Part 7: Housing Finance etc.|
Clause 92: Housing Revenue Accounts etc: adaptation
105. Clause 92 inserts a new section 87A into
the Local Government and Housing Act 1989 ("the 1989 Act").
The new section 87A is a broad Henry VIII power. It allows the
Secretary of State and the National Assembly for Wales, by order,
to amend, repeal, re-enact, disapply or modify provisions in Part
6 of, and Schedule 4 to, the 1989 Act. Schedule 4 of the 1989
Act is introduced by section 75 in Part 6 of the 1989 Act.
106. The new section replaces the existing powers
in paragraph 3 in Part 4 of Schedule 4 to that Act which enables
Schedule 4 to be amended by order subject only to negative procedure.
Because section 87A confers broader powers than paragraph 3 of
Part 4 of Schedule 4, it was considered appropriate to make the
exercise of the clause 87A powers in England subject to affirmative
resolution of both Houses of Parliament. Section 87A(6) provides
107. Section 87A, unlike the current paragraph
3 of Part 4 of Schedule 4 to the 1989 Act, would also allow amendments
to be made to sections 74 to 88 of the 1989 Act.
108. Section 87A(2)(b) explicitly allows an order
to confer, expand, curtail or repeal discretions conferred on
the Secretary of State or National Assembly for Wales or any other
person. Section 87A(3) makes clear that it could be used to amend
the Secretary of State and National Assembly's powers to make
directions (e.g. as to credits and debits to the Housing Revenue
Account) or determinations (e.g. as to the calculation of Housing
Revenue Account subsidy).
109. The powers could be exercised differently
for different cases or different authorities e.g. provisions could
be modified or disapplied for some, but not all authorities.
110. It is not possible to say exactly how these
powers would be used. There are no current plans to make an order
under the new section 87A. However, if these wider powers to amend
Schedule 4 to the 1989 Act had been available four years ago,
when the Government first committed itself to removing rent rebates
from the Housing Revenue Account, then proposals could have been
put to Parliament straight away, as local government and tenants
groups had asked.
111. The powers conferred by the new section
87A will enable such technical changes to the Housing Revenue
Account to be made in future, subject in England to parliamentary
approval, to reflect new circumstances or to improve financial
arrangements for local authority housing.
112. Given that the powers conferred by the new
section 87A are very broad, it was considered appropriate that
in England, they should be subject to affirmative resolution of
both Houses of Parliament (see section 87A(6)). This can be contrasted
with the narrower powers in paragraph 3 of Part 4 of Schedule
4 to the LGHA 1989, which they replace, which only required negative
resolution procedure. In Wales, any order made under the new section
87A would be subject to the National Assembly's own scrutiny procedures
in accordance with its standing orders.
Clause 93: Local housing authority houses: rents
113. Clause 93(1) effectively repeals section
24(3) of the Housing Act 1985 in England, by limiting the effect
of that section so that it applies only to Wales.
114. Section 24(3) of the Housing Act 1985 requires
local authorities in England and Wales, when setting their rents,
to have regard to the principle that rents of houses of any class
or description should have broadly the same proportion to private
sector rents as the rents of houses of any other class or description.
115. Since April 2002, the rent restructuring
policy for the social housing sector in England has encouraged
social landlords to move their rents towards a national rents
formula, designed to produce a pattern of rents which is fairer
and more coherent to tenants, while keeping rents affordable and
well below market levels.
116. Some authorities in England have suggested
that the requirement in section 24(3) might make it difficult
for them to restructure their pattern of rents in the way required
in England, particularly towards the end of the restructuring
period. Therefore Clause 93 (1) is required to remove this potential
obstacle to achieving social rent reform.
117. The National Assembly for Wales has not
introduced a rent restructuring policy for Wales, but may decide
to do so in the future. Clause 93(2) would allow the National
Assembly to repeal by order section 24(3) (as amended by subsection
1) if necessary at any time in the future. This power would allow
the National Assembly for Wales to remove in Wales a potential
obstacle to achieving fair and transparent rent systems which
deliver affordable rents. Any such order would be subject to the
National Assembly's own scrutiny procedures in accordance with
its standing orders.
Clause 95: Power to disapply section 94(1)
118. Clause 95 provides a power for the Secretary
of State or (in relation to authorities in Wales) the National
Assembly for Wales, to make orders disapplying the power to charge
in clause 94 either indefinitely or for a particular period in
- particular descriptions of, or particular best
- the provision of particular kinds of services
by all, particular or particular descriptions of best value authorities.
119. This reserve power would only be used exceptionally
where for example it emerged that authorities were exercising
the power to charge in a manner that ran contrary to the intention
of the provisions.
120. An example of use might be where evidence
of unfair competition emerged where an authority marketed a service
that undercut local private service suppliers, especially if the
authority was giving substantial numbers of people discounts on
the charges. The power to charge might also be withdrawn generally
for a particular service or services where it became evident that
it would not be appropriate for any authorities to charge for
121. Clause 95 could be used to withdraw the
power to charge for discretionary services should an authority
not comply with the various requirements placed on the power in
clause 94 of the Bill. In particular authorities are under a "duty
to secure that, taking one year with another, the income from
does not exceed the costs of provision". If
it became clear that an authority was not complying with this
duty in clause 94(3) and effectively undertaking unauthorised
trading activities, clause 95 would enable the power to charge
to be withdrawn.
