House of Lords
Publications on the internet
Other Bills before Parliament
Arrangement of Clauses (Contents)
|Greater London Authority Bill|
These notes refer to the Greater London Authority Bill
GREATER LONDON AUTHORITY BILL
1. These explanatory notes relate to the Greater London Authority Bill, as brought from the House of Commons on 7th May 1999. They have been prepared by the Department of the Environment, Transport and the Regions in order to assist the reader of the Bill and to help inform debate on it. They do not form part of the Bill and have not been endorsed by Parliament.
2. The notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. So where a Clause or part of a Clause does not seem to require any explanation or comment, none is given.
3. The Bill establishes the Greater London Authority (GLA), and provides for elections for the Mayor of London and the London Assembly. It establishes the financial arrangements for the Authority and sets out terms and conditions for the Mayor and the members of the Assembly.
4. The Bill defines the Mayor's and Assembly's powers and functions. It establishes Transport for London (TfL). It amends the Regional Development Agencies Act 1998 to provide for the creation of the London Development Agency. It establishes the Metropolitan Police Authority, and it reconstitutes the London Fire and Civil Defence Authority as the London Fire and Emergency Planning Authority. In the Bill, these new bodies and authorities are referred to as 'functional bodies'. The Bill also defines the GLA's planning, environmental and cultural responsibilities.
5. In the Bill, 'Greater London' means the London Boroughs, the City of London, and the Inner and the Middle Temple, in accordance with section 2(1) of the London Government Act 1963.
6. The aim of the Bill is to give effect to the Government's policy on the governance of London, the principal features of which were set out in the White Paper A Mayor and Assembly for London (Cm 3897). This was published in March 1998 in connection with the referendum held in Greater London on 7 May 1998. A majority of those voting in the referendum answered 'Yes' to the question 'Do you agree with the Government's proposals for a Mayor and Assembly for London?'
The Greater London Authority
7. The GLA will consist of a directly elected Mayor and separately elected Assembly, each elected for a term of four years. The GLA will have a general power to do anything which it considers will further any one or more of its principal purposes. Its principal purposes will be to promote economic development and wealth creation in Greater London; promote social development in Greater London; and promote the improvement of the environment of Greater London. In determining whether and how to exercise its power in pursuit of its principal purposes the Authority must have regard to the effect the proposed exercise of the power would have on the health of people in Greater London, and the effect it would have on the achievement of sustainable development in the United Kingdom.
8. The Authority will have specific powers and duties in relation to transport, economic development, planning, police, fire and emergency planning, environment and culture. The GLA will take over responsibilities from some existing pan-London bodies - the London Ecology Committee, London Research Centre and the London Planning Advisory Committee.
The Mayor of London
9. The GLA will have a directly elected Mayor, known as the Mayor of London.
10. The Mayor will be responsible for developing the GLA's strategies for transport, planning and the environment in London and will have a range of powers to implement them. He or she will also approve strategies for economic development and culture. The Mayor will be required to ensure that these strategies take each other into account. The Mayor will be responsible for setting a budget for the GLA and its four functional bodies, and he or she will make a number of appointments to the boards of the four functional bodies and other London organisations.
The London Assembly
11. The Assembly is the forum in which the Mayor's proposals will be examined and the Mayor's decisions and actions will be reviewed.
12. The Assembly must be consulted by the Mayor during the preparation of each of the GLA strategies. The Assembly will consider the budget for the GLA and the four functional bodies, and will be able to overrule either all or part of the Mayor's proposals by a two-thirds majority. The Assembly will scrutinise the exercise of the Mayor's functions and conduct investigations into London issues.
13. The Mayor and Assembly will be accountable to Londoners. The Mayor will hold an annual, public, State of London debate and will attend a monthly question time to allow Assembly members to enquire into actions and policies. The Mayor and Assembly together will hold a twice yearly public meeting called a "People's Question Time".
Elections to the GLA
14. If there are three or more candidates, the Mayor will be elected under the Supplementary Vote system which gives voters the opportunity to express a first and second preference in respect of the candidates for election. (If there are fewer than three candidates, the 'first past the post' voting system will be applied.)
15. Assembly members will be elected by the Additional Member System. There will be twenty-five Assembly members; fourteen will be elected for constituencies and eleven will be elected on a London-wide basis. The fourteen constituencies will be established by order under the Bill. The Local Government Commission made recommendations on Assembly constituency under Part II of the Greater London Authority (Referendum) Act 1998, which were published on 30 November 1998, following a London-wide consultation exercise. Ministers have announced their intention to accept these recommendations.
GLA Financial Systems
16. The GLA and the four functional bodies will be subject to the local government finance regime. The GLA will set a budget for itself and each of the four functional bodies. These budgets will together form the consolidated budget.
17. Funding will transfer to the GLA along with functions. The GLA will receive central government, national non-domestic rate and council tax funding and distribute it to the functional bodies in line with their budgets. The Mayor and Assembly and their staff will be funded through government grant, and by council taxpayers.
18. Capital finance controls will apply to the GLA and each of the functional bodies independently. The Mayor will have influence over capital spending priorities through preparing a capital spending plan.
19. The GLA and each of the four functional bodies will be responsible for administration of their own financial affairs, and for preparing their own accounts. The GLA and the four functional bodies will follow the local authority accounting framework and be subject to audit by auditors appointed by the Audit Commission.
Functions of the GLA
20. The Mayor will have a duty to produce an integrated transport strategy for London. This strategy will be prepared within the context of the national integrated transport policy as expressed in the Government White Paper A New Deal for Transport: Better for Everyone (Cm 3950) which was published in July 1998. The Bill also provides the Mayor and the London borough councils with enabling powers which would allow them to introduce road user charging and a levy on workplace parking in the context of the Mayor's integrated transport strategy.
21. The Bill gives a power for the Secretary of State, by regulation, to make provisions in connection with a Public-Private Partnership ("PPP") for the London Underground, as announced in Parliament by the Deputy Prime Minister on 20 March 1998 (Hansard 308, col 1539).
22. The Bill unifies responsibility for transport in London by establishing a single body, Transport for London (TfL), which will replace London Regional Transport and take over the functions of other transport bodies. TfL will be directly accountable to the Mayor and will be responsible for implementing his transport strategy.
23. TfL will be chaired by either the Mayor, or a chairman appointed by the Mayor, and will have a wide range of executive responsibilities. The current powers of London Regional Transport will be divided between the Mayor and TfL, with certain key powers resting with the Mayor and operational powers resting with TfL. TfL will be responsible for road maintenance and traffic management on the Greater London Road Network, which will comprise important London roads. The Mayor and TfL will also have powers to regulate taxis and minicabs and promote river services. The Mayor will have extensive powers of direction over all TfL activities.
24. The Bill provides in relation to the London Development Agency (LDA), as established in the Regional Development Agency Act 1998, for the Mayor to exercise most of the functions exercised by the Secretary of State in respect of other Regional Development Agencies. The LDA will be responsible for economic development and regeneration and will promote competitiveness and employment in London.
25. The Mayor will be responsible for London's economic development strategy. It will be prepared by the LDA under the Mayor's guidance, and agreed or amended by the Mayor before publication. The LDA will be responsible for implementing this strategy.
26. The Bill establishes a new Metropolitan Police Authority (MPA) for London, which will be similar in structure and function to other police authorities in England and Wales. The majority of the MPA's membership (12 out of 23 members, one of whom will be the Deputy Mayor) will be drawn from the Assembly members. The others will be magistrates and independent members.
27. The Bill amends the boundaries of the Metropolitan Police District (MPD) so as to bring them into line with the Greater London area (except that the City of London will continue to be policed separately). Those parts of the current MPD which lie in Essex, Hertfordshire and Surrey will be policed by the forces of those counties.
Fire and Emergency Planning
28. The Bill reconstitutes the existing London Fire and Civil Defence Authority as the London Fire and Emergency Planning Authority (LFEPA). The majority of the LFEPA's membership (nine out of seventeen) will be drawn from the Assembly, and will be appointed by the Mayor. The other eight will be members of the London borough councils. The LFEPA will be responsible for providing efficient and effective fire brigade and emergency planning services in the capital.
29. The Mayor will be responsible for producing a Spatial Development Strategy for London. This will be linked to the Mayor's other strategies, and will set out an overall land use strategy for London and consider its economic, environmental and social implications. Borough unitary development plans must be in general conformity with the Mayor's strategy. London borough councils will remain the development control authorities for their areas, but the Mayor will be consulted and, if necessary, will be able to intervene in the decision making process, by directing the London borough councils to refuse planning consent where issues of strategic importance are concerned.
30. The Mayor will be responsible for assessing and reporting on the state of London's environment. The Mayor will prepare and publish strategies on air quality and waste, and have powers of direction to ensure they are delivered. He or she will inherit some of the Secretary of State's other responsibilities in respect of local authority Waste Recycling Plans and Air Quality Management Plans. The Mayor will prepare an action plan on biodiversity and an ambient noise strategy for London.
31. The Bill gives the Mayor some responsibilities in respect of cultural issues in London and establishes the Cultural Strategy Group for London. The Cultural Strategy Group will be required to produce a culture strategy, for the Mayor who can amend it if he or she wishes before publication. This strategy will cover London's built heritage, museums, library services, the arts, broadcasting, tourism and sporting issues in London.
32. The Greater London Authority Bill consists of twelve parts. These are:
COMMENTARY ON CLAUSES
PART I: THE GREATER LONDON AUTHORITY
Clause 1: The Authority and Clause 2: Membership
33. Clauses 1 and 2 and Schedule 1 provide for the establishment of the GLA. The GLA will be made up of a directly elected Mayor and a separately elected Assembly of twenty five members. The Mayor and Assembly together will have a corporate legal identity as the Authority.
34. The Assembly will be elected under the additional member system. Fourteen Assembly members will represent constituencies, each made up of two or three complete London boroughs. The Secretary of State will decide the boundaries and names of these constituencies, on the basis of recommendations made by the Local Government Commission for England (the 'LGC'). Eleven Assembly members (known as "London members") will be elected under the additional member system for the whole of Greater London.
35. The election of the Authority as a whole will take place once every four years (the "ordinary election"). There will be an election for the Mayor and one for the London members plus elections in each constituency for the constituency member. The term of office of those elected at an ordinary election will run from the second day after the last declaration to the second day following the last declaration at the next ordinary election.
36. Schedule 1 contains provisions on the Assembly constituencies. In May 1998, using powers contained in the GLA (Referendum) Act 1998, the Secretary of State directed the LGC to produce recommendations for the boundaries of the Assembly constituencies. The LGC submitted its recommendations on 30 November 1998. The Minister for London announced in Parliament on 19 January 1999 (Hansard Col 726) that the Government have decided to accept the Commission's recommendations and that, subject to the passage of the Bill, they would be implemented by secondary legislation after Royal Assent. A map of the GLA constituencies is shown at Map A.
37. Clause 2(4) empowers the Secretary of State to implement these recommendations by order.
38. Schedule 1 also contains provisions to allow for future reviews of the constituency boundaries. Detailed ground rules state that there should always be fourteen constituencies, composed of combinations of two or more contiguous whole London Boroughs, and that the number of electors in each constituency should be as similar to each other as is reasonably practicable.
39. The Schedule also lays down a basic structure for future reviews of the Assembly constituencies. Reviews of the constituencies will be at the discretion of the Secretary of State. The Secretary of State will commission the LGC to carry out a review, and may produce guidance that the LGC will have to take into account; the LGC will carry out its review, and produce recommendations. The Secretary of State will have powers to implement these recommendations.
