Section 24: Absence of requirement for political balance

64. Section 24 provides that executives and executive committees need not reflect the political balance of the authority.

Section 25 to 30: Procedure with respect to operation of executive arrangements

65. Section 25 requires every local authority (except those to whom section 31 applies) to draw up proposals for moving to executive arrangements. Before drawing up proposals a local authority must consult widely with the local community on the proposals. This consultation should include local electors, but also other interested parties. In drawing up these proposals the local authority must decide which form of executive it intends to adopt and which functions would be the responsibility of the executive (where the local authority has a choice). The proposals must also include a timetable for implementation of the proposal; details of any transitional arrangements that will be put into place and such details of the executive arrangements as the Secretary of State may direct.

66. In drawing up proposals an authority must consider the extent to which the proposals, if implemented, are likely to assist in securing continuous improvement in the way in which the authority's functions are exercised, having regard to a combination of economy, efficiency and effectiveness. In addition, an authority must comply with directions from the Secretary of State.

67. A copy of the proposals must be sent to the Secretary of State accompanied by a statement describing the steps taken to consult and the extent to which the outcome of the consultation is reflected in the proposals. The aim is to ensure that the executive arrangements adopted by an authority reflect the aspirations of the community and are appropriate to that authority. The Secretary of State may, by order, specify a date by which every local authority must comply with this section.

68. Section 26 provides that authorities which propose a form of executive that does not require a referendum must implement their proposals in line with the timetable included in their proposals. It also provides a definition of a form of executive for which a referendum is required.

69. If the proposals drawn up under section 25 involve a form of executive for which a referendum is required, section 27 requires a local authority to:

hold a referendum; and

draw up and send to the Secretary of State an outline of fall-back proposals that they intend to implement if the proposals under section 25 are rejected in the referendum.

70. Fall-back proposals are proposals for executive arrangements for which a referendum is not required or for alternative arrangements within the meaning of section 32. The outline fall-back proposals must include a timetable for implementation of detailed fall-back proposals (based on the outline) in the event that the proposals drawn up under section 25 are rejected by the referendum. An authority must consult local government electors and other interested parties when drawing up their outline fall-back proposals. The referendum decision would be binding on the authority. Where the proposals under section 25 are approved by the referendum they must be implemented. Where such proposals are rejected, the authority must not implement them; instead, it must draw up detailed fall-back proposals based on the outline fall-back proposals.

71. Detailed fall-back proposals must include such details of the executive or alternative arrangements as the Secretary of State directs. In drawing up these proposals the local authority must consider (where the proposals are for executive arrangements and the authority has a choice) which functions would be the responsibility of the executive. The proposals must also contain details of any transitional arrangements that will be put into place. An authority must consult with the local community before drawing up the detailed fall-back proposals. This consultation must include local electors, but also other interested parties.

72. In drawing up detailed fall-back proposals an authority must consider the extent to which the proposals are likely to assist in securing continuous improvement in the way in which the authority's functions are exercised, having regard to a combination of economy, efficiency and effectiveness. In addition, an authority must comply with directions from the Secretary of State when drawing up detailed fall-back proposals.

73. A copy of the detailed fall-back proposals must be sent to the Secretary of State. The detailed fall-back proposals must be implemented in accordance with the timetable included in the outline fall-back proposals.

74. Section 28 allows an authority to apply to the Secretary of State for approval of outline fall-back proposals which are not available at that time, but which are of a type which could be made available by regulations under section 11(5) or section 32. Where the Secretary of State approves such fall-back proposals, the authority must implement their fall-back proposals in accordance with the timetable included in the outline fall-back proposals, subject to any delay in making the necessary regulations. The Secretary of State may give directions on the form and content of an application for approval.

75. Section 29 requires a resolution of the full council to adopt executive arrangements. Once adopted, details of the arrangements must be made available for inspection by the public and be widely publicised in the area of the authority. Such publicity should include the main features of how the arrangements will work and give a date on which the arrangements enter into effect.

76. This section also makes clear that once an authority has adopted executive arrangements, it cannot revert to arrangements which are not based on a separate executive, unless the authority is operating alternative arrangements in place of executive arrangements under the provisions made under section 33(5).

