31.Two instruments relating to the COVID-19 pandemic, the Drivers’ Hours and Tachographs (Temporary Exceptions) Regulations 2021 (SI 2021/58), and the Heavy Commercial Vehicles in Kent (No. 3) (Amendment) Order 2021 (SI 2021/109), are drawn to the special attention of the House in this report (see pages 1 to 7 above).
32.These Regulations propose new levy rates for the 2021/22 financial year to enable the Contract for Difference (CfD) Counterparty and the Settlement Body for the Capacity Market to recover their operational costs. Both organisations share their resources and facilities. The CfD scheme is the main mechanism for supporting new renewable electricity generation projects in Great Britain and the CfD Counterparty enters into and manages CfDs with low carbon electricity generators. The Capacity Market is one of the main mechanisms to ensure that there is enough capacity to meet peak demand for electricity at minimum cost to consumers in Great Britain and the Settlement Body is responsible for financial transactions relating to the Capacity Market.
33.The Department for Business, Energy and Industrial Strategy (BEIS) says that it would have preferred to propose new levy rates for the next three financial years to reduce the administrative burden on the sector as it did in 2017, but that electricity demand has fallen significantly during the pandemic and that this uncertainty makes it difficult to forecast electricity demand beyond the 2021/22 financial year. BEIS estimates that the total impact of the new levy rates will be around 40p on the average annual household electricity bill, £30 for a typical small-sized business (using around 250 megawatt hours per year) and £1,200 for a typical medium-sized business (using around 10 gigawatt hours per year). According to BEIS, the new levy rates will amount to less than 0.1% of these users’ electricity bills.
34.This instrument enables a governance petition that is submitted to a council between 16 March 2020 and 8 February 2021 to be treated as having been presented on 9 February. According to the Ministry of Housing, Communities and Local Government (MHCLG), this enables a referendum to be held within six months of 9 February 2021, including on 6 May 2021, alongside any local elections taking place on that date. The instrument also enables governance petitions to be presented from 9 February 2021. MHCLG says that in practice this allows the London Borough of Croydon to process a petition that has already been presented and to hold a governance referendum on the introduction of a mayor and cabinet system at the same time as scheduled elections in the local authority area.
35.MHCLG explains that the changes are necessary as an earlier instrument postponed local by-elections and governance and neighbourhood planning referendums until 6 May 2021 and also provided that governance petitions may not be presented during the period between 16 March 2020 and 5 May 2021. Despite these measures, a small number of governance petitions have been submitted which, under the current restrictions, would need to be resubmitted after 5 May 2021, making it impossible to hold a referendum on 6 May 2021. According to MHCLG, the changes made by this instrument avoid the need for a standalone referendum sometime later in the year which would risk very low turnout and substantial additional financial costs and administrative burdens for the councils affected.
36.This instrument sets out how local authorities should set their education budgets in the 2021/22 financial year, including by setting the parameters that local authorities must follow in determining schools’ budgets and the budgets which may be retained centrally. The Regulations also set out how local authorities are to allocate funding to maintained schools and private, voluntary and independent providers of free early years provision through locally-determined funding formulae. The Department for Education (DfE) explains that an instrument to this effect is made annually and that in 2021/22, local authorities will continue to determine schools’ budget allocations at a local level, through a local funding formula. This is known as a “soft” schools National Funding Formula (NFF). DfE says that while a “hard” schools NFF will be implemented in future, whereby schools receive what they attract through the national formula rather than through different local authority funding formulae, the Department does not intend to introduce any changes to further restrict local authority discretion over their own funding formulae in 2021/22 in order to ensure stability during the pandemic.
37.The Explanatory Memorandum includes headline funding figures for the 2021/22 financial year. We asked DfE about the availability of additional funding for schools to help them deal with the impacts of the pandemic. The Department has provided information which we are publishing at Appendix 1. DfE highlights that this additional funding is temporary and paid out as specific grants, not through the funding formula administered by local authorities, and therefore does not affect this instrument.
38.The Regulations also make permanent a provision which was introduced in an earlier instrument which allowed schools forums to meet remotely during the pandemic. DfE says that feedback from local authorities suggests that holding school forum meetings remotely has been successful and has made the arrangement of such meetings easier.
39.This instrument extends a temporary exception granted to certain religious charities from the requirement to be registered with the Charity Commission (“the Commission”) until 31 March 2031. The exception would otherwise expire on 31 March 2021. This is not the first extension: the exception has been extended several times since it was first granted in 1996.
40.The Department for Digital, Culture, Media and Sport (DCMS) explains that most charities have to register if their gross annual income is more than £5,000. This is to promote public trust and confidence in the charities sector. Certain charities are exempt from registration, either permanently or temporarily, if their gross annual income does not exceed £100,000. There are around 35,000 exempt charities, most of them religious charities connected with particular denominations, boy scout and girl guide charities and armed forces charities, as well as students unions and charities that provide premises for some types of schools. Most of these exceptions are permanent and the charities affected are regulated by another regulator under a separate legal framework. The temporary exception applies only to religious charities.
41.DCMS explains that many of these charities have been impacted by the pandemic and lack the capacity and resources to manage the administrative burden of the registration process, while significant planning and support will be required to register them with the Commission. According to DCMS, it would be inappropriate to impose a regulatory burden on them at this time. DCMS says that the extension until 31 March 2031 will enable the Commission to develop an approach for phasing the affected charities onto the register over the course of the extension period. The Commission will begin liaising with church bodies in the first half of 2021–22 to design and consult on a programme of phased voluntary registration. Given that the current exemption has been extended repeatedly since 1996, the House may wish to press the Minister for assurance that this will be the final extension and that the registration process will be completed over the extension period.
7 Local Government and Police and Crime Commissioner (Coronavirus) (Postponement of Elections and Referendums) (England and Wales) Regulations 2020 ().
8 Schools Forums (England) (Coronavirus) (Amendment) Regulations 2020 ().
9 Schools forums are statutory bodies established by each local authority to advise on matters relating to the local authority’s schools budget, including five to 16-year old provision in mainstream schools, early years provision and high needs provision for children and young people (aged 0-25) with complex needs.