Local leadership, local choice
 |
Chapter 4 - High standards of conduct throughout local government
- There must be a bond of trust between the community and those that represent them.
- The legislation will put in place a new framework to deliver high standards of conduct throughout local government.
- Standards are to be laid down in statutory codes of conduct for members and officers.
- Standards committees are to oversee conduct in each council.
- There will be independent investigation of alleged unethical conduct.
- There will be fair hearings with effective penalties for proven cases.
High standards of conduct throughout local government
4.1 One of the key features of effective democratic government is the bond of trust between the community and those that represent them, whether in local or central government. Restoring this bond at local level is a vital part of our agenda for modernising local government. The Government wants to make sure that local people can trust their councils to serve them, their families and their communities. Proposals for doing so were set out in Chapter 6 of "Modern local government - in touch with the people".
4.2 The public rightly place high expectations on those in public office nationally and in local government. Although we continue to see and hear reports in the press and media of problems caused by the corrupt or inappropriate behaviour of some local councillors or officers, the vast majority of them operate in a conscientious and professional manner. It is this behaviour that the Government seeks to support through its new ethical framework for local government. Councils will benefit from the increased trust this engenders. More importantly, local people will benefit from knowing that their council is run to serve them and not the personal interests of councillors or officers.
The current position
4.3 The Government's proposals for a new ethical framework have been broadly welcomed by local government. Many local authorities have already taken the message to heart, and are developing systems that will instil greater public confidence that they are serving and leading their local communities in an open and honest manner. Large numbers of authorities have already begun to put in place stronger arrangements to ensure high standards of conduct from both their members and officers.
4.4 The steps that have been taken include the establishment of some form of standards committee, panel or bench to deal with matters of conduct relating to members of the council. The actual arrangements put in place vary from one council to the next, both in the number of people on the committees, the balance between elected and independent members and in the action that the committee can take. Some councils have opted to have panels consisting solely of independent members. In other authorities independent members are in the minority and in yet others, an independent member is the chair of the committee or panel. There is also variation in how far the committee membership reflects the political balance of the authority. Many authorities are reviewing their member/officer protocols and, following Royal Assent last July of the Public Interest Disclosure Act 1998, re-evaluating existing "whistleblowing" arrangements.
4.5 These and other initiatives can strengthen peoples' sense that their council takes ethical issues seriously and that it has open and fair procedures for considering councillors' conduct.
The new ethical framework
4.6 The new ethical framework set out in the local government White Paper had three principal components:
- a requirement upon every council to adopt a code of conduct that all members would have to sign up to;
- a requirement for most 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 a council's code of conduct.
Codes of Conduct
4.10 At present, councillors are required to declare at the time of accepting office that they will be guided by the National Code of Local Government Conduct (issued as a Joint Circular under section 31 of the Local Government and Housing Act 1989). The Government intends to replace this arrangement with a statutory requirement for every council to adopt a code of conduct covering the behaviour of elected members, each of whom would have to agree to abide by the code.
4.11 The starting point for developing such codes will be a set of general principles of conduct, which will be subject to Parliamentary approval. These principles will form the basis of a national code of conduct which the Secretary of State will invite the Local Government Association (LGA) to develop. Local authorities, including in due course the Greater London Authority, will be required to adopt the mandatory elements of a model code, but they will also be able to adapt the code to suit their particular decision-making structure. While the mandatory elements of the code will set common standards that apply to all councillors, the precise form of an authority's code will need to reflect its political management arrangements.
4.12 Certain types of authority - town and parish councils, and combined authorities - will be subject to uniform national codes.
4.13 Some people have expressed concern that the concentration of decision making power in fewer councillors that is envisaged in the new models of political management brings with it a risk of greater secrecy in decision making and an increased chance of unethical conduct taking place. The Government does not see it that way. The new legislation will put in place suitable arrangements to ensure that decisions are reported promptly and openly and that it is clear who has taken them. The new ethical framework will minimise the likelihood of unethical conduct in all councils, regardless of their management structure. It will also introduce ways to punish such behaviour effectively.