77. Section 30 enables the Secretary of State to make regulations to cover all the eventualities where local authorities are changing their executive arrangements or moving from one form of executive arrangements to another, different, form of executive arrangements.

Sections 31 to 33: Alternative arrangements

78. Section 31 provides that certain authorities may decide whether to draw up proposals for executive arrangement or proposals for alternative arrangements. The authorities who have this choice are district councils whose area is within the area of a county council and whose resident population is less than 85,000 (as estimated by the Registrar General on 30 June 1999), and any other description of authorities specified in regulations under this section.

79. Section 31 requires that authorities must consult widely with the local community in deciding whether to draw up proposals for executive or alternative arrangements and each authority must consider, in drawing up its proposals, the extent to which the proposals are likely to assist in securing continuous improvement in the way in which the authority's functions are exercised, having regard to a combination of economy, efficiency and effectiveness. Authorities which draw up proposals for alternative arrangements under this section must also comply with other requirements in regulations, such as requirements as to the implementation of the proposals.

80. Section 32 allows the Secretary of State to specify in regulations alternative arrangements for the discharge of functions which do not involve an executive. Such arrangements cannot include a separate executive, must include overview and scrutiny arrangements and must, in the Secretary of State's opinion, be likely to ensure that decisions are taken in an efficient, transparent and accountable way. Alternative arrangements may also include provision for the discharge of functions by individual members of the authority, or appointment of committees whose membership does not reflect the political balance of the authority.

81. Section 33 provides that an authority may not operate alternative arrangements unless required or permitted to do so by virtue of this Part of the Act, and that once an authority is operating alternative arrangements it may not cease to do so unless it operates executive arrangements in their place. A resolution of the full council is necessary to adopt executive arrangements and, once adopted, details of the arrangements must be made available for inspection by the public and be widely publicised in the area of the authority. Such publicity should include the main features of how the arrangements will work and a date on which the arrangements come into effect.

82. This section also enables the Secretary of State to make regulations which provide for all the eventualities where:

• authorities to which section 31 applies are changing from executive arrangements to alternative arrangements;

• any authorities are changing their alternative arrangements or moving from one form of alternative arrangements to another, different, form of alternative arrangements; and

• any authorities are changing from alternative arrangements to executive arrangements.

Sections 34 to 36: Referendums

83. Section 34 gives the Secretary of State a power to make regulations concerning public petitions in relation to whether a local authority should have a form of executive involving a directly-elected mayor or such other form of executive for which a referendum is required. It provides that regulations made under this section could require a local authority to hold a referendum where they have received a petition signed by at least 5% of local electors. Regulations may specify matters such as the form of petitions (including electronic petitions), their verification, the timing of referendums, the action to be taken by a local authority on receipt of a petition, and the manner in which and times at which the number of electors required to sign the petition is to be calculated and publicised. Regulations may also vary the 5% threshold for petitions.

84. Section 35 gives the Secretary of State a regulation-making power which enables him to direct a local authority to hold a referendum on whether they should adopt executive arrangements involving a form of executive described in or under section 11. The regulations will specify the circumstances in which the Secretary of State will be able to invoke this power, and may include provisions for the timing of a referendum and the action to be taken by the authority before and after the referendum.

85. Section 36 enables the Secretary of State, by order, to require all local authorities, or all authorities of a particular description, to hold a referendum on a particular form of executive described in or under section 11.

86. Any requirement to hold a referendum arising under these sections will be subject to the constraint in section 45 that a referendum on executive arrangements may not be held more than once in any five years.

Section 37: Local authority constitution

87. Section 37 requires an authority which is operating executive arrangements or alternative arrangements under this Part of the Act to maintain a document (referred to as their constitution) and ensure that it is available for inspection by members of the public. The authority will have to supply a copy to anybody who requests one, upon payment of a reasonable fee. The constitution is to include the standing orders and councillor code of conduct of the authority and such other information as the Secretary of State may direct.

