Councillors set free?

The coalition government has promised a radical overhaul of local government standards. David Richardson and Sam Fowler-Homes analyse what the Localism Bill says, examine whether the proposed changes were really needed and consider what impact the new regime will have.

The Localism Bill, published in December 2010, proposes wide-ranging measures that give increased powers to local communities; and greater powers and responsibilities to local authorities. The empowerment of local authorities is illustrated in the “radical” (although not that radical) reform proposed to the rules governing the conduct and voting procedures for local authority councillors.

According to Secretary of State Eric Pickles, these heralded reforms will enable councillors to “champion” the causes which matter most to their residents, free from the shackles imposed on them under the current system. At the heart of these reforms are the abolition of the Standards Board regime and the Code of Conduct, and a statutory rule addressing predetermination and bias.

Released from these restraints, councillors will be able to decide upon the rules which govern them, creating individualised codes of conduct through democratic discussion with all sectors of the community.

The current position

The Standards Board regime, headed up by Standards for England, is charged with monitoring the standards performance of local authorities and aiding them in the upholding of local democracy. Ensuring compliance with the Code of Conduct forms an integral part of the work of Standards for England and it regularly offers guidance on the appropriateness of measures put in place by local authorities to achieve such compliance.

The Code of Conduct establishes the Ten General Principles of Public Life which should be adhered to by all local authority members, and sets out rules governing personal and prejudicial interests. The impact of these rules has been contentious. Some critics have contended that the rules are drawn too narrowly with the result that they restrict councillors from entering into local political debate, and further that the rules prevent councillors from taking a stand on local issues for fear of accusations of bias when these matters reach the decision stage.

Standards for England has issued guidance on predetermination and bias (see Occasional Paper of August 2007: "Predisposition, Predetermination or Bias, and the Code"). This was informed by a written opinion of Philip Sales QC of 2007, which sets out the existing law with regard to predetermination and bias. The headline points are:

• a councillor may not be a party to a decision in relation to which is he actually biased (ie he has a closed mind), or gives the appearance of bias;
• the test in relation to the latter is whether a fair minded and informed observer, having considered the facts, would conclude there was a real possibility of bias;
• the test of lawfulness is whether the councillors in question have genuinely addressed themselves to the relevant issue, taking into account their policy on it, but being prepared to consider whether their policy should change or not be applied in light of arguments and representations made in relation to the matter in question.

National Assembly for Wales v Condron

A recent, and telling, case on the rules governing predetermination and bias is National Assembly for Wales v Condron [2006] EWCA Civ 1573. This is a Court of Appeal case, in which the chair of the committee purportedly told an objector which side of the fence he sat on regarding a decision before the date of the committee meeting. Nevertheless, the court held, applying the "fair minded observer" test, that there was no bias, taking into account the active participation of the chair in the debate during the "unusually prolonged" meeting.

At the heart of the judgment lay an analysis of the difference between holding a “legitimate predisposition” and having an “illegitimate predetermination”. Richards LJ held there was nothing in the Code which prevented a council member from having a predisposition on a matter before deciding on it. What was essential was that the member kept an open mind and a willingness to survey all the facts before him when making a decision.

Richards LJ emphasised that the application of the rules on bias must be placed in the particular factual context of the case under consideration. It was necessary to adopt a subjective approach with particular scrutiny on the actions of the challenged decision-maker. This approach gave local authority members the ability to take a stand and “champion” local causes provided that they can show that they were still open minded about the eventual outcome.

The conclusions to be drawn from Condron, and the guidance issued by Standards for England, show that the rules governing members are not as restrictive as implied by the government or, indeed, as restrictive as members are often advised that they are. Members are not prevented from holding opinions or making statements on particular issues but must be aware that they may be put to the test of showing that they have not formed a predetermination.

The new world

The changes in the Bill, which broadly speaking are set out in Chapters 4 and 5 of Part 1, and Schedule 4, were trumpeted by the Coalition Government well in advance of the Bill being published.  In the summer of this year DCLG announced the intention to change the rules on predetermination and to abolish Standards for England (and the regime that went with it, including the model Code of Conduct). There followed press releases in September, November and early December 2010 giving advance notice of the proposed changes.

The chief justification for these changes was to better enable councillors to express their views, and represent their community, whilst retaining an open mind when debating and voting on key issues on which they may have campaigned. There is sound logic to this – councillors are elected on the basis of what they campaign on, and it would seem obtuse that, once in a position to vote on such matters, they should be barred from doing so due to a previously adopted, and publicised, position. Of course, one might question the need to legislate for this – the existing regime already recognises the difference between predisposition, and predetermination. More on this below, but first, what do the provisions in the Bill say?

Predetermination

Predetermination will now be addressed directly in legislation, in what is currently section 13 of the Bill. This section will be triggered where:

• there is an allegation of bias or predetermination or an issue regarding the validity of a decision; and
• whether a decision maker had (or appeared to have had) a closed mind when making the decision is relevant to that issue.

