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FRESH NOLAN INQUIRY INTO PERSONAL LIABILITY OF COUNCILLORS

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EXTRACT FROM SPEECH BY LORD NOLAN TO ASSOCIATION OF COUNTY COUNCILS ANNUAL DINNER LAST NIGHT: ...
EXTRACT FROM SPEECH BY LORD NOLAN TO ASSOCIATION OF COUNTY COUNCILS ANNUAL DINNER LAST NIGHT:

'I know you are expecting me to say something about standards in public life. When we were set up two years ago, most people thought we had been asked to look only at parliament.

But we knew that we were to be a standing committee, and that we had been given a remit which covered every nook and cranny of public life. We thought it important, therefore, to establish a conceptual basis which would enable us to approach all our diverse studies in a reasonably consistent way - not usually a priority in British constitutional arrangements.

The core of our approach, as I am sure you know, was that in our first report we set out what we called the seven principles of public life. These are Selflessness, Integrity, Objectivity, Accountability, Openness, Honesty, and Leadership.

These are important principles, and we set them out because we believed that in the modern world you cannot be sure that everyone understands without being told what are the moral absolutes.

And with so many diverse organisations now providing public services, they need a consistent framework to build round. But we knew that to some extent they are a statement of the obvious, and we set them out and went so far as to define what we meant by them with some trepidation.

So we were relieved, as well as very pleased, when the House of Commons, in drawing up its Code of Conduct for Members adopted our seven principles and our definitions verbatim.

We also set out three practical ways in which organisations could ensure that they achieved the standards implied by the seven principles. Codes of conduct are the first, the other two being training, and independent scrutiny. Codes of conduct and external scrutiny, bring us straight to the heart of the issues which you in local government have asked us to look at in our current study.

I should perhaps remind you that when we began this study we published an 'Issues and Questions' paper which was written quickly and ranged widely. We set out there the issues which we thought might be important, and asked you for your views. We said that when we take oral evidence, which is next month in Scotland and Wales, and mainly in February in England, we should concentrate on the areas which were identified by you and others as important during our written consultation.

We have received over 900 written submissions, and many of them are of very high quality indeed. Needless to say, it will take us some time to digest them all. But we have been through enough already for me to indicate some of the main lines which with your help we will be following up. First, while I think there is very widespread agreement that a statutory code of conduct for councillors should be retained, the view is equally widespread that the overall package of rules, practices and guidance on conflicts of interest is confusing, and needs to be overhauled.

Needless to say, because this is a difficult and complex area - especially where non-financial interests are involved - there is less agreement on what the outcome should be. So that is one area where we shall be trying very hard to see if we can suggest improvements.

The second main area which we need to look at further is that of relationships between officers and members, and whether councils should do more to clarify the ground-rules. It is much too early to form definite views, but I rather doubt whether we can sensibly aim at a single set of national rules.

The question seems to be rather whether all councils should be encouraged to set out their ground-rules in writing, so that both officers and councillors know where they stand. We have received conflicting views on this, and also on whether the time has come to implement more fully the Widdecombe recommendations which would regularise the relationships between officers and party groups.

Third, I would guess that almost every council in the land has raised the issue of surcharge with us. Views differ greatly on what the outcome should be, but even the Audit Commission, who as reported in the local government press have defended surcharge, have suggested some changes. So looking at that will be a major concern.

A fourth issue which concerns many people is that of the personal liability which can arise when councillors or officers serve on other bodies on the council's behalf, whether simply to act as a link or because the council is in partnership with that body.

This is a matter of growing concern as partnerships become the norm. In our second report, we suggested that the government should commission a study to establish what personal liability falls in law to board members, trustees and directors of bodies with different kinds of legal status, what are the reasons for the differences which exist, and how significant any differences may be.

We also suggested that the review should identify the availability and scope of insurance cover. The government has recently agreed that we ourselves should commission this study, and we hope to do so fairly soon. I hope that it will provide the factual basis needed for considering whether any further action is needed in this troublesome area.

We shall be exploring other areas in our study, but I hope I have given you sufficient food for thought to sustain you for the rest of the evening.

Let me just end, however, by reassuring you that the Nolan Committee will do our best to ensure that our recommendations are practical. We realise that local authorities are there so that they can do a particular job - each of them doing its own job in its own area in its own way.

Standards of conduct are part of the framework which is necessary to enable that job to be done properly, but we need to strike the right balance and not recommend rules which are so complicated or burdensome that the job cannot be done. We must keep our sense of priorities, and not allow obsession with excessive regulation to obscure the need to score the runs.

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