Commentary on sections
Section 90: Surcharge etc.
228.Section 90 has the effect of repealing the current surcharge provisions set out in the Audit Commission Act 1998 and also the Secretary of State’s power to sanction an item of account. The changes will affect all bodies to which the surcharge provisions apply.
229.Although the term ‘surcharge’ is not used in the 1998 Act, it describes the existing powers of the auditor to recover financial losses from individuals on the basis that he or she is responsible for the authority incurring unlawful expenditure or has caused loss to the authority through misconduct.
230.Removal of the relevant surcharge provisions from section 17 of the 1998 Act does not affect the auditor’s ability to apply to the courts for a declaration that an item of account is contrary to law. However, in future, the Standards Board and Adjudication Panel, rather than the auditor, will determine whether there has been misconduct and any issue would be pursued through them under the provisions in Part III of this Act.
231.This section also removes the Secretary of State’s power to sanction an item of account. The granting of sanction protected individuals authorising unlawful expenditure from the possibility of surcharge by preventing the auditor from applying to the court for a declaration that an item of account is unlawful. Removing the surcharge provisions removes the need for the Secretary of State to grant sanction.
Section 91: Advisory notices
232.Section 91 replaces sections 20 to 23 of the Audit Commission Act 1998, revoking the existing arrangement for prohibition orders and replacing them with a system of advisory notices. Advisory notices will apply to all bodies subject to audit under the 1998 Act, other than health service bodies.
233.The advisory notice gives auditors time to seek the opinion of the courts on the legality of an authority’s actions where they consider that the authority is contemplating a decision or course of action that would result in unlawful expenditure or other financial loss. This section gives the auditor power to issue an ‘advisory notice’ in such circumstances, and specifies the form of the notice and how it should be served on the authority concerned.
234.An authority in receipt of a notice must first consider it. If it then decides that it wants to proceed with the action specified in the notice, this section requires the authority to provide the auditor with written notice of their intentions. Furthermore, it prevents the authority from proceeding with the activity for a period (of up to 21 days) specified by the auditor in the advisory notice. During this period, the auditor may then choose to seek an opinion from the court on the legality of the proposed course of action. The authority may then only proceed with the action if the court decides that it is lawful or if the auditor does not seek a court’s opinion within the notice period.
Section 92: Payment in cases of maladministration
235.Section 92specifically enables relevant authorities to pay compensation where they are satisfied that maladministration has, or may have, occurred.
Sections 93 to 96: Welfare services
236.Section 93 creates powers for the Secretary of State, with the consent of Treasury, to determine and pay a grant to local authorities to enable them to contribute to the cost of welfare services. Similar powers are given to the NAW.
237.Other powers conferred by this section include powers to determine the purpose of the grant, to attach terms and conditions to the grant, and to provide guidance and directions to local authorities. This section defines which local authorities will receive the grant.
238.Section 93 also includes requirements for the Secretary of State (or NAW) to consult with local authorities, service providers and service users before issuing guidance or directions.
239.Section 94 allows information about recipients of Housing Benefit, Income Support (IS) or income-based Job-seeker’s Allowance (JSA) to be transferred to the local authority section administering the new grant, and to providers of welfare services. This transfer of information is necessary so that welfare services previously funded under Housing Benefit (or IS, or income-based JSA) can be funded under the new grant created in section 93. It will enable a smooth transfer to the new grant scheme.
240.Section 95 makes it an offence to unlawfully disclose information received under section 94.
241.Section 96 accordingly enables entitlement to Housing Benefit in respect of certain support services to be withdrawn. This section will apply to Scotland as well as England and Wales.
Sections 97 and 98: Further access to information provisions
242.Section 97amends the access to information provisions in Part VA of the Local Government Act 1972 to ensure that reports published for a meeting of a principal council and its committees contain a list of the background papers used in compiling the report.
243.Section 98allows the Secretary of State to vary, by order, provisions in Part VA of the Local Government Act 1972 so as to increase the number of days before a meeting of a principal council and its committees when papers need to be made publicly available.
Sections 99 and 100: Allowances and pensions for local authority members
244.Section 99 provides that regulations under section 7 of the Superannuation Act 1972 may include provision for the payment of pensionable remuneration to certain councillors. This section also amends section 18 of the Local Government and Housing Act 1989 to provide for carers’ allowances, and for pensions for members of local authorities. Regulations made under the amended section 18 may also require councils (other than parish councils and community councils) to establish an independent panel which will make recommendations on allowances. The regulations may also enable such panels to be set up by another body to make recommendations on allowances to a group of authorities or for the NAW to set up a panel to make recommendations to local authorities in Wales.
245.Section 100 enables the Secretary of State to make regulations in relation to England on allowances for members of parish councils and, for members of all authorities, allowances for travel and subsistence, including:
travel by bicycle;
allowances for attending conferences; and
reimbursement of expenses.
The NAW has similar powers in Wales.
Section 101: Indemnification of members and officers of relevant authorities
246.Section 101introduces a power for the Secretary of State to make provision to enable councils to indemnify their members and officers. The intention is to enable indemnity to be provided against any damages, cost or expenses which such member or officer may be liable to pay, or may reasonably have incurred, in connection with their membership of, or employment by, the council.
Section 102: Social services functions
247.Section 102(1)removes the statutory requirement for a local authority to discharge its social services functions through a social services committee (sections 2 to 5 of the Local Authority Social Services Act 1970) where the authority adopts one of the forms of executive in or under Part II of this Act. Subsection (2) removes the requirement that an authority’s director of social services cannot discharge non-social services functions without the prior approval of the Secretary of State (section 6(5) of the 1970 Act). Subsection (3) inserts a definition of social services functions and replicates the order-making power in section 2(2) of the 1970 Act.
Section 103: Recoupment by local authorities of cost of providing day care
248.Section 103 enables local authorities to charge parents receiving tax credits for local authority-provided childcare places. Subsection (1) limits the current scope of section 29(3) of the Children Act 1989 to services provided by local authorities under section 17 or section 18(1) or (5) of that Act, i.e. childcare for children in need.
249.Subsection (2) adds a new section to the 1989 Act which ensures that people in receipt of Income Support or income-based Jobseeker’s Allowance pay no charges for services provided under section 18(2) or (6) (childcare for children not in need), in addition to the services under sections 17, 18(1) or (5).
250.This section does not require local authorities to charge parents on tax credits. Authorities will still be required to have regard to parents’ ability to pay when deciding upon any childcare charges.
Section 104: Prohibition on promotion of homosexuality: bullying
251.Section 2A of the Local Government Act 1986 (inserted by section 28 of the Local Government Act 1988) prohibits local authorities from intentionally promoting homosexuality, from publishing material with that intention, or from promoting the teaching in maintained schools of the acceptability of homosexuality as a “pretended family relationship”.
252.Section 104 amends section 2A by clarifying that it does not prevent head teachers, teachers or governors of maintained schools from taking steps to prevent any form of bullying.