122. It is appropriate that the Secretary of
State has this reserve power to deal with particular circumstances
as they arise. The negative resolution procedure is appropriate,
as the powers might have to be exercised rapidly.
Clause 96: Power to trade in function-related
123. Clause 96 provides a power for the Secretary
of State, or (in relation to authorities in Wales) the National
Assembly for Wales, to make an order enabling best value authorities
(with the exception of Police Authorities and the London Development
Agency) to trade in any of their ordinary functions. An order
under this provision may be made in relation to all, particular
or particular descriptions of best value authorities.
124. It may also relate to all activities in
relation to a function, particular activities, or descriptions
of activity. It is therefore intended that the powers will enable
best value authorities to enter into trading agreements or arrangements
with any person for the provision of goods and materials, staff,
accommodation and services.
125. The approach of granting this power through
delegated legislation is so as to provide maximum flexibility
and thus enable the scope of the trading power to be related to
an authority's performance categorisation where appropriate, in
accordance with clauses 100(4) and 101(1) and (2)(e)). This is
consistent with proposals in the White Paper - Strong Local Leadership
- Quality Public Services- that the freedom to trade on a wider
basis should only be available to authorities that have a strong
record on performance. The operation of the trading power by authorities
with reference to their description, may alter from time to time
depending on their performance categorisation. Accordingly it
is considered appropriate to grant this power by order, rather
than on the face of the Bill so as to facilitate selectivity and
flexibility as authorities circumstances change over time.
126. Clause 96 is subject to the negative resolution
procedure which we consider is an appropriate level of Parliamentary
scrutiny given that the exercise of the power by local authorities
will be dependant on an order made under clauses 100(4) and 101(2)(e)
(exercise of powers by reference to authorities performance categories)
which is also subject to the negative resolution procedure.
Clause 97: Regulation of trading powers
127. Clause 97 provides a general power to impose
conditions on the exercise of any trading power by a best value
authority, including where the trading activity is undertaken
through a company. Best value authorities are required to have
regard to any guidance that may be issued about the exercise of
their trading powers. Guidance may address certain matters that
authorities will need to have regard to when exercising trading
powers, including potential implications arising from competition
and EC legislation.
128. An order made under this provision may apply
to all, particular or particular descriptions of best value authorities.
It is intended that an order under clause 96 will include clause
97 conditions. With the power to set conditions in this context,
we wish to ensure that any trading arrangements will not expose
public funding to unacceptable risk, or give authorities undue
advantage in the market place. An example of the kind of safeguard
we have in mind might include requiring authorities to undertake
a risk assessment as part of a business case to be prepared in
advance of any proposed trading activity to ensure that the exercise
of the power is justified.
129. Clause 97 is subject to the negative resolution
procedure. It is largely likely to be used in the context of clause
96, where we would propose to impose conditions and it is also
linked to orders made under the performance categorisation provisions
which are themselves subject to the negative resolution procedure.
There is no immediate intention of making a clause 97 order imposing
conditions in relation to trading powers other than those granted
under clause 96. However were a situation to arise warranting
such measures it is likely to be in response to a case requiring
the swift imposition of conditions in order to regulate certain
trading activities. The negative resolution procedure would facilitate
rapid action in such cases.
Clause 98: Power to modify enactments in connection
with charging or trading
130. Clause 98 confers powers that would enable
the Secretary of State to make an order which amends, repeals,
revokes or disapplies any enactment that:
- prevents or obstructs a best value authority's
ability to charge for the provision of a discretionary service
or carry out trading in its functions; or
- Confers power on a best value authority to charge
for a discretionary service. The effect of disapplying such a
power would be to substitute, for the specific provision in question,
the general power to charge under clause 94.
131. An order under clause 98 may be made in
respect of all, particular or particular descriptions of best
132. This Henry VIII power to modify enactments
is precedented in the Local Government Acts 1999 (section 16)
and 2000 (sections 5 and 6). Apart from subsection (10) clause
98 is closely modelled on section 5 of the 2000 Act.
133. It is envisaged that these powers would
be used in circumstances where, once authorities' began to use
the new powers proposed at clauses 94, 96 and 97 of this Bill,
it became apparent that the requirements placed on them by earlier
legislation in some way conflicted with those placed on them by
the new powers to charge or trade. This power might also be used
to rectify circumstances where other legislation in some way prevented
or restricted authorities' ability to make use of the powers to
charge and to trade.
134. By virtue of clause 94(2), clause 94(1)
will not apply where there is an existing power to charge or a
prohibition on charging. However it may be acknowledged that an
existing charging regime in respect of specific services may be
so restrictive or cumbersome that authorities are discouraged
from providing the discretionary service in question. It may also
be acknowledged in the future as appropriate for authorities to
be allowed to charge for a service where there is a prohibition
on charging. In such circumstances an order might be made under
the power proposed at clause 98 to substitute the existing charging
regime with the charging power under clause 94(1); or to remove
a prohibition on charging thereby substituting it with the power
under clause 94(1).
