Memorandum by Department for Transport,
Local Government and the Regions (LGA 22)
1. The Local Government Act 2000 (the Act)
received Royal Assent on 28 July 2000. Along with the Local Government
Act 1999, it provides the powers underpinning the Government's
drive to modernise local government. This agenda was set out for
English Authorities in the 1998 White Paper "Modern Local
GovernmentIn Touch with the People."
and for Welsh authorities in "Local VoicesModernising
Local Government in Wales".
This memorandum deals only with the implementation in England,
for which the Department for Transport, Local Government and the
Regions has responsibility.
2. The Government has made significant progress
on implementing the reforms introduced by the Act. This memorandum
sets out in detail the progress which it has made on each Part.
The Government welcomes the hard work which authorities have themselves
put into the task of implementation. The main achievements to
date have been:
80 per cent of councils have said
they will have their community strategy published by March 2002,
in line with the guidance the Department published in December
214 councils had implemented new
constitutions by the end of 2001. All authorities will have new
constitutions in place by the end of 2002, providing more efficient,
transparent and accountable decision-making;
127 authorities had adopted codes
of conduct by 8 February 2002. All should have done so, by the
time of the next council elections in May 2002;
The Standards Board for England was
established on 22 March 2001.
3. The Government wishes to maintain the
momentum of these reforms and to extend them. It set out its future
programme to take them forward in the 2001 White Paper, "Strong
Local LeadershipQuality Public Services".
PART I: ECONOMIC,
4. Part I of the Act gives local authorities
powers to take any steps which they consider are likely to promote
the well-being of their area of their inhabitants. It places authorities
under a duty to develop community strategies, together with other
local bodies, for this purpose.
5. 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. Before the Local Government Act 2000, authorities
had a wide range of permissive powers enabling them to undertake
defined activities and a small number of "general" powers.
However, the conditions attached to these had, on occasion, led
the courts to take a restrictive view of the activities that could
be pursued. This had 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,
and consequently restricted their capacity to serve their communities
6. Local authorities' authority to promote
economic, social and environmental well-being consists of two
separate but linked statutory powers and dutiesto promote
well-being and to prepare strategies to promote well-being.
Power to Promote Well-Being
7. Following the 1998 Local Government White
Paper, the Local Government Act 2000 introduced a new discretionary
power for local authorities to take steps which in their view
promote the economic, social and environmental well-being of those
who live in, work in or visit their area. This allows authorities
to take any action promoting well-being, unless it is subject
to statutory prohibitions, restrictions or limitations specifically
set out in legislation. This broadens the scope for local authority
action while reducing the potential for challenge on the grounds
that local authorities lack specific powers. For example, it enables
authorities to work in partnership with other bodies and to assist
other statutory bodies to discharge their functions, or to exercise
those functions on their behalf. This facilitates local authorities
and other statutory service providers working together to deliver
services in ways which meet the needs of communities.
Duty to Prepare Strategies to Promote Well-Being
8. To facilitate a more co-ordinated and
coherent response to local service delivery, the Local Government
Act 2000 also introduced a new duty on authorities to prepare
community strategies. These strategies, developed with local people,
business, public and voluntary organisation, will set out how
the authority and its partners will work together to promote the
well-being of their local community by establishing common priorities
and the actions to address them.
Progress to Date
9. In exercising the power and preparing
the community strategy, authorities must have regard to the Government's
guidance. Two sets of guidance were published in December 2000
and in March 2001.
10. A recent Local Government Association
survey found that nearly 80 per cent of councils that responded
said they would have their community strategy published by March
2002, with the remainder published by March 2003. Authorities'
progress in 2002-3 will also be reported via a Best Value Performance
Indicator. It will ask whether authorities have prepared a strategy
an action plan as developed in collaboration
with the local strategic partnership;
arrangements for monitoring the implementation
of the action plan;
mechanisms for measuring progress
against short- and long-term outcomes;
a means of reporting this progress
to the local community; and
a timetable for periodically reviewing
11. The power to promote well-being is an
essential component in enabling local authorities to lead their
communities. This is a role the Government expects councils to
assume. It should encourage a new approach to decision-making
by ending the long-standing precautionary approach which restricted
councils to acting only when they were confident they had the
explicit powers. It provides the scope for a significant shift
in culture, with councils needing to ask only "Is there any
relevant restriction?" rather than "Is there the necessary
12. This shift will take time to happen.
However, it will be encouraged by the forthcoming introduction
of the powers to enable councils to charge for discretionary services
provided under the well-being power and the additional provisions
to promote partnerships under best value that will be contained
in an order to be made under section 16 of the Local Government
Act 2000. These will help to build councils' confidence in the
breadth of their statutory powers and allow them with confidence
to do things about which hitherto they would have hesitated.
