House of Commons - Explanatory Note
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Clause 102: Staff transfer matters: pensions

283.     This provides that the Secretary of State and the National Assembly for Wales shall exercise their powers under clause 100 to give directions so as to ensure that English and Welsh local authorities, in contracting for the provision of services, secure specified pension benefits. These are, first, that the contractor is required to secure pension protection for employees of an authority who are transferring from the authority under TUPE or who, in a re-contracting case, transferred from the authority under TUPE when the services were first contracted out, have transferred under TUPE on each subsequent change in contractor and are again transferring under TUPE in connection with the contract with the contractor. Secondly, that the contractual terms for the securing of pension protection for a transferring employee are enforceable by the employee. Pension protection is secured where the employee's rights to acquire pension benefits are the same as, or broadly comparable to, those enjoyed by the employee before the transfer.

Clauses 103 and 104: 2004 Local Government Elections

Clause 103: Power to change date of local elections in England

284.     This clause permits the Secretary of State to move, by order, the dates of local elections (for principal councils and parish councils) and Greater London Authority (GLA) elections in 2004 so that they are held on the same day as the European Parliamentary general election due in 2004. Ordinary local and GLA elections (i.e. elections other than by-elections) would normally be held on the first Thursday in May (6th May in 2004), whilst in 2004 the European Parliamentary elections have to be held in the period 10th to 13th June. Subsection (1)(a) enables the Secretary of State to leave ordinary parish council elections to take place on 6th May, or to move with them to June with the GLA and other ordinary local elections.

285.     A by-election generally has to take place within a specified period after a vacancy occurs. In the event that local elections are moved to June, subsection (2)(a) would (for example) allow the Secretary of State's order to provide that by-elections should not take place during the period from 6th May 2004 until the June election date.

286.     Section 16(1) of the Representation of the People Act 1985 provides that where parish council, principal council and European Parliamentary elections would otherwise all take place on the same day, the parish council elections are to be postponed for 3 weeks. Subsection (2)(b) would allow the Secretary of State's order to override that provision with the result that all of the elections could take place on the same day in June.

287.     Local authorities, joint authorities and police authorities are required to hold annual meetings. In a year where a local authority has an ordinary election, the date of the meeting is linked to, but follows, the date of the election. In other years, and in every year for a police authority, the period within which its annual meeting has to be held allows for by-elections, or elections of its locally elected members, to take place on the first Thursday in May. Subsections (2)(c) and (3) will allow the Secretary of State's order to cater for those meetings being moved to after the June elections in areas where ordinary elections are not held in 2004 but by-elections might be.

288.     Some statutory provisions assume that there will be a single ordinary date of election for councillors throughout England and Wales. Subsection (4) enables the Secretary of State to make an order providing, for example, for the sensible working in England of such provisions in the event of the National Assembly for Wales making an order under clause 103 moving some or all of the Welsh local elections in 2004 from May to June.

289.     Paragraph 7 of Schedule 6 to the Bill extends the power under section 15(5) of the Representation of the People Act 1985 so that, in the event of local and GLA elections being moved in 2004, regulations about combining those elections with the European Parliamentary general elections in that year will be able to modify any of the legislation governing any of the combined elections. The references to Gibraltar (both in paragraph 7 of Schedule 6 and in clause 123(4)) allow for the enactment of the European Parliament (Representation) Bill, as that would result in combined 2004 elections being governed by law which extended not only to each part of the United Kingdom but also to Gibraltar.

Clause 104: Power to change date for elections in Wales

290.     This clause permits the National Assembly for Wales to move, by order, the dates of local elections (either the principal council elections, the community council elections, or both sets of elections) in 2004 so that they are held on the same day as the European Parliamentary general elections due in 2004. Ordinary local elections (i.e. elections other than by-elections) would normally be held on the first Thursday in May (6th May 2004) whilst in 2004 the European Parliamentary elections have to be held in the period 10th to 13th June.