135. Authorities may develop innovative approaches
to trading activity that may lead to the identification of restrictions
that obstruct or prevent sensible initiatives. The power would
provide a means to respond quickly in developing circumstances,
which may not be possible if reliance was placed on primary legislation
alone. Scarcity of Parliamentary time to deal with changes to
primary legislation highlights the need for a more flexible and
136. Where the Secretary of State proposes to
make an order under this provision which has effect in Wales,
he may not do so without first consulting the National Assembly
for Wales (NAW). Neither may the Secretary of State make provision
under clause 98 which affects legislation made by the NAW without
the consent of the Assembly. The NAW may submit their own proposals
to the Secretary of State as to how any proposed order under clause
98 should be exercised in relation to Wales.
137. We recognise that this is a very broad power
and that Parliament will rightly expect it to be subject to rigorous
scrutiny procedures. Accordingly such close scrutiny will be facilitated
by the enhanced affirmative resolution procedure explained in
detail under clause 99.
138. Clause 98(10) makes provision about the
parliamentary procedure applicable to orders that amend earlier
orders made under this provision just for the purpose of causing
them to apply, or not apply, in relation to particular authorities
or authorities of a particular description. Orders amending earlier
orders in this manner are to be subject to the negative resolution
procedure in either Houses of Parliament. We consider that this
level of scrutiny is appropriate given the narrow and specific
nature of the changes proposed.
Clause 99: Procedure for orders under section
139. Clause 99 sets out the draft affirmative
resolution procedure to be followed by the Secretary of State
in making orders under clause 98. Additionally, clause 99 provides
for the detailed scrutiny of any such proposed orders before they
are laid. By virtue of subsection 99(1), the Secretary of State
is required to consult best value authorities and others before
making an order. Subsequently, subsection 99(2) requires the Secretary
of State to bring before Parliament a document which explains
the proposals, sets them out in the form of a draft order, and
gives details of the consultation, including the views of the
NAW, where the proposals affect Wales. Only after 60 days can
an order be laid before Parliament under subsection 99(3). The
Secretary of State must take account of any representations made
during that period (subsection 99(5)) and any order must by virtue
of subsection 99(6) be accompanied by a statement giving details
of any such representations, and any changes made to the proposals.
140. The Government believes that these additional
procedures, in combination with the affirmative resolution, will
ensure that Parliament has available to it sufficient information
before approving any order made under clause 98.
Clause 100: Categorisation of local authorities
by reference to performance
141. This clause provides for the Secretary of
State to make an Order reflecting the audit commissions' categorisation
of local authorities. The Secretary of State can only make an
order which reflects the Audit Commissions findings as reported
to him. He has no discretion to alter the findings of the Commission
as reported to him (other than to correct typographical or clerical
errors). The power is exercisable by negative resolution. This
is because there will be no direct effect on an authority as a
result of the order. The purpose of this order is merely to provide
a reference point by which other legislative mechanisms (for example
regulatory reform orders) may be used to modify the law in relation
to categories of authority based upon performance.
Clause 101 and Schedule 3: Exercise of powers
by reference to authorities' performance categories
142. Clause 101(1) makes it clear that the powers
listed in 101(2) may be exercised differentially and in relation
to the categories of authority set out by the Secretary of State
by order under 100(4).
143. Clause 101(3) provides that Schedule 3 has
effect. Schedule 3 amends various powers in order that they can
inter alia be applied differentially to categories of authority.
The powers that are so amended are; sections 4,5,16 and 19 of
the Local Government Act 1999 and section 3 of the Local Government
144. Clauses 101(4) and (5) provide that other
existing powers may be amended in order that they can be applied
differentially to authorities. The power is limited to amending
powers to allow this differentiation and does not allow any other
amendment to existing powers. This power is exercisable by affirmative
145. Schedule 3 also makes a slight modification
to the procedure for making orders under sections 16 and 19 of
the Local Government Act 1999 and under section 3 of the Local
Government Act 2000. The modification provides that where one
of these orders is required to be amended merely to extend its
provisions to another authority or category or to make provisions
cease to apply to a particular authority or category that this
can be done by negative resolution order. The rationale for this
is that Parliament will already have considered the substance
of the order by way of debate in both Houses and a less cumbersome
procedure is therefore adequate merely for adding or deleting
an authority or category from the order.
Clause 102: Staff transfer matters: general
146. This allows for the Secretary of State,
the National Assembly for Wales and Scottish Ministers to issue
directions to require best value authorities, in contracting with
other persons for the provision of services or in circumstances
where a contracted-out service is brought back into the public
sector on the termination of a contract, to deal with staff transfer
matters (employment or pensions) in accordance with any directions
made. The clause also requires authorities to have regard to guidance
on staff matters issued by the Secretary of State or the Assembly.
147. The background to this is the commitment
made as part of a package of workforce measures, following the
review of Best Value, to legislate to make statutory within local
government the provisions in the Cabinet Office Statement of Practice
on Staff Transfers in the Public Sector and the Annex to it, A
Fair Deal for Staff pensions ("COSOP").
