LOCAL GOVERNMENT STANDARDS. Jenni Richards QC. Annabel Lee. b. Identifying the key changes from the previous regime; and

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1 LOCAL GOVERNMENT STANDARDS Jenni Richards QC Annabel Lee Introduction 1. This talk is divided into three main sections: a. An outline of the new standards regime; b. Identifying the key changes from the previous regime; and c. Practical implications for dealing with standards issues. A.The New Standards Regime 2. In keeping with the coalition Government s localism agenda, the new regime was designed to restore power to local people. It was said that a standards committee with the power to suspend a local authority member and regulated by a central quango was inconsistent with the principles of localism Chapter 7 of the Localism Act by and large took effect on 1 July 2012.The provisions of the Act apply to relevant authorities, which include a county council in England, a district council, a London borough council, a parish council, and the Greater London Authority The new regime as introduced by the Localism Act includes a requirement for local authorities to operate a code of conduct based on the seven principles of public life and to promote and maintain high standards of conduct. 3 Authorities are also required to put in place arrangements under which it can investigate allegations of a breach of the code. 4 An authority must therefore have arrangements in place to handle complaints. The Act does not prescribe 1 DCLG Press Release Abolition of the Standards Board Regime December Section 27(6) 3 Section 28(1) 4 Section 28(6) 1

2 how local authorities should do this; instead, it is for local authorities to determine how they meet these requirements. 5. Section 28(7) of the Act requires local authorities to appoint an independent person to advise the council before it makes a decision on an allegation. There are restrictions on who can be appointed as the independent member; in general the independent person cannot be a councillor, officer or their relative or close friend. Former members of standards committees can be appointed as the independent person, but only until 30 June Section 29 requires monitoring officers of relevant authorities to establish and maintain a register of members and co-opted members interests, to make the register available for inspection and to publish it on the website of the principal council. In addition, parish councils are required to publish the register on their own website, if they have one. It is up to authorities to decide which interests (subject to other provisions in the Act) are to be entered in the register Section 30 requires members of relevant authorities to notify the monitoring officer of any disclosable pecuniary interests of them or their spouse or civil partner they live with, within 28 days of taking up office. The section allows the Secretary of State to make regulations defining a disclosable penuinary interest, 7 and requires the monitoring officer to enter any notified disclosable pecuniary interest in the authority s register, as well as any other interest notified to them, whether or not it is pecuniary. 8. The Relevant Authorities (Disclosable Pecuniary Interests) Regulations 2012 lists in Schedule 2 the disclosable pecuniary interests specified for the purposes of the Act. Pecuniary interests cover the member s employment, office, trade, profession or vocation, any sponsorship of the member, including contributions towards their election expenses, any contracts between the member and the authority, any land the member has an interest in and lies within the area of the authority, any licences the member holds to occupy land in the area, any 5 Localism Act 2011 (Commencement No. 6 And Transitional, Savings and Transitory Provisions) (Amendment) Order Section 29(2) 7 Section 30(3) 2

3 corporate tenancies, and certain securities the member may hold. The new arrangements explicitly state any payment or financial benefit from a trade union must also be declared. 9. These provisions apply to either an interest of the member s or an interest of member s spouse, civil partner or partner. However, guidance issued by DCLG makes it clear that the member does not have to differentiate between their own or their spouse/civil partner/partners interests or to name them. 10. Under section 31, a member is prohibited from participating in discussions or voting on any matters relating to their interests or taking any steps in relation to the matter. A member must disclose a pecuniary interest of which they are aware if they are in a meeting or acting alone in relation to their interest. If the interest is not already registered, it must be, within 28 days. 11. There are dispensations in section 32 that allow for sensitive interests to be withheld where disclosure could lead to a member or connected person being subject to violence or intimidation (although the register will have to state that this is the case); and in section 33 for the relevant authority to grant a dispensation that allows the member or members to allow them to participate in discussions or votes on such matters if certain conditions are met. 12. Section 34 of the Localism Act makes it a criminal offence if a member or co-opted member fails, without reasonable excuse, to comply with requirements under section 30 or 31 to register or declare disclosable pecuniary interests, or takes part in council business at meetings or takes any steps in relation to a matter in which the member has a pecuniary interest when discharging a function of the authority as a member acting alone. 13. It empowers the magistrates court, upon conviction, to impose a fine of up to level 5 (currently 5,000), and an order disqualifying the person from being a member of a relevant authority for up to five years. It extends the time for bringing a prosecution for the offence by allowing a prosecution to be brought within 12 months of the prosecuting authorities having the evidence to warrant prosecution, but any prosecution must be brought within 3 years of the commission of the offence and only by or on behalf of the Director of Public Prosecutions. 3

