House of Commons - Explanatory Note
Local Government And Public Involvement In Health Bill - continued          House of Commons

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Clause 16 - Agreements about incidental matters

67.     This clause provides for the agreements that a public body affected by an order made under clause 7 or 10 can make/enter into. These agreements may relate to: property, income, rights, liabilities and expenses and any financial relations between the parties to the agreement.

68.     Subsections (3) and (4) set out that should the parties not reach agreement as to any disputed matter, it shall be referred to an arbitrator for him to decide.

Clause 17 - Residuary bodies

69.     This clause enables the Secretary of State by order to establish one or more corporate bodies to take over any property, rights, liabilities or functions of local authorities which cease to exist as a result of clause 7 or 10.

70.     Subsection (2) outlines other provisions that the Secretary of State may make under subsection (1).

71.     Subsection (3) allows the Secretary of State to transfer to any body or bodies the property, rights, liabilities and any related functions of the residuary bodies and to give effect to any scheme submitted to him for the dissolution of the residuary body.

72.     Subsection (4) establishes that the order may include incidental, consequential, transitional or supplementary provision and subsection (5) allows an order dealing with residuary bodies to contain provision which applies, modifies or amends enactments.

Clause 18 - Staff Commissions

73.     This clause enables the Secretary of State to establish one or more staff commissions for the purpose of considering staffing arrangements, transfers and problems that may arise as a result of orders under this Chapter. Staff commissions may also be established to advise the Secretary of State on the steps necessary to safeguard the interests of staff affected by such an order.

74.     Subsection (3) allows the Secretary of State to direct the staff commission(s) with respect to their procedure.

75.     Subsection (4) enables the Secretary of State to give directions to a relevant authority with respect to the provision of any information requested by the staff commission, the implementation of any advice given by the staff commission and the payment by such an authority of any expenses incurred by a staff commission in undertaking requests of the authority.

76.     Subsection (6) allows the Secretary of State, by order, to wind up any staff commission established under this clause.

77.     Subsection (8) defines "relevant authority" as a local authority or a residuary body established under clause 17.

Clause 19 - Certain county councils to be billing authorities

78.     This clause establishes that where the functions of a district council transfer to a county council for that area as a result of an order under this Chapter, the county council shall be the billing authority for the purposes of Part 1 of the Local Government Finance Act 1992 (c.14) for that area; it shall not be a major precepting authority.


Clause 20 - Correction of orders

79.     This clause allows the Secretary of State to rectify a mistake in an order under Chapter 1, ie a restructuring or boundary change order or an order containing incidental or consequential provision, where he is satisfied that there is a mistake in the order which can not be rectified by a subsequent order by virtue of section 14 of the Interpretation Act 1978. This relates to orders which may not otherwise be capable of amendment as their provisions may be spent soon after commencement.

80.     Subsection (2) sets out that a "mistake" includes a provision contained in or omitted from the order in reliance on inaccurate or incomplete information supplied by any public body.

Clause 21 - Pre-commencement invitations etc

81.     This clause provides that it does not matter if the Secretary of State issues invitations or guidance prior to commencement of the Bill and that he may consult on any proposals received prior to commencement. This means that the Secretary of State will be able to implement, after Royal Assent, proposals received before Royal Assent.

Clause 22 - Consequential Amendments

82.     This clause provides that Schedule 1 has effect.

Clause 23 - Definitions for the purposes of Chapter 1

83.     This clause defines various terms for the purposes of Chapter 1. In particular:

  • a "single tier" area is firstly where there is a single tier of local government for an area, ie where there is a county council and no district councils for that area or where there is a district council and no county council for that area. Secondly, an area is "single tier" if it is a London Borough;

  • a "two-tier" area is either a district area where there is a district council and a county council undertaking functions which apply to the area or it is a county area where there is a county council and district areas all of which have district councils;

  • a proposal is only made "in response to" an invitation or direction if it is a type of proposal which is permitted, is in response to an invitation or direction, is in accordance with that invitation or direction and includes a local government area of which at least part is currently two-tier;

  • a "body affected by an order" includes a body whose area or functions are affected by an order; which will cease to exist following an order; or which is established pursuant by or in consequence of an order.