148. It is intended to use the direction making
powers to ensure that contracting exercises are conducted either
on the basis that TUPE will apply or, in circumstances where TUPE
does not apply, that staff involved should be treated no less
favourably than had the Regulations applied, unless there are
exceptional circumstances. The power may be used in relation to
terms and conditions and pensions provision for transferring staff.
149. The direction making powers will allow the
Secretary of State to make the principles of COSOP applicable
to best value authorities.
150. It was felt that a direction making power
was the most appropriate way to apply the principals of COSOP
to local authorities. In particular COSOP refers to exceptional
circumstances which are cases when TUPE does not apply and where
we would not want it to apply. These may change over time and
it was felt that the more flexible power to give directions would
allow a greater flexibility than might be the case with other
forms of delegated powers. The power is deliberately drawn narrowly
so as not to allow the Secretary of State, in exercising it, to
stray into unrelated areas of employment law. Clause 102 is a
discretionary power and allows the Secretary of State to exercise
his discretion to give directions to any or all best value authorities.
151. Clause 103 provides that the direction making
power contained in 102 shall (i.e. it is not discretionary) be
exercised by the Secretary of State in certain cases. The power
must be used in relation to staff transferring from a local authority
with the protection of the TUPE regulations. The clause requires
that in respect of these people the Secretary of State must make
provision ensuring that their pension rights are protected. The
reason for this is that the TUPE Regulations specifically do not
include occupational pensions.
Clauses 104 and 105: Power to change the date
of local elections in England and Wales,
152. The order which would be enabled by Clause
104 would allow the Secretary of State to move the date of the
local elections in England and the Greater London Authority (GLA)
elections in 2004 so that they can take place at the same time
as the European Parliamentary elections, planned for 10 June 2004.
The Secretary of State would be able to move all local elections
and GLA elections in 2004, including parish council elections,
or just elections to principal councils and the GLA.
153. The order-making power would also enable
the Secretary of State to make certain specified changes to primary
legislation and is likely to be used in conjunction with the power
in clause 122 to make incidental, supplementary and consequential
changes. The Secretary of State will use these powers where he
believes these are necessary to ensure the smooth running of elections
in 2004 and to ensure consistency and clarity in the conduct of
local authority business where the occurrence of other matters
is governed by reference to local election dates.
154. Clause 104(5) requires the Secretary of
State to undertake consultation, both with the Electoral Commission
and such other bodies as he considers appropriate, before making
an order. The ODPM and the Lord Chancellor's Department undertook
a consultation exercise on this proposal, which closed on 31st
January 2003. The Government intends this exercise to fulfil the
requirement to consult in subclause 5. It is for this reason that
the Bill includes a provision at subclause 6 allowing consultation
which takes place in advance of Royal Assent to satisfy the requirement.
155. The Government is currently considering
the responses to the consultation and intends to announce in due
course, having taken into account the responses to consultation,
whether it is still minded, subject to the passage of the Local
Government Bill, to move local and GLA elections in 2004 to coincide
with the European Parliamentary elections.
156. The Government has not yet decided what
further modifications to primary legislation it would be minded
to propose in any order which it brought forward. This decision
will be informed by the detailed analysis of responses to consultation
recently completed and further discussions, including with the
Electoral Commission. Given previous experience of changes to
primary legislation that were required when local elections were
moved and combined with the General Election in 2001, clause 104
allows the Secretary of State to make certain modifications to
primary legislation which may be desirable in the event that the
date of local and GLA elections is moved. In particular:
- subclause 2(a) contains a power to amend Section
89 of the Local Government Act 1972 in order to move, if he so
elects, any by-elections to fill casual vacancies in the office
of councillor for a principal local authority or a parish council;
- subclause 2(b), together with subclause 3, contain
a power to allow the Secretary of State to disapply section 16(1)
of the Representation of the People Act 1985 which postpones for
three weeks the poll at an election of parish councillors where
the date of the poll at a European Parliamentary general election
and the ordinary day of election for councillors in England and
Wales are the same;
- sub-clause 2(c) contains a power to allow the
Secretary of State if he thinks it fit to move, until after the
date of the European Parliamentary elections, the annual meetings
of authorities where there are no ordinary elections in 2004 but
where there might be by-elections. (The annual meetings will automatically
be postponed where there are ordinary elections);
- sub-clause 4 contains a power to allow the Secretary
of State to make any consequential provision which may be needed
if the National Assembly for Wales opt to move the date of their
local elections to 2004. (This is a technical provision to deal
with the fact that existing legislation is framed on the basis
that there is one and the same "ordinary day" of elections
in England and Wales and if the National Assembly move their elections
and the Secretary of State does not move the elections in England,
these references will need to be modified.)
157. The need for other changes to existing legislation
may become clear when the results of the consultation are analysed.
The Government intends to use the power to make consequential
provisions in section 122 to make any such changes.
158. There are two further provisions which the
Government will consider using in bringing forward any order.
- Clause 126 will allow the Secretary of State
to make changes to primary legislation consequential on any provision
in the Bill when enacted, including clause 104. This is unlikely
to be used in view of the power available in clause122, but in
view of the need to make any order under clause 104 shortly after
commencement, could be used to pick up any changes which are subsequently
identified as necessary.