Mainstreaming the promotion of economic, social
and environmental well-being
13. This framework reflects the Government's
expectation that the promotion of economic, social and environmental
well-being in the longer term should become a mainstream issue
for local authorities, their partners, and local communities.
As part of this approach, the 2001 Local Government White Paper
explained that the Government considers that the most effective
way to achieve this would be to build on Local Agenda 21 strategies
and subsume them within community strategies. The former were
non-statutory approaches developed following the 1992 Rio Earth
Summit; the preparation of the latter are a statutory duty, and
required, by law, to promote sustainable development.
Summary and context
14. Part II of the Act makes provision for
London borough councils, county councils and district councils
in England and county councils and county borough councils in
Wales to introduce new constitutions. It requires each council
to consult on, draw up proposals for and adopt a new constitution.
15. The legislation provides that each principal
authority will adopt a new constitution. For the most part an
authority's new constitution will be one of the three forms of
executive arrangement defined in section 11 of the Act. In two
of these models executive arrangements can consist either of a
leader elected by councillors or a mayor elected directly by voters,
in each case supported by a cabinet consisting of between two
and nine councillors. In the third model the executive consists
of a mayor directly elected by voters and a council manager appointed
by the local authority. In all cases the full council remains
responsible for establishing the policy framework and setting
the budget. The executive is responsible for delivering the council's
programme. Having an executive makes it clear who is responsible
for taking individual decisions, leading to greater transparency.
The establishment of overview and scrutiny committees means that
decision takers are held to account.
16. Additionally any authority in a two-tier
area which has a population of less than 85,000 can adopt a fourth
option which the Act refers to as "alternative arrangements".
This form of constitution is a streamlined form of the former
17. As recognised by the Standing Committee
of the House of Commons which scrutinised the legislation in 1999,
the overall aim of the new arrangements is to improve the efficiency,
transparency and accountability with which local authorities take
decisions. In line with this overall aim, following the Spending
Review 2000, the Government adopted the following public service
agreement (PSA) target;
"Ensure that by December 2002 each council
has adopted and put into operation a new constitution which is
transparent, accountable and efficient."
Progress to date
18. The Government expects the PSA target
to be met. By the end of December 2001, 214 local authorities
had already implemented a new constitution. 168 local authorities
have indicated that they are planning to implement between then
and the end of June 2002. The Government expects the remaining
three authorities to implement before the end of 2002. Annex 1
provides more details of the arrangements authorities are implementing.
19. Local authorities are obliged to consult
local people on the form which executive arrangements should take.
They are also obliged to submit their proposals to the Secretary
of State before adoption. Two authorities have not yet submitted
their proposals; Lincolnshire and Stoke-on-Trent City.
Following the two months after receipt of proposals, the Secretary
of State assesses them, given the powers he has to direct the
holding of a referendum. To date the Secretary of State has directed
one council, Southwark, to hold a referendum. He is currently
minded to direct referendums in Birmingham and Bradford.
Approach to implementation
20. The Government views the introduction
of new constitutions, under whatever model, as a step change in
how local authorities operate. Executives who have the ability
to work flexibly and efficiently without being overburdened with
the bureaucracy of the old committee system will be better placed
to deliver the improved public services for which councils are
responsible. New constitutions form a central and integrated part
of the Government's overall approach to modernising local government.
21. At the same time the approach allows
for greater transparency and accountability. The establishment
of overview and scrutiny committees means executives are held
to account for the decisions they make. It means non-executive
councillors can focus on scrutiny and on representing their communities
and ensuring their views are properly reflected in the work the
council undertakes. The Government expects these arrangements
to help to invigorate local democracy.