4 B. Key Changes 14. The key changes to the regime can be identified under the following headings: a. The abolition of Standards for England (previously Standards Board for England); b. Local codes of conduct; c. The independent person; d. Disclosable pecuniary interests; and e. Sanctions, including the creation of a new criminal offence for failing to register relevant interests. The abolition of Standards for England 15. The Government considered that the previous standards regime was ineffective. In particular, there was concern that the regime was used as a vehicle for vexatious or politically motivated complaints. As a result, the Standards Board has been abolished and none of the Standards Board s functions have been transferred to other bodies. 16. The First-tier Tribunal (Local Government Standards in England) has lost jurisdiction over the conduct of local authority members. The transitional provisions preserve the old law where the proceedings were commenced before 1 July 2012 or relate to a decision by a standards committee made before 1 July The Act has also abolished the requirement for local authorities to have standards committees. However, principal local authorities (and other types of authority to which Chapter 7 of the Localism Act applies, and not parish or town councils) may decide to operate a voluntary standards committee (or indeed something similar). Local Codes of Conduct 4

5 18. Unlike the previous statutory regime, the 2011 Act does not prescribe a model code of conduct. A model code of conduct was introduced as a result of the Local Government Act 2000 and updated in However, the Local Authorities (Model Code of Conduct) Order 2007 (SI 2007/1159) which prescribed the model code of conduct to apply to members of relevant authorities has now been revoked. 19. The Localism Bill originally removed the requirement for local councils to maintain a code of conduct at all, instead making it a voluntary matter. The Relevant Authorities (General Principles) Order 2001, which sets out the principles which govern the conduct of members and co-opted members of relevant authorities in England and police authorities in Wales, has been revoked. However, amendments made to the Bill in the House of Lords now require councils to maintain a code of conduct which must be based on the Committee on Standards in Public Life s seven principles of public life. Therefore, local authorities remain under an obligation to secure a code of conduct which, when viewed as a whole, is consistent with the principles of (a) selflessness; (b) integrity; (c) objectivity; (d) accountability; (d) openness; (f) honesty; and (g) leadership. These will all be very familiar from the previous standards regime. 20. In accordance with the legislation therefore, there will no longer be a centrally-determined model code; instead councils have to determine whether they want to amend or replace the existing code of conduct; and how they fulfil the duty in the Act of promoting and maintaining high standards of conduct. Ultimately, the new code is a matter for local determination and gives authorities the freedom to determine their own priorities. 21. DCLG has published an illustrative text of what a code of conduct might look like, as have the Local Government Association (LGA) and the National Association of Local Councils (NALC). 22. Different approaches have been adopted by local authorities across the land. Some have more or less adhered to the existing code, other authorities have adopted the model LGA code and others have gone for a more simplified code. The independent person 5

6 23. The role of the independent person is a new role. It is not the same as the role of the independent chairman and independent members on the former standards committees. The former role was principally to be involved in the determination of allegations about misconduct of members. In contrast, the role of the new independent person is wholly advisory, providing advice to the council on any allegation it is considering, and to a member facing an allegation who has sought the views of that person. 24. Transitional arrangements are in place to allow the appointment of someone who has been an independent chairman or member of the authority s standards committee but only until 30 June Disclosable pecuniary interests 25. The definition of a disclosable pecuniary interest is significantly different from the former prejudicial interest definition from the old regime. Firstly, it applies not only to the interests of members themselves, but also to interests of their spouse or partner. However, there is no reference to the interests of a member s family or friends. 26. There are also some changes as to what is identified as a personal or pecuniary interest. For example, the Employment category applies only to employment or business carried on for profit or gain, so it does not apply to include unpaid work for public voluntary and charitable bodies. Gifts and hospitality have been omitted from the 2012 Regulations. Sanctions 27. The previous standards regime provided for a range of sanctions, 9 including: a. Censure of that member; b. Restriction for a period not exceeding six months of that member s access to the premises of the authority or that member s use of the resources of the authority; c. Suspension for a period not exceeding six months; d. The requirement to submit a written apology in a form specified by the standards committee; e. The obligation to undertake training; and 8 Transitional arrangements are in the Localism Act 2011 (Commencement No. 6 And Transitional, Savings and Transitory Provisions) (Amendment) Order Regulation 19(3)) of the Standards Committee (England) Regulations 2008 (SI 2008/1085) 6