Standards Committees
4.14 All principal authorities (county, district and borough councils) will be required to establish a standards committee to encourage, develop and maintain high standards of conduct for all members. Town and parish councils and combined authorities are relatively small in terms of their budget, membership and staffing and it would be unduly bureaucratic (and financially and administratively inefficient) to require them to establish a standards committee. However, most members of combined authorities will also be members of principal authorities already covered by a standards committee.
Role of the Standards Committee
4.15 The standards
committee will advise the authority on the adoption of a local code and monitor
and update it as necessary. It will have a key role in implementing the code,
providing or organising training for councillors on ethical conduct. The
committee will also investigate and deal with the less serious allegations of
impropriety, referred to them by the Standards Board. The standards committee
will be a source of advice and guidance, for example advising councillors on
matters of conduct such as the treatment of personal interests. Its remit need
not be confined to ethics. It will have the freedom to take on other roles if
that fits better with the authority's overall arrangements. But the standards
committee should not be able to take executive decisions or consider issues of
policy since these may introduce a conflict of interest with its primary
role.
Membership
4.16 Every standards committee will be
required to have at least one independent member co-opted to assist it in
carrying out its work. Independent members would be able to vote. The presence
and contribution of an independent member will provide a clear signal to the
public that standards committees will take a fair and impartial view of
conduct-related issues. Individual authorities are likely to have their own
views on the number of independent members that would be most appropriate to
their local circumstances. To ensure suitable links with the council there
should be at least two elected members on the standards committee. To avoid
domination of the committee by the executive, not more than one member of an
authority's political executive should be a member. That member should not be a
directly elected mayor, and should not chair the committee.
4.17 This means that the minimum size for a standards committee would be three people. Of those three, at least one would be independent and at least one would be an elected, non-executive member of the authority. Beyond these minimum requirements authorities will have flexibility to determine the size, membership and political composition of their standards committee. The intention behind this flexible approach is to allow local authorities to build on any steps that they have already taken, to learn lessons from experience and to develop arrangements that best suit local circumstances. In order to ensure that all councils establish suitable arrangements, the Standards Board may issue guidance on the functions, composition and political balance of standards committees. The Secretary of State will also be able to make regulations on these and other issues.
Support for the Standards Committee
4.18 The standards
committee will need officer support. We envisage the monitoring officer of the
authority having a key role in this respect. Under the new ethical framework,
the monitoring officer will have an enhanced role in providing advice and
assistance on ethical standards issues to members, officers and also to the
standards committee and in maintaining the public register of interests. There
must be a good and close working relationship between the standards committee
and the monitoring officer. Detailed arrangements will vary from council to
council, and it would not be suitable to legislate on the relationship between
standards committees and monitoring officers. But the Standards Board may wish
to issue guidance to ensure that each supports the role and work of the
other.
Standards Board
4.19 The task of handling any alleged breaches of a council's code of conduct will fall to a new independent body, the Standards Board. Maintaining an arms-length relationship with both central and local government is important to reinforce the message to the public that the Board will deal with any complaints in a rigorous yet impartial manner. The Standards Board will be funded by grant in aid from the Government and the Secretary of State will provide a copy of the Board's audited annual accounts to Parliament. These arrangements mirror those for other independent public bodies such as the Audit Commission, the Local Government Commission and the Commission for Local Administration.
4.20 There is a great deal of uncertainty about the level of complaints that the Standards Board is likely to face. Whatever the number of cases the Board is faced with in its early years, the Government expects that the volume will dwindle over time. That will be one of the measures of success of the new ethical framework. Given the difficulty in predicting the potential workload of the Standards Board, the Government has not sought to prescribe the organisational structure of the Standards Board by having fixed numbers of Board members or regional panels. A flexible approach is needed in order to allow the Standards Board to adjust in size to suit the volume of work.
