STANDARDS COMMITTEE  - 7th May  2002

To advise the Committee of the powers given to the Standards Committee to grant dispensations to members to permit speaking and/or voting at meetings in certain circumstances.

1.2

Prior to the adoption of new Codes of Conduct, Sections 94 and 95 of the Local Government Act 1972 required members to declare direct or indirect pecuniary interest in contracts and other matters when the same were under consideration at a meeting of the Council or one of its committees or sub-committees. Direct pecuniary interests included those of your spouse  (if you were living together) and indirect pecuniary interests included those of your employer or business partner or of a company of which you were a member.  In addition to the duty to declare a relevant interest, two further duties were imposed - not to speak and note to vote. Failure to comply with any of them constituted a criminal offence punishable on summary conviction by a fine not exceeding £2,500. Standing Order frequently imposed an additional burden on a declarant  - to withdraw from the meeting when the matter in which he had an interest was under consideration.  

1.3

In 1974 the Prime Ministers Committee on Conduct in Local Government also recommended that the rules on pecuniary interests should be supplemented by a voluntary Code of Conduct dealing with, among other things, the declaration of certain non pecuniary interests which had the potential to impede objective consideration of a matter. The voluntary code was introduced in 1975 and following the recommendations of the Widdicombe Committee, Section 31of the Local Government & Housing Act 1989 gave the Secretary of State the power to issue a compulsory code to be known as the  National Code of Local Government Conduct. The compulsory code was issued in 1990 and Members undertook to be guided by its provisions as part of the declaration of acceptance of office. A copy of the Code is attached as Appendix 1.1.

1.4

In summary, the Code applied itself to Members personal and private interests such as “those of your family and friends as well as those arising through membership or association with clubs, societies and other organisations such as freemasons, trade unions and other voluntary bodies.” If such an interest was remote or insignificant (i.e. one shared with other members of the public generally as council taxpayers or residents), it did not require declaration. In contrast, significant interests had to be declared provided they were “clear and substantial” In most cases the declaration of a non pecuniary interest also required members to take no further part in the proceedings, i.e. to not speak or vote, although there were a number of exceptions. e.g. members appointed to an external body as the Councils representative would have to declare that interest  but could speak and vote.

1.5

In relation to pecuniary interests, Section 97 of the Local Government Act 1972 gave the Secretary of State the power to remove the disability of non participation where the numbers so disabled would impede the transaction of the authorities business or in any other case when it was in the interests of the inhabitants to do so. As a matter policy the Secretary of State only granted dispensations to speak and vote where at least half the council or committee was debarred or sufficient numbers were debarred to upset the existing political balance - otherwise the dispensation would be to speak but not vote. In addition, a general dispensation was granted to members who were tenants of unfurnished accommodation to speak and vote on housing policy matters other than those relating exclusively to their own tenancy.

1.6

A little used system of self dispensation also existed under the National Code of Local Government Conduct in relation to non pecuniary interests In essence, members who had such an interest could ignore that disability if, had the interest been a pecuniary one, the Secretary of State would have granted a dispensation. Even then, the Code urged caution by providing that no self dispensation should be given where the non pecuniary interest was so “immediate and direct” that it would be wrong under any circumstances to take part - e.g the  allocation of a council house to a close friend.   

1.7

From the date that a relevant authority adopts a new Code of Conduct incorporating the compulsory provisions of the Model Code published by the Secretary of State (or from 5 May 2002 if earlier), the declaration of interests regime described above ceases to apply, including the power of the Secretary of State to grant dispensations. The question then arises as to who should have the power to grant dispensation in relation to the new interests regime compulsorily incorporated into the new Codes of Conduct by the Model Code?  In effect, Section 81(4) of the Local Government Act 2000 provides that any participation by a member in any business that is prohibited by the mandatory provisions of the Model Code  “is not a failure to comply with the authority’s code of conduct if the member or co-opted member has acted in accordance with a dispensation from the prohibition granted by the authority’s standards committee.” As a result, the terms of reference of the Standards Committee include such a power “so far as permitted by law”.

1.8

The Secretary of State has now made the necessary Regulations governing the extent of the powers of dispensation to be conferred on standards committees - the Relevant Authorities (Standards Committees) (Dispensation) Regulations 2002 - which came into force on 18 March 2002.   A copy is attached as Appendix 1.2.  Members will not be surprised that the Secretary of State largely seeks to limit the scope and discretion of the Committee to a part of the dispensation powers he applied under the old regime. In summary, Regulation 3 provides that a member must apply in writing to the Standards Committee for a dispensation, giving reasons. The Standards Committee, having regard to the reasons given and all the circumstance of the case may grant that application  only if :-

·

the transaction of the business of the authority would be impeded by or as a result of the mandatory provisions because the numbers prohibited from participating exceed 50% of the members entitled to participate; or

·

political balance is threatened.

1.9

Members attention is drawn to five points about these dispensation powers.  Firstly, the power of the Secretary of State to grant dispensations when it is in the interests of the inhabitants of the area is not to be entrusted to the Standards Committee. In fact it has ceased to exist as a basis for dispensation altogether. Secondly, there is no provision for the granting of general dispensations such as existed under the old regime Thirdly, even the limited dispensation powers granted are prescribed in certain circumstances. For example, a dispensations cannot be granted to a member who is prohibited from participating in the deliberations of a scrutiny committee in relation to a decision made or action taken by a committee of which he was a member. In addition, a dispensation can never be granted to an executive member to enable him to exercise individual decision making powers. Fourthly, the Standards Committee will have the discretion to determine whether to permit participation in the form of speaking only or speaking and voting (although it should be noted that the Secretary of State normally granted speaking and voting dispensations in these circumstances). Fifthly, dispensations are limited to four years in duration.  Overall, Members would be right to conclude that the power to grant dispensations is unlikely to be exercised in Councils where a particular party group has a healthy majority.

1.10

Regulation 4 of the Dispensation Regulations provides that the Standards Committee must ensure that the existence, duration and nature of any dispensation granted is recorded in writing and kept with the relevant Register of Members Interests established and maintained by the Monitoring Officer. It is therefore recommended that the Monitoring Officer is made responsible for bringing the necessary written record of dispensations granted into existence and  for  placing them on the appropriate Register.

RECOMMENDATION

1.     That the report be noted

     2     That the Head of Legal Services in his capacity as the Monitoring Officer be made

                        responsible for recording the existence, duration and nature of any dispensation     granted by the Standards Committee and placing a copy of such record on the relevant Register of Members Interests