Clause 24 - Authorities dissolved by orders: control of disposals, contracts and reserves

84.     This clause provides that the Secretary of State may make a direction requiring relevant authorities to obtain consent, with effect from a date specified by the Secretary of State, from the person(s) specified in the direction before they can:

  • dispose of land if the consideration for it exceeds £100,000;

  • enter into a capital contract where the authority concerned would be required to pay consideration of more that £1,000,000 or where the contract includes a term allowing the consideration to be varied;

  • enter into any non-capital contract where the consideration exceeds £100,000 and the contract extends beyond a date specified in the direction, or under the terms of the contract, the period of the contract may be extended beyond that date;

  • include an amount of reserves in the calculation of its budget requirement for council tax purposes.

85.     Subsection (2) defines a "relevant authority" as one which is to be dissolved by order made under clause 7 or 10 and which is specified or falls within a description of authority specified in the direction.

86.     Subsection (3) defines "capital contract" and "non-capital contract". A capital contract means a contract in relation to which the consideration payable by the authority would be capital expenditure for the purposes of Chapter 1 of Part 1 of the Local Government Act 2003.

87.     Subsection (4) provides that the person(s) whose consent is required as specified in the direction, may be the Secretary of State or such authority or other person as he thinks appropriate. He may identify a different person for different matters that require consent or in relation to different authorities or types of authorities.

Clause 25 - Directions: further provisions about reserves

88.     This clause provides that the Secretary of State, in making a direction under clause 24, may specify that in relation to reserves of a specified description, or reserves below a certain amount, relevant authorities should not be subject to the requirement to seek consent before applying such reserves to reduce their budget requirement for council tax purposes.

Clause 26 - Directions: supplementary

89.     Subsection (2) of clause 26 enables consent to be given for a particular disposal or contract, or for disposals or contracts of any description. Consent may be given either unconditionally or subject to conditions.

90.     Subsection (3) provides that certain enactments will have effect subject to direction, that is, that the direction will take precedence. The enactments are: (a) section 123(1) of the Local Government Act 1972 which provides that a local authority must obtain the Secretary of State's consent where it proposes to dispose of land at less than best consideration and (b) any other enactment relating to the disposal of land by a local authority.

91.     Subsection (4) provides that any consent required by this direction is additional to any consent required by other legislation in relation to the disposal of land by local authorities.

92.     Subsections (5) and (6) set out that where the consideration under the contract is not in money, the value of the consideration shall apply for the purposes of the financial limits in clause 24. Where there is a question over the value of such consideration and the relevant authority and the person who is required to give consent can not reach agreement as to the value, it will be determined by the Secretary of State.

93.     Subsection (7) provides that a direction may be varied or revoked by a subsequent direction.

Clause 27 - Consideration to be taken into account for the purposes of direction

94.     This clause provides that for the purpose of deciding whether the financial limits in clause 24 have been exceeded, the consideration with respect to certain disposals and contracts shall be taken into account.

95.     The consideration in relation to other disposals of land made after the 31 December 2006 (ie before the direction was issued) shall be taken into account.

96.     The consideration that shall be taken into account is that in respect of contracts entered into by the authority after the 31 December 2006 (ie before the direction was issued) which are either with the same contractor as the contract in question, or which relate to the same or a similar description of subject matter as the contract in question.

Clause 28 - Contraventions of direction

97.     Subsections (1) and (2) provide that any disposal made in the absence of consent in contravention of clause 24 will be void. Any contract similarly entered into without consent, will not be enforceable against the successor authority.

98.     Subsection (3) defines a "successor" authority as an authority which is established by order under clause 7 or 10 and whose area covers whole or part of the area of an old authority.

99.     Subsection (4) provides that a contract entered into in contravention of a direction under clause 24 will not be a certified contract for the purpose of the Local Government (Contracts) Act 1997. This means that the contractor will not be afforded the protection provided by that Act, that is, the contract will be open to a challenge in private law and that there will not be terms which survive any setting aside of the main contract.

100.     Subsections (5) and (6) provide that if an authority applies reserves to reduce its budget requirement for council tax purposes without consent, the authority will be treated as though it has not made its council tax calculations as required by the Local Government Finance Act 1992 and accordingly will not be able to collect council tax.

Clause 29 - Power to amend

101.     This clause allows the Secretary of State to amend the amounts identified in clause 24(1) and to amend the date specified in clause 27(1) and (3) so that he will be able to make appropriate directions in the future, after the first wave of restructuring.



102.     Part 2 of the Bill enables district councils holding elections by halves or thirds to hold whole council elections (i.e. electing all councillors at the same time once every four years) where they wish to do so. It provides for a means by which the local authority concerned can take the decision and for the years that that decision can be taken and the change can occur. A decision to move to whole council elections must be taken in a specified period and any such decision must be publicised and notified to the Electoral Commission. This Part also removes the requirement for the number of councillors in a metropolitan district ward to be divisible by 3 and allows local authorities to change the names of their electoral areas.