If triggered, the provisions go on to state that the decision maker cannot be said to have had (or appeared to have had) a closed mind when deciding on an issue simply because:

1. the decision-maker had previously done anything to indicate (directly or indirectly) what view they might take in relation to that matter; and
2. that matter was relevant to the decision in question.

This 'new' rule on predetermination will only apply to decisions made after this section of the Bill comes into force, which according to the commencement provisions will be two months after the day on which the Bill is passed. It is important to note that this does not prevent bias being used to overturn a decision. A councillor acting in a biased or predetermined way in a meeting will still (quite rightly) have no defence. Members will clearly be able to champion causes but must still be careful, as part of the decision-making process, to avoid bias and predetermination.

The demise of Standards for England

Schedule 4 of the Bill, incorporated by section 14, takes an axe to SfE and the associated regime, chiefly by amendments to the Local Government Act 2000 (LGA). Of particular note is paragraph 55 of Schedule 4, which states that codes of conduct adopted by relevant authorities, based on the model Code, will cease to have effect. Undertakings to comply with such codes given by members or co-opted members of authorities will cease to have effect at the same time. This part of Schedule 4 comes into force on a day to be appointed by the Secretary of State, and there is no indication, as yet, as to how quickly that might be following the passing of the Bill.

The SfE regime is replaced by the provisions set out in Chapter 5 of Part 1 of the Bill. There is a general duty for relevant authorities (defined to include all the usual suspects) to promote and maintain high standards of conduct by members and co-opted members. In place of the Model Code the Bill gives authorities the discretion to adopt a code dealing with the conduct expected of members. Presumably this could be based on the existing Model Code if they so wish. There are, thereafter, accompanying powers in the Bill for relevant authorities to revise any adopted code, and replace or withdraw it. Section 16 of the Bill provides that, if there is a failure to comply with the adopted code, the relevant authority must consider whether it is appropriate to investigate, and it may do so in whatever manner it believes appropriate. It then has a wide discretion, if a breach is found, as to whether to take action and what action to take.

New provisions regarding the disclosure and registration of members interests

Section 17 sets out the provisions relating to disclosure and registration of members interests and is due to come into force on the day the Bill is passed. It is notable that these have more immediate teeth than those relating to breaches of any adopted code described above. The detail of the new arrangements will be set out in regulations to be made by the Secretary of State in due course, and these regulations will require the monitoring officer of a relevant authority to establish and maintain a register of interests (no doubt this will be little different to the existing registers). The Bill gives us an inkling of what else the regulations may provide for, including: the specification of financial and other interests in the register; preventing or restricting participation where an interest is disclosed; and the sanctions that may be imposed by the relevant authority for failure to comply with the regulations.

Section 18 of the Bill anticipates breaches of the regulations to be brought forward by the Secretary of State. A breach will occur if, without reasonable excuse, a person:

• fails to register a financial or other interest; or
• fails to disclose an interest, of a kind specified in the regulations, before taking part in business of the authority to which it relates; or
• takes part in business of the authority to which the interest relates contrary to a prohibition or restriction imposed by the regulations.

The penalties for committing any of the above offences are also set out in section 18. They include fines on summary conviction not exceeding level 5 on the standard scale, and disqualification from becoming a member or co-opted member of a relevant authority for a period not exceeding five years. However, there are limitations set out in the section. Proceedings must be brought within 12 months from when evidence sufficient (in the opinion of the prosecutor, the DPP) to warrant proceedings came to the prosecutor's knowledge. There is also a longstop providing that in any event no proceedings can be brought more than three years after the committing of an offence, or in the case of a continuous contravention after the last date on which the offence was committed.

Comment

The Coalition Government has moved to clarify the existing situation with regard to predetermination, bias and how councillors may properly take part in debates, and vote on matters important to their communities. Arguably the moves were unnecessary. The law already recognises the difference between predisposition and predetermination and indeed it is clear from the cases that councillors can go some way towards indicating their inclinations (i.e. predisposition). Notwithstanding what those predispositions might be, provided they could be seen to be taking part in the debate and keeping an open mind to other options, then their powder was dry. Nevertheless, the removal of Standards for England and the accompanying regime will be welcomed from some quarters given the suspicion of creeping overzealousness, and the cost of dealing with un-meritorious bias claims. However, might this not have been remedied by addressing the activities of the Standards Board regime, rather than abolishing it completely?

Even under the new regime there remains the natural tension between a clear disposition on behalf of councillors and the need to vote fairly. A closed mind could still be disguised by participating in, or being seen to participate in, the debate and councillors will still need to be careful when expressing views in advance of key decisions, as the statutory provisions in the Bill may be triggered by allegations of a closed mind, presumably even if rather spurious.

The new power to define local standards is, probably, an illusion. Authorities are likely to use the existing model as a base, and to peer review against other authorities. A consensus will emerge and we are likely to see similar provisions being adopted around the country. Despite the likely uniformity there will be a cost for those dealing with authorities who will need to review local codes to see if there are any unusual variants.

David Richardson is an associate and Sam Fowler-Holmes is a trainee at SNR Denton (www.snrdenton.com). David can be contacted on 020 7246 7119 or by email at This email address is being protected from spambots. You need JavaScript enabled to view it..