22. Mayoral forms of executive available
under the Act offer the opportunity, consistent with the overall
approach, of combining a strong form of political leadership and
the increased democratic accountability of direct election. The
Government wishes to leave the choice as to the adoption of mayoral
forms of constitution to local communities. It was made clear
in the 2001 Local Government White Paper that where local people
think that a mayor is right for their town or city, they should
have the opportunity to vote for one. The power to direct a mayoral
referendum has been used only where the Secretary of State believed
the authority was not following the outcome of consultation with
23. In order to promote greater transparency,
rules governing access to information in local authorities have
been established. The central requirement is for local authorities
to publish a forward plan of future key decisions. The Government
announced in the 2001 White Paper that local authorities are best
placed to decide what constitutes a key decision, and will provide
guidance on developing best practice in this area.
24. The Government wishes to support local
authorities which are now in many cases in the early stages of
operating new constitutions. The Government has issued detailed
which includes advice on how best to conduct local consultation
and on how to construct a constitution. This guidance has been
developed in close co-operation with the LGA and leading academics.
The Government sees this as an ongoing process and is continuing
to work with the LGA, IDEA and others on the development of best
Evaluation and review
25. The new policy will be kept under review.
The Government has said it will look at the lessons learnt from
first round of referendums, on which the Electoral Commission
have published a report.
The rules governing public access to information held by local
authorities will be reviewed from June 2002. The Department's
research programme includes work on overview and scrutiny and
participation by young people in local government, and a five-year
study to evaluate both the introduction of new constitutions,
and the new ethical framework. This work will support the development
of guidance and best practice.
26. The emphasis in the 2001 White Paper
in this area is on consolidating the improvements which local
authorities are now implementing, rather than significantly revising
the requirements. Local opinion remains the guiding principle
to determining the development of these changes. The Government
has proposed that local authorities should review their constitutions
after perhaps five years, taking local opinion into account through
consultation, and, where appropriate, referendums. The aim will
remain to promote strong local leadership in local authorities.
The Government will seek to ensure that the benefits of greater
efficiency, transparency and accountability are realised in practical
terms, within the overall framework of modernising local government.
27. Part III of the Act establishes a new
ethical framework for local government. This includes the introduction
of statutory codes of conduct, with a requirement for every council
to adopt a code covering the behaviour of elected members and
a code covering the behaviour of officers, and the creation of
a standards committee for each authority. The principal elements
of this framework are set out below.
General principles and members' codes of conduct
28. These set out the standards of conduct
expected of elected and co-opted members of relevant authorities.
An order, setting out the 10 general principles that are to govern
the conduct of members, was made on 5 April 2001. In November
2001, the Government made four model codes of conduct. These set
out detailed requirements that members must follow when discharging
the business of the council. Authorities must adopt their own
codes of conduct, based on the Government's model, by 5 May. Once
an authority has adopted a code of conduct, its members have two
months in which to declare that they will observe it. If members
do not make a declaration within two months that they will observe
the code, they will cease to be members of the council. As of
8 February, 127 authorities had adopted codes of conduct. It is
a statutory requirement that all will have done so by the time
of the next council elections in May 2002.
29. All relevant authorities are required
to establish standards committees to promote and maintain high
standards of conduct within the authority. The Government made
regulations governing the composition and proceedings of standards
committees in August 2001. All authorities (apart from parishes)
should now have established standards committees.
The Standards Board of England
30. The Standards Board for England was
established on 22 March 2001 to promote high standards of conduct
in local government. It will investigate allegations that members
have breached codes of conduct. The Board can only investigate
allegations of misconduct that occur after an authority has adopted
its code of conduct. The Board, which is chaired by Tony Holland,
has a staff of 35 and a budget in 2001-02 of £5.8 million.
The Board has issued guidance to authorities on codes of conduct
and is currently advising the Department on regulations under
s.66 of the Act. These will give authorities the opportunity,
in certain circumstances, to investigate and hear allegations
of misconduct at the local level.