- Paragraph 7 of Schedule 6 inserts a new subsection
5A into Section 15 of the Representation of the People Act 1985
(combination of polls) to allow the Secretary of State to make
provision in relation to combined elections which modifies any
enactment relating to election of members of the European Parliament
or any instrument made under any such enactment or under the Representation
of the People Acts.
159. The Committee should note that the rules
for the conduct of a combined poll will need to be updated and
that existing rule-making powers will be used in order to do this.
160. The Secretary of State will consider as
part of the response to consultation whether, in the event that
clauses122, 126 and paragraph 7 of Schedule 6 are enacted, whether
further consequential amendments are required to be made in the
order moving the date of local elections.
161. Clause 105 has a similar effect to Clause
104, allowing the National Assembly for Wales to move local elections
for which they are responsible. The Clause, in conjunction with
clause 117, makes similar provision for the National Assembly
of Wales to make equivalent related and consequential and amendments
in Wales as the Secretary of State has in England. The power in
clause 126 to amend primary legislation other than in an order
moving the elections is not available to the National Assembly,
but the Secretary of State would use it in respect of Wales, where
necessary and with the agreement of the Assembly. Use of the order-making
power in Clause 105 is entirely a matter for the Assembly, who
have informed the Office of the Deputy Prime Minister that they
have no intention of using the power at present.
162. The negative resolution procedure applies
to both of these powers. We consider that this is appropriate
and necessary, because:
- Parliament will have had sufficient opportunity
to consider the issues of principle when considering the Bill
- the scope of the powers is relatively narrow
and specific; and if it is decided to proceed it will be necessary
to make the order as soon as possible, to allow electoral administrators
maximum time to prepare for the June 2004 combined elections.
We have been heavily criticised in the past for agreeing late
changes, and believe we should provide as much time as possible
between changes being made and the date of the elections themselves,
particularly given the complexities of combining European Parliamentary
elections with local elections in London. The Government believes
that, in the event it decides in principle to use the power which
Parliament is currently considering during the passage of the
Bill, electoral administrators should be allowed the maximum time
possible for preparations to ensure the smooth running of elections
163. The Committee will also wish to note that
regulations under section 85 of the Local Government Act 2000,
which allow the Secretary of State to move the dates of council
elections as part of a change to a new electoral cycle, are subject
to the negative resolution procedure.
Clause 106 and Schedule 4: The Valuation Tribunal
164. Clause 106(9) provides that Schedule 4 has
effect. Schedule 4 deals with the constitution of the Valuation
Tribunal Service including disqualification from membership at
paragraph 2. Paragraph 2(1)(b) provides that a person shall be
disqualified from being appointed a member of the Service if he
is subject to a bankruptcy restrictions order or interim order.
Bankruptcy restrictions orders will be made under Schedule 4A
to the Insolvency Act 1986 (inserted by Schedule 20 to the Enterprise
Act 2002.) Schedule 4A extends to England and Wales by virtue
of section 280(1) of the Enterprise Act 2002.
165. Under section 268 of the Enterprise Act
2002, the Secretary of State may by order amend pre-8th November
2002 legislation that imposes bankruptcy related disqualifications.
Orders under that section may remove disqualifications or extend
them to, or replace them with disqualifications of, persons subject
to a bankruptcy restriction regime and may also provide for disqualifications
to be applied at a specified person's discretion.
166. Paragraph 25 of Schedule 4 provides that
paragraphs 2(1)(c), (2) and (3) of Schedule 4 (disqualification
of bankrupts in Northern Ireland or Scotland) will be treated
as though they were pre-8th November 2002 legislation for the
purposes of section 268 of the Enterprise Act 2002. An order under
that section will be able to modify those paragraphs should bankruptcy
restrictions orders, or a similar regime, be introduced in Northern
Ireland or Scotland.
167. Paragraph 25(2)(a) provides that there will
be no power in relation to the identified paragraphs of Schedule
4 to make the application of a disqualification provision subject
to a person's discretion, i.e. the power contained in section
268(5)(d), (6) to (8) and (15) is omitted. As that power is omitted,
and as the provisions on which the power will operate are identified
by paragraph 25, we consider that the negative resolution procedure
Clause 110: Registered social landlords
168. Clause 110 amends the Audit Commission Act
1998 to give the Audit Commission the power to inspect Registered
Social Landlords. The clause inserts into the Audit Commission
Act 1998 a new section 41B which includes an order-making power
exercisable by the Secretary of State, or in the case of Wales
the National Assembly for Wales (the relevant person).
169. In relation to England, the power allows
the Secretary of State to make an Order allowing the Audit Commission
to charge registered social landlords for inspections. The power
is exercisable by negative resolution but only after consultation
with the Audit Commission, the Housing Corporation and persons
appearing to represent registered social landlords effected.
170. It was felt that negative resolution is
appropriate in this case. The power is tightly drawn and its use
is subject to specific consultation requirements.
Clause 114: Standards committees and monitoring
171. Section 53 of the Local Government Act 2000
provides that every relevant authority in England and Wales must
establish a standards committee. An authority's standards committee
has the general function of promoting and maintaining high standards
of conduct by members and co-opted members and of assisting them
in their observation of the authority's code of conduct.