Sections 39 to 41: Elected mayors and elected executive members

88. Section 39 provides that an "elected mayor" means an individual elected to that post by the local government electors in the authority's area. "Elected executive members" are also to be elected by the local government electors for the authority's area. Elected executive members are individuals who are directly elected to an executive or to a particular post in an executive, where an executive including such members has been provided for in regulations under section 11(5). The section also provides that the Secretary of State may make regulations specifying those enactments in respect of which elected mayors are to be treated as a local authority councillor or member.

89. The normal term of office for an elected mayor or an elected executive member will be four years, except as otherwise provided for in regulations made by the Secretary of State under section 41.

90. Section 40 provides that no one may be the elected mayor and a councillor for an electoral division or ward in the same authority. Subsection (1) provides that if anyone stands for election to be, and is elected as, both the elected mayor and a councillor for an electoral division or ward in the same authority in elections held at the same time, a vacancy will arise in the office of councillor.

91. Subsection (2) provides that where the election for the elected mayor is not held at the same time as elections for councillors for an electoral division or ward and a sitting councillor is elected as the elected mayor of the authority, a vacancy will arise in the office of councillor.

92. Subsections (3) and (4) provide that an elected mayor may not stand in an election to be a councillor for an electoral division or ward unless the elections are to be held at the same time in which case the elected mayor may stand in one, the other, or both elections. If he or she stands in both elections and is elected in both, a vacancy will arise in the office of councillor.

93. Section 41 enables the Secretary of State to make regulations providing for the dates, years, and intervals at which elections for elected mayors or elected executive members can take place. This enables the Secretary of State, for example, to provide for elections which are consistent with the different electoral cycles operated by local authorities, and could allow initial terms of office for directly elected members of greater or less than four years so that the cycle can be brought into step with the normal electoral cycle.

Sections 42 to 44 and Schedule 2: Elections

94. Section 42 and Schedule 2 describe the method for electing a directly-elected mayor. This will normally be the supplementary vote system (SV), unless there are less than three candidates in which case the simple majority system is used.

95. Under the SV system, the elector has two votes—a first preference vote cast for the elector's preferred candidate, and a second vote cast for the elector's second preference from among the remaining candidates. Schedule 2 specifies the procedure for returning an elected mayor under the SV system. If any candidate receives more than half of the first preference votes cast, that candidate is the winner. Otherwise, all but the two candidates who received the greatest number of first preference votes are eliminated. Any second preference votes among the votes for the eliminated candidates which have been cast for the two remaining candidates are then added to those candidates' total votes, and the candidate with the highest number of votes overall is elected mayor. Schedule 2 also provides procedures for dealing with an equality of votes at any stage of the process.

96. Section 43 provides that entitlement to vote at elections of elected mayors or elected executive members is the same as the electoral franchise for normal local government elections.

97. Section 44 provides for the Secretary of State to make regulations regarding the conduct of elections for elected mayors and elected executive members. This includes a power to apply or modify any statutory provisions relating to the conduct of elections. This allows the Secretary of State to provide for the existing statutory framework for the conduct of elections to be applied to mayoral (and any elected executive) elections appropriately.

Section 45: Provisions with respect to referendums

98. Section 45 provides that a local authority may hold only one referendum on proposals for executive arrangements in any five-year period. This includes referendums triggered by a public petition under section 34, or required by the Secretary of State under section 35 or 36. The people eligible to vote in a referendum will be those people who would normally be entitled to vote at local government elections in the authority conducting the referendum.

99. Section 45 also provides for the Secretary of State to make regulations on the conduct of referendums, and for the application of electoral and referendum legislation to the holding of these referendums.

Section 46 and Schedule 3: Amendments to the Local Government Act 1972

Section 47: Power to make further provision

101. Section 47 allows the Secretary of State, by order, to make such incidental, consequential, transitional or supplemental provision as he considers necessary or expedient to give full effect to Part II. This includes a power to modify, apply, extend, or repeal any legislation.

PART III: CONDUCT OF LOCAL GOVERNMENT MEMBERS AND EMPLOYEES

Summary

102. Part III of the Act establishes a new ethical framework for local government. This includes the introduction of statutory codes of conduct, with a requirement for every council to adopt a code covering the behaviour of elected members and of officers, and the creation of a standards committee for each authority.