40. The Schedule provides for two different scenarios in which a review of the constituencies might occur:
41. There are three possible outcomes here:
Clauses 3 and 4: Ordinary elections
42. Clause 3 contains provisions on ordinary elections to the Authority. The first ordinary election will be held on 4 May 2000, unless the Secretary of State exercises the order making power provided by this Clause to postpone that date. Subsequent elections will be held on the first Thursday in May in the fourth calendar year following that in which the first ordinary election was held.
43. Clause 4 contains provisions on voting at ordinary elections. The ordinary election for the Authority will consist of a mayoral election, the election of Assembly members in each of the fourteen constituencies and the election of the London members.
44. In the mayoral election, if there are only two candidates, the one with the most votes wins under first-past-the-post procedures. But if there are three or more candidates, a different voting system - the Supplementary Vote (SV) system - comes into play. Voters will be able to indicate their first and second choice for Mayor. How these choices are counted, in order to determine who should be returned as Mayor, is set out in Part I of Schedule 2 to the Bill.
45. Candidates for the Assembly will be elected under the Additional Member System (AMS). Voters will have two votes - one for a constituency member and one - known as a London vote - for an individual or political party list. Each of the 14 constituencies will return one constituency candidate elected on the normal first-past-the-post basis. Eleven additional seats in the Assembly will be allocated on the basis of the London vote using the De Hondt formula. This is intended to top up the number of seats for each party in the Assembly in order to reflect broadly their proportion of the London vote. The precise way in which this is done is set out in Part II of Schedule 2 of the Bill. A worked example is given below.
46. The way in which the elections of the Mayor and Assembly members interact is the subject of subsections (7) to (10) of the Clause. The result of the elections of the Mayor and the constituency members must be determined first, so that the calculation (set out in Part II of Schedule 2) resulting from the count of the London vote can be made under Clause 4 and Schedule 2; this calculation is not to be held up if any of the constituency polls has been countermanded. No-one may stand in more than one Assembly constituency and if the person returned as Mayor is also successful in a constituency election, a by-election will ensue in that constituency (but the seat will be counted as having been won by the relevant party for the purposes of the London vote - see paragraph 6(4) of Schedule 2). More detailed provision for the interaction of the various polls is contained in Schedule 2 to the Bill.
47. Schedule 2 contains detailed provisions on voting at elections for the Mayor and the London members of the Assembly.
The Mayoral Poll
48. Whenever there are three or more candidates to be Mayor, each voter may indicate on the ballot paper their first and second choices for Mayor. When the votes are counted any candidate with more than half the first preference votes wins outright. However if no candidate wins an overall majority then second preference votes are taken into consideration. The two candidates with the most votes remain in the contest (and there is provision for any tie for second place). The second preference votes on the ballot papers of the eliminated candidates are then examined and any second preference votes for the remaining candidates are allocated to them. The candidate who then has the most votes is returned as Mayor.
Note: "Other" includes papers where the second preference vote was spoilt, unclear or not recorded or where the vote was for one of candidates B or D.
The final vote is therefore -
And candidate A is returned as Mayor.
Voting for the Assembly
49. The Assembly seats deriving from the London vote will be allocated according to the De Hondt formula, a commonly-used way of allocating seats under proportional representation. When allocating seats in the Assembly on the basis of the London vote, the Greater London Returning Officer (defined in Clause 24) considers the party affiliation of the constituency candidates who have been returned as members of the Assembly and the number of London votes cast for that party. He then divides the party's total London vote by the number of seats that party has won plus one (one is added to avoid dividing by zero where no seat has been won). The result is known as the party's London figure. Independent candidates are given a London figure equal to their London vote.
50. The first seat is then allocated to the party or individual with the highest London figure. When a seat is allocated to a party, its London figure is recalculated on the basis of the new total number of seats plus one. The next seat is then allocated on the basis of the highest London figure at that stage, after which the winning party's London figure is similarly recalculated, until all 11 seats have been allocated. Should two parties tie for the last seat, their figures are recalculated as though each party had one more seat and the one whose London figure is the highest gets the seat. If the tie continues the matter is to be settled by lot. A threshold for election as a London member of the Assembly is set in paragraph 7 of Schedule 2. A party or independent candidate failing to win at least 5% of the total of London votes will not be allocated any of the London member seats.
51. A worked example is set out below:
52. In this worked example, the fourteen Assembly constituency seats are shared between parties A, B, and C as follows:
Party A: 6 seats
Party B: 5 seats
Party C: 3 seats
53. The eleven London-wide seats are contested by the three parties and by one independent candidate. The votes cast are as follows:
54. The eleven London-wide seats are then distributed on the basis of these figures as follows:
Guideline for the calculation of London-wide seats:
Allocation of London-wide seats.
Clauses 5 to 11: Vacancies in the Assembly
55. Clauses 5 to 11 make provision for vacancies in Assembly membership and are based on the provisions in Part V of the Local Government Act 1972 for vacancies in the membership of local authorities.
56. A vacancy arises where
57. A vacancy arising otherwise than on account of death, resignation or automatic disqualification has to be declared by an officer of the Authority charged with that function or by the High Court under Clause 22. A vacancy in an Assembly constituency is filled at an election held in the constituency on the first past the post basis. The election must be held no later than 35 days after the date on which the vacancy is to regarded as occurring in accordance with Clause 9 (but Sundays and holidays are left out of account).
58. If a vacancy occurs within six months prior to the date of an ordinary election, no election will be held; instead it will be left unfilled until the next ordinary election of the whole Assembly. However, if the occurrence of a vacancy means that the total number of vacancies exceeds one-third of the total membership of the Assembly, then an election to fill that vacancy must take place.
59. Where a vacancy arises among the London members, it will remain unfilled until the next ordinary election unless the vacancy is of a London member elected from a party list and there are persons on the list who can be chosen by the Greater London returning officer to fill the vacancy.
60. To be eligible to fill such a vacancy, a person on a list must be willing to serve. In addition, if a person on the list is no longer a member of the party concerned, the party may notify the returning officer that he or she is not to fill the vacancy.
61. If there is more than one person who satisfies the conditions set out above, then the highest placed of these persons on the list will be returned.
62. The term of office of the persons elected or chosen to fill vacancies will end at the next ordinary election.
Clauses 12 to 16: Vacancy in the office of the Mayor
63. Clauses 12 to 16 deal with vacancies in the office of Mayor and are broadly similar to the provisions for vacancies in Assembly membership. In the case of the Mayor, however, the provision for disqualification on account of a failure to attend meetings relates to a failure on six consecutive occasions to attend the monthly meetings of the Assembly held under Clause 44(2).
64. A mayoral vacancy is filled by an election held on the same basis as an ordinary election unless it occurs in the six months preceding the next ordinary election. In that case the office of Mayor is to be left unfilled and the deputy Mayor will act as Mayor until the next ordinary election.
Clause 17: Franchise, conduct of elections etc.
65. Clause 17 and Schedule 3 make detailed provision for Authority elections by amending the Representation of the People Act 1983, which makes provision for the conduct of parliamentary and local government elections. Section references in the following description of Schedule 3 are to that Act.
66. Schedule 3 to the Bill amends section 203 to make Authority elections local government elections for the purposes of that Act. The result is that the normal provisions applying to local government elections in respect of the entitlement to vote, registration, conduct of election, voting offences, the campaign, questioning a result and corrupt and illegal practices will apply in respect of Authority elections. However, in certain instances, Schedule 3 changes the Representation of the People Act to reflect the Authority's different electoral systems and such changes are noted below where they occur.
67. Paragraph 2 enables polling districts for Authority elections to be prescribed by London borough councils and the Common Council (section 31) and paragraph 3 makes provision for the returning officers at constituency elections to be designated by the Secretary of State and for the returning officer for the other Authority elections to be an officer appointed by the Authority (section 35).
68. Paragraph 4 enables rules for Authority elections to be prescribed (section 36). The paragraph specifies that these rules need not apply the parliamentary election rules, as normal local government election rules do under section 36(2), because the Authority's different electoral systems will call for different rules. (For example, Rule 50 of the Parliamentary election rules requires the returning officer to declare elected the candidate for whom the majority of votes has been given. This simple rule does not cover the counting of second preference votes in the mayoral election nor the calculation described in paragraph 53 of this note, necessary as part of the Assembly election.)
69. Paragraph 5 extends the Secretary of State's power to move the ordinary day for local elections in any year (section 37) so that Authority elections may be on a day other than the first Thursday in May, while paragraphs 6 and 7 make consequential and technical amendments to sections 39 and 40.
70. Paragraph 8 disapplies section 46 (which prescribes the number of votes each elector may give) as the number of votes of each elector at Authority elections is dealt with at Clauses 4, 10 and 16.
71. Paragraph 9 provides for the returning officers' costs (section 48) and paragraph 10 adds provisions appropriate to the Authority elections to the voting offences in section 61.
72. Paragraphs 11 to 16 make provision in respect of election agents, in particular, to deal with the appointment of a single agent for candidates on a registered political party's list. Paragraphs 17 to 20 make provision in respect of election expenses, in particular, to enable the Secretary of State by order to set limits on the election expenses of candidates at Authority elections. Paragraph 21 adds the Authority to section 82 (dealing with election expenses) and similarly paragraph 23 adds Authority members to section 159 (which deals with candidates reported guilty of a corrupt or illegal practice). Paragraphs 24 and 25 add a number of definitions to sections 202 and 203 (interpretation) in consequence of other amendments to the Act. Paragraph 18 provides for the Secretary of State to set limits on the election expenses of candidates for Mayor and candidates for the Assembly. Paragraph 22 disapplies section 93 of the RPA 1983, which it is impracticable to implement in relation to the new electoral arrangements. This provision was also disapplied for elections to the Scottish Parliament, the Welsh Assembly and to the European Parliament.
Clause 18: Cost of holding the first ordinary elections
73. Clause 18 provides for the reasonable expenditure of returning officers in relation to the holding of the first election of the Authority to be charged on and paid out of the Consolidated Fund. The Secretary of State may, with Treasury consent, determine the kind of expenditure recoverable and its maximum amount.
Clauses 19 to 22: Qualifications and disqualifications
74. Clauses 19 to 21 make provision in respect of qualification and disqualification for being elected and holding the office of Mayor or Assembly member and are based on the provisions of Part V of the Local Government Act 1972 which apply to local authority membership. They apply to the selection of a person to fill a vacancy among London members in the same way as to an election.
75. In addition to the nationality and age conditions set out in Clause 19, a person must at the time of nomination and election also satisfy at least one of the conditions set out there which establish a connection with Greater London, namely, registration as a local government elector for Greater London or, during the previous 12 months, holding property, working or residing within Greater London. If a person elected as Mayor or an Assembly member only satisfied the condition of being a local elector for Greater London and, at any time, ceases to be registered as such an elector he ceases to be qualified to hold office and a vacancy will occur.
76. A person is disqualified from being elected or being the Mayor or an Assembly member if he or she:
77. The provision allowing the Secretary of State to designate offices or appointments which disqualify a person for being Mayor or an Assembly member does not apply to local authorities but is similar to provisions made in respect of the Welsh Assembly and the Scottish Parliament. It might be used, for example, to designate certain public appointments, the holders of which would be disqualified from standing for Mayor or for the Assembly. An example of this would be the Chairman of a Housing Corporation.
78. Clause 22 provides that section 92 of the Local Government Act 1972 (proceedings for disqualification) will apply in relation to the Authority, as it applies in relation to a local authority.
79. This will allow any registered local government elector for Greater London to instigate legal proceedings against any person on the grounds that he acted, or claimed to be entitled to act, as Mayor or as an Assembly member, while in fact being disqualified from acting under Clause 20 or for failing to meet the qualification criteria set out in Clause 19 or to make a declaration under Clause 23, or for having ceased to be Mayor or an Assembly member through resignation or a failure to attend meetings.
