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LOCAL GOVERNMENT (ORGANISATION AND STANDARDS) BILL - LGA BRIEFING

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Introduction ...
Introduction

The draft Local Government (Organisation and Standards) Bill published this week will introduce proposals for new political management arrangements and codes of conduct in local authorities. This paper briefly summarises the draft bill and consultation paper, gives initial LGA views on the proposals, and spells out activity which the LGA will be undertaking around the bill.

The LGA welcomes the fact that the Bill has been published in draft form. This is an innovative approach to local government legislation, and the LGA hopes that the final form of the eventual Bill will benefit greatly from the process of consultation, and that over-prescription in primary legislation can be avoided. The publication of the draft bill also marks the occasion of central government policy catching up with the widespread good practice in local government.

The consultation paper says that 'Government will introduce legislation when Parliamentary time allows'. The LGA expects this to be in the next session of Parliament.

The draft Bill is published as part of a consultation paper ''Local Leadership, Local Choice'. This paper has been sent to all local authorities, and comments on the draft bill are invited by the DETR by Friday 21 May 1999. Comments should be sent to New Local Governance, DETR, Floor 5/A3, Eland House, Bressenden Place, LONDON SW1E 5DU.

It is expected that a Parliamentary Select Committee will then wish to consider and to report on the draft bill.

Summary of contents of the consultation paper

The draft bill is the annex to the four chapter consultation document. The contents of each chapter are as follows:

1. Explanation of links with other parts of the modernisation agenda

2. deals with referendums and elected mayors;

3. provides details of proposals for a strong executive, and outlines the three options;

4 sets out the details of the new framework on standards of conduct;

There is also a postscript to the consultation paper which outlines the steps which councils need to take to implement the proposals in the draft bill

Chapter 1: Modernisation and new forms of local governance

This chapter provides the context in which the Bill is published. It explains the link with the other parts of the Government's modernisation programme, and how the draft bill sits alongside other aspects of implementation.

The aim of the paper is set out as making available to people choices about how they are governed locally which are characterised by efficiency, transparency, accountability;and high standards of conduct.

Chapter 2: Local governance: local choice

The proposals in this chapter are as follows:

every Council will be required to consult its local community about what new form of political management structure to adopt;

Government envisages Councils consulting on a range of options;

proposals for a directly elected Mayor will have to be endorsed by a binding local referendum;

local people can petition for a referendum on whether to move to an elected Mayor model if 5% of the electorate request it;

a Council can continue with its existing traditional political structures only where the electorate has rejected a clear option for a new way of working in a referendum;

powers for Secretary of State to compel a binding referendum if a Council does not move to a new model or does not put proposals to a referendum.

This chapter sets out the Government's expectation that Councils will consult their communities very thoroughly about which model they adopt. The Bill (Clause 10) is couched in terms of an authority taking 'reasonable steps to consult' and paragraph 2.8 says that each Council should determine for itself what consultation is best suited to its local needs.

Such local flexibility is welcome but authorities must not underestimate the emphasis that the Government is placing on the wishes of local people. The chapter asserts that simply consulting on a single favoured option is not an open process. Significantly, the Government has also lowered the threshold for local people to trigger a referendum on a directly elected Mayor from 10% of the electorate to 5%.

Chapter 3: Strong leadership for communities, powerful role for all councillors

Proposals:

the emphasis is on finding a form of local governance to provide strong leadership for local communities;

the ways of achieving this have been categorised by the Government under three broad models, as set out in the Modern Local Government White Paper:

directly elected Mayor with Cabinet

cabinet with a leader

directly elected Mayor and council manager

the common characteristics of these are:

they provide a clearly identified and separate executive

powerful roles for Councillors in order to ensure transparency and local accountability

this chapter provides considerable detail on the way the models will operate and the role of the different constituent parts of an authority: the Executive; 'overview and scrutiny committees'; and the full Council;

Councils will draw up a proposal for new political management arrangements - 'a new constitution';

the Bill sets out a number of key parameters which such a new constitution must meet, but within these, the precise arrangements are a matter for local choice;

there is provision for a Council to move from one model to another, but subject to safeguards, and to referendum if it proposes to abandon or adopt an elected Mayor model.

The LGA welcomes the acknowledgement that there is to be flexibility within the models proposed. The key phrase here is 'local choice' - and the LGA has consistently pressed for Councils to have the maximum discretion within the basic models. Examples of where there will be local discretion include: scope to add to the function of the full Council, or to delegate from it; to determine locally the structure of the overview and scrutiny function; to design executive arrangements to suit local circumstances.

The draft legislation proposes some basic limits to this discretion - for example some functions will be clearly the responsibility of the executive, and there are draft provisions limiting the size of the executive (whichever is the smaller of 10 members or 15% of the total number of Councillors). The LGA will test the appropriateness of these limitations during its hearing process next month.

