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LOCAL GOVERNMENT ACT 1999 GETS ROYAL ASSENT

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'This Act represents a major step forward in the modernisation of ...
'This Act represents a major step forward in the modernisation of

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.

The Local Government Act 1999 aims to raise standards in local

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

rises.

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

people.

'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

parliamentary committee.

The Local Government Act 1999

Main provisions

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

to account.

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

committee.

Other reforms

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

long term.

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).

NOTES

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.

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