80. Proceedings may be brought in the High Court or a magistrates' court but must be brought in the High Court if the person against whom they are brought claims to have been entitled to act. Proceedings may not be brought in respect of an act that took place more than six months before the bringing of the proceedings.
81. Where it is proved that a person acted while not qualified or disqualified, the High Court has power to declare a vacancy in his office and order forfeiture of monetary sums while a magistrates' court has power only to impose a fine. Where proceedings are instituted in a magistrates' court, that court has power to refer them to the High Court and they must be referred if the High Court so orders at the defendant's request.
Clause 23: Declaration of acceptance of office
82. Clause 23 makes provisions about this. Any person elected as Mayor or an Assembly member must make a declaration of acceptance of office in order to be allowed to act in that office. The declaration must be delivered to the proper officer of the Authority within two months of the date of the election, or else a vacancy will be declared.
83. Clause 3(4) enables the Secretary of State to make detailed arrangements in connection with the first ordinary elections. The Secretary of State may also use this order to make provision specifying how, in connection with the first elections, declarations of acceptance of office are to be made and delivered. The order may for example appoint an officer to receive these first declarations.
PART II: GENERAL FUNCTIONS AND PROCEDURE
Clauses 25 to 28: The general and subsidiary powers of the Authority
84. Clause 25 of the Bill provides for the Authority to have power to do anything which will further any one or more of its principal purposes. The Bill defines the GLA's principal purposes as being - to promote economic development and wealth creation in greater London; to promote social development in Greater London; and to promote the improvement of the environment of Greater London (see Clauses 25(2) and 329 for interpretation).
85. In determining whether or not to exercise its power to further one or more of its principal purposes the Authority is required to consider the effect this may have on the remaining purpose or purposes - in so far as that is practicable - and, over a period of time, to secure a reasonable balance between furthering each of its principal purposes. It must consider the effects the proposed exercise of the power would have on the health of people in London, and the achievement of sustainable development in the United Kingdom. If it decides to exercise its powers it must do so in a way which is best calculated to promote improvements to the health of people in Greater London and which will contribute to the achievement of sustainable development.
86. The Authority will have to have regard to any guidance issued by the Secretary of State under Clause 25 concerning the application of the Authority's general purpose.
87. Clause 26 sets out certain limitations on the exercise of the Authority's general power. The Authority will not be able to do anything using this power which would duplicate the statutory functions of TfL or the Police and Fire Authorities, and he must seek to secure that he does not duplicate the activities of the London Development Agency. The Mayor will also be unable to duplicate the statutory functions of local authorities or of other public bodies, in particular the London borough councils and the London Health Authorities. Subsection (3) specifies the services in respect of which the GLA cannot incur expenditure - including housing, education, social services or health services - where these services may be provided by a London borough, the Commons Council or any other public body. Subsection (7) gives the Secretary of State a power to add to the list things which the Authority is prevented from doing in this way, subsection (9) and gives the Secretary of State powers to remove or restrict such prohibitions. Subsection (8) contains a reserve power to impose limits on the expenditure that can be incurred using the general power.
88. The Mayor will however be able to use the power in Clause 25 to co-operate with other public authorities or bodies, or to co-ordinate or facilitate the activities of such authorities or bodies on a London-wide or a wider than local basis. This might include, with the agreement of such authorities or bodies, providing a related specialist service which would be of benefit to London as a whole.
89. To protect other authorities or bodies, organisations or individuals whose interests might be affected by the exercise of its general power, Clause 27 (1) requires the Authority, to consult such bodies or persons as it may consider appropriate in any particular case, prior to the exercise of the power. Clause 27(2) provides that, in deciding whom to consult, the Authority must consider whether or not to consult the following bodies or organisations: the London boroughs and the Common Council; voluntary bodies; bodies which represent the interests of different racial, ethnic or national groups; bodies which represent different religious groups; and bodies which represent the interests of persons carrying on business in Greater London.
90. Clause 28 provides for the Authority to be able to do anything which is incidental to the exercise of its functions, including its general power under Clause 25.
Clauses 29 and 30: Exercise of functions: general principles
91. Clauses 29 and 30 provide the general principles for the exercise of the Authority's functions. Clause 29 provides for functions to be exercisable by the Mayor, by the Assembly or by the Mayor and the Assembly together.
92. Clause 30 and Schedule 4 provide for the discharge of the Mayor's functions by the Deputy Mayor when there is a vacancy in the office of Mayor or the Mayor is temporarily unable to act. (The Deputy Mayor is appointed by the Mayor from among the members of the Assembly as set out in Clause 41.) However, there are certain functions of the Mayor which the Deputy Mayor cannot exercise. These functions are set out in paragraphs 4 and 10 of Schedule 4: the preparation of a consolidated budget for the Authority and the functional bodies; the preparation, alteration or replacement of any of the Mayor's strategies; and appointments to the functional bodies.
Clauses 31 and 32: Functions exercisable by the Mayor
93. Clause 31 provides for the delegation of functions exercisable by the Mayor. The majority of the functions of the Authority will be exercisable by the Mayor, who will be able to delegate those functions to any of the bodies or persons specified in this Clause including the Deputy Mayor, TfL and the London Development Agency. Clause 32 extends the provisions of Part II of the Deregulation and Contracting Out Act 1994 so as to apply them to the GLA. This means that a Minister may make an order providing for the contracting out of any of the functions of the GLA which are exercisable by the Mayor.
Clauses 33 to 36: The Mayor's strategies
94. The Bill requires the Mayor to produce a number of strategies, including strategies in relation to transport (Clause 124); economic development and regeneration (Clause 239); spatial development (Clause 264) biodiversity; (Clause 282); municipal waste management (Clause 283); air quality (Clause 289); ambient noise (Clause 297); and culture (Clause 301).
95. Clause 33 sets out the strategies to which the general duties of the Mayor apply, the duty of the Mayor to review and revise the strategies, and the matters to which the Mayor must have regard in preparing, revising or implementing those strategies. In preparing, reviewing or amending the strategies, the Mayor must have regard to the need to ensure that each of the strategies is consistent with national policy and with such international obligations as the Secretary of State may notify to the Mayor, and with his or her other strategies. The Mayor must also have regard to the principal purposes of the Authority and the effect the proposed strategy or revision would have on the health of people in London and the achievement of sustainable development in the United Kingdom. The Mayor must also have regard to the resources available to implement each strategy, the desirability of promoting the improvement of the health of Londoners and the desirability of promoting and encouraging the use of the River Thames - in particular for passenger transport and freight transportation.
96. Clause 34 places a duty on the Mayor to carry out consultations in preparing or revising his or her strategies. The Mayor must consult, in the first instance, the Assembly and the functional bodies, and subsequently each London borough council and the Common Council. The Mayor must also consult any other organisation or individual he or she considers it appropriate to consult, including bodies of the descriptions in Clause 27(3). Subsection (5) exempts the Mayor from the duty to consult as to a proposed revision of strategies where he or she considers those revisions do not materially alter the strategy: it will be for the Mayor to decide whether or not revisions to the strategies materially alter those strategies and therefore whether or not consultation about those revisions are necessary.
97. Clause 35 requires the Mayor to ensure adequate publicity is given to his or her strategies, to make them available for public inspection, and to provide them at a reasonable cost to members of the public who ask for them.
98. Clause 36 provides for directions by the Secretary of State as respects the preparation and publication of the first strategies. Should the Secretary of State consider that the Mayor who is first elected is failing to take the necessary steps to prepare the strategies, the Secretary of State will have a reserve power to direct the Mayor to prepare and publish the strategies within a specified period of time.
Clauses 37 to 40: Public accountability
99. Clauses 37 to 40 contain provisions on the Mayor's accountability. Clause 37 provides that the Mayor will make a monthly report to the Assembly setting out significant decisions he or she has taken, with reasons, and responses to any formal proposals the Assembly has put to him or her. The Mayor will attend monthly meetings of the Assembly and answer Assembly members' questions about his or her responsibilities. In answering Assembly questions, the Mayor will not be required to disclose advice from GLA staff. Similarly, GLA staff will not be required to disclose advice to the Mayor under Clause 51 (the Assembly's power to summon and require evidence and documents). Clause 48, which applies to the Assembly provisions of the Local Government Act 1972 as to public access to meetings and documents, has the effect of ensuring that the Mayor's reports will be available to the public, and the meetings at which he answers questions will be open to the public, subject to the general exceptions for confidential and other exempt material.
100. Clause 38 provides that the Mayor will prepare an Annual Report. The Annual Report will assess the Mayor's progress on implementing strategies, and include information about the performance of the Authority's statutory functions which the GLA is obliged to publish under any legislation. The Mayor will also include in the report information which the Assembly has asked to be included before the beginning of the year covered by the report. The Mayor will send the report to the Assembly before publishing it.
101. Clause 39(2) requires that the annual State of London debate is to be held in April, May or June but it must not be held until at least 7 days after the publication of the Annual Report. The effect of this provision is to require the Annual Report to be published at least 7 days before the end of June in the financial year after that to which the Report relates.
102. Clause 39 provides that the Mayor will hold and attend an annual public "State of London" debate. The debate will take place in April, May or June, at least 7 days after the Annual Report is published. Clause 40 provides that the Mayor and Assembly will hold twice-yearly "People's Question Times".
Clause 41: The Deputy Mayor
103. Clause 41 contains provision for the Deputy Mayor. The Mayor will be required to appoint a Deputy Mayor from amongst the Assembly members, and will be required to appoint the Deputy Mayor as a member of the Metropolitan Police Authority. The Mayor will be able to delegate his or her functions to the Deputy Mayor (see note on Clauses 31 and 32), and the Deputy Mayor will act as Mayor when there is a vacancy in the Mayor's office or the Mayor is temporarily unable to act (see note on Schedule 4).
104. The Deputy Mayor cannot be the Chair or Deputy Chair of the Assembly.
105. The Mayor may dismiss the Deputy Mayor at any time. A Deputy Mayor may resign at any time. In either case, the Mayor must appoint a successor.
Clauses 42 and 43: Chair and Deputy Chair of the Assembly
106. Clause 42 provides for the offices of 'Chair of the London Assembly' and 'Deputy Chair of the London Assembly', and for the functions of those office-holders. Clause 43 covers their appointment. The Chair and Deputy Chair will both be elected by the Assembly from amongst its members. Neither can be appointed as Deputy Mayor and retain the office of Chair or Deputy Chair of the Assembly. If there is a vacancy in the office of Mayor and there is no Deputy Mayor, the Chair of the Assembly will exercise the functions of the Mayor subject to the restrictions which relate to the Deputy Mayor - as set out in paragraphs 4 and 10 of Schedule 4.
Clauses 44 to 48: Meetings and procedure of the Assembly
107. Clause 44 provides for meetings of the whole Assembly. Within ten days of an ordinary election (as set out in Clause 3), the Assembly must meet to elect a Chair and Deputy Chair.
108. The Assembly must hold its first monthly meeting, at which it will consider the Mayor's monthly report (details of which are provided in the note on Clause 37), and question the Mayor and employees of the Authority, not later than 15 days after the date of the first ordinary election. Thereafter, the Assembly must hold meetings of this sort at intervals of no more than one month.
109. The Mayor and his employees (other than his two political advisors) will be required to attend these monthly meetings and answer questions put to them by the Assembly. Subsection (4) of Clause 59 specifies those employees of the Authority who are to be required to attend the Assembly's meetings as part of their terms and conditions. They will include senior permanent officers, together with the Mayor's ten personal appointments.
110. Subsection (4) of Clause 44 allows the Chair of the Assembly to call extraordinary meetings of the Assembly at any time.