291.     A by-election generally has to take place within a specified period after a vacancy occurs. In the event that local elections are moved to June, subsection (2) (a) would (for example) allow the National Assembly for Wales' order to provide that by-elections should not take place during the period from 6th May 2004 until the June election date.

292.     Section 16(1) of the Representation of People Act 1985 provides that where community council, principal council and European Parliamentary elections would otherwise all take place on the same day, the community council elections are to be postponed for 3 weeks. Subsection (2) (b) would allow the National Assembly for Wales' order to override that provision with the result that all of the elections could take place on the same day in June.

293.     Some statutory provisions assume that there will be a single ordinary date of elections for councillors throughout England and Wales. Subsection (3) enables the National Assembly for Wales to make an order providing, for example, for the sensible working in Wales of such provisions in the event of Secretary of State making an order under clause 103 moving some or all of the English local elections in 2004 from May to June.

294.     Paragraph 7 of Schedule 6 to the Bill extends the power under section 15(5) of the Representation of the People Act 1985 so that, in the event of local elections being moved in 2004, regulations about combining those elections with the European Parliamentary general elections in that year will be able to modify any of the legislation governing any of the combined elections.

Clauses 105 and 106 (and Schedules 4 and 5): Valuation Tribunal Service

Introduction

295.     Valuation Tribunals (VTs) are independent bodies established under Schedule 11 to the Local Government Finance Act 1988, although they have existed in one form or another since 1948. Their purpose is to hear appeals against rating, council tax valuations and liability. There are 56 Tribunals in England, served by 25 administrative offices, grouped into 14 regional units with around 165 staff.

296.     Tribunals are organised broadly on a county or metropolitan area basis. Members are appointed jointly by local authorities and presidents of local VTs. Each VT may appoint a clerk and other employees and maintain a permanent office, although some VTs maintain joint offices and appoint the same clerk and staff. The Office of the Deputy Prime Minister undertakes a range of administrative functions on behalf of the VTs, including accommodation, pay and technical finance matters.

297.     A quinquennial Financial Management and Policy Review of the VTs in 1999 recommended that their administration should be brought together in a regional structure and that a management board supported by a small national office should provide central direction. The purpose of this provision is to implement that recommendation.

Clause 105: The Valuation Tribunal Service

298.     Clause 105 establishes a new non-departmental public body, the Valuation Tribunal Service. The Service has power to carry out administrative functions for the VTs in England only, including accommodation, staffing, information technology, equipment and training needs. The Service also has power to give general advice about procedure in relation to proceedings before tribunals in England.

299.     The Service is under a general duty in carrying out its functions to do what, in its opinion, is best to secure the efficient and independent operation of VTs in England.

300.     The Secretary of State may provide guidance to the Service about the carrying-out of its functions. Following consultation with the Service, he may also provide directions for the purpose of securing the effectiveness of the Service in carrying out its functions. Once issued, the Service will be required to comply with any directions and have due regard to any guidance in carrying out its functions.

301.     The Service will be required to consult with the valuation tribunals about the carrying out of its functions to ensure consistency and best practice.

Schedule 4: The Valuation Tribunal Service

302.     Schedule 4 makes further provision in relation to the Service.

303.     The Secretary of State will appoint between six and ten members to form the Service. At any time, the majority of members of the Service must be presidents or chairmen of the VTs. The rest of the Service need not be presidents or chairmen of VTs but must have suitable qualifications or experience. The Secretary of State will appoint a Chairman and a Deputy.

Disqualification from membership of the Service

304.     A person shall be disqualified from being appointed to the Service or from remaining a member of the Service if he is an employee of the Service or is married to one, he is an undischarged bankrupt or he has been convicted of an offence in the last five years and sentenced to imprisonment for three months or more.

305.     Appointments must not exceed three years but a member may be re-appointed. The member may resign at any time. The chairman or deputy chairman of the Service will cease to hold that office if he ceases to be a member of the Service. A member of the Service who falls foul of one of the prescribed disqualification events will automatically cease to be a member. A member of the Service who was appointed by the Secretary of State as one of the majority of members who was a president or chairman of a VT will cease to be member of the Service if he ceases to be a president or chairman of a VT. Furthermore, where a member fails to attend Service meetings without reasonable excuse over a continuous period of three months, his appointment will cease.