Remit and membership
4.21 The Secretary of State will
appoint a number of Ethical Standards Officers (ESOs). ESOs will be responsible
for receiving, investigating and reporting on allegations of breaches of an
authority's code of conduct. The Standards Board will comprise the ESOs together
with a number of non-executive members also appointed by the Secretary of State,
some of whom may represent local government and related organisations. The Board
is to have a minimum of three members. A number of staff will be needed to help
the Board, and particularly the ESOs, with their work. The Standards Board will
take overall managerial responsibility for their organisation, and will be
responsible for issuing guidance, producing the annual report, paying staff and
so on.
Adjudication
4.22 The ESO's role is to investigate
written allegations that an authority's code of conduct has been breached. In
order to secure a suitable separation of this investigative role from
adjudication on whether an allegation is true, we will establish an Adjudication
Panel which will be independent of the ESOs and their work.
4.23 The Adjudication Panel will hear cases referred to them by the Standards Board, decide whether a breach of the code has taken place and, if so, impose a suitable penalty. The Secretary of State will appoint a chair, deputy chair and other members of the Panel as he sees fit. No maximum number of members can be specified, since this will largely be governed by caseload and may need to vary over time. In order to ensure that its procedures are fair and impartial, the Panel's work will be subject to the jurisdiction of the Council on Tribunals. Adjudication on individual cases will be dealt with by "case panels" of not less than three members of the Adjudication Panel.
4.24 Members of the Standards Board and the Adjudication Panel must command the trust of local government and the public. A person who is disqualified from being elected as a member of a local authority will be ineligible for membership of either body. To ensure suitable political impartiality Standards Board and Adjudication Panel members will not be able to hold national elected office. Because of their sensitive role at local level, ESOs will also be restricted from holding local elected office.
4.25 The investigative and adjudicative roles need to be clearly separated. The Bill achieves this by establishing separate bodies for the Standards Board and the Adjudication Panel. It would, however, be more cost-effective if the two functions could be exercised within one organisation. We will consult the Council on Tribunals and others with the intention of establishing arrangements which achieve this whilst still being demonstrably fair and just.
How alleged breaches of the code will be handled
4.26 The Standards Board will have the task of handling complaints or allegations that an authority's code has been breached. This process is displayed in Fig 13 below. It is important that the Standards Board does not get bogged down with numerous mischievous or frivolous complaints. It cannot operate on the basis of hearsay and rumour. We believe that anyone who has good reason to believe that a councillor has behaved unethically should be willing to say so in writing. The Standards Board will therefore only be required to consider complaints made in writing.
4.27 Allegations may be submitted to the Board by members of the public, or councillors or officers in an authority. If an alleged breach of the code is brought to the attention of the monitoring officer or standards committee of an authority, they must refer it to the Standards Board for consideration. The police, the Ombudsman and auditors may all come across potential breaches of an authority's code in the course of their own work that they would then refer to the Standards Board to take forward.
4.28 The Standards Board will arrange for individual cases to be allocated between the ESOs. Depending on the seriousness of the allegation, the ESO will either refer the allegation to the authority's monitoring officer and standards committee for them to deal with, or decide that a Standards Board investigation is needed.
4.29 Where an allegation is particularly serious, the ESO may consider that there is a need for swift action. In such cases, the ESO will have the power to issue a notice suspending a member from any meetings of the council for up to a six-month period. This power would only be used where the ESO:
- considered that the allegation (if proven) was sufficiently serious that it would merit disqualification from office;
- had good reason to believe the allegation was true; and
- considered that it was in the public interest to suspend the member concerned before the conclusion of a full investigation.
4.30 The person being investigated would be allowed to respond to the allegation before any such suspension took effect, and would be able to appeal against such a suspension to the High Court.
4.31 An investigation might be carried out by Standards Board staff or by a selection of people with experience or skills relevant to the nature of the matter being investigated. This might include an accountant or auditor, an ex-local authority officer or someone with relevant specialist knowledge e.g. a person who has a detailed understanding of the planning process.