The draft legislation also makes clear that there will be scope for the Secretary of State to provide for new models to be added to the core three identified in the White Paper. This meets one of the key LGA lobbying objectives for the draft Bill.

Chapter 4: High Standards of Conduct Throughout local Government

The consultation paper refers to 'the bond of trust between the community and those who represent them' and the Government's proposals as restoring that bond. It recognises that despite press reports on inappropriate behaviour by councillors, 'the vast majority of them operate in a conscientious and professional manner'. The steps already taken by many authorities to put in place stronger arrangements on propriety is also recognised.

The three main components of the New Ethical Framework are repeated in the paper and the draft Bill:

Codes of Conduct

Local authorities' codes will be based upon a Model Code to be issued by the Secretary of State, which will include general principles of conduct (Clauses 25 and 26)

The LGA will be invited to develop this model code

Local authorities must adopt the mandatory elements of the model code in their local code, but will be able to adapt it to suit their local decision- making structures

The Bill provides for uniform national codes to be developed for specific groups of authorities - eg town and parish councils; police, fire and other combined authorities

Standards Committees

A requirement for principal authorities, but not for town, parish or combined authorities.

Role will be to advise on the adoption, monitoring and adoption of the local code; training for councillors on ethical conduct; investigation and dealing with less serious allegations of impropriety referred to it by the Standards Board;

Membership: at least 1 independent member; at least 2 councillors of which at least 1 should be non-executive - ie a minimum of 3 persons but flexibility for more;

No reference is made to the sanctions available to a Standards Committee in dealing with such allegations. (Limited to reprimand in the White Paper)

Monitoring Officer

The Monitoring Officer will have an enhanced role, providing advice and assistance on probity issues to members, officers and to the Standards Committee;

There must be ' a good and close working relationship' between the standards committee and the monitoring officer;

The monitoring officer will maintain the public register of interests

There is no reference to the White Paper proposals for a statutory duty on councils to establish and maintain such a public register and to remove the present criminal sanction from a failure to register a pecuniary interest.

National Standards Board

The Board will investigate allegations of breaches of the local codes

Ethical Standards Officers will be responsible for investigating allegations and together with non-executive members will make up the Board

An Adjudication Panel will hear cases referred by the Board and will be independent of ESOs

The split of functions between the Board and the Adjudication Panel is a new proposal.

Employees' Code of Conduct: a statutory code will be introduced (Clause 42), forming part of employees' terms and conditions. Reference is made to around 90% of authorities having adopted the LGA/LGMB voluntary Code of Conduct.

Surcharge

The consultation paper says that the means of achieving the repeal of surcharge 'are being considered alongside work on the proposed new offence of misuse of public office'. No provision for this is included in the draft Bill.

Postscript

A postscript to the consultation paper summarises the steps the Government feels councils need to undertake to move towards the new structures. In brief, these steps are:

start or continue an open dialogue with local people about their local governance;

in the light of this, reassess their current working methods (a checklist of 12 things to consider are set out, including such as reviewing committee structures and the numbers on these committees;

consider how local people will be involved in decisions about the future shape of local government;

draw up proposals for a move to a new constitution

Annex - Draft Bill and explanatory notes: The draft Bill, 42 pages long, and made up of 47 clauses and 4 schedules, is included as an annex to the Bill. It implements the proposals set out above, and has two Parts:

Part 1 covers proposals on the move to new political arrangements. It sets out requirements for a separate executive; and sets out the three models, and it allows the Secretary of State to add further models at a further date. It requires authorities to set up 'overview and scrutiny committees' on which members of the executive cannot sit. Each authority is to be required to draw up a proposal for its new political arrangements and to consult widely within the community on this. There is a requirement for a referendum on proposals involving an elected Mayor, where 5% or more of the local electorate petition for such arrangements, or where the Secretary of State requires an authority to hold a referendum if it has not moved towards adopting a new model.

Part 2 of the Bill establishes the new ethical framework comprising statutory codes of conduct for members and officers; Standards Committees for each local authority; and an independent process for investigating and penalising instances of unethical conduct. The draft Bill does not include the replacement of surcharge and other provisions which could be included in legislation on this issue.

What the LGA is doing to take forward proposals on the draft bill

The LGAis continuing to develop the wider debate on the draft Bill. We have developed a wide programme of events including:

a series of LGA Hearings on the Bill to be chaired by LGA President Lord Hunt of Tanworth. We have invited local councils and over 100 other organisations to submit evidence and oral hearings will take place in March and April. The findings will be published in May in time for the LGA to contribute to the consultation process on the Bill.

a national seminar on the Bill has also been arranged on Tuesday 13 April 1999. A series of regional seminars are also planned.

responding to Parliamentary scrutiny of the draft bill and publishing a commentary for local authorities on the contents of the Bill.

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