A New Ethical Framework for Local Government in Scotland

Chapter 2 - New Codes of Conduct for Councillors

The New Duty on Councils

11 The recommendations of the Nolan Report were that:

R2 The present National Code of Local Government Conduct should be replaced by a statement of the ‘General Principles of Conduct for Local Councillors’. This should be a Great Britain document, issued by the Secretaries of State for the Environment, for Scotland, and for Wales, and approved by affirmative resolution of both Houses of Parliament.

R3 The Secretaries of State should take powers to approve ‘Model Codes of Conduct for Local Councillors’ prepared by the local government associations and ombudsmen, provided that any Model Code which is approved incorporates and reflects the ‘General Principles’.

R4 Each local authority should be required to adopt a local code of conduct which incorporates and reflects the ‘General Principles’ and achieves at least the same effect as the approved model code.

R6 The appropriate Secretary of State should be able to make a formal request to a local authority that it should make changes in its local code or standing orders if he or she considers that it does not achieve at least the same effect as the model code. If the local authority does not comply, the Secretary of State should be able to refer the code to the relevant Local Government Tribunal (see R24), which would have the power to order changes.

R7 The Commissioner for Local Administration (the local ombudsman) should be able to recommend changes to a local authority’s code, and if necessary refer the matter to the relevant Local Government Tribunal for a final decision.

12 We agree that the present National Code of Local Government Conduct should be replaced. We agree that central to the new ethical framework there should be a duty on councils to adopt a Code of Conduct for their councillors. Our intention is that each council’s Code should be a comprehensive statement of the principles and rules of conduct for the behaviour of its members in the performance of their duties as councillors.

13 In its recommendations the Nolan Report recognised that these General Principles would be insufficient as a comprehensive Code of Conduct. The Report also recognised that as regards the more detailed provisions to be included in a council’s Code a degree of consistency across all councils was required. The recommendations sought to achieve this, by providing for a National Model Code with a requirement that any council’s Code “achieves at least the same effect as the approved model code”.

14 Whilst we recognise the logic in the idea of a Model Code, we see some difficulties in practice in implementing the test of any council’s Code against the criterion of “whether it achieves at least the same effect as the approved model code”. Indeed, similar concerns led a number of consultees to argue for a common National Code. We believe moreover that given the size of Scotland and the relatively small number of councils, it ought to be possible within the framework to produce a single code which is relevant to all. This code could be developed in conjunction with the local authorities themselves, in order to achieve acceptance by them.

15 We are, therefore, proposing an approach for Scotland along the following lines: After consultation with the Convention of Scottish Local Authorities, the Accounts Commission and the Commissioner for Local Administration in Scotland (the local government ombudsman), the Secretary of State would be required to lay before Parliament for their approval a statement of the General Principles of Conduct for Local Councillors in Scotland. After the election of the Scottish Parliament this duty would pass to a Minister of the Scottish Executive. The relevant Minister would also be required to invite the Convention of Scottish Local Authorities, after consulting with the Accounts Commission and the Commissioner for Local Administration, to submit within a prescribed time to him a draft Code, containing the approved General Principles, and setting out rules of conduct which are considered necessary to ensure both that councillors’ personal conduct in the discharge of their duties conforms to those General Principles, and that they act in accordance with the public trust placed in them. Once the Minister received a draft Code from COSLA, he could approve it, with or without modifications, and if approved would lay it before Parliament. There would also need to be appropriate reserve powers for the Minister. Each council would be required within a prescribed time to adopt the Code. Any questioning of whether a council is complying with these requirements could be pursued both through the proposed independent Standards Commission (see Chapter 3), or through the courts.

Q1. The Government would welcome views on these proposals. Do they provide the most appropriate roles for the Secretary of State (or Minister of the Scottish Executive), COSLA, and individual councils?

Q2. Do you agree with the Government’s proposals that a single Code of Local Government Conduct should be applicable to all Scottish councils?

New Duty on Councillors

16 The new duty on councils to adopt a Code of Conduct will be matched by a new duty on a council’s members that they must observe the Code which that council has adopted. The Government accepts the recommendation of the Nolan Report that

R5 Every new councillor and every councillor on re-election, should be required to state that they had read, understood and would observe their local code.

17 Once a councillor has made the required declaration about the Code they would be under an obligation to observe that Code. The Government is committed to introduce new disciplinary arrangements, as described in the following chapter, for the enforcement of a councillor’s compliance with the Code.