306.     The Secretary of State may also terminate a member's appointment where he is unfit or unable to carry out his functions.

307.     The Secretary of State will have the power to re-appoint a person a member of the Service, provided he did not cease to be a member because he was disqualified by reason of conflict of interest, he was bankrupt, he was convicted of an offence and received a sentence of imprisonment of three months or more, or he was absent from meetings for the prescribed period.

308.     The Secretary of State will determine how much remuneration members should receive from the Service. The Service has power, if so required by the Secretary of State, to pay pensions to members and former members, or to establish pension schemes for such people. The Service, if so required by the Secretary of State, will make compensation payments to a member leaving the Service.

Staff of the Service

309.     The Service will have a Chief Executive. The first Chief Executive will be appointed by the Secretary of State in consultation with the chairman or chairman designate of the Service. Future Chief Executive appointments will be made by the Service subject to consent from the Secretary of State.

310.     The Service can appoint and pay remuneration and allowances to such other staff as it thinks appropriate. The Service will determine how much remuneration such staff should receive, subject to the Secretary of State's consent.

311.     The Service can set up a pension scheme and pay pensions for the staff of the Service. However, VT employees (for example, clerks to VTs) are eligible to join the Local Government Pension Scheme. It is envisaged that Service employees (including the Chief Executive) will also be eligible to join this scheme.

312.     Currently all staff are locally employed by the valuation tribunal they work for. The new body will become the employer of all staff. Where the Service proposes to appoint a clerk for a VT, it must obtain the consent of the VT before it may do so.

Committees of the Service

313.     The Service has the general power to delegate performance of its functions to committees and its employees, by specific written authorisation. Committees will be able to delegate their functions to their sub-committees and Service employees, and sub-committees will be able to delegate their functions to Service employees. Non-Service members will be allowed to sit on committees so that specialist expertise may be utilised in appropriate cases. The Service may pay such remuneration and allowances as the Secretary of State may determine, to members of committees and sub-committees who are neither members nor employees of the Service.

Interests of members of the Service

314.     A member who has an interest in any matter that is brought up for consideration at a meeting of the Service, committee or sub-committee must disclose his interest to the meeting. His interest will be minuted and that member shall not take part in the deliberation or decision regarding that matter. The member can give a general notification that he has an interest in a company, firm or other organisation. If he takes reasonable steps to ensure that his interest is notified in a notice which is read and considered at the meeting, he does not need to attend the meeting in person. The Secretary of State has power to allow the member to take part in considering matters in which the member has an interest subject to such conditions as he considers appropriate.

The Service's finances

315.     The Secretary of State may pay grants and loans as he thinks fit to cover the expenses incurred by the Service in performance of its duties. However, there will be no power for the Service to borrow money without the consent of the Secretary of State.

316.     The Service will be subject to the normal provisions applying to public bodies in relation to the keeping of proper accounts, the role of the Comptroller and Auditor General, and the presentation to Parliament of reports at the end of the financial year.

Clause 106: Transfer to Service of property, rights and liabilities

317.     As a result of the establishment of the Service, there will be a need to make a formal transfer of property, rights and liabilities from its sponsoring Department (who currently own many of the assets used by the administration offices which support the Valuation Tribunals), and from individual valuation tribunals, to the Valuation Tribunal Service. This means that all tribunal offices and associated assets and the associated contractual liabilities arising from them will need to be formally transferred via a transfer scheme or schemes. It is envisaged that this will take place on the day the provisions establishing the Service comes into force. More detail about transfer schemes is given by Schedule 5.

Schedule 5: Contents of transfer scheme

318.     Schedule 5 makes further provision about the property, rights and liabilities that may be transferred to the Service by a transfer scheme.