4.32 ESOs' powers of investigation will be similar to those of district auditors, and ESOs will be able to confer these powers on people appointed to assist with an investigation. Failure to co-operate with an investigation will (as with auditors' investigations) be a criminal offence.
4.33 Where an allegation concerns possible criminal charges, the criminal investigation would take precedence over the ESO's inquiry. Where maladministration or financial impropriety is involved, the ESO would need to make suitable arrangements to co-ordinate the investigation with any activities by the Ombudsman or auditor.
4.34 The product of an investigation will be a written report. This may conclude that the allegation is unsubstantiated, that no further action is necessary, or that the matter should be referred back to the standards committee of the authority in question, or forwarded to the Adjudication Panel. In all cases the ESO would provide a copy of the report to the person who is the subject of the allegation and to the chair of the standards committee of that person's authority. Obviously if the ESO concludes that the matter should be referred to the Adjudication Panel then it too would receive a copy of the report.
4.35 On receipt of a report from an ESO the chair of the Adjudication Panel will set up a case panel. The detail of how case panels will operate will be covered in secondary legislation, which will be drawn up in consultation with the Council on Tribunals and will comply with the requirements of the European Convention on Human Rights. Case panels will be able to require people to give evidence and to produce documents. Failure to do so without reasonable excuse would be a criminal offence.
4.36 At the conclusion of their hearing a panel would determine whether a breach of the code has taken place and if so what penalty is appropriate. Three types of penalty would be available: censure; suspension from meetings of the authority and its committees for up to one year; and for the most serious cases, disqualification from being a member of an authority for up to five years. There will be a right of appeal to the High Court against the decisions of a case panel.
Employees' code of conduct
4.37 The public expects the highest standards of conduct from the councillors they elect to represent them. High standards are also expected of the officers who work for those councillors. The large majority of local government officers are diligent, honest, and committed to providing an impartial and thoroughly professional service to their members and the public. Some 90% of local authorities subscribe to the LGMB Code of Conduct for local government employees. The Government intends to strengthen existing arrangements by introducing a statutory code of conduct for employees. This will be drawn up by Government in consultation with local authority employers and employees. Once approved by Parliament, the code will form part of employees' terms and conditions of employment.
4.38 The contents of the code would include how employees carry out their duties, employees' conduct in relation to pecuniary and other interests, and rules restricting the political activities of certain employees. These rules will be targeted more effectively by increasing the threshold at which posts are deemed to be 'politically restricted'.
4.39 This chapter has described Government proposals for the core elements of the new ethical framework. Additional provisions, which have not been included in the draft Bill, are described in Appendix 1.
|
Figure 13 Handling breaches of codes of conduct |
|
|
Appendix to Chapter 4 - Other Components of the New Ethical Framework
Audit and Surcharge
The White Paper affirmed the Government's intention to repeal the surcharge provisions whilst retaining some means of ensuring that any improper financial gain at the taxpayers' expense would be returned to the council. The means for achieving this are being considered alongside work on the proposed new offence of misuse of public office.
Advisory Notices
In accordance with the recommendation of the Nolan Report, the Government intends to repeal the auditors' power to issue prohibition notices. The difficulty identified in the Nolan report was that a body's proposed course of action could be brought to a halt by a prohibition order even if the body had obtained legal advice to the effect that the action would be lawful. The intention behind the introduction of advisory notices is to provide auditors with an opportunity to voice their concerns, while leaving it to the courts to decide whether those concerns are justified. The auditor is to have power to issue a notice to be known as an "advisory notice". The purpose of such a notice is to act as a warning to the body receiving it that, in the auditor's view, a proposed course of action is not lawful. A council receiving such a notice would be obliged to reconsider the matter to which the notice refers. If, after considering the notice, the council decided to proceed with its intended course of action, it would be required to give at least 21 days notice to the auditor before doing so. The auditor could then apply to the court for a definitive legal ruling.
