, as detailed at paragraph 45 above.
Clause 23: Absence of requirement for political balance55. Clause 23 provides that executives and executive committees need not reflect the political balance of the authority.
Clause 24 to 27: Procedure with respect to operation of executive arrangements56. Clause 24 requires every local authority to draw up proposals for moving to executive arrangements. These proposals must include the form of executive which the authority intends to adopt; which functions would be the responsibility of the executive (where the local authority has a choice); a timetable for implementation of the proposal; details of any transitional arrangements that will be put into place and such details of the executive arrangements as the Secretary of State may direct. An authority must consult widely with the local community on the proposals. This consultation should include local electors, but also other interested parties.
57. In drawing up proposals an authority must consider the extent to which the proposals, if implemented, are likely to assist in securing continuous improvement in the way in which the authority's functions are exercised, having regard to a combination of economy, efficiency and effectiveness. In addition, an authority must comply with directions from the Secretary of State when drawing up proposals.
58. A copy of the proposals must be sent to the Secretary of State accompanied by a statement describing the steps taken to consult and the extent to which the outcome of the consultation is reflected in the proposals. The aim is to ensure that the executive arrangements adopted by an authority reflect the aspirations of the community and are appropriate to that authority. The Secretary of State may, by order, specify a date by which every local authority must comply with this section.
59. Clause 25 provides that authorities which propose a form of executive that does not require a referendum must implement their proposals in line with their timetable. It also provides a definition of an executive for which a referendum is required.
60. If the proposals drawn up under clause 24 involve a form of executive for which a referendum is required, clause 26 requires a local authority to:
61. Fall-back proposals are proposals for executive arrangements for which a referendum is not required or alternative arrangements within the meaning of clause 29. The outline fall-back proposals must include a timetable for implementation of detailed fall-back proposals based on the outline fall-back proposals in the event that the proposals drawn up under clause 24 are rejected by the referendum. An authority must consult local government electors and other interested parties when drawing up their outline fall-back proposals.
62. The referendum decision would be binding on the authority. Where the proposals under clause 24 are approved by the referendum they must be implemented. Where such a proposal is rejected, the authority must not implement them and must draw up detailed fall-back proposals based on the outline fall-back proposals and send a copy of the detailed fall-back proposals to the Secretary of State.
63. Detailed fall-back proposals must include such details of the executive or alternative arrangements as the Secretary of State directs. They must say (where the proposals are for executive arrangements and the authority has a choice) which functions would be the responsibility of the executive. They must also contain details of any transitional arrangements that will be put into place. An authority must consult widely with the local community on the detailed fall-back proposals. This consultation must include local electors, but also other interested parties.
64. In drawing up detailed fall-back proposals an authority must consider the extent to which the proposals are likely to assist in securing continuous improvement in the way in which the authority's functions are exercised, having regard to a combination of economy, efficiency and effectiveness. In addition, an authority must comply with directions from the Secretary of State when drawing up detailed fall-back proposals.
65. A copy of the detailed fall-back proposals must be sent to the Secretary of State. The detailed fall-back proposals must be implemented in accordance with the timetable included in the outline fall-back proposals.
66. Clause 27 requires a resolution of the full council to adopt executive arrangements. Once adopted, details of the arrangements must be made available to the public and be widely publicised in the area of the authority. Such publicity should include the main features of how the arrangements will work and a date on which the arrangements enter into force.
67. The clause also makes clear that once an authority has adopted executive arrangements, it cannot revert to arrangements which are not based on a separate executive.
1 Cm 4014, July 1998. Available from The Stationery Office (telephone: 0345 023474) or on the DETR website (www.detr.gov.uk). |
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| © Parliamentary copyright 2000 | Prepared: 17 March 2000 |