DCLG consults on changes to the Functions and Responsibilities Regulations

The deadline for responses is 6 March 2015.

03/02/2015

DCLG is consulting on proposed changes to the Local Authorities (Functions and Responsibilities) (England) Regulations 2000 (SI 2000/2853) (as amended). The deadline for responses is 6 March 2015.

Whilst changes to the Functions and Responsibilities Regulations may sound a bit esoteric, this is an important consultation that merits a considered response. The question of whether something is an executive or a council function is very important to local authority lawyers and whilst there are some principles which are usually followed, that is not necessarily the case. While, on the whole, the proposals follow the same principles, there are some variations which mean that they will have to be looked at extra carefully. In addition, there are potentially significant changes which extend the powers of directly elected mayors, but which do not apply to Leader and Cabinet authorities.

The form of the consultation

The first point to note is that the proposals combine a consolidation of the amendments which have already been made to the original 2000 Regulations, with further amendments to take account of recent legislative changes, plus a number of significant changes to the balance of power between the Executive and Council in respect of, for example, budgeting, neighbourhood plans and land disposal. They also seek to put right one issue which was in desperate need of sorting out, which is the very doubtful ability currently to delegate executive functions to a Health and Well-Being Board, due to some unclear wording in the Health and Social Care Act 2012.

The consultation also seeks views on the principle of giving Council a veto over executive proposals in respect of two current politically sensitive issues, namely car parking – both extension of enforcement areas and charges – and the frequency of domestic bin collections. The explanatory text tries to distinguish updating changes from policy amendments, and contains a draft amended set of Functions and Responsibilities Regulations, but no draft text is provided for the proposed changes in respect of extension of parking enforcement areas or car parking charges and waste collection. DCLG are asking for broad suggestions as to how such changes might be effected, without providing any draft text for comment. 

We would suggest that the correct way to make any changes would be by means of two separate statutory instruments, one making the policy amendments, and a second making the updates to take account of existing legislative changes, as it is very difficult to ensure that the amendments do not make policy amendments without properly identifying them as such.

We would also suggest that councils seek an undertaking that, if the Government decides that it wishes to introduce policy amendments in respect of car parking charges or waste collection, it further consults on a draft regulation.

Key proposed policy amendments

Budgeting

The current position is that the Executive must refer to full Council any proposal which would be contrary to or not wholly in accordance with the Council-approved Budget, or contrary to any Council-approved policy, plan or strategy. The Council's Budget has included "virement limits" which have enabled the Executive to switch budget provision between budget heads as the year progresses, but only so far as is permitted by such virement limits. The proposal is, effectively, to scrap virement limits and limit the Budget to the sums required for the statutory council tax or precept calculations, therefore allowing the executive complete freedom to move budget between different budget heads, subject only to not exceeding the Council-approved budget total to be exceeded.

However, the draft Regulations provide that the executive would still need to refer to full Council any proposal which would be contrary to the authority's executive arrangements, financial regulations, standing orders or other rules or procedures, which leaves unresolved the question as to how far Council can use such "executive arrangements, financial regulations, standing orders or other rules or procedures" to re-impose virement limits. This proposal would also mean that an authority's policies on charging for all executive services would now be entirely under the control of the Executive (save of course for those car parking charges referred to above).

Directly-elected Mayors – Policies, plans and strategies

In respect of directly-elected Mayors, the proposal is to restrict substantially the extent to which the Mayor would have to refer "departure proposals" to full Council for determination. Whereas currently, just as with the Leader and Cabinet model, the Mayor must refer any proposal which would be contrary to a Council-approved  policy, plan or strategy, and Council may decide to adopt policies, plans and strategies which go beyond the very limited list of "statutory plans" set out in Schedule 3 to the current Functions and Responsibilities Regulations, the draft Regulations introduce a new concept of "the Mayor's Plan", which is to be adopted by the Executive within six months of the Mayor's election but is not subject to any control by Council or requirement for consistency with Council-approved plans, policies or strategies. This is a potentially very significant matter and it widens the difference between Elected Mayors and Council Leaders. 

Where any proposed decision is consistent with the Mayor's Plan, it is proposed that the Executive may take that decision without reference to Council, even if it is directly contrary to any Council-approved policy, plan or strategy other than the very limited list of "statutory plans". It should be noted that the list of "statutory plans" omits all mention of important functions such as Education, Adult Social Care or Children's Services , which would now be entirely within the control of the Mayor and Cabinet Executive. The text in the letter to Chief Executives, which accompanies the draft regulations, suggests that ministers are minded that these new powers of the Elected Mayor will not extend to making any change to new parking enforcement areas, parking charges or changes to the frequency of waste collection which must be referred to full Council.