172. Clause 114 makes provision for a standards
committee to appoint one or more sub-committees from among its
members for the discharge of any of its functions. This will enable,
for example, a standards committee to appoint a sub-committee
of a smaller and more suitable size to hear allegations of breaches
of the authority's code of conduct.
173. There are currently powers under section
53(6) of the Local Government Act 2000 for the Secretary of State
to make provision by regulation in respect of standards committees
of relevant authorities in England and police authorities in Wales.
The National Assembly of Wales may make similar provision in respect
of relevant authorities in Wales, other that police authorities,
under the powers currently available under section 53(11) of the
Local Government Act 2000.
174. This clause provides that regulations made
under section 53(6)(a) and (c) to (g) or section 53(11) of the
Local Government Act 2000 may also make provision in relation
to any sub-committee appointed by a standards committee. This
draws the sub-committees into the ambit of the existing regulation
making power under which regulations can be made, and have been
made, in respect of standards committees.
175. As regards relevant authorities in England
and police authorities in Wales the regulation making power in
respect of sub-committees does not extend to making provision
for the appointment to sub-committees of an "independent"
member, that is a person who is not a member or officer of that
authority or any other relevant authority. The composition of
the standards committee, from which the sub-committee will be
drawn, will already include at least one "independent"
member, as required by section 53(4)(b) of the Local Government
Act 2000. It is not felt necessary to make any further provision
as to the appointment of "independent" members to sub-committees.
176. As regards relevant authorities in Wales
other than police authorities, the regulation making power in
respect of Wales in this clause includes the power to regulate
in respect of the appointment of "independent" members
to the sub-committee. There is currently no statutory requirement
that there be such a person on standards committees in relevant
authorities in Wales. The issue of regulation in respect of standards
committees (including the appointment or otherwise of "independent"
members) is a matter left to the National Assembly for Wales under
the Local Government Act 2000. This clause reproduces that position
in respect of sub-committees.
177. The current procedure for regulating in
respect of standards committees is by the negative resolution
procedure. As this clause seeks to draw sub-committees of standards
committees into the ambit of that regulation making power, the
negative resolution procedure is felt to be the appropriate procedure.
Clause 116: Voting rights on overview and scrutiny
178. Clause 116 inserts new paragraphs (paragraph
12 to 14) in Schedule 1 of the Local Government Act 2000. Under
this new provision a local authority in England may establish
a scheme under which it may permit a co-opted member of its overview
and scrutiny committee to vote at meetings of the committee.
179. The Government believes that giving authorities
the ability to grant voting rights to co-optees on overview and
scrutiny committees will allow them to strengthen the role that
these committees play in holding the authority, and where appropriate
the executive, to account for its decisions. It will be for local
authorities to decide whether to adopt a voting rights scheme
and, if they do, to decide how it will operate. The Government
wants local authorities to be locally accountable for any voting
right scheme they adopt. It is for this reason that the provision
will require authorities to publicise any schemes, or any changes
or revocations to schemes. Consequently where there is conflict
over the nature of a voting rights scheme, the Government believes
that this will be settled through local debate.
180. Clause 116 does however include reserve
power for the Secretary of State to regulate such schemes. This
reserve power is to be found at paragraph 13 of the provision
to be inserted into Schedule 1 of the Local Government Act 2000.
The Secretary of State would only wish to exercise this power
where there was concern that local choice was being abused, for
example if there was evidence that local authorities were undermining
the role of overview and scrutiny committees through the co-option
of voting members. There are no proposals to make use of this
power in the absence of evidence of any abuse.
181. Any regulations made by the Secretary of
State would be subject to the negative resolution procedure which
is considered appropriate given the nature of the power.
Clause 118: Appropriate sum under section 137(4)
of the Local Government Act 1972
182. Clause 118 amends section 137(4) of the
Local Government Act 1972. The clause affects parish and town
councils in England and community councils in Wales. It provides
for the 'ceiling' on their 'section 137' expenditure to be determined
in accordance with a new schedule to the 1972 Act. The Schedule
states that the 'ceiling' for the financial year in which the
Act comes into force, will be £5.00 per elector and that
it will automatically be increased for each financial year thereafter
in line with the annual change in the retail prices index.
183. The Schedule also permits the Secretary
of State to specify, by order, an alternative 'ceiling'. The Order
making power is exercisable by negative resolution. It was felt
that this procedure is appropriate as it replicates the current
position as found in section 137 of the 1972 Act. Having introduced
the inflationary rise then it is now much more unlikely that the
power will in fact be used. The likelihood is that it will be
used only in exceptional circumstances (where for example the
economy has taken a very unexpected turn and the inflationary
rise is effected in an undesirable manner).
Clause 119: Use of fixed penalties for litter
and dog-fouling offences
184. Clause 119 repeals the statutory requirement
that local authorities pay to the Secretary of State (or in Wales,
the National Assembly) any receipts from fixed penalties for leaving
litter and dog mess. These receipts may in future be retained
and used to finance authorities' statutory litter and dog mess
functions. This clause gives the Secretary of State (or in Wales,
the National Assembly) the power to make regulations adding to
the types of function which a local authority may finance using
its fixed penalty receipts.