General Principles of Conduct for Local Councillors

18 The Nolan Report set out a first draft of a statement of general principles of conduct for councillors. The following illustration of a Statement of General Principles was produced in consultation with the local government associations in Great Britain and the local government ombudsmen. On a number of items we have yet to form any conclusive view. For ease of reference, where the text conforms with the draft suggested in the Nolan Report, it is set in bold.

GENERAL PRINCIPLES

These principles have been approved by resolution of Parliament. Elected members of local authorities are expected to behave according to the highest standards of personal conduct in the performance of their duties. In particular, elected members must observe the following principles of conduct.

Duty You have a duty to uphold the law and to act on all occasions in accordance with the law and the public trust placed in you; and a duty to act in the interests of the council as a whole and all the communities it serves.

Constituency You have a duty to consider carefully the views and wishes of your constituents; and to help ensure that the council knows of them and that your constituents are able to pursue their concerns.

Selflessness You should act solely in the public interest. You should never improperly use your position as a member to gain financial benefits, preferential treatment, or any other advantage for yourself, your family, your friends or anyone else.

Integrity You should not put yourself in a position where it might reasonably be thought that you have an obligation to outside individuals or organisations which could improperly influence you in the performance of your official duties.

Hospitality You should not accept gifts or hospitality that might reasonably be thought to influence, or be intended to influence, your judgement; or where to do so could bring discredit upon the council.

Propriety As well as avoiding actual impropriety, you should avoid any appearance of improper behaviour.

Objectivity In carrying out public business, including making public appointments, awarding contracts, or recommending individuals for rewards and benefits, you should make choices solely on merit.

Decisions Whilst you may very properly be influenced by the views of others, including your political group, it is your responsibility to decide what view to take, and how to vote, on any question which members have to decide.

Accountability You are accountable to the public for your actions and your part in reaching decisions, and must submit yourself to whatever scrutiny is appropriate to your office.

Openness You should be as open as possible about all your actions and your part in reaching decisions. You should ensure that reasons are given for decisions of your council’s committee, or sub-committee, and that disclosure of information is restricted only in accordance with the law.

Stewardship You have a responsibility to play your part in ensuring that the council uses its resources prudently and in accordance with the law.

Confidentiality You should ensure that confidential material, including material about individuals, is handled in accordance with the law and the rules laid down by the council; and is not used for private purposes.

Confidence You have a duty to act in such a way as to preserve public confidence in the council.

Participation You may take part in the consideration of questions which come before members unless you have a private interest of a kind which, in accordance with this Code, precludes you from participation.

Honesty You have a duty to declare any private interests relating to your public duties and to take steps to resolve any conflicts arising in a way that protects the public interest.

Declarations You should make relevant declarations of interest at meetings of the council, its committees and working groups, or any outside body to which you are appointed or nominated by the council; during informal contacts, and meetings of your political party, and in all circumstances where you are active in your role as a member.

Relations with officers You should respect the role of the council’s officers and employees and treat them with courtesy at all times.

Leadership You should promote and support these principles by leadership and example.

Q3. Are these principles the essential elements of a conduct framework for councillors?

Q4. Are they sufficiently precise as to be the foundation of a Code which will be subject to rigorous enforcement arrangements?

Councillors’ Personal Interests

19 As the Nolan Report recognised, the resolution of conflicts of interests is at the heart of probity in public life. Central to a Code of Conduct, therefore, must be rules relating to the treatment of councillors’ personal interests, both pecuniary and non-pecuniary. These rules will reflect the general principles, and give practical effect to the principle of “Honesty” which we propose should state that councillors “have a duty to declare any private interests relating to [their] public duties and take steps to resolve any conflicts arising in a way that protects the public interest”.

20 The Nolan Report was critical of the present approach to councillors’ personal interests. It concluded that the requirements on registers of interests in local government are not consistent with current good practice and should be reviewed. It also concluded that at present decisions on declarations of interest, and on when to refrain from speaking or voting, are unnecessarily complex as a result of the current mixture of documents and rules governing those decisions. Accordingly, it made a number of recommendations for change.

Register of interests

21 First, the Report recommended the introduction of a new system of registration of personal interests in local government.

R8 Every council should have to maintain a public register of councillors’ interests, listing their pecuniary interests; those non-pecuniary interests which relate closely to the activities of the council and associated bodies, or which members of the public might reasonably think could influence a councillor’s judgment; and pecuniary interests of close family members and people living in the same household as the councillor.

R9 It should no longer be a criminal offence to fail to register a pecuniary interest.

R14 Regulations under the statute should be confined to requiring councils to have public registers of interests, to setting out the framework of interests which must be included in those registers, and to requiring councils to have rules covering declaration, withdrawal, and disciplinary procedures.