Change to whole-council elections

Clause 31 - Eligible councils

103.     Clause 31 defines the term "eligible council" as a district council in England that currently holds election by halves or elections by thirds. The term therefore covers all metropolitan district councils and over 100 shire (non-metropolitan) district councils including some single tier local authorities. It is these local authorities that may change the method (scheme) of holding elections in their area under clause 32.

Clause 32 - Changing scheme for ordinary elections

104.     Clause 32 enables an eligible council to change to a scheme of whole council elections by resolution. The resolution can only be passed during a specified period, "the permitted resolution period." This period differs according to whether the council is a metropolitan district council or a non-metropolitan one. Clause 32(8) enables the Secretary of State to extend the period during which the decision must be taken. Once the council has resolved to move to whole council elections, clause 32(6) prevents it from changing to a different scheme of elections, such as elections by thirds.

Clause 33 - Scheme for whole-council elections

105.     This clause is concerned with how a scheme for whole council elections will operate. It requires whole council elections to be held in particular years. For metropolitan district councils, these are 2008, 2012 and every four years after. For non metropolitan district councils, the whole council election years continue to be 2011, 2015, and every four years after.

106.     Subsection (6) provides that where the permitted resolution period is to be extended beyond 31 December elections will be in the same year as the end of the resolution period.

Clauses 34 and 35 - Publicising change of scheme for ordinary elections and Notice to the Electoral Commission

107.     As soon as possible after the resolution has been made the local authority must, in a manner it sees fit, publicise the decision to move to whole council elections and explain when the change is to be made. It must then notify the Electoral Commission of its decision.

Clause 36 - Amendment of existing provisions about schemes for ordinary elections

108.     This Clause makes consequential amendments to those parts of the Local Government Acts 1972, 1992 and 2000 which are concerned with schemes for council elections; in particular it removes the provision in the Local Government Act 1972 that allows non-metropolitan district councils to request that the Secretary of State change their scheme of elections by order.

Electoral Areas

Clause 37 - Metropolitan districts: councillors per ward.

109.     This clause removes the requirement in the Local Government Act 1972 that the number of councillors returned for a ward in a metropolitan district be divisible by three. Instead, the number of councillors returned for such a ward can be whatever is provided by order by either the Electoral Commission following an electoral review or the Secretary of State when implementing a structural or boundary change under Part 1 of this Bill. This will bring metropolitan district councils into line with shire district councils where there is no restriction on the number of councillors for a ward.

Clause 38 - Change of name of electoral area

110.     This clause enables a county council or a district council to change the name of an electoral division or district ward, as the case may be, in its area by passing a resolution at a special meeting held for the purpose. The council must then inform certain bodies, including the Electoral Commission, of the change. The Electoral Commission's power to amend the names of local authority electoral area remains unaffected. It should be noted that if a change in the name of an electoral area is proposed within 5 years of a change made by the Electoral Commission, the local authority must first seek the approval of the Electoral Commission.



111.     Part 3 and Schedules 2-4 of the Act introduce new executive models and build on local authority governance arrangements for England which were first introduced by the Local Government Act 2000.

112.     The Local Government Act 2000 put in place a new decision-making framework in which there is a separation of the decision-making and scrutiny roles of local authorities. It required the majority of local authorities to put in place, following consultation, executive arrangements involving the creation and operation of one of three different forms of executive. For certain small district councils a further option, alternative arrangements, which did not involve a separate executive, was made available.

113.     These clauses offer local authorities a different choice of executive governance models.

Executive Arrangements for England

Clause 39 - Executive arrangements for England

114.     This clause modifies the provisions in the Local Government Act 2000 in respect of the forms of executive which local authorities may operate.

115.     It requires any council in England which operates executive arrangements to operate one of the following models:

  • Leader and Cabinet executive (England);

  • Mayor and Cabinet executive;

  • Elected executive.

116.     The key features of each executive model are as follows.

  • Leader and cabinet executive (England) - a councillor elected as leader for either a 4 year term, in the case of a local authority operating whole council elections, or until his or her term of office as councillor expires, where the local authority instead operates elections by halves or thirds, and two or more councillors of the authority appointed to the executive by the executive leader;

  • Mayor and cabinet executive - a directly elected mayor who appoints two or more councillors to the executive;

  • Elected executive - A leader and cabinet who are all directly elected to the council's executive.