185. The Secretary of State envisages that in
due course her regulation making power will be exercised to expand
the range of environmental functions which may be financed using
fixed penalty receipts. High performing authorities may be given
complete freedom as to how they spend their receipts. These matters
have been left to delegated legislation, because we wish to ensure
that the often neglected problems of litter and dog mess are being
tackled before local authorities are allowed to spend their receipts
from fixed penalties on other functions. The regulation-making
power provides the Secretary of State with the flexibility to
keep matters under review and to act where she sees that particular
environmental problems are being starved of finance.
186. Regulations made by the Secretary of State
or the National Assembly may also cover what a local authority
is to do with its receipts pending their being used. Regulations
may set a deadline by which time a local authority must spend
its receipts, and make clear what the authority must do with the
receipts if this deadline is missed. The powers of the Secretary
of State are sufficiently wide to provide for receipts to be paid
to her where authorities do not spend their receipts within a
reasonable time (the National Assembly has corresponding powers
for Wales). If necessary (to safeguard the receipts) regulations
may set out accounting arrangements. For similar reasons, the
clause confers on the Secretary of State and the Assembly an information
187. The Secretary of State's regulation making
powers are subject to the negative resolution procedure. We consider
that this is an appropriate level of Parliamentary scrutiny given
the nature of the power. The powers might have to be exercised
rapidly if, for example, there is any evidence that urgent steps
need to be taken to ensure proper use of public money.
Clauses 122, 126 and 127: Orders and regulations,
minor and consequential amendments and repeals and commencement
188. Clause 122 makes general provision for orders
or regulations made under the Act. It does not apply to commencement
orders made under clause 127 (see clause 122(7)). Clause 122(1)
provides that the power to make orders or regulations includes
power to make different provision for different cases or areas
(in particular different provision for different local authorities
or descriptions of local authorities) and provision to make incidental,
supplementary, consequential or transitional provisions or savings
(including provision amending or repealing any enactment or instrument
made under any enactment). The power is necessary to ensure that
the Bill, which deals with complex matters, many of which are
financial measures, is properly implemented to give full effect
to Parliament's intention. To the extent that clause 122(1) confers
a Henry VIII power, it is limited in scope to the making of the
incidental etc. provision (and, of course, is also limited in
scope by the particular order or regulation-making power).
189. Clause 126(1) and (2) gives effect to Schedules
6 and 7 (minor and consequential amendments, repeals and revocations).
A large number of amendments and repeals are included in those
Schedules, but given the size and complexity of the Bill and the
complex subject-matter of the legislation it amends, it is likely
that some necessary consequential measures will have been overlooked.
Clause 126(3) therefore empowers the Secretary of State, by order,
to make consequential provision by amending, repealing or revoking
enactments or instruments made under enactments. To the extent
that this confers a Henry VIII power, it is limited in scope to
the making of consequential amendments.
190. Clause 127(3) to (5) empower the Secretary
of State, National Assembly for Wales or Scottish Ministers as
appropriate, to commence certain provisions by order. Clause 127(9)
provides that the power to make a commencement order includes
a power to make such transitional provision or saving as the Secretary
of State etc. considers necessary or expedient for the purposes
of commencement. It does not include a Henry VIII power. The wide-ranging
nature of the Bill and the likely complexities of implementation
mean that it is appropriate to give the Secretary of State etc.
flexibility as to when the provisions are to be introduced.
191. These provisions are standard and are necessary
for the reasons set out above. They are all subject to the negative
resolution procedure which we consider is an appropriate level
of Parliamentary scrutiny as the powers are limited in scope -
they would only be used for limited purposes to give effect to
the policy that Parliament has approved when passing the legislation.
This follows the precedent of previous local government legislation,
including section 194 and 195 of the Local Government and Housing
Act 1989 and section 114 of the Local Government Finance Act 1992.
Clause 124: Application to the Isles of Scilly
192. This clause provides that Part 1 and sections
25 to 28 apply to the Isles of Scilly subject to such exceptions,
adaptations and modifications as the Secretary of State may by
order provide. This delegated power is desirable so that the particular
characteristics of the Isles of Scilly can be taken account of
in applying Parts 1 and 2. This follows the precedent of section
193 of the Local Government and Housing Act 1989 and section 25
of the Local Government Act 1992.
193. Paragraphs 36 and 37 of Schedule 6 make
minor amendments to existing powers of the Secretary of State
to make orders, in sections 140B and 140C of the Social Security
Administration Act 1992, relating to the payment of rent rebate
subsidy, rent allowance subsidy and council tax benefit subsidy.
Orders made under sections 140B and 140C of the SSAA 1992, as
amended by paragraphs 36 and 37 of Schedule 6, will be subject
to negative resolution procedure, and to the Treasury's consent
in accordance with sections 190(3) and 189(8) of that Act.