7 f. The requirement to participate in conciliation 28. The 2011 Act does not prescribe the detail of the arrangements for investigating allegations, and does not prescribe the detail of the arrangements under which decisions on allegations can be made. In particular, section 28(11) does not prescribe the range of actions that the local authority can take; but does envisage that some action can be taken against a member or co-opted member who fails to comply with that authority s code of conduct. 29. An authority no longer has the power to disqualify or suspend members. In essence, a finding of a breach of the Council s local code following an investigation, may lead to one or more of the following outcomes: a. A formal letter to the member confirming that a finding of a breach of the code has been made; b. Formal censure by motion; c. Removal by the authority of the member from committee(s); d. The issuing of a press release or other publicity. 30. Section 34 introduces a new criminal offence for failure to register and declare disclosable pecuniary interests contrary to sections 30 and 31 without reasonable excuse. In this respect, the Localism Act strengthens the requirements to register interests. C. Practical Implications 31. In June 2012, the Committee of Standards in Public Life expressed concern that a large number of local authorities remained unprepared for the new standards regime. 32. A number of local authorities have been troubled by the role of the independent person and many could not readily identify a suitable candidate for the role. The role and responsibilities of the independent person is not altogether clear. For example, is the same independent person expected to advise both the councillor under the investigation and the authority? Some authorities have appointed multiple persons for the role. Section 28 stipulates that at least one independent person must be appointed. 33. There has been particular concern over the new offence of failing to declare a pecuniary interest. Some have suggested that the legislation is unclear and that it was not well understood by authorities. There is a reasonable excuse defence available meaning that 7

8 failing to disclose or register a pecuniary interest is only a criminal offence if there is no reasonable excuse for the failure. Of course, what constitutes a reasonable excuse will vary according to the circumstances, but in cases of doubt, members would be well advised to register interests even where they might have a defence of reasonable excuse given the severe penalties they risk. 34. Some commentators have expressed concerns that the new regime does not provide an adequate range of sanctions and is insufficient to protect officers and members from workplace bullying. Concerns were raised during the passage of the Localism Bill that the sanctions were toothless and needed more bite. Local authorities must be careful not to exceed their statutorily conferred powers, which no longer include the power to disqualify or suspend members. Such actions are now likely to be ultra vires. 35. The new framework permits a much greater degree of local discretion to authorities as to what their local arrangements are. Each authority s arrangements will be different, reflect local circumstances, and will need to be individually examined when advising in relation to conduct issues in the future. Members who may currently belong to a number of tiers of local government (e.g. district and county council) could face different codes in each of the authorities on which they serve. Inconsistency is likely to be prevalent. It is advisable for authorities to co-ordinate on this issue and for similar county wide codes to be adopted where possible for the sake of consistency. 36. Whilst there is a much greater degree of discretion for authorities designing new codes of conduct and procedures, they must nonetheless abide by general public law principles. Judicial review is still a possible means of challenge to the authority in conducting standards cases under the new regime. Dissatisfied complainants may complain to the Local Government Ombudsman. 37. Therefore, in dealing with standards cases, authorities must at a minimum have in place a procedure that accords with rules of natural justice. For example, authorities must have procedures for impugned councillors to defend their position and to challenge the alleged breaches of standards made against them. 30 January 2013 Thirty Nine Essex Street LLP is a governance and holding entity and a limited liability partnership registered in England and Wales (registered number 0C360005) with its registered office at 39 Essex Street, London WC2R 3AT Thirty Nine Essex Street's members provide legal and advocacy services as independent, self-employed barristers and no entity connected with Thirty Nine Essex Street provides any legal services. Thirty Nine Essex Street (Services) Limited manages the administrative, operational and support functions of Chambers and is a company incorporated in England and Wales (company number ) with its registered office at 39 Essex Street, London WC2R 3AT 8