111. If the Chair refuses to call an extraordinary meeting after a request by five members of the Assembly has been presented to him, or if the Chair fails to call an extraordinary meeting within seven days of receiving such a request, then any five Assembly members may call such a meeting. The power to request or call an extraordinary meeting cannot be delegated by the Assembly to a committee or to an individual Assembly member.
112. Clause 45 contains provisions on Assembly procedure. The Assembly will be able to determine its own procedure and that of all its committees, including the size and composition of a quorum. This discretion will be subject to the provisions set out in Clause 43 requiring the Assembly to elect a Chair and Deputy Chair, to hold regular monthly meetings, to procedures for holding extraordinary meetings, and any subsequent provisions regulating the Assembly's procedures.
113. Clause 46 provides for delegation of the discharge of the functions of Assembly. The Assembly may arrange for any of its functions to be exercised either by a committee of the Assembly, or by a single Assembly member. In arranging for its functions to be exercised by a committee or individual Assembly member, the Assembly does not thereby prevent itself as a whole from exercising those functions. Certain functions must be exercised by the whole Assembly; for example, its duty to hold a meeting to elect a Chair and Deputy Chair, as provided for in Clause 44.
114. There are special provisions relating to the Police. Section 20 of the Police Act 1996 requires relevant councils to make arrangements for questions on the discharge of the police authority's functions to be put by members of the council at meetings of the council. Paragraph 73 of Schedule 22 inserts a new section 20A, which makes corresponding provision. The Assembly will not be permitted to arrange for its functions under section 20A of the 1996 Act to be exercised by an individual Assembly member.
115. Clause 47 covers rules on the political composition of Assembly committees. Local government provisions governing the political composition of committees, set out in sections 15 to 17 of and Schedule 1 to the Local Government and Housing Act 1989 and regulations made under those provisions, will apply to committees of the Assembly. The effect of these provisions is to require the Assembly to ensure that the allocation of appointments to Assembly committees reflects the strength of different political groups in the Assembly as a whole.
116. The Assembly shall be required to review the political composition of its committees, as specified by section 15(1) of the 1989 Act, when it first appoints members to any committee.
117. Clause 48 makes the Assembly subject to the rules which apply to local authorities generally requiring them to hold meetings in public, give public notice of meetings and make documents publicly available. These requirements are set out in Part VA of the Local Government Act 1972 (sections 100A to 100K and Schedule 12A).
Clauses 49 and 50: General functions of the Assembly
118. Clause 49 sets out the Assembly's powers to carry out reviews and investigations. The Assembly will be required to keep the Mayor's exercise of statutory functions under review. In particular, the Assembly will have power to investigate, and prepare reports about, any actions and decisions of the Mayor, any actions and decisions by any member of the Authority's staff, matters relating to the principal purposes, matters in relation to which statutory functions are exercisable by the Mayor, or any other matters which the Assembly considers to be of importance to Greater London.
119. Clause 50 allows the Assembly to resolve, by a majority of those members present and voting, to submit a proposal to the Mayor. This power may not be delegated to a committee or an individual Assembly member, so any proposal submitted to the Mayor will have to come from the whole Assembly. The Mayor will be required to make a formal response to any proposals submitted to him by the Assembly in his monthly report.
Clauses 51 to 54: Attendance of witnesses and production of documents
120. Clause 51 contains powers for the Assembly to summon certain categories of people to give evidence at its meetings and to produce documents.
121. Subsections (2) to (5) set out the categories of persons who may be required to attend or to produce documents. These are:
122. Clause 52 sets out the procedures the Assembly will be required to follow when it requires attendance at its meetings. These include the timescales within which the Chief Administrative Officer of the Authority (see below) must give notice of where and when people are to attend, and the documents or types of documents they must produce.
123. Clause 53 provides that the Secretary of State may make orders prescribing the categories of information which a person summoned to give evidence to the Assembly may refuse to give, and categories of document which he or she may refuse to produce. Orders under this power are statutory instruments which are subject to the negative resolution procedure of the Houses of Parliament (as provided by Clause 325).
124. Clause 54 covers the consequences of failure to attend proceedings. It will be an offence for somebody who falls into the categories set out in Clause 51 to:
125. Any person found guilty of such an offence will be subject to a fine of no more than level 5 on the standard scale (currently specified under the Criminal Justice Acts as £5,000) or to imprisonment for a period not exceeding three months.
Clause 55: Ethical standards
126. Clause 55 relates to ethical standards. Because of the allocation of responsibilities between the Mayor and the Assembly, the usual procedures which govern the conduct of business within local authorities cannot be applied to the Authority. The Bill therefore provides a power for the Secretary of State to issue guidance to the Authority about, amongst other things, the disclosure and registration of interests, voting in cases where an Assembly member has an interest in the matter in question, the exercise of functions by or on behalf of the Mayor, the Deputy Mayor or any member of the Authority's staff in cases where the mayor, Deputy Mayor or member of staff has an interest in the matter in question; and the prescription of model codes of conduct. The Secretary of State may also provide guidance on the establishment, by the Authority, of one or more committees concerned with ethical standards and about the functions of such a committee.
Clauses 56 to 62: Staff
127. Clause 56 provides for the appointment of three categories of employees of the Authority, and also provides for them to be appointed to the Authority in different ways.
128. The Mayor will be able to appoint two political advisers. They will be personal appointments made by the Mayor alone, and the jobs will not need to be advertised or subject to competition. The Mayor will be required to report to the Assembly the terms and conditions of the appointments, including their duration. No appointment in this category can extend beyond the term of office for which the Mayor is elected.
129. The Mayor will also be able to appoint not more than 10 other people to his or her office. These posts will be advertised and open to competition, and appointments will be made on merit in line with provisions of section 7 of the Local Government and Housing Act 1989. The Mayor will be required to report to the Assembly who has been appointed to each of the posts, and the terms and conditions under which the appointment has been made. No appointment in this category can extend beyond the term of office for which the Mayor is elected.
130. The Assembly, or a committee or individual member of the Assembly to whom the function has been delegated, will appoint all other employees of the Authority. These appointments will be made subject to the restrictions and terms and conditions set out in Clauses 56 to 60 of the Bill which reflect provisions in local government legislation for the appointment of local authority officers.
131. Clause 61 requires the Authority to appoint a Chief Administrative Officer who will have the same duties as those imposed by section 4 of the Local Government and Housing Act 1989 on the Head of Paid Service in local authorities. The appointment will be made by the Assembly following consultation with the Mayor.
132. Clause 62 requires the Authority to appoint a Monitoring Officer who will have the same duties as those imposed by section 5 of the Local Government and Housing Act 1989 in relation to local authorities.
Clauses 63 to 65: General local authority provisions
133. By virtue of Clause 63 the GLA will be included in the list of bodies subject to scrutiny by the Commission for Local Administration (commonly known as the "local government ombudsman"). This list is set out in the Local Government Act 1974 (as amended). Clause 313 provides for the GLA functional bodies also to be subject to investigation by the local government ombudsman.
134. The ombudsman is responsible for investigating and reporting on complaints by members of the public about maladministration. The ombudsman investigates complaints and where appropriate suggests a course of action for authorities to take that should satisfy the complainant.
135. The Bill gives the ombudsman powers to carry out investigations in areas where the GLA and its functional bodies are competent. Members of the public will be able to make complaints to the ombudsman about maladministration by the GLA and its functional bodies in the provisions of services. Because the GLA will be a strategic authority, it will be responsible for the direct provision of services to the public in only a few areas. It is likely that these will mostly be related to TfL's responsibility for highways and transport planning. (Public complaints about the provision of passenger transport services by TfL will be dealt with by the London Transport Users Committee - see the note on Clauses 198 to 202.) Decisions taken by the Fire and Police Authorities that may have a direct impact on members of the public could include planning.
136. Clause 63 also contains provisions to amend the parts of the 1974 Local Government Act which set out how the Ombudsman should inform local authorities of investigations he is undertaking into them, and how he should present the conclusions that he draws. These amendments will allow for the different structure of the GLA, and will ensure that the ombudsman takes account of the division of responsibilities between the Mayor and Assembly when he is preparing or submitting reports on complaints of maladministration against the GLA. For example, when the ombudsman submits a report to the GLA he will submit it to both the Mayor and the Assembly.
137. Subsection (5) of Clause 63 amends the 1974 Act to allow the ombudsman to identify individual members of the GLA in any report on the authority that he might prepare. Presently, the ombudsman can only identify individual members of local authorities who have contravened the local government code of conduct.
138. Clause 64 ensures that the GLA will be subject to standard local authority rules laid down by the Local Government Act 1972 covering documents, notices etc.
139. Clause 65 of the Bill provides that the GLA should follow the same procedure as local authorities (set out in section 236 of the Local Government Act 1972) when it makes byelaws.
Clause 66: Contracts
140. Clause 66 concerns contracts. Section 17 of the Local Government Act 1988 prevents local authorities from taking account of specified non-commercial matters when letting contracts for the supply of goods and services, or the execution of works. This Clause amends this section to include the GLA. The Bill also makes similar provisions for the Metropolitan Police Authority in Schedule 22 and for the London Fire and Emergency Planning Authority in Schedule 24.
PART III: FINANCIAL PROVISIONS
CHAPTER I: THE AUTHORITY AS A MAJOR PRECEPTING AUTHORITY
141. Clauses 67 to 69 provide that the GLA will be a major precepting authority, that is an authority which does not raise council tax direct from individual council tax payers. Instead the GLA will require each London borough council to raise a certain amount (the "precept") from council tax payers in its area. The Bill defines the GLA as a major precepting authority by amending the Local Government Finance Act 1992, and removes the London Fire and Civil Defence Authority and the Receiver for the Metropolitan Police District from the list of major precepting authorities.
142. Clause 69 amends section 42 of the Local Government Finance Act 1992 to require the GLA to follow the procedure under that Section whenever it issues a substitute precept, including a substitute precept following a direction to increase the budget for the Metropolitan Police Authority under Clause 80 below. A substitute precept is a precept issued by a local authority to give effect to substitute calculations of budget requirements and/or basic amounts of Council tax carried out by the authority in respect of a particular financial year.
143. Clauses 70 and 71 set out how the GLA will calculate its component and consolidated annual budget requirements. For each constituent body, that is the authority and each of the four functional bodies, the authority must calculate the budget requirement. The GLA must then calculate the consolidated budget requirement by adding together the budget requirements of each of the constituent bodies. The budget requirement of a constituent body is calculated in a similar way to that of local authorities by calculating the difference between the sum of expenditure items and the sum of income items as narrowly defined in the Bill. A budget requirement cannot be negative; if the sum of expenditure items is less than the sum of income items, it will be nil.
144. The Bill sets out rules which the GLA must follow in calculating budget requirements. An amount of income or expenditure which has been included in the calculation of a budget requirement of one constituent body should not be included in the calculation of the budget requirement of another. In estimating the Metropolitan Police Authority's expenditure, the GLA should take into account levies from the National Criminal Intelligence Service and the National Crime Squad. In estimating the expenditure of the other bodies, levies issued to them shall be taken into account. The GLA shall not anticipate any levies which have not been issued, unless an order or regulations have been made allowing it to do so.
145. The Secretary of State will be able to amend the rules governing the calculations by statutory instrument, in the same way as he or she may amend the equivalent rules for local authorities generally.
146. Clause 72 and Schedule 5 establish the roles of the Mayor and Assembly in deciding budget requirements for the GLA itself and each of the functional bodies ("component budgets") and the consolidated budget requirement. The functional bodies will also be consulted about their own budgets.
147. The GLA's budget must be finalised by the end of February each year.
148. The first stage is for the Mayor, having consulted the Assembly and the functional bodies about their relevant component budgets, to draw up a draft (consolidated) budget. He or she will then consult the Assembly about the draft budget before presenting it to the Assembly at a public meeting on or before 1 February. The Assembly may approve this draft, or may amend it, both by simple majority vote, before returning it to the Mayor.