Clauses 107 to 110: Audit Commission

Clauses 107 to 108: Auditors' public interest reports

319.     These clauses make amendments to the Audit Commission Act 1998 regarding the publication, and handling by local authorities, of public interest reports prepared by appointed auditors. They provide for the auditor to have direct responsibility for publishing reports and making copies available more widely than just to the authority concerned. They also reduce the time authorities have to respond to these reports to ensure that the matters to which such reports refer are considered promptly by authorities.

Clause 107: Auditors' public interest reports: time allowed for consideration

320.     This clause amends the Audit Commission Act 1998 and reduces from four months to one month the time limit within which local authorities must consider, in a meeting open to the public, the contents of public interest reports prepared under section 8 of that Act by appointed auditors. The existing provision whereby an auditor may allow longer for consideration of such reports is to be retained.

Clause 108: Auditors' public interest reports: publicity

321.     An auditor may, under section 8 of the Audit Commission Act 1998, make a report in the public interest on any matters coming to his notice during an audit which he considers should be brought to the attention of the public. A report may be made at the conclusion of an audit, or where the auditor considers it appropriate the matter may be made the subject of an immediate report. The auditor must give a copy of the report to the audited body forthwith if it is an immediate report, or otherwise within 14 days of the conclusion of the audit. Where an audited body receives an immediate report any member of the public may inspect the report, make copies or require the body to supply a copy of the report, or any part of it, on payment of a reasonable fee. The auditor may also notify any person that he has made a report and supply a copy or any part of it to any person he thinks fit.

322.     This clause amends the Audit Commission Act 1998 to provide that auditors should assume responsibility for publishing all public interest reports, notifying persons they think fit that such reports have been published and supplying copies to members of the public on request. From the time a report is sent to an audited body, auditors should ensure that members of the public may inspect reports and have copies made available. The obligation on auditors to provide copies will last for one year, thereafter it will fall to the Audit Commission.

Clause 109: Financial Year

323.     At present the Audit Commission's financial year, determined by paragraph 11(5) of Schedule 1 to the Audit Commission Act 1998, runs from 1 November to 31 October. Clause 109 amends paragraph 11(5) so that the Commission's financial year will run from 1 April to 31 March.

324.     Paragraph 61 of Schedule 6 to the Bill changes certain other dates mentioned in Schedule 1 to the Audit Commission Act 1998. These amendments are consequential on the change to the Commission's financial year.

Clause 110: Delegation

325.     Clause 110 inserts a new paragraph 11A in Schedule 1 to the 1998 Act, which provides that any of the Audit Commission's functions may be delegated to its committees and sub-committees and its officers and servants.

Clauses 111 to 116: Other

Clause 111: Standards Board for England: delegation

326.     This clause gives the Standards Board for England the power to delegate any of its functions to:

  • an officer or servant of the Board;

  • a committee or sub-committee of the Board; or

  • an individual member of the Board.

327.     The Standards Board is an independent body responsible for the promotion and maintenance of high standards of conduct by members and co-opted members of relevant authorities in England.

328.     The Standards Board was set up and is governed by the Local Government Act 2000. The Board has a number of functions conferred by the Act, one of which is to consider a written allegation and decide whether the allegation should be referred to an ethical standards officer for investigation.

329.     There is no provision in the Act which gives the Standards Board the ability to delegate functions. The number of complaints received by the Board and the ability to cope with the demands made by those complaints has led to the view that a power of delegation is required in order to allow Board members to fulfil their proper role of setting strategic guidance and direction.

Clause 112: Paid time off for Councillors etc not to be political donations

330.     Where any salary is paid to an employee by an employer in respect of time off taken in order to undertake duties as a local councillor, this clause ensures that the value of the salary is not classified as a political donation under the Political Parties, Elections and Referendums Act 2000 ("PPERA").

