Select Committee on Transport, Local Government and the Regions Memoranda

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 Government—In Touch with the People."[5] and for Welsh authorities in "Local Voices—Modernising Local Government in Wales".[6] 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 2000;

    —  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 Leadership—Quality Public Services".[7]


  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.

Promoting Well-Being

  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 effectively.

  6.  Local authorities' authority to promote economic, social and environmental well-being consists of two separate but linked statutory powers and duties—to 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[8] and in March 2001.[9]

  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 which includes:

    —  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 it.

  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 power?"

  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 committee system.

  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[10]. 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 local people.

  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 guidance,[11] 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 practice.

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.[12] 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.

Future developments

  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.

Standards committees

  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 unions.



  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 held.

  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 government.

  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.

Moving ahead

  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

6   CM 4028, July 1998, Local Voices-Modernising Local Government in Wales. Back

7   CM 5237, December 2002, Strong Local Leadership-Quality Public Services. Back

8   Preparing Community Strategies: Government Guidance to local authorities, December 2000. Back

9   Power to Promote or Improve Economic, Social and Environmental Well-Being, March 2001. Back

10   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 March. 

11   New Council Constitutions, Guidance Pack Volumes 1 and 2, Local Leadership Local Choice. Back

12   Reinvigorating Local Democracy? Mayoral Referendums in 2001, Electoral Commission, January 2002. Back

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Prepared 22 April 2002