103. It also establishes a new non-Departmental public body (NDPB), the Standards Board for England; in Wales the functions of the Standards Board will be conferred on the Commissioner for Local Administration in Wales (CLAW). This will ensure an independent process for investigating instances of unethical conduct by relevant authority members, including any allegations that a code of conduct has been breached.

Background

104. Until now, councillors have been required (by virtue of section 83 of the Local Government Act 1972) to declare at the time of accepting office that they will be guided by the National Code of Local Government Conduct—which was issued as a Joint Circular under section 31 of the Local Government and Housing Act 1989. The Code deals with the treatment of non-pecuniary interests.

105. A requirement on members to give notice of their pecuniary interests in the form of a register was introduced by regulations made under section 19 of the 1989 Act. The declaration of pecuniary interests at relevant meetings is a requirement under section 94 of the 1972 Act; section 97 of that Act enables dispensations to be granted to speak and/or vote at such meetings.

106. However, apart from the criminal offences under section 94(2) of the 1972 Act of failure to declare a pecuniary interest or non-registration of such an interest under section 19(2) of the 1989 Act, the only action that can be taken against an individual member for misconduct is under section 30(3A) of the Local Government Act 1974 which provides for the local government Ombudsman to be able to name a member or members where he finds that a breach of the code by an individual member constitutes maladministration.

107. The Third Report of the Committee on Standards in Public Life on Standards of Conduct in Local Government (the Nolan Committee) in July 1997 recommended that the existing National Code of Local Government Conduct should be replaced. The Nolan Committee also recommended that local authorities should be able to discipline individual councillors, subject to a right of appeal to an independent tribunal.

108. The Government response to the Nolan Committee's report was included in the consultation paper Modernising Local Government: a new ethical framework5. The paper set out possible arrangements for introducing such a new framework, subject to consultation. It broadly agreed with the Nolan Committee conclusions but went further in its emphasis on external independent investigation and discipline.

5 Published April 1998, DETR.

109. A separate consultation paper, entitled Modernising Local Government in Wales: a new ethical framework6, was published in Wales, setting out suggested arrangements for introducing a new framework tailored to Welsh requirements.

6 Published June 1998, Welsh Office.

110. The White Paper Modern Local Government: In Touch with the People7 set out the Government's intention to legislate for a new ethical framework for local authorities. It signalled three principal components of the new framework:

• a requirement on every council to adopt a code of conduct, based on a national model, that all members would have to sign up to;

• a requirement for all authorities to set up a standards committee to oversee ethical issues and provide advice and guidance on the code of conduct and its implementation;

• the establishment of an independent body, the Standards Board, with responsibility for investigating alleged breaches of the council's code of conduct.

7 Cm 4014, July 1998.

111. A separate White Paper, Local Voices: Modernising Local Government in Wales8, set out the intentions of the newly formed National Assembly for Wales (NAW) to implement a new ethical framework for Welsh authorities, broadly comparable to the English framework.

8 Cm 4028, July 1998.

112. The Government papers Local Leadership, Local Choice9 in England and A Stronger Voice for Local People10 in Wales provided further details of the framework; proposals were included in the draft Local Government (Organisation and Standards) Bill which was submitted to the scrutiny of a Parliamentary Joint Committee of MPs and Peers in May 1999.

9 Cm 4298, March 1999.

10 Published April 1998, Welsh Office.

Commentary on sections

Section 49: Principles governing conduct of members of relevant authorities

113. Section 49(1) and (2) of the Act provides the Secretary of State in England and the NAW in Wales with a power to develop a set of general principles of conduct, which will apply to all authorities covered by the new ethical framework. The general principles are intended to provide a guide for councillors' behaviour in the execution of their duties and will underpin the model code of conduct under section 50 that these authorities will adopt for their members. The general principles will also be subject to approval by Parliament in respect of England, by affirmative resolution of both Houses, before the Secretary of State can introduce them. In Wales, the general principles of conduct will be subject to approval by a resolution of the NAW.

