local government' said Hilary Armstrong after a new Local
Government Act was yesterday given royal assent within a year of the
publication of the local government White Paper.
services by replacing compulsory competitive tendering with a new
duty of best value. The Act also replaces crude and universal capping
legislation with new reserve powers to limit excessive council tax
The local government minister said:
'I am delighted that we have achieved so much progress in the last
year. There is real momentum for change in local government. We are
making excellent progress in delivering our programnme for modern,
effective councils, in touch with the needs and concerns of local
'The new Act is an important step towards improved local services,
focused on the people's needs, concerns and aspirations.'
A second, draft bill, which will change council management structures
and introduce a new ethical framework for councillors, has been
subject to wide consultation as well as consideration by a joint
The Local Government Act 1999
The Act is in two Parts. Part I of the Act creates a new duty of
best value, which requires councils to secure continuous improvement
in exercising all their functions, with due regard to economy,
efficiency and effectiveness. The duty requires councils to create
performance plans, work to perform targets and consult widely within
the community. Part I also repeals those provisions within previous
legislation which require councils to submit specified activities to
compulsory competitive tendering.
The purpose of Part II of the Act is to enable the government to
regulate increases in council tax. Firstly, the Act will repeal the
existing capping legislation used for this purpose and take reserve
powers that are more flexible. As with the existing legislation, the
powers will be exercised on the basis of the budget requirement.
Secondly, the Act will make provision for payments between tiers of
authorities so that any major precepting authority exceeding the
guideline increase in budget requirement set by the Secretary of
State will be required to pay to billing authorities a contribution
to council tax benefit.
The government will consult on various aspects of best value, prior
to issuing orders and guidance in the autumn. The new duty will
apply from 1 April 2000.
Draft Bill on Organisation and Standards
The draft bill, published in March 1999, is aimed at enabling
communities to have a real say about how they want to be governed
locally and about how those who take local decisions are to be held
The draft proposals envisage a complete overhaul of council
structures which have remained basically unchanged for 150 years.
These new political management structures would give strong,
accountable and efficient leadership to local communities. Local
people would have to be consulted on which new structure would best
meet the needs of their community. Where people wanted a
directly-elected mayor, councils would have to hold a referendum.
The second part of the draft bill introduces statutory Codes of
Conduct for local authority members, establishes local authority
standards committees and establishes independent Standards Board and
an adjudication panel to handle any breaches of the codes.
The draft bill was published alongside a consultation paper entitled
'Local Leadership, Local Choice', to which we received nearly 300
responses. Those responses are now being considered by the
department, as will this week's report by the joint parliamentary
In addition to legislative proposals, considerable progress has been
made on other policies contained in last year's White Paper.
A beacon council scheme has been established to select councils which
will serve as pace setters and centres of excellence in key service
areas and from which good practice can be spread around the country.
To provide greater stability in council funding, the government has
frozen grant formulae for three years. During this time, the
government has announced that it will conduct a thorough review of
the grant distribution system, in partnership with local government,
conducting a major survey of councillors and senior council officers.
The government is also conducting a parallel review of capital
finance, including research into the creation of a single capital pot
so that councils can use resources more flexibly and plan for the
The government aims to produce proposals from both revenue and
capital finance reviews in a consultation paper next year.
This year, the government has provided an extra£2.6bn for
local services, with a lower average council tax increase of 6.8% in
comparison to 8.6% in the previous year (1998/9).
1. Local Government Act 1999 is due to be published shortly by The
Stationery Office, together with a full explanatory notes.
2. The draft Local Government (Organisation and Standards) Bill was
published for consultation in a Command Paper, 'Local Leadership,
Local Choice', available from the The Stationery Office, price
£12.50, ISBN 0101429827.
3. The White Paper, 'Modern Local Government: In Touch With the
People' was published on 30th July 1998.