149. The Mayor will then prepare a final draft budget and present it to the Assembly at a public meeting before the end of February. If the final draft does not include amendments the Assembly made to the first draft, the Mayor will give reasons. The Assembly will either approve the final draft budget by a simple majority, or may amend it by a two thirds majority.
150. If the Mayor fails to present a draft budget on or before 1 February, or a final draft budget within a reasonable time, the Assembly will decide the GLA's budget by a simple majority.
151. The Secretary of State will be able to change the 1 February date by order. The purpose of this power is to accommodate any delay to the Local Government Finance Settlement.
152. Clauses 73 to 78 amend or replace the equivalent sections of the Local Government Finance Act 1992 (sections 44 to 48) which relate to the calculation of precepts.
153. Clauses 73 and 74 set out the rules for calculating the basic amounts of council tax for the GLA. The rules for the GLA are broadly similar to those for other precepting authorities. However, in the case of the GLA it is necessary to apportion the various grants which help to meet the GLA's consolidated budget requirement between police services and the other services provided by the GLA. This division of the various grants between police and non-police services is required because the GLA is responsible for police services in only part of the GLA area, the inner and outer boroughs, but not the City of London, which has its own police force.
154. Council tax payers in the City of London contribute to the cost of police services in the City of London through that part of their council tax which goes directly to the City of London. They are not required to contribute to police services in the remainder of London which are provided by the GLA, nor should the element of their council tax in respect of GLA services take into account grants from central government to the GLA in respect of the police services supplied by the GLA in the rest of London.
155. Clauses 73 and 74 provide for this by specifying that the GLA first calculates an amount of council tax for the non-police services which it supplies across the whole of the GLA area. The GLA then calculates an additional amount of council tax in relation to the police services which it provides in the inner and outer boroughs. The calculation for non-police services takes into account that portion of the central government grants which relate to non-police services; the calculation for the additional element of council tax for police services takes into account those grants relating only to police services and that portion of the non-police grants which relate to police services. Council tax payers in the City of London only pay the GLA the amount for non-police services; council tax payers in the inner and outer London boroughs pay the total of the police and non-police amounts. Clauses 73 and 74 also provide powers for the Secretary of State to set rules for the calculation of the police and non-police elements of the GLA basic amounts of council tax.
156. Clause 75 defines police services as the only expense of the GLA which does not apply across the whole of the GLA area, and that this expense relates to the area of the Metropolitan Police District.
157. Clause 76 amends the Local Government Finance Act 1992 to remove references to police services, and to probation services and magistrates courts services in London. These references are no longer required following changes in the provision of these services which will accompany the introduction of the GLA.
158. Clauses 77 and 78 cover the calculation of council tax for properties in different council tax valuation bands and the calculation of the amount payable by each billing authority. They do this by amending sections 47 and 48 of the Local Government Finance Act 1992, inserting references to the Greater London Authority, and to the relevant sections of the Greater London Authority legislation.
159. Clause 79, Clause 83 and Schedule 6 provide that the GLA will have a similar power to make substitute calculations to that of other local authorities. The effect is that normally, it will have powers only to reduce its precept, except where the previous calculations are quashed by court proceedings, or where the Secretary of State directs that the Metropolitan Police Authority budget should be increased, in accordance with Clause 80 of this Bill.
160. The roles of the Mayor and Assembly in carrying out substitute calculations are set out in Schedule 6, and are similar to the procedures for determining the budget originally.
161. Clauses 80 and 81 give the Secretary of State a reserve power to set a minimum level for the Metropolitan Police Authority's budget. This power can be used only if the Secretary of State considers that the budget set by the GLA is too small to provide an efficient and effective police force. The Secretary of State may specify a minimum level for the budget, which must not be greater than the amount required to restore or maintain an efficient and effective police force.
162. Where the Secretary of State has made such a direction, the GLA may increase the MPA's budget by increasing the precept, cutting the other component budgets, or through a combination of the two. The GLA will not be able to increase the precept by any more than the difference between the MPA budget specified in the direction and the MPA budget previously set by the GLA and considered by the Secretary of State to be too low.
163. If the GLA chooses to change the precept, the previous precept would remain valid until the new precept is issued. If the GLA fails to make substitute calculations when required to under Clause 80 and to issue a revised precept within 35 days, it will not receive any sums that billing authorities (the boroughs and the City) would have otherwise paid to it in respect of the precepts until it has carried out the substitute calculations.
164. Clause 82 provides that the Mayor will be able to recalculate component budgets when he considers this is appropriate because of an emergency or disaster involving the destruction of or danger to life or property. This will allow him to reallocate income (other than grant allocated to a specific body) between constituent bodies. The GLA will not be able to change the consolidated budget requirement.
165. Clause 89 amends section 155 of the Local Government and Housing Act 1989, under which central government grants may be paid to local authorities in whose area there occurs an emergency or disaster involving destruction of, or danger to, life or property. The GLA is added to the list of authorities eligible to apply for these grants. The GLA will be able to apply for assistance, either on its own behalf or on behalf of the LFEPA, the MPA or TfL, following an emergency or disaster in the GLA area.
CHAPTER II: GRANTS AND REDISTRIBUTED NON-DOMESTIC RATES
Clauses 85 and 86: Grants
166. Clauses 85 and 86 create two new central government grants. Clause 85 provides for the Secretary of State to pay to the Authority a general-purpose grant. It is at present envisaged that this grant would cover the majority of the costs of the Mayor and Assembly, with London council tax payers covering most of the remainder. The grant will be paid annually. The Secretary of State will consult the Mayor before settling the amount. It may be paid in instalments.
167. Clause 86 provides for the Secretary of State to pay to the Authority a grant which draws together existing streams of funding for transport in London: the GLA Transport Grant. This is to be an annual grant, payable in instalments. The amount of the grant will be determined after consultation by the Secretary of State with the Mayor.
168. Subsection (2) of Clause 86 provides that this grant is paid for the purposes of TfL, which include both the services it runs itself and the support it will provide to London borough councils. Clause 88(1) compels the Mayor to pay GLA Transport Grant received from the Secretary of State directly to TfL. The grant is thus not available to the Mayor for spending on other purposes or for allocation to another functional body.
Clauses 87 and 88: Distribution of grants etc.
169. Clauses 87 and 88 deal with the distribution of grants. The GLA will receive general grants on behalf of itself and its four bodies. These will include Revenue Support Grant, additional grant, relevant special grant, the general GLA grant, redistributed non-domestic rates, and income from the GLA precept. The GLA will have a duty to pay the functional bodies in instalments their share of the sums it receives in accordance with their budgets. The GLA must ensure that the amount and timing of instalments would allow a functional body to fulfil its functions, and will have a duty to pay the instalments punctually.
170. The GLA will also receive grants intended for a specific functional body (e.g. police grant) and will have to pay those grants to the relevant body forthwith.
CHAPTER III: EMERGENCY FINANCIAL ASSISTANCE, FUNDS AND MISCELLANEOUS MATTERS
Clause 90: Component budgets: anticipation of certain levies
171. Clause 90 amends the Local Government Finance Act 1988 so that Regulations can be made to allow the GLA to anticipate a levy for itself or its constituent bodies except the Metropolitan Police Authority for which separate provision is made. This brings the GLA into line with other major precepting authorities.
Clause 91: The Authority's general fund
172. Clause 91 requires the GLA to establish a General Fund. This is the main revenue fund of a local authority, from which day to day spending on services is met.
Clause 92: Judicial review
173. Clause 92 provides that the only means of challenging the GLA's calculations of component and consolidated budget requirements and precepts will be through judicial review.
Clause 93: Functions to be discharged only by certain authorities
174. Clause 93 provides that the calculation of budget requirements and the setting and issuing of precepts is to be carried out on behalf of the Authority by the Mayor, Assembly, or Mayor and Assembly acting jointly in accordance with the Act. These functions cannot be delegated to a committee or representative. The only exception is that the Mayor may consult a committee or other representatives of the Assembly on the draft consolidated budget if a majority of Assembly members have voted for this to happen.
Clause 94: Information
175. Clause 94 places an obligation on the GLA and the functional bodies to provide, when requested, the financial information that other local authorities already provide to the Department of the Environment, Transport and the Regions (DETR).
176. Section 168 of the Local Government Act 1972 allows the Secretary of State, among others things, to collect, at the end of a financial year, information about the Authority's income and expenditure during that financial year. Section 139A of the Local Government Finance Act 1988 gives the Secretary of State the power to collect non-personal information from local authorities for the purpose of exercising his grant making powers under the Act.
Clause 95: Provision of information by functional bodies to Mayor or Assembly
177. Clause 95 requires the functional bodies to provide the Mayor and Assembly with information relating to their financial affairs, or those of any company in which they have an interest. The Mayor and Assembly will be able to request any such information which the body has or could reasonably obtain.
CHAPTER IV: REVENUE ACCOUNTS AND CAPITAL FINANCE
Clause 96: Application of Part IV of Local Government and Housing Act 1989
178. Clause 96 brings the GLA and the four functional bodies within a slightly modified form of the local government capital finance system. This was established by Part IV of the Local Government and Housing Act 1989, and has effect with respect to the finances of most local authorities in England and Wales and a number of other public authorities, including police authorities and combined fire authorities. (Authorities and bodies covered by the system are referred to in Part IV as "local authorities".)
179. Part IV regulates the use for capital purposes of borrowed money, credit arrangements and capital receipts. Capital purposes include, in particular, the acquisition of land, buildings or equipment, and the construction or improvement of buildings. The use of revenue or grant for such purposes is not regulated by Part IV; separate constraints apply to such funding.
180. Part IV also requires amounts to be set aside out of capital receipts and revenue to meet credit liabilities and regulates the use of such amounts.
Clauses 97 to 103: Credit approvals
181. Section 43 of the LGHA 1989 confers on local authorities a power to borrow money for any purpose relevant to their functions. Other provisions of Part IV regulate the use of credit arrangements which, as defined, include leases, hire purchase contracts and any transaction under which credit is given by a deferral of payment.
182. A credit approval is needed as authority to charge expenditure to any account other than a revenue account. Thus, all expenditure of borrowed money requires the use of a credit approval. A credit approval is also required to be used if an authority meets capital expenditure out of amounts set aside as provision for credit liabilities.
183. Using a credit approval is also one of the ways in which an authority may provide the credit cover which is required when entering into credit arrangements (alternatively, the authority may provide credit cover by setting aside additional amounts out of revenue or capital receipts).
184. Credit approvals are issued by the Government. A basic credit approval has to be issued for a local authority before the beginning of every financial year. Supplementary credit approvals may be given during a financial year.
185. Clauses 97 to 103 contain provisions on credit approvals. It is intended that the Government will have power to issue to the Authority and the functional bodies two new kinds of credit approval called aggregate credit approvals and additional credit approvals. The aggregate credit approval will, like the basic credit approval for other local authorities, be issued by the Secretary of State before the beginning of the financial year. An additional credit approval may be issued by the Secretary of State or any other Minister at any time during a financial year.
186. All such credit approvals are to be issued to the Mayor (different arrangements will apply in the first year before the Mayor is elected), but copies have to be sent to the functional bodies.
187. Clauses 98 and 99 provide that the amount of an aggregate credit approval may be nil. But subject to that, an aggregate or additional credit approval will consist of any number of amounts. Each amount specified must be of one of four categories. By specifying category A or B amounts for a specified functional body or for the Authority, the Government will be allowing the specified body to incur credit for capital purposes. In the case of a category A amount, this will be for any such purposes. In the case of a category B amount, it will be for a specified capital purpose.