331.     Schedule 7 to the PPERA controls donations made to a person in his or her capacity as a councillor in connection with his or her political activities. It is considered that where an employee is a councillor, and is allowed paid time off work to carry out council duties, the pay for the time off is a controlled donation. This effect runs counter to the Government's intention that the provisions of the PPERA should not apply to the receipt by a councillor of paid time off for carrying out his or her duty as a councillor. This clause will ensure that the value of any salary paid to an employee by an employer in respect of time taken off in order to undertake "qualifying business" as a local councillor is not a donation for the purposes of Schedule 7 to the PPERA.

     332.     "Qualifying business" relates to the business of the authority, whether conducted by the authority itself, its executive (or any committee or member of the executive) or any of its committees or sub-committees. Qualifying business also relates to any duties that a councillor may carry out for:

  • other bodies to which the councillor has been appointed or nominated by the council of which the councillor is a member, and

  • any public bodies to which the councillor has been appointed , whoever makes the appointment.

333.     The time off for which pay will not count as a political donation is time off for a widely defined range of duties, including the doing of anything for carrying out the functions of the council to which a councillor has been elected and the doing of anything for carrying out any functions of another council where that other council has delegated the discharge of those functions to the councillor's council.

     334.     The clause will apply retrospectively, so that any pay for time off which may have been granted to councillors since 16th February 2001, when the requirements of Schedule 7 to the PPERA came into force, will no longer be considered a political donation.

     335.     The clause will extend (see clause 123(5)) to England and Wales, and also to Northern Ireland and Scotland, but only partially in the latter case. For, although the clause amends an existing enactment that extends throughout the United Kingdom, it is anticipated that a similar amendment will be made by an Act of the Scottish Parliament. However, such a similar amendment could amend the existing enactment only so far as it is part of the law of Scotland that can be amended by the Scottish Parliament. In particular, the Scottish Parliament cannot amend the law of Scotland to confer or remove functions exercisable otherwise than in or as regards Scotland. The existing enactment, though, affects conduct throughout the United Kingdom. The clause therefore extends the existing enactment, to the extent that it is part of the law of Scotland, only so far as the Scottish Parliament could not amend it. This will enable the existing enactment to be fully amended throughout the United Kingdom.

Clause 113: Overview and scrutiny committees: voting rights of co-opted members

336.     Clause 113 and paragraph 74 of Schedule 6 modify the Local Government Act 2000 so as to provide local authorities in England with a power to grant voting rights to members of overview and scrutiny committees who are not members of the authority. The purpose of the change is to meet a commitment given in the Local Government White Paper of December 2001 (Strong Local Leadership - Quality Public Services).

337.     Clause 113 inserts three paragraphs into Schedule 1 to the Local Government Act 2000.

338.     Paragraph 12 to be inserted into Schedule 1 to the Local Government Act 2000 allows a local authority to permit co-opted members of an overview and scrutiny committee, being members of the committee who are not members of the authority, to vote at meetings of that committee. Such a permission may only be given in accordance with a scheme made by the local authority. Such a scheme may include provision for the maximum or minimum numbers of co-opted members with voting rights.

339.     Paragraph 13 to be inserted into Schedule 1 to the Local Government Act 2000 grants the Secretary of State power to make regulations in relation to the exercise by authorities of the power to grant voting rights to co-opted members. It gives the Secretary of State:-

  • the power to make regulations requiring authorities to include certain provisions within their schemes;

  • the power to make regulations requiring local authorities to notify the Secretary of State of the making, variation or revocation of schemes relating to the grant of voting rights; and the power to direct a local authority to vary its scheme.

340.     Paragraph 14 to be inserted into Schedule 1 to the Local Government Act 2000 requires an authority to make copies of its scheme available for inspection by members of the public at its principal office. An authority must also publish a notice recording the making or variation of the scheme, the details of the scheme, and details of how the scheme may be inspected by the public, in one or more local newspapers. If the scheme is revoked an authority must publish a note of the fact.

341.     Paragraph 74 of Schedule 6 amends s 21(10) of the Local Government Act 2000 so that the provision in that section that members of an overview and scrutiny committee who are not members of the local authority may not vote is subject to paragraphs 12-14 of Schedule 1 to the Act, which are inserted by clause 113.

 
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Prepared: 26 November 2002