House of Commons - Explanatory Note
Local Government Bill - continued          House of Commons

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Clause 114: Local Polls

342.     This clause confirms, by creation of an express power, the right of a local authority to conduct an advisory poll. There is no obligation on a local authority to hold such a poll, nor any requirement to act in accordance with the result of such a poll.

343.     The extent of this express power is broadly drawn, allowing the local authority to hold a poll on any matter relating to the services for which it is responsible (including where these may be delivered by a third party), or the finance that it commits to those services, or any other matter that is one relating to the authority's power under section 2 of the Local Government Act 2000(authority's power to promote well-being of its area)

344.     The clause also provides express freedom to a local authority in determining, for any poll it proposes to hold, who to poll and how the poll is to be conducted.

Clause 115: Appropriate sum under section 137(4) of the Local Government Act 1972

345.     Clause 115 amends section 137(4) of the Local Government Act 1972. Section 137 permits parish and town councils in England, and community councils in Wales, to spend up to a given amount in a financial year on items that are of direct benefit to their area in relation to which no other powers of expenditure exist. The amount is found by multiplying the appropriate sum by the relevant population of the authority's area. The appropriate sum in England, which was set by section 137(4AA)(c), is £3.50 per elector, but this is due to be increased in advance of the Bill, by statutory instrument, to £5.00 per elector in time for the financial year 2003/04. The appropriate sum in Wales is already £5.00 per elector and this was set by the Local Authorities (Discretionary Expenditure Limits)(Wales) Order 2000 (SI 2000/990).

346.     Clause 115 provides for the appropriate sum to be determined in accordance with a new Schedule 12B to the 1972 Act.

347.     The Schedule states that the appropriate sum for the financial year in which the Act comes into force, will be £5.00. It also specifies that the sum will automatically be increased for each financial year thereafter in line with the annual change in the retail prices index. This is achieved by multiplying the appropriate sum for the preceding financial year by the ratio between the retail prices index for September of the preceding financial year and the corresponding figure a year earlier.

348.     The Schedule also permits the Secretary of State to specify, by order, an alternative appropriate sum to that calculated with reference to changes in the retail prices index for parish and town councils in England; and for the National Assembly for Wales to specify an alternative appropriate sum for community councils in Wales.

Clause 116: Use of fixed penalties for leaving litter and dog fouling offences.

349.     Clause 116 makes provision in response to the commitment made in the Local Government White Paper of December 2001 (Strong Local Leadership - Quality Public Services). Subsection (1) of clause 116 allows local authorities to retain any sums which they receive from fixed penalties for leaving litter and dog faeces; these fixed penalty receipts will no longer have to be paid to the Secretary of State (in relation to England) or the National Assembly for Wales (in relation to Wales). Under subsections (2) and (3)(a) & (b) of this clause an authority will be able to use its fixed penalty receipts to pay for its statutory functions relating to litter and dog faeces, including the function of giving fixed penalty notices for leaving litter and failing to remove dog faeces.

350.     The Secretary of State and the National Assembly for Wales are given the power to make regulations adding to the activities which an authority may finance using its fixed penalty receipts (see subsection (3)(c) of clause 116). So, for example, an authority could be given the ability to spend its fixed penalty receipts on specified activities related to improving the local environment which are not carried out under the provisions mentioned in subsections (3)(a) and (b). However, the new regulation making power will be sufficiently wide to give an authority complete freedom as to how its spends its receipts (see subsection (4) of clause 116). Note that the regulation making power is referred to in subsection (2)(f) of clause 100 (exercise of powers by reference to English authorities' performance categories).


Clause 122: Commencement

351.     Subsections (1) to (4) make express provision about the commencement of some of the provisions of the Bill. Subsection (5) provides for every remaining provision of the Bill to be brought into force, so far as relating to England, by a commencement order made by the Secretary of State and, so far as relating to Wales, by a commencement order made by the National Assembly for Wales.


352.     Two provisions in the Bill are considered to have direct and quantifiable cost implications on public funds. These are the council tax revaluation and best value grants to parishes. Depending on the approach taken to council tax revaluation and including the costs of handling appeals, the cost could be in the region of £200 million, spread over six years, starting in 2003/04. The estimated cost of best value grants to parishes is £1.2 million per year, the first full financial year this could start is 2004/05 but it may be possible to pay grants sooner.

353.     The establishment of the Valuation Tribunal Service as a non-departmental public body will also have direct and quantifiable cost implications on public funds, but it is likely that this will be funded from within existing resources for the Valuation Tribunal Services. The 160 Valuation Tribunal staff will transfer to the new body. Their employment rights will be protected through the existing employment legislation (TUPE) but there is additional explicit protection of redundancy rights.


354.     The Regulatory Impact Assessment prepared for the Local Government Bill covers the following elements which affect businesses, charities or the voluntary sector and reach the following conclusions:

  • Part 4: Business Improvement Districts - the proposals are intended to provide businesses with the opportunity to work with local authorities and other partners to improve their local area, contribute to those improvement by way of a levy. This measure is not expected to have any significant effect on competition.

  • Part 5: small business relief; calculation of the non-domestic multiplier; transitional relief; rating of meters; exemptions for agricultural buildings; removal of power to prescribe rateable values; and provision of information - this covers a variety of proposals for changes to business rates, but none are expected to raise any competition concerns in any market.

  • Part 6: billing authorities' power to reduce the council tax discount on second and empty homes - This primarily affects domestic property. There is the potential for impact on businesses that have empty properties used for holiday lets but these will only be affected if the property is let for less than 140 days a year.

  • Part 8: charging for discretionary services; trading; contracting out (staff transfer matters) - Empowering local authorities to charge and trade does have the potential to impact on businesses but is likely to be both positive and negative in different contexts. The impact on competition of the provisions about staff transfer matters where services are contracted out is likely to be negligible.


355.     The Local Government Bill is considered to be compatible with the European Convention on Human Rights. In summary:

  • Parts 4 and 5 - the Convention could be relevant to the Business Improvement Districts and business rates provisions in the Bill, but there are grounds for considering each of these objectively and reasonably justified.

  • Part 6 - all tax proposals touch on property rights protected under the Convention. Provisions giving authorities discretion over council tax discounts in their areas could mean persons in otherwise similar circumstances but living in different areas paying different amounts (possibly discrimination within Article 14). However, the proposals are justified in the public interest and proportionate to policy aims.

  • Part 6 - clause 85 allowing council tax data sharing for empty homes purposes, touches on the right to respect family and private life. However, it is not considered to constitute an interference with that right and even if it does, it is justified and proportionate to policy aims relating to the economic well-being of the country.

  • Part 8 - the Convention touches on the provisions for charging and trading. These are considered to be proportionate and justified in the wider public interest because they will enable authorities to make better use of their assets and improve the delivery of public services.

  • Part 8 - if Valuation Tribunals are held to determine civil rights, the provisions in the Bill that make the administrative support systems independent of ODPM will improve the compatibility of the Valuation Tribunals with Article 6 of the Convention.

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Prepared: 26 November 2002