Clause 40 - Discharge of functions

117.     This clause amends the provisions of the Local Government Act 2000 to provide for the leader in a Leader and Cabinet executive (England) and in an elected executive to make arrangements for the discharge of functions in the same way as a Mayor and Cabinet executive

Clause 41 - Changing governance arrangements

118.     This clause allows a local authority to change its executive arrangements, including the replacement of their existing form of executive with a different form of executive as permitted under Section 11 of the Local Government Act 2000, or where they are operating alternative arrangements, their alternative arrangements, including the replacement of those arrangements with executive arrangements in accordance with this clause.

119.     The clause inserts new section 33A to 33Q into the Local Government Act 2000. Sections 33A to 33I set out the way local authorities in England can vary their executive arrangements; move from alternative arrangements to executive arrangements; draw up proposals for changing their governance arrangements; resolve and publicise their decision to vary or change their governance arrangements; and set out the timetable for implementing new or varied governance arrangements.

120.     Where local authorities are proposing to adopt a new form of executive or are moving to executive arrangements, sections 33J to 33N make certain provisions regarding what details must be provided in the proposals; the need to hold a further referendum if the current governance arrangements were originally approved in a referendum; and the consultation requirements for proposals which aim to move from a governance model involving direct election to the executive which was originally adopted without the need for a prior referendum.

121.     Sections 33O to 33Q make provision regarding pre-commencement consultation; the procedures that will apply should a council operating alternative arrangements fail to adopt executive arrangements within the permitted time allowed for by the legislation; the meaning of certain terms used within this clause; and the permitted periods in which local authorities can resolve to change their governance arrangements.

Clause 42 - Referendum following petition

122.     This clause amends the provisions in section 34 of the Local Government Act 2000 to extend the ability of local people to petition their local authority to hold referendum on a directly elected mayor so as to enable them to petition for a referendum on a directly elected executive.

Clause 43 - Elected mayors

123.     This clause amends section 39 of the Local Government Act 2000 by omitting the provisions and references to directly elected executives, provisions for which are consolidated into clause 43.

Clauses 44 to 48 - Elected executives; other elected executive members; meaning of "elected executive member"; Time of elections etc; and Voting at elections of elected executives.

124.     Clauses 44, 45, 46, 47 and 48 make provision with respect to elected executives. Elected executive members are elected by the local government electors for the local authority area. For this model, there will be an election of a single "slate" consisting of a team of between 2-9 candidates to be members of the proposed executive, plus one candidate to be leader of the proposed executive if the "slate" is elected.

125.     Clause 44 allows members of the elected executive to be treated as councillors for the purposes of some enactments, such as those relating to voting rights, conduct and remuneration of councillors. This mirrors the existing provision for elected mayors in the Local Government Act 2000.

126.     This clause permits a person to stand as both a councillor and on a "slate" as an elected executive member and also makes provision as to what should happen in the event of a councillor of the authority being returned as a member of a directly elected executive. In such a case, a vacancy will arise in the office of councillor. Where the "slate" of candidates is formed of 9 or 10 existing councillors, a consequence of this could be a large number of by-elections immediately after the election should that "slate" be comprised of existing councillors.

127.     Clause 45 makes provision with respect to the term of office of a member of an elected executive who is not an elected mayor or a member of an elected executive; section 11(5) of the Local Government Act 2000 allows the Secretary of State to prescribe forms of executive which are additional to those set out in section 11.

128.     Clause 46 provides that "elected executive member" means an individual elected to an authority's executive by the electors of the area.

129.     Clause 47 and 48 and Schedule 2 amend the Local Government Act 2000 so as to extend the supplementary vote (SV) system used for election of elected mayors to the election of elected executives.

130.     In relation to the election of an elected executive, under the supplementary vote system, the elector has two votes - a first preference vote cast for the elector's preferred "slate", and a second vote cast for the elector's second preference from among the remaining "slates". Schedule 2 specifies the procedure for returning a directly elected executive where there are three or more slates. Ordinarily, the "slate" which receives more than half of the first preference votes cast will be elected. If none of the candidates receive more than half of all of the first preference votes the election remains in contest. It is at this point that the second preference votes are counted for those candidates that remain in the contest. The executive returned is the one with the greatest total number of preference votes (both first and second). Schedule 2 also provides procedures for dealing with an equality of votes at any stage of the process.

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Prepared: 13 December 2006