188. Category C and D amounts are not for the use of a specified body, but are for allocation by the Mayor in such proportions as he may see fit. An allocation will allow the body to which it is made to incur credit for such capital purposes as the Mayor decides. In the case of a category C amount, the Mayor may state that it is for any purpose or for a particular purpose.
189. In the case of a category D amount, the Mayor may only state that it is for any purpose specified by the Government or for a particular purpose of that description. For example, if the Secretary of State specified that the amount was for "regeneration", the Mayor would be able to allocate it for regeneration or for a particular regeneration project.
190. Clause 100 provides that the Mayor must notify all four functional bodies of every allocation made from a category C or D amount contained in a credit approval, whether it is made to one of them or to the Authority. In the case of category C and D amounts contained in the aggregate credit approval, the allocations to the functional bodies are to be notified as part of a capital spending plan for which provision is made in Clause 107.
191. Clause 101 confers power on the Secretary of State to make regulations requiring an amortisation period to be specified in aggregate and additional credit approvals. This is a period during which the body using the approval (i.e. the body either specified in it or having an allocation from the Mayor) have to set aside amounts out of revenue which could be used to meet its debts.
192. But such regulations would not apply if a category B amount was specified in an aggregate or additional credit approval as authority for a specified body to use borrowed money for expenditure which is treated as being for capital purposes because a direction has been given under section 40(6) of the LGHA 1989. Clause 90 provides that in such a case, the Minister giving the credit approval is to have a discretion to decide whether or not to specify an amortisation period.
193. Clause 102 sets out the criteria for issuing credit approvals. In determining the amounts of aggregate and additional credit approvals, the Secretary of State or other Minister is to have the same discretion to take account of such factors as appear to him to be appropriate as he has under Part IV of the LGHA 1989 in relation to basic and supplementary credit approvals. He may, in particular, have regard to grants, contributions and (subject to certain qualifications) capital receipts. But he may not take account of the ability of the Authority or a functional body to finance capital expenditure from revenue.
194. The effect of Clause 103 is that having been specified for a category A or B amount or having received an allocation from a category C or D amount, the authority concerned (the Authority or a functional body) shall be treated as having received a credit approval under Part IV of the LGHA 1989.
195. Consequently, the authority conferred by aggregate and additional credit approvals (to charge capital expenditure to a non-revenue account and to enter into credit arrangements) and the effect of using them are the same as for basic and supplementary credit approvals. Thus, for example, a functional body for which a category A amount is specified, may use it to charge capital expenditure to borrowing, to enter into a lease, or to make a transfer of credit approval to any other local authority under section 56(2) of the LGHA 1989. And when the approval is used, it increases the functional body's "credit ceiling" (this is a measure of the extent to which an authority still has to make provision for its debts and other credit liabilities).
Clauses 104 to 106: Capital receipts and mutual grants
196. Clauses 104 to 106 make provision for capital receipts and mutual grants. The sums received by a local authority which are capital receipts are described in section 58 of the LGHA 1989. They include the proceeds of disposal of assets and investments and the repayment of capital grants and loans made for capital purposes. A part of a capital receipt received by a local authority may have to be set aside as provision to meet credit liabilities (but, at present, this is generally confined to receipts from disposals of houses). The balance of capital receipts after such deductions have been made is called the usable part of the authority's capital receipts, and that part is available for meeting capital expenditure.
197. Clause 104 confers on the Secretary of State power to make regulations to confer on the Mayor power to direct the payment to the Authority by a functional body of part of the functional body's usable capital receipts. Amounts paid to the Mayor under such a direction could only be used to meet capital expenditure of another functional body or of the Authority.
198. The regulations may prescribe the maximum percentage of usable capital receipts that may be specified in such a direction, or the portion in respect of which a direction may be issued (for example, the amount by which the usable part of capital receipts has increased during a financial year). The regulations may also enable the Mayor to require the body which has the benefit of a redistribution to apply the amount paid to it towards meeting expenditure for capital purposes of a particular description.
199. Clause 105 authorises the GLA to pay grants to a functional body towards meeting expenditure for capital purposes, and authorises the functional bodies, with the Mayor's consent, to pay grants towards meeting expenditure for capital purposes of another functional body or of the GLA. Such a grant may be used by the body to which it is paid for any expenditure of that sort incurred for the purposes of or in connection with its functions.
200. Clause 106 authorises the GLA to pay grants to a functional body towards meeting any expenditure which is not for capital purposes, and authorises the functional bodies, with the Mayor's consent, to pay grants towards meeting any expenditure of another functional body or of the GLA which is not for capital purposes. Such a grant may be used by the body to which it is paid for any expenditure of that sort incurred for the purposes of or in connection with its functions.
201. These Clauses are intended to facilitate the efficient use of the resources of the GLA and the functional bodies as a whole by providing administrative means for overcoming the restriction that a local authority may not use its capital resources to meet expenditure which is not for capital purposes.
202. For example, a body which at any time has available capital grants or capital receipts and a pressing need to incur expenditure towards which it cannot apply such amounts (because it is not expenditure for capital purposes) could arrange with the Authority or another functional body to receive a grant it could use towards that expenditure in return for making a capital grant to the body concerned.
Clauses 107 and 108: The Mayor's capital spending plan
203. Clause 107 makes provision about the preparation by the Mayor for each financial year of a capital spending plan for the functional bodies. The capital spending plan is to be in the four sections described in Clause 107. Section A is a statement of the resources each functional body will have for capital expenditure by virtue of capital grants (other than grants payable by the GLA) and usable capital receipts.
204. Section B is a statement of the resources each functional body will have for capital expenditure by virtue of grant that the Mayor has decided that the Authority is to pay under Clause 105, category A and B amounts specified in the aggregate credit approval for the relevant financial year, and any amounts that the Mayor has decided to allocate out of category C and D amounts specified in the aggregate credit approval for that year.
205. Section C is a statement for each functional body of total expenditure for capital purposes that the Mayor expects the body to incur, and of the total credit cover that the Mayor expects the body to need for credit arrangements. Section D is a breakdown of this total capital spending showing how much the Mayor expects the body to meet out of capital grants; how much he expects it to meet out of the usable part of its capital receipts; how much he expects it to meet by using amounts specified in, or allocated from, the aggregate credit approval; and how much he expects it to meet out of revenue.
206. Clause 108 lays down a timetable for the preparation of, and consultation on, a draft capital spending plan, and for the completion of the plan and disclosure of its contents.
Clauses 109 to 111: Supplementary provisions
207. Clause 109 provides that in preparing the capital spending plan, the Mayor may take account of such factors as appear to him to be appropriate, and makes it clear that preparation includes deciding for each functional body the minimum amount of grant that the GLA is to pay under Clause 105, and the amounts to be allocated out of category C and D amounts specified in the aggregate credit approval. These amounts are to appear in section B of the plan (see Clause 107(4)).
208. Clause 109(3) provides that the Mayor may in particular take account of how far a functional body has, in any previous financial year, met total capital spending specified in section C of the capital spending plan for that year according to the expected breakdown of that spending given in section D. The intention is that the Mayor may, but is not bound to, have regard to the extent to which a functional body has departed in previous years from the pattern of capital spending (amounts and means of funding) about which all of the functional bodies will have been consulted, and which will have been set down in sections C and D of the relevant plan for the benefit of the GLA and the functional bodies as a whole.
209. Clause 110 confers on the Mayor power to require the functional bodies to provide information that he needs to decide how to exercise his powers and perform his functions under Chapter IV of Part III of the Bill. If a functional body fails to supply information sought by the Mayor, the Mayor may make assumptions and estimates. The Mayor may rely on any information available to him, whether or not it is obtained from a functional body under this Clause.
CHAPTER V: FINANCIAL ADMINISTRATION, ACCOUNTS AND AUDIT
210. The GLA and the functional bodies will be within the local government framework for financial administration, accounts and audit purposes. Clauses 112 to 120 introduce the necessary amendments to the existing legislative provisions reflecting the particular circumstances of each body.
Clauses 112 to 117: Financial administration
211. Clauses 112 to 117 require the GLA and each of the functional bodies to make arrangements for the proper administration of its financial affairs and secure that one of its officers has responsibility for the administration of these affairs ("chief finance officer"). In most cases, the chief finance officer will be a member of staff with a professional qualification and a member of an approved accountancy body but, in the case of Transport for London and the London Development Agency, provision is made enabling the chief finance officer to be a member of the body rather than a member of staff.
212. A chief finance officer of the GLA or a functional body ("relevant authority") will carry out the functions of the post in accordance with the provisions of section 114 of the Local Government Finance Act 1988. He is required to make a report to the relevant authority in respect of decisions involving unlawful expenditure or unlawful actions or unlawful items of account. In preparing the report, the chief finance officer of the GLA, the Metropolitan Police Authority or the London Fire and Emergency Planning Authority should consult the head of paid service and the monitoring officer. The chief finance officer of the London Development Agency should consult its chief executive and the chief finance officer of Transport for London should consult a designated member of the body or of its staff. A chief finance officer will copy reports to each member of the relevant authority (which, in the case of the GLA itself means the Mayor and each member of the Assembly) and, where the report concerns a functional body, to the Mayor and the Chair of the Assembly as well.
213. Clause 116 sets out the duties of a relevant authority as regards a chief finance officer's report. A functional body and, in the case of the GLA, the Assembly must consider it at a meeting within a period of 21 days beginning from the day on which copies of the report are sent. The public access provisions of Part VA of the Local Government Act 1972 will apply to such a meeting (and provision is made to apply that Part to Transport for London and the London Development Agency). Where a report is made by the chief finance officer of the GLA, the Assembly will consider it at a meeting which the Mayor must attend. After the meeting, and taking account of the views of the Assembly, the Mayor will decide whether he agrees with the views contained in the report and what, if any, action he proposes to take.
Clauses 118 to 120: Accounts and audit
214. Clauses 118 to 120 provide that the GLA and the functional bodies will be subject to audit under the Audit Commission Act 1998 ("the 1998 Act") by auditors appointed by the Audit Commission. The GLA and each of the bodies will be required to keep its own accounts and prepare its own statements of accounts and these will be subject to the full provisions of the 1998 Act, including public inspection, action by the auditor and prevention of unlawful expenditure.
215. The GLA will also prepare a summary statement of accounts in respect of itself and the functional bodies and provision on the form of that statement and other matters will be made in regulations under section 27 of the 1998 Act. To avoid duplication in respect of matters already subject to sections 15 to 24 of the 1998 Act, those sections will not apply to this summary statement.
216. For the purposes of the summary statement, a functional body is required, at the request of the Mayor, to provide the GLA with such information relating to any accounts or statement of accounts as may be specified or described in the request.
217. Schedule 7 contains the individual amendments to the 1998 Act to deal with the application of that Act to the GLA and the functional bodies.
218. Under section 8 of the 1998 Act an auditor is able to make a report on matters coming to his notice where it is in the public interest to do so. Where he does so in respect of a functional body he is required to send a copy to the Mayor as well as to the body. Section 8 reports are considered at a meeting of the body concerned. The public access provisions of Part VA of the Local Government Act 1972 will apply to such a meeting (and provision is made to apply that Part to Transport for London and the London Development Agency).
219. Specific provision is made for a report in respect of the GLA. The Assembly will consider the report at a meeting, which the Mayor must attend. After the meeting the Mayor will decide whether the report requires the GLA to take any action and what if any action to take. In taking his decision the Mayor must take account of any recommendations made by the Assembly. The duties imposed on the Mayor and the Assembly must be performed within four months, although an auditor may allow more time for consideration.