114. Section 49(3), (4) and (5) places a duty on the Secretary of State and the NAW to consult various bodies in developing the general principles of conduct. These include representatives of relevant authorities, the Audit Commission and the Commissions for Local Administration in England and Wales (the local government Ombudsmen).

115. Section 49(6) sets out the relevant authorities in England and Wales whose members' conduct are to be governed by the general principles of conduct. Police authorities in Wales will be governed by the English general principles because policing is a non-devolved matter.

116. Section 49(7) provides a definition of a co-opted member. The new ethical framework applies equally to all those voting members of a relevant authority, whether they have been elected to the authority or appointed to it. Hereafter in these notes, the term member should be taken to include co-opted members unless otherwise stated.

Section 50: Model code of conduct

117. Section 50(1) and (2) enables the Secretary of State or the NAW to issue a model code of conduct for members of relevant authorities. The model code will give practical effect to the general principles in terms of councillors' behaviour. The code replaces a number of statutory instruments implemented in an ad hoc fashion over time. Once councillors have signed up to a locally adopted version of this code, they will be expected to abide by it. If they do not, they will become subject to investigation by the new Standards Board in England (and the CLAW in Wales) and to possible subsequent disciplinary action under section 79.

118. This section specifies that the model codes must be consistent with the general principles. A code may include mandatory and optional provisions. Once again, the Secretary of State and the NAW would be required to consult representatives of relevant authorities and other persons or organisations before introducing model codes. The Secretary of State may invite these organisations to draw up a draft model code.

Sections 51 and 52: Duties

119. Section 51 places a duty upon relevant authorities to adopt a code of conduct within six months of the new model code coming into force. An authority's code of conduct must include any mandatory provisions of the model code that applies to the authority. However, the authority has discretion to incorporate in its code any optional or additional provisions it wishes to include, providing they are not inconsistent with any within the model code of conduct. Again, police authorities in Wales will be subject to the English model code of conduct as policing is a non-devolved matter.

120. This section also makes provision that if an authority fails to adopt a code of conduct within the specified period, the mandatory provisions of the model code relevant to the authority will apply to it by default until it adopts its own code. Once an authority has adopted or revised its code of conduct, it must publish the fact, make the code of conduct available for public inspection, state the address where it will be available for inspection, and send a copy to the Standards Board.

121. Section 52 makes provision for declarations and undertakings by members of relevant authorities that they will observe codes of conduct.

Sections 53 and 54: Standards committees

122. Section 53 places a duty upon all relevant authorities—except parish councils or community councils—to establish a standards committee.

123. This section also specifies various details of the composition of an authority's standards committee. Although the authority has discretion over the overall number of members of the standards committee, the committee must have at least three members—two who are elected members of the authority and one of whom is an independent person (i.e. not a member of that or any other authority). In an authority that operates under the executive arrangements set out in Part II of the Act, a standards committee must not include a directly-elected mayor or executive leader, and may not be chaired by a member of the executive.

124. Section 53 also gives both the Secretary of State and the NAW power to make regulations on the appointment of the independent member, the size of standards committees, and the way in which standards committees conduct their business. The Standards Board (the CLAW in Wales) may also provide guidance to relevant authorities on such issues. This section provides the independent members on the committee with voting rights, and requires the authority to provide the Standards Board with a copy of the standards committee's terms of reference. Police authorities in Wales will be subject to the regulations made by the Secretary of State, and to advice and guidance from the Standards Board, due to the non-delegation of policing matters.

125. Section 54 sets out the functions of a standards committee. The general functions are to promote and maintain high standards of conduct within the authority and to assist members of that authority to observe the authority's code of conduct.

126. This section also outlines a range of specific functions. These are to:

• advise the authority on the adoption or revision of a code of conduct;

• monitor the operation of the authority's code; and

• advise members of the authority on matters relating to their code of conduct.

127. This section also enables the Secretary of State and the NAW to issue further regulations in respect of the functions of standards committees. It also allows the Standards Board (and the CLAW in Wales) to issue guidance on these matters.