194. Paragraph 36(a) of Schedule 6 repeals the
second sentence of section 140B(2) of the Social Security Administration
Act 1992 ("the SSAA 1992") to allow the Secretary of
State to take into account, in making an order providing for the
calculation of rent rebate subsidy, rent rebates which had been
debited to the HRA in earlier years. Paragraph 36(b) of Schedule
6 repeals subsection (7) of section 140B of the SSAA 1992 in order
to clarify the existing broad powers in that section. It is considered
that subsection (7) did not confer any additional power on the
Secretary of State, and made the true extent of the Secretary
of State's powers under section 140B unclear.
195. Paragraph 37 of Schedule 6 inserts a new
subsection (1A) into section 140C of the SSAA 1992, which expands
the kind of information which authorities can be required to supply
by a condition in an order made by the Secretary of State under
section 140C(1), to include information necessary for the Secretary
of State to carry out any of his functions relating to subsidy,
including making an order setting out how subsidy will be calculated
as well as calculating the subsidy payable under an order. We
anticipate that conditions will be imposed under subsections 140C(1)
and (1A) requiring authorities to supply information for the purposes
of providing for a rent rebate subsidy limitation scheme in the
order under which subsidy will be paid.
196. Paragraphs 43, 45 and 52(2) of Schedule
6 amend regulation making powers in sections 21 and 24, and paragraph
8 of Schedule 2 to the Local Government Finance Act 1992 ("the
LGFA 1992"), in consequence of clause 78 which provides for
a statutory council tax revaluation cycle. All regulations made
for England, by the Secretary of State, under these amended enabling
powers would, like regulations made under the existing powers
be subject to the negative resolution procedure, provided by section
113(1) of the LGFA 1992. In Wales the regulations would be made
by the National Assembly in accordance with its standing orders.
197. Paragraph 43 of Schedule 6 inserts into
section 21 of the LGFA 1992 a new subsection (2A)(b)(ii) allowing
the Secretary of State (in Wales the National Assembly for Wales)
to make regulations providing for dwellings to be valued as at
a date less than two years before the date on which the new council
tax valuation lists are compiled. New computerised revaluation
techniques may speed subsequent council tax revaluations, allowing
the use of more up to date house values.
198. Paragraph 45 of Schedule 6 makes a consequential
amendment to section 24(9)(b) of the LGFA 1992, so that the Secretary
of State (in Wales the National Assembly for Wales) can make regulations
about the circumstances in which new lists deposited under section
22B(10) (inserted by clause 78), can be altered.
199. Paragraph 51 of Schedule 6 adds to the list
of statutory instruments in section 113(3) of the LGFA 1992 which
are not in England subject to negative resolution procedure, orders
under the new section 22B(3)(a) (inserted by clause 77) bringing
forward English council tax revaluations from the 10 year cycle.
Paragraph 51 also amends section 113 to provide that any power
of the National Assembly for Wales to make orders or regulations
under the LGFA 1992 shall be exercisable by statutory instrument.
200. Paragraph 52(2) of Schedule 6 amends paragraph
8 of Schedule 2 to the LGFA 1992 to enable regulations to be made
requiring billing authorities to notify owners of exempt dwellings
of the valuation band the property has been assigned to in the
new lists, and proposed new lists, prepared under section 22B.
201. Paragraph 52(3) of Schedule 6 inserts a
new paragraph 21 into Schedule 2 to the LGFA 1992, in consequence
of clause 77. Paragraph 21(2) will allow regulations to be made
providing that a dwelling falling within a class of case for which
the authority has determined that council tax liability shall
be nil, shall be treated as exempt for council tax administration
purposes (e.g. so the billing authority could be required to notify
the person who'd otherwise be liable of the council tax band and
amount which would otherwise be payable). Paragraph 21(3)will
allow regulations to be made providing that a dwelling falling
within a class for which the authority has determined that council
tax liability shall be reduced other than to nil, shall be treated
for council tax administration purposes of as if it were subject
to a discount under section 11 or section 12 of that Act (e.g.
so the billing authority could be required the to take reasonable
steps to ascertain the applicability of any such reductions, notify
the liable person of assumptions made by it as to reductions made
in calculating the council tax bill.) Any regulations made under
the new paragraph 21 of Schedule 2, like any other regulations
made under Schedule 2 to the LGFA 1992, would be made by negative
resolution procedure in accordance with section 113(3) of the
202. Paragraph 53 of Schedule 6 amends Schedule
4 to the LGFA 1992 to make clear that "prescribed amounts"
referred to in subsections (2) and (3) of clause 81, which can
be included in the attachment of earnings order, are to be prescribed
in regulations made by the Secretary of State, in relation to
England, and by the NAW in relation to Wales (as this is a new
power which has not already been devolved to the NAW under the
National Assembly for Wales (Transfer of Functions) Order 1998
203. Paragraph 58 of Schedule 6 makes a "missed"
consequential amendment to section 122(4) of the Housing Act 1996,
following amendments made by the Social Security Administration
(Fraud) Act 1997 to section 140B of the Social Security Administration
Act 1992. Section 122(4) of the Housing Act 1996 permits the Secretary
of State to include certain provision in an order made (by negative
resolution procedure) under section 140B of the SSAA 1992. The
amendment to section 122(4) made by paragraph 58 will mean that
readers will no longer have to rely on section 17(2)(a) of the
Interpretation Act 1978 to interpret section 122(4).
12 March 2003