The Adjudication Panel for England
31. The Adjudication Panel for England was
established for the purpose of convening tribunals to hear and
determine cases referred to it by the Standards Board and to censure
members who are found to have breached codes of conduct. A President,
David Laverick, was appointed in October 2001. Eight legal and
16 lay members will be appointed shortly.
Employees' code of conduct
32. The Employees' code of conduct will
set out standards of conduct for employees of relevant authorities.
The code will form part of employees' terms and conditions of
employment. The Government expects to consult on a draft code
in the very near future. The code will be based on recommendations
made to Government by a working party made up of the Local Government
Association, the Employers' Organisation and the public sector
PART IV: ELECTIONS
33. Part IV of the Act gives the Secretary
of State a power to alter, by order, the frequency of elections
to local authorities, and the years in which local elections are
34. The 1998 White Paper proposed that all
"single tier" principal councils should have a scheme
of frequency of elections known as "elections by thirds",
whereby a third of councillors are elected in each of the first
three years of a four-year electoral cycle. The fourth year was
proposed for use for "other" local elections, for example
any election of a directly-elected local mayor, or elections to
the Greater London Authority. In two-tier areas, that is where
both a county council and a district council exercise functions,
it was proposed to introduce a scheme which alternated the election
of 50 per cent of the county and district councillors for the
area, such that electors would be able to exercise their vote
in a local election every year of the four-year cycle.
Progress to date
35. During the passage of the Act through
Parliament, Ministers made clear that the actual implementation
of the policy described in the 1998 White Paper would be taken
forward on a cautious basis, in close consultation with local
36. During the debate in the 15th session
of Committee considering the Bill in the House of Commons on 13
June 2000, the then Minister for Local Government (Hilary Armstrong
MP) said that "nothing will happen [in relation to the order-making
powers then being debated] this side of a general election. In
any event, whatever we do will involve close consultation, obviously
with the Local Government Commission, but also with local government
and, through it, the electorate." In the same Committee session,
the Minister also referred to an agreement that had already been
reached with the Local Government Association, that in two-tier
areas the means of achieving more frequent elections would be
that councils involved would alternate the holding of elections
(as described above), rather than by requiring both tiers to hold
elections by thirds.
37. The Government has received six requests
from shire district councils to make an order for elections by
halves, where those councils have recently completed a periodic
electoral review that has resulted in all (or at least the majority)
of their wards electing two members. The Government has decided
to consult on making these changes, making clear that the final
outcome must be in line with the Electoral Commission's review
of the cycle of local elections, described below.
38. The 2001 Local Government White Paper
said that the Government would invite the Electoral Commission
to propose options to simplify the current cycle of local elections,
because it believes as it stands the cycle is confusing and could
be discouraging participation. The Electoral Commission is particularly
well-placed to conduct a review and make recommendations, as it
is both independent of central and local government and, from
April this year (having taken on the functions of the former Boundary
Commission), will also have the skills and knowledge relating
to local electoral reviews.
39. Consequently, the Department will establish
with the Electoral Commission the terms of reference of the review.
Once the Commission has conducted its review and reported to the
Secretary of State, the powers contained in Part IV of the Act
will be used to implement those recommendations of the Electoral
Commission that are felt to be the most appropriate way forward.
5 CM 4014, July 1998, Modern Local Government: In
Touch with the People. Back
CM 4028, July 1998, Local Voices-Modernising Local Government
in Wales. Back
CM 5237, December 2002, Strong Local Leadership-Quality Public
Preparing Community Strategies: Government Guidance to local
authorities, December 2000. Back
Power to Promote or Improve Economic, Social and Environmental
Well-Being, March 2001. Back
The Department has now received proposals for new executive arrangements
from Lincolnshire and Stoke-on-Trent City. This means that all
authorities have now submitted their proposals to the Secretary
of State. These proposals were received shortly after the memorandum
had been prepared for the Committee:
Stoke-on-Trent's proposals for Mayor and Council Manager were
sent on 28 February;
Lincolnshire's proposals for leader and cabinet were sent on 11
New Council Constitutions, Guidance Pack Volumes 1 and 2, Local
Leadership Local Choice. Back
Reinvigorating Local Democracy? Mayoral Referendums in 2001,
Electoral Commission, January 2002. Back