220. The GLA and the functional bodies will be able to request the Commission to conduct a study to promote economy, efficiency and effectiveness in the use of resources. There is also to be a provision for the Mayor to request that such a study be carried out in respect of a functional body. Before exercising this power the Mayor will consult the functional body and such associations of employees as appear to him appropriate. The costs of any study commissioned by the Mayor will be met by the GLA.
CHAPTER VI: MISCELLANEOUS AND SUPPLEMENTARY PROVISIONS
Clause 121: Council tax: no crown exemption for Authority or functional bodies
221. Clause 121 makes the occupants of dwellings maintained by the GLA and its functional bodies, but used for the administration of justice, police matters or other Crown purposes, subject to council tax. It does this by amending section 19 of the Local Government Finance Act 1992.
PART IV - TRANSPORT
222. The special position of London as the capital and the largest city in Great Britain has given rise to the development of separate statutory codes for London in respect of transport.
CHAPTER I: TRANSPORT FUNCTIONS OF THE AUTHORITY
Clause 123: The general transport duty
223. Clause 123 gives the Mayor a general duty to promote and encourage safe, integrated, efficient and economic transport facilities and services to and from London and within London.
Clauses 124 to 126: The transport strategy
224. Clause 124 requires the Mayor to prepare a transport strategy for London setting out his proposals for fulfilling the duty under Clause 123, including those for people with mobility problems. The duty and the strategy will not be confined to those forms of transport for which the Mayor will be directly responsible. The duty encompasses all forms of transport, including walking, and does not apply only to users of transport who are resident in London. It covers the movement of goods as well as people.
225. Clause 125 gives the Secretary of State power to direct the Mayor to change the transport strategy. However, the Secretary of State will only be able to use this power where the strategy would be inconsistent with national policy and have an adverse effect outside Greater London. The London borough councils, the Common Council of the City of London and any other statutory body exercising transport functions will be required to have regard to the strategy. The Mayor can issue guidance about the implementation of the strategy to other bodies that must also have regard to it.
226. The transport strategy will be subject to Clauses 33 to 36 of the Bill, which make provision as to the general process by which all strategies will be prepared and published. These include provisions on timing and the need to have regard to available resources, and provisions concerning the persons to be consulted by the Mayor.
Clauses 127 to 132: Local implementation plans
227. Clause 127 requires the London borough councils to prepare local plans ("local implementation plans") setting out their own proposals on how they intend to put the transport strategy into effect. The councils are required to consult various bodies and must include a timetable for when they intend to implement the proposals in their plan. The Mayor will have reserve powers to ensure that the councils implement the strategy.
228. Clause 128 provides that the Mayor will approve each local plan, ensuring that they adequately implement the transport strategy. If the Mayor considers that a Borough local plan is wholly or partly inconsistent with the transport strategy he will be able to ask a council to rewrite their local plan. Clause 129 provides that if the council fails to do this or fails to produce a plan at all then the Mayor will be able to compel the council to write a plan according to his directions or write it himself. If the Mayor writes a plan himself then he must go through the same procedure as that applying to the council.
229. Clause 130 provides that once a plan has been approved the council must implement it according to the timetable in the plan. A plan prepared by the Mayor for a council will be treated the same as if the council had written it itself.
230. Clause 131 provides that if the Mayor considers that a council has not carried out any proposal in its local plan satisfactorily and according to the timetable in the plan, he will be able to exercise the appropriate powers of the council in order to fulfil the overall strategy.
231. Clause 132 provides that the Mayor may give legally binding instructions to the councils on the manner in which they perform any of their duties as set out in Clauses 127 to 130 of the Bill: i.e. provisions on the preparation, submission, re-submission and implementation of local implementation plans.
CHAPTER II: TRANSPORT FOR LONDON
Clause 133: Transport for London
232. Clause 133 establishes Transport for London (TfL) as a statutory corporate body and requires it to exercise its functions in accordance with guidance or directions given by the Mayor and in order to facilitate the general duty of the authority, and to implement the transport strategy.
233. Subsection (4) of Clause 133 introduces Schedule 8.
234. Paragraph 1 of Schedule 8 provides that TfL is not to be regarded as an emanation of the Crown and its staff and property are not to be regarded as civil servants or property of the Crown. Thus it will not have the benefit of the rule that a statute does not bind the Crown except by express provision or necessary implication. The powers of TfL will be restricted to powers conferred by the Act and powers incidental to those powers.
235. Paragraphs 2 and 3 of Schedule 8 provide that TfL is to have between eight and fifteen members, all of whom will be appointed by the Mayor. If the Mayor wishes, he or she can be the Chairman of TfL, but cannot otherwise be a member. In making appointments, the Mayor will have to consider the desirability of ensuring that TfL members, between them, have experience of transport, finance and commerce, national and local government, the management of organisations and trade unions. The membership of TfL will also need to represent the interests of women and disabled people. Apart from the Mayor, no holders of specified political offices (including Members of either House of Parliament and Councillors) may be members of TfL.
236. Paragraph 12 of Schedule 8 provides that members of TfL will be required to disclose any business interests they may have in any matters discussed at meetings of TfL or its committees or sub-committees. Any such disclosure will not automatically prevent the member from taking part in discussion of, or voting on, a particular matter, unless the Mayor says so. Any member failing to disclose a relevant interest is liable to prosecution and, if convicted, a fine not exceeding level 4 on the standard scale (level 4 is currently set under the Criminal Justice Acts at £2,500).
237. Paragraphs 4 to 9 of Schedule 8 provide that TfL will be able to decide for itself how its committees, sub-committees and individual officers will operate, and what functions each will have. TfL will be able to co-opt people from outside the organisation on to its committees and sub-committees, but such people will not be able to vote at meetings of the committee or sub-committee. Written records will have to be made of all meetings of committees and sub-committees.
238. Paragraphs 10 and 11 of Schedule 8 provide that when TfL's official seal is used on documents, the signature of an authorised member or officer will authenticate it. Similarly, legal documents served by TfL will have to be signed by an authorised member or officer.
Clause 134: Directions etc by the Mayor
239. Clause 134 provides that TfL's duty is to implement the Mayor's transport strategy in the manner that the Mayor instructs it to. The Mayor will be able to instruct TfL at any time on what to do on specific operational matters. This control of operational matters will include control over the conduct of legal proceedings by TfL. The Mayor is given power to issue guidance and general or specific directions as to the exercise of the functions (duties as well as powers) of TfL. Directions and guidance must be in writing.
Clause 135: Structure of fares and services
240. Clause 135 requires the Mayor to ensure that the general level and structure of fares to be charged on public transport provided or secured by TfL is set. The Mayor will also have to ensure, in general terms, that the routes to be served by TfL public transport services, and the frequency of those services, are set.
Clauses 136 to 138: Public passenger transport etc
241. Clause 136 provides that TfL will have general powers. They are similar to the powers London Regional Transport currently has under section 3 of the London Regional Transport Act 1984. TfL will be able to form, promote or assist companies, either by itself or with others, in order to carry out its transport functions. TfL will be able to enter into agreements with others for the carrying out of TfL's functions. Such agreements can include arrangements for joint operation, ticketing and revenue pooling between TfL and the other party.
242. TfL will also be able to make agreements for the carrying out of other activities for which TfL does not have specific powers. This is intended to facilitate private finance initiative arrangements, such as, for example, the Prestige ticketing project to provide easier to use machines and smartcard technology which is currently being undertaken by LRT. (Where such agreements have been entered into by LRT prior to its abolition, TfL will take on LRT's obligations under any such agreements.) TfL will be able to transfer its relevant property, rights and liabilities to the company or person with whom they have the agreement if that would be necessary for the purposes of the agreement.
243. Schedule 9 of the Bill, which is introduced by Clause 136(10), sets out the operating transport powers of TfL. These are as follows.
244. Paragraphs 1 to 3 provide that TfL will be able to provide services to carry passengers, luggage and goods by any form of land or water transport, to, from or within Greater London. TfL will also be able to enter into agreements with others to provide such services. TfL will be able to store goods that are to be or have been carried.
245. Paragraphs 4 to 6 provide that TfL will be able to provide incidental amenities and facilities for use by other parties with whom TfL has entered into agreements to carry out transport services. For example, TfL might agree to provide a private bus company with a rest room for off-duty drivers. TfL may also provide (or agree with others to provide) amenities and facilities that TfL thinks would benefit people using other TfL facilities. For example, using this power TfL might provide a snack bar at a station. TfL will also be able to provide car parks, and parking for public service vehicles (such as buses).
246. Paragraph 7 provides that TfL will be able to charge for the services and facilities it provides.
247. Paragraph 8 provides that TfL will be able to manufacture, maintain and repair machinery and components whether they belong to TfL or to other parties.
248. Paragraphs 9 and 10 enable TfL to provide professional and technical assistance and advice to others, and to charge for that service.
249. Paragraphs 11 to 13 enable TfL to hire out its vehicles and to sell or lease any of its assets which the Mayor does not require for the implementation of the transport strategy with the exceptions explained in Clause 141 below. TfL can also: supply spare parts for any passenger road vehicles it sells; use any resources which it does not require for other purposes (such as letting out surplus office space); and spend a reasonable amount of money on the exploitation of commercial opportunities.
250. Paragraphs 14 to 20 enable TfL to acquire, develop, sell and/or lease land. TfL will be able to acquire land compulsorily with the agreement of the Secretary of State.
251. Paragraph 21 provides that TfL will be able to carry out research and development work in areas related to its transport functions, or enter into agreements with others to do that work.
252. Paragraph 22 provides that TfL will be able to do anything which will promote the welfare and efficiency of employees, and the efficiency of its equipment.
253. Paragraphs 23 and 24 provide that TfL will be able to buy other businesses if the assets of those businesses are wholly or mainly required for purposes of its business.
254. Paragraph 25 provides that when letting vehicles for hire or developing land, TfL and its subsidiaries must act as if they were commercial businesses.
255. Paragraphs 27 to 29 provide that TfL is not to be regarded as a "common carrier" and will therefore not be subject to the duties and liabilities that, at common law, the status implies (such as those in respect of the acceptance of goods for carriage, rates to be charged, and liability for loss or damage). TfL is also relieved of the obligations contained in local enactments to provide connections to private railway sidings, to permit privately-owned wagons to use its railways and to provide or maintain any other railway services or facilities. TfL will be able to fulfil contracts entered into by London Regional Transport before LRT was abolished.
256. Clause 137 provides that TfL and the Franchising Director will be under a duty to co-operate with each other over the co-ordination of services provided or secured by TfL and franchised rail services overseen by the Franchising Director. TfL and the Franchising Director may enter into agreements with one another for that purpose. (The Franchising Director is the person appointed by the Secretary of State who is responsible for arranging and managing the provision of passenger rail services in Great Britain.)
Clauses 139 to 142: Miscellaneous
257. Clause 139 requires TfL to prepare an annual report on its performance and submit it to the Assembly as soon as possible after the end of the financial year. TfL's key responsibilities are to act to facilitate the discharge of the Mayor's transport duty and implement the Mayor's transport strategy. This Clause specifies that the annual report should explain how it fulfils these responsibilities, as well as how the activities of any subsidiary companies have contributed to its performance. The Mayor may specify what information on these topics or other aspects of TfL's performance should be included in the annual report.
258. Clause 140 provides that the GLA will be able to make schemes transferring the legal ownership of its property, rights and liabilities between itself, TfL and TfL's subsidiaries. This provides a simplified procedure for property transfer, avoiding the cost and time of the normal process of conveyancing.
259. Clause 141 provides that TfL cannot dispose of railway or tramway lines or stations, either through sale or long lease, without first seeking the consent of the Secretary of State. That consent is to be given by means of an order which is subject to the negative resolution procedure. The Clause provides that all lines and stations are subject to this restriction, even when they are no longer used. Clause 140(2) prevents lines or stations being transferred through a transfer scheme to the Authority or another functional body and being disposed of without consent.
