Memorandum by the Department
of the Environment, Transport and the Regions
1. The Department understands
from Counsel to the Lord Chairman of Committees that the Joint
Committee would welcome an explanation of the exercise in this
Order of the power conferred by section 2(5) of the Local Government
Act 1999 (c.27) ("the 1999 Act"). Section 2(5) provides
that a best value authority of a description specified in an Order
is not to be subject to certain duties "in relation to such
functions as may be specified". The Order is drafted so as
to provide that the authorities concerned are not subject to any
of the "best value" duties in relation to any of their
2. The Department considers
that as a matter of vires there is nothing in section 2(5)
(or elsewhere in the 1999 Act) which prevents an Order from specifying
all of the functions or duties of an authority or description
of authority (either by an exhaustive list of specific functions
or a generic description such as "all" or "any").
It does, however, appreciate that there may be concerns as to
whether use of the powers in this way might be unusual or unexpected.
In this respect, it might assist the Committee to have an explanation
of the purpose and origins of this draft Order.
3. The authorities to which
the Order applies are the majority of parish councils (i.e. those
parish councils with budgets of less than £500,000 per annum).
It is considered that the administrative and other costs of subjecting
these authorities at all to any of the "best value"
duties would be disproportionate to the benefits. This was why,
in its consultation documents and White Paper proposals in 1998,
the Government suggested a general "de minimis" cut-off
level of £500,000.
4. During the passage through
Parliament of the Bill which became the 1999 Act, there was a
certain amount of debate about, in particular, the future section
2(5) and, in general, the question of a cut-off point for small
authorities. (Official reports: House of Commons Standing Committee
BTuesday 26 January 1999, columns 12,13,18, 28; Thursday
28 January 1999, columns 47-56; House of Lords, Official Report,
volume 6000 No.79, Monday 10 May CWH 1-3, 17-18). Copies of the
relevant extracts of proceedings are being made available with
this Memorandum [not printed]. In addition, the Department's
memorandum to the House of Lords Select Committee on Delegated
Powers and Deregulation (which dealt with the Local Government
Bill in its Twelfth Report for Session 1998/99) mentions, at paragraphs
26 to 29, the Government's intention to exempt smaller bodies
such as parish councils by applying a financial threshold below
which the best value duty would not apply, in addition to the
possibility of exempting certain functions only in relation to
other types of authority.
5. The Department believes that
it is sufficiently clear from the Parliamentary proceedings that
one possible use which might be made of the powers conferred by
section 2(5) was to provide a general cut-off point for small
authorities, which would exclude them from the best value regime
altogether (e.g. the Minister for Local Government and Housing
at column 55 of the House of Commons proceedings "the Bill
provides for the de minimis level to be set by order and that
will happen"). The Department hopes that the Joint Committee
would agree, in these circumstances, that the use proposed to
be made of the relevant powers by the draft order is one which
is contemplated by the 1999 Act.
14 January 2000