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Select Committee on Transport, Local Government and the Regions Fifteenth Report

Additional measures

63. The consultation paper covering the draft Bill suggests that the final version of the Bill will include additional measures related to:

  • Council tax discounts and exemptions;
  • Expenditure grant; and
  • Two-tier workforce.

Council tax discounts and exemptions

64. It is over four months since the end of the Government's consultation on council tax exemptions on second and empty homes. We are pleased that central Government has signalled its intent to take action on this matter but disappointed that detailed Clauses could not be included in the Bill. The Committee made a recommendation about the payment of council tax on empty properties in its Empty Homes report:

"Any discretionary powers given to local authorities to charge full council tax on empty homes must include the freedom to do so on a ward by ward basis to take account of differences in demand within a local authority area, failure to provide for such flexibility could prove very damaging in areas where demand is low."[85]

This should be incorporated into the Bill.

Expenditure grant

65. The Notes on Additional Measures in the consultation paper state: " There will be a power to make a wide range of capital or revenue grants to local government. It will provide the means of delivering Government support for local authorities' capital investment programmes (regardless of whether that takes the form of revenue grant, capital grant or some combination of the two)." Many witnesses said that the grant regime must be consistent with, and support, the new prudential rules—based capital finance system,[86] and stressed that it should not be biased in favour of PFI /PPP schemes.[87] CIPFA told us that the "prime method of providing Government support for capital investment in local government should be through revenue support" because "capital grants make capital investment free to the local authority at the point of delivery" and as a result, can skew management decisions.[88] Put bluntly, capital grants can encourage local authorities to undertake schemes that would not otherwise be seen as providing good value for money. We believe that these are important points. We recommend the Government provide the majority of support for local authorities' capital investment programmes through revenue support; and to make capital grants only in exceptional cases, for example, as pump-priming for new initiatives. Such a system should create a level playing field between local authority borrowing and PFI/PPP.

Two tier workforce

66. The Notes on Additional Measures in the consultation paper state, "Earlier this year the Government committed to legislate to make statutory within local government the provisions in the Cabinet Office Statement of Practice on Transfers in the Public Sector and the annex to it, A Fair Deal for Staff Pensions." This decision was made as part of the outcome of the recent review of Best Value and has been welcomed by the Local Government Association, Trades Union Congress and Confederation of British Industry. In its memorandum, the CBI stated:

"We welcome the intention to legislate. This will make it clear that staff should transfer consistently when the local authorities outsource work and subsequently when contracts change hands. It must be supported with practical advice on handling the staff transfer process and by ongoing efforts to raise awareness of the requirements and good practice."[89]

We welcome the intention to give statutory force within local government to guidance on staff transfers, thereby ending uncertainty on the Transfer of Undertakings (Protection of Employment) regulations, which damages the interests of local authorities, employees and contractors. We recommend that the legislation is accompanied by practical support for local authorities to spread good practice.

85   Recommendation j, Transport, Local Government and the Regions Committee's Sixth Report, Empty Homes, HC240-I, March 2002 Back

86   For example Qq89-91 Back

87   Q462 Back

88   LGB29 Back

89   LGB39 Back

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Prepared 24 July 2002