260. Clause 142 places the Mayor and TfL under a duty to ensure that the subsidiaries of TfL do not do anything that TfL has not been given power to do by the Bill. The activities of any company are usually set out in the legal documents setting up the company (the Memorandum and Articles of Association). In the case of TfL, those legal documents cannot override the powers set out in the Bill.
CHAPTER III: LONDON REGIONAL TRANSPORT
261. Clause 143 amends the London Regional Transport Act 1984 to provide for LRT's powers of disposal and introduces a new definition of the word disposal into section 9 of the 1984 Act. LRT will be using these powers to dispose of businesses under section 9 of the 1984 Act as the means of transferring to the private sector PPP contractors the assets, contracts etc that they will need to inherit in order to carry out their activities. 'Disposal' is not defined in the 1984 Act, which might mean that it could be interpreted as a once-and-for-all sale, but PPP contracts will be for 30 years only after which the public sector will regain responsibility for the infrastructure.
262. Details on the transition from LRT to TfL are set out below in Chapter XIV.
CHAPTER IV: REGULATION OF BUS SERVICES IN GREATER LONDON
263. Greater London is the only area in Great Britain in which bus services were not deregulated under Part I of the Transport Act 1985. A separate system for regulating road passenger transport in London is contained in Part II (sections 34 to 46) of that Act. This provides for the licensing of local bus services. No licence is required where a bus service is provided by LRT, one of its subsidiaries or someone who has an agreement with LRT by virtue of section 3(2) of the London Regional Transport Act 1984. Most local bus services in London are provided by private bus companies under contract to LRT through powers contained in the LRT Act 1984. A small number of bus services are licensed by the Traffic Commissioner through powers contained in the Transport Act 1985. The Bill adapts the regulation of bus services in Greater London.
Clauses 144 and 145: Introductory
264. The bus services that are covered by the Bill in this Chapter are local services that have stopping places within the Greater London area (including the London section of a service that runs partly outside London). There are exceptions such as those services that have stopping places more than 15 miles apart and rail replacement services. The Bill sets out provisions with which such services will have to comply. Failure to do so is an offence which may result in a fine up to a maximum of level 3 on the standard scale (level 3 is currently set under the Criminal Justice Acts at £1,000).
265. A PSV operator's licence, provisions for which are set out in the Public Passenger Vehicles Act 1981, is normally required by anyone carrying fare-paying passengers in vehicles over a certain size. Community bus permits (section 22 of the Transport Act 1985) are granted by traffic commissioners for certain types of non profit-making services serving particular communities.
Clauses 146 to 149: The London bus network
266. These Clauses requires TfL to determine which bus services are required to make up the "London bus network" and so far as practicable to ensure that that network is provided. Only TfL or a subsidiary or someone who has an agreement with TfL may provide a service that is a part of the network. Any party who provides a bus service under an agreement with TfL must hold a PSV operator's licence or a community bus permit.
267. Agreements between TfL and another person to provide a bus service that is part of the London bus network will be called "London local service agreements". The London local service agreement must take account of any restrictions placed by a Traffic Commissioner on the part of the service that runs outside London.
268. These Clauses provide for consultation of interested parties where TfL proposes to provide (or enter into an agreement for the provision of) a new network service, to vary an existing service or to discontinue a service. TfL is required to consult the police, the local authorities affected, the London Transport Users' Committee and anyone else it thinks fit before proceeding.
Clauses 150 to 155: Bus services outside the network
269. Anyone who wishes to provide a bus service which is not part of the London bus network must obtain a London service permit. The Mayor is placed under a duty to state his policy for the issue of permits by publishing a guidance document (as to which, see below). That will contain the criteria against which applications for a permit will be considered. It must be kept under review and revised as necessary.
270. Clause 150 provides for applications for and the grant of London service permits. Separate fees may charged for processing the application and for granting the permit or a composite fee may be charged for both. TfL must consult the police, the local authorities affected, the London Transport Users' Committee and anyone else it thinks fit, but in deciding whether or not to grant a permit it must have regard to the guidance document and to any other material considerations (such as exceptional local conditions) which are relevant to the application.
271. Clause 152 provides that where a permit is refused TfL must issue a notice stating its reasons. An aggrieved applicant will have a right of appeal to the Mayor who may refer the matter to an independent appeals panel before giving directions to TfL as to how it should act in response to the appeal.
272. Clauses 153 to 155 provide for the terms on which a permit is held. Conditions may be attached to a permit to ensure that suitable routes and stopping places are used and that the safety and convenience of the public (including those persons with mobility problems) is secured. Conditions about fares may not be imposed by a permit. TfL may at any time alter, remove or attach conditions to a permit. The duration of a permit will normally not be longer than 5 years. The effect of applying Section 57 of the Public Passenger Vehicles Act 1981, through Clause 159, means that a permit is terminated early if a permit holder dies or becomes bankrupt, though TfL is given power to defer such termination if appropriate.
273. If a condition of a permit is contravened the holder may, by virtue of Clause 153(6), be liable to prosecution and if convicted fined up to the maximum of level 3 on the standard scale (currently set under the Criminal Justice Acts at £1,000). If the breach is considered serious enough by TfL the permit may be revoked or suspended.
Clauses 156 and 157: Guidance document
274. Clauses 156 and 157 provide for the preparation and publication of the guidance document. It must first be prepared in draft and the local authorities affected, the police, the Traffic Commissioners affected, the London Transport Users' Committee and anyone else the Mayor thinks fit must be consulted. It must be published not later than 180 days from the date of publication of the Mayor's transport strategy and be made available to the public. Similar provision is made for the preparation and publication of revisions to the document.
CHAPTER V: RAILWAYS
Clauses 161 to 166: Railways
275. Under Clause 161 the Authority will be able to issue guidance to the Franchising Director about the management of passenger rail franchises serving London. (Franchised rail services are passenger rail services operated under a franchise agreement between the Franchising Director and a train operating company.) The guidance can cover services to, from and within Greater London, but the Franchising Director must not follow the guidance where to do so would conflict with guidance issued to the Franchising Director by the Secretary of State or have an adverse impact on passenger services outside London or require the Franchising Director to make additional payments to franchise operators from his own budget.
276. Clause 162 provides that existing exemptions from the Railways Act 1993 are expanded to include TfL, its subsidiaries and the PPP contractors.
277. Clause 163 also ensures that LRT and TfL will have the power to enter into agreements involving the Rail Regulator to meet any need relating to transport in and around London.
278. Clause 164 provides that, like local authorities across the country, the GLA and TfL will not be able to run franchised railway services on the national network. But under the terms of the Franchising agreement it will be open to the GLA/TfL at its own expense to enter into agreements with franchise operators for additional passenger services.
279. Under Clause 165 the Mayor will have to be notified by the Franchising Director of any proposal by him to close a service affecting Greater London.
280. Clause 166 provides that the franchise agreements, under which passenger rail services are provided in Great Britain, will be amended so that the GLA is included in the definition of a local authority in such agreements. This will put the GLA on the same footing as local authorities elsewhere to make arrangements such as concessionary travel schemes.
CHAPTER VI: PUBLIC-PRIVATE PARTNERSHIP AGREEMENTS
281. Chapter VI makes specific provision for the Public-Private Partnership, so that it can be implemented in the most effective way and ensure value for money.
Clauses 167 to 169: Introductory
282. Clauses 167 to 169 define a "PPP agreement" and the procedure to be followed for the designation of such an agreement.
Clauses 170 to 173: Key system assets
283. Clauses 170 to 173 enable "key system assets" to be designated by agreement between London Underground and the PPP contractor, thereby giving them special protection under the Bill. The effect is that, without the consent of LRT (later TfL), designated assets cannot be transferred to another party, nor can any interest in or security over the assets be given to a third party. Designated liabilities cannot be released, discharged or transferred to another party without consent. Any transaction which contravenes these requirements will be void. No execution or other legal process can be commenced or continued, and no distress can be levied, against any property or rights which are key system assets. The purpose of such a regime, which is based on that for "franchise assets" under section 27 of the Railways Act 1993, is to give statutory protection to the assets needed to run the Underground railway so that they will not be lost and will be immediately available to the public sector at the end of a PPP contract, and train services can continue without interruption.
Clauses 174 and 175: Land
284. Clause 174 disapplies landlord and tenant law from Public-Private Partnership leases so that London Underground and the PPP contractor will interpret their rights and duties solely in accordance with the PPP contract and lease. The purpose of the Clause is to enable the public sector to recover all the real property it needs to continue services when a PPP contract ends, without the delays inherent in established landlord and tenant practice.
285. Clause 175 disapplies the normal requirement to register title with the Land Registry for leases of over 21 years. This is intended to save the considerable time and money which would be required to produce copies of suitable plans, deeds, etc. The effort of complying with the registration requirements would be of little or no benefit because of the very restricted opportunities for PPP contractors to transfer or otherwise deal with the land.
Clauses 176 to 180: Insolvency
286. Clauses 176 to 180 and Schedules 10 and 11 provide for a special PPP administration order regime. Such an order may be made by the High Court in relation to a PPP contractor which is on the point of insolvency or winding-up. It may direct a person appointed by the court to take over the running of the PPP contractor with a view to achieving the purposes of the PPP administration order in a manner which also protects the respective interests of the members and creditors of the PPP contractor. The purpose of the PPP administration order regime is to ensure that the duties of the administrator to protect the interests of principally the members and the creditors of the company are balanced against the purpose of ensuring that the activities under the PPP contract are carried on thus securing continuity of services for passengers.
Clauses 181 to 190: The PPP arbiter
287. Clauses 181 to 190 provide for the appointment of an arbiter by the Secretary of State, and set out the arbiter's general duties and powers. The arbiter's primary role will be to undertake, if requested by the parties, periodic reviews so that TfL can carry out a thorough review of its priorities and matters such as the price to be paid to the PPP contractors for their future obligations can be reconsidered. An independent third party with statutory powers and duties may be needed to ensure that levels of payment to the PPP contractors are re-set to a level which would earn an efficient PPP contractor the rate of return bid in the competition for the PPP contracts.
288. Clause 181 provides for the appointment of the arbiter by the Secretary of State. Clause 182 makes provision concerning the terms of appointment and dismissal of the arbiter, whilst Clause 183 deals with the appointment of staff and their ability to discharge functions on behalf of the arbiter.
289. Clause 184 sets out the arbiter's powers to give directions on matters referred to him by the parties to a PPP agreement. Clause 185 gives the arbiter a power to give non-binding guidance to the parties where they jointly refer a matter to him, the aim being to encourage the parties to reach agreement between themselves, in the light of the arbiter's guidance, without relying on a binding determination.
290. Clause 186 sets out the arbiter's duties when making determinations or giving guidance. Clause 187 sets out further powers of the arbiter, including a power to inspect relevant assets. Clause 188 empowers the arbiter to require parties to a PPP agreement and their associates to provide information which the arbiter considers relevant to the discharge of his functions.
291. Clause 189 removes the liability of the arbiter and his staff for any acts or omissions, unless they can be shown to have been committed in bad faith.
292. Clause 190 provides for the funding of the arbiter by the Secretary of State and the recovery of costs from the parties concerned.
Clause 191 and 192: Miscellaneous and supplementary
293. Clause 191 extends statutory undertaker status to a PPP contractor when exercising statutory functions relating to a railway and carrying out the subject matter of a PPP agreement. This will effectively give the PPP contractor similar statutory undertaker status to that enjoyed by London Underground Limited. Clause 192 contains definitions.
|© Parliamentary copyright 1999||Prepared: 10 May 1999|