Disposal of land

The proposal is to require the consent of full Council to the disposal of any land or other asset with a value in excess of £500,000. Many authorities have adopted a working definition of a "key decision" which sets a threshold value for land disposals and requires advance notice of any such proposal and facilitates the call in of such proposals for scrutiny. It must also be questioned whether a threshold figure of £500,000 is appropriate for every authority, from a major metropolitan authority to a small district council.

Delegation of functions to Health and Well-Being Boards

The consultation proposal would enable both executive and non-executive functions to be delegated to Health and Well-Being Boards, so attempting to put right the problems caused by the drafting in the Health and Social Care Act 2012 which appeared to ignore the distinction  between executive and council functions. However, by including this as a "local choice" function in Schedule 2, the draft regulation would enable Council to assume the function of delegating executive functions to the Board. In our view it would be more sensible to include such a power to delegate in Schedule 1, as a non-executive function, in so far as it relates to non-executive functions, leaving the executive with the power to delegate executive functions to the Board, which is certainly what appeared to be the intention of the 2012 Act.

Establishing Combined Authorities and Economic Prosperity Boards

At present, the legislation provides that it is Council which prepares and approves any proposal for a Combined Authority or Economic Prosperity Board. The reality is that such initiative normally comes from the Executive, not least as the majority of functions which would be passed to such a new authority or Board would be executive functions. So the consultation paper proposes to copy the pattern whereby the Executive prepares the proposals, but the proposals would require the approval of Council.

Contracting Out

Except where specific legislation allows, a local authority may buy in a service but may not contract out a function. In other words, it cannot authorise a third party to take a decision or exercise a power where that decision or power is conferred on the authority by statute. However, the Secretary of State may make an order under the Deregulation and Contracting-Out Act 1994 to enable local authorities to authorise third parties to take specified decisions or exercise specified powers.

To date, the power to implement such a contracting out has been viewed as incidental to the power to exercise the primary function. So the Executive has undertaken the procurement and authorisation of a third party to exercise powers to remove abandoned vehicles from the highway, because the power to remove abandoned vehicles otherwise rests with the Executive. The consultation paper suggests is that in future the Executive should prepare such proposals but Council would be required to approve the proposal. That seems to be unnecessarily complicated. Why not leave the Executive responsible for any outsourcing of executive functions, and Council responsible for any outsourcing of any non-executive functions?

Car parking charges and weekly bin collections

In almost a throw-away paragraph, the DCLG letter to Chief Executives states that: "Ministers are also minded to include in the proposed Regulations provision to require decisions relating to: 

  •  new parking enforcement areas or parking charges, and  
  •  to the frequency of waste collection

should be put to the full Council."

The consultation paper does not elaborate on either proposal or provide a draft text for a Regulation. DCLG are merely seeking views as to how this might be implemented.
These proposals do not fit with the rest of the consultation, relating as they do to matters of current political controversy.

The devil is in the detail, so it is important that, if DCLG decides to proceed with legislation on either or both of these topics, there should be a separate consultation on the actual text of any proposed legislation. Thus, it is impossible to comment very helpfully without knowing whether the proposal would be to require Council approval for, say, any increase in charges above RPI, or a 10-metre extension to a restricted parking area.

Whilst car parking charges are an important element of local authority budgets, and have a real impact on motorists' costs and the prosperity of town centres, they are largely dictated by the value of parking spaces and the potential for alternative development of parking sites. In most towns and cities, the local authority's on and off-street parking services operate in competition with NCP and other private operators of off-street parking who, free from political pressures, regularly set their charges 10 per cent above the local authority's charges. Other than current political controversy, it is hard to see why this particular aspect of local authority charging for executive services should be subject to the approval of Council.

Frequency of domestic waste collections

Without entering the debate as to the merits or demerits of weekly bin collections and their impact on re-cycling, it is hard to see why this particular aspect of the delivery of an otherwise executive function should be subject to the approval of Council.

Conclusion

There is no doubt that the 2000 Regulations are in desperate need of an overhaul, and so the fact that the Government has now prepared a draft and is consulting on revised and updated regulations has to be welcomed.  Most of the revisions are sensible and necessary. There are however some anomalies in the proposals, as highlighted above.

Given the importance of the divisions between council and executive functions, which causes friction in most authorities from time to time, local authorities should examine these closely with a view to making representations to Government before the consultation closes on 6 March 2015.

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