22 Underlying these recommendations is the belief that the purpose of registers should be to enable councillors to register any pecuniary interest, and other interests which members of the public might reasonably think could influence their actions, speeches or votes in the council. It is this same belief which underlies the approach currently taken by Non-Departmental Public Bodies, and as the Nolan Report makes clear, also underlies the register of Members’ Interests of the House of Commons. We share the view that this same approach should apply to members of a council. Accordingly, we envisage arrangements for registration along the following lines. There would be a duty on each council to establish and maintain a public Register of Members’ Interests. The council’s Monitoring Officer would have the duty to enter information in the Register. The Code of Conduct would contain requirements on each councillor as to the furnishing of information about his or her interests to the Monitoring Officer for that Officer to enter in the Register.

23 We are also minded to adopt the approach recommended in the Nolan Report that failure to register should be a matter dealt with through our new proposed disciplinary arrangements (see Chapter 3), and not through the criminal law. The new disciplinary arrangements will ensure that action is taken rapidly to remedy any failure to register – in contrast to occasions when criminal law proceedings can be protracted. We also consider that extending the register to include significant non-pecuniary interests, whilst of considerable benefit in terms of enhanced openness and accountability, introduces a degree of imprecision which could render as inappropriate the application of criminal law penalties to a failure to register. There is a place for the criminal law in dealing with personal interests; the criminal law should be reserved for situations in which councillors take actions which put private interests above the public interest, or are otherwise against the public interest.

Q5. The Government would welcome views on the approach it envisages for registration of interests.

Direct pecuniary and other interests

24 Underlying the Nolan Report’s approach to the treatment of interests is first the concept that councillors’ interests fall into two categories – one category being that of direct pecuniary interests and the other category embracing all other interests. The Nolan Report does not define what is a direct pecuniary interest – no doubt following the long established approach in legislation that these words must simply be given their natural meaning. The Report, however, does suggest that in circumstances where the pecuniary advantage or disadvantage accruing to the councillor is no greater in principle than that which accrues to the generality of those affected by a decision, the councillor should not be treated as having a direct pecuniary interest in that decision.

25 The Report’s approach towards interests other than those of a direct pecuniary nature (the “other interests” category) is based on the common law concept of “a real danger of bias”. The Report sees two kinds of interest in this “other interest” category – those with a real danger of bias, and those which do not give rise to a real danger of bias, although they might reasonably be thought by a member of the public to influence the councillor’s decision. A real danger of bias is created when a councillor, or his or her close family, are affected more than the generality of those affected by the decision.

26 The Report envisages that wherever a councillor has a direct pecuniary interest, or an interest in the “other interests” category which meets the test of a real danger of bias, he or she should declare it and not participate in the matter. If the interest is an “other interests” category which does not meet the real danger of bias test, the Report envisages that it should be declared, but that the councillor may continue to participate.

27 We have considered carefully this analysis, and the comments we have received on it, both from consultees and in our discussions with the Convention of Scottish Local Authorities, the local ombudsman, and others. For the reasons identified by the Nolan Report, we agree that the present arrangements are in need of simplification and improved clarity. We are, therefore, minded to accept the categorisation of interests as between – direct pecuniary interests, “other interests”, which require declaration and withdrawal from any further participation in the matter under consideration, and “other interests”, which require only declaration.

28 We do, however, have some concern about the underlying test of whether a councillor is affected more than the generality of those affected by the decision in question. This test is used in the Nolan Report both to decide whether a pecuniary advantage or disadvantage is a “direct pecuniary interest”, and to sub-divide the “other interests” category. We are more attracted to a twofold test to be applied to each case on its merits. This twofold test would be along the lines: is the councillor, or his or her close family, affected more than the generality of those affected by the decision? or would an ordinary member of the public, being aware both of the facts of the case and the general principles of conduct, think it wrong for the councillor to take part in the decision in question?

29 If the answer to either limb of the test is “yes” the councillor concerned would have a declarable interest debarring them from participating in the decision concerned.

Q6. The Government would welcome views on this analysis of councillors’ interests, and in particular on the practicability of the proposed test.

Dispensations

30 The Nolan Report considered that the current arrangements for dispensation, exemption, and self-dispensation (for non-pecuniary conflicts of interest) are complex and require simplification. The Report concludes, however, that there remains a need for special arrangements – dispensations – to allow in certain circumstances the participation and voting of a councillor with a direct pecuniary interest, or other interest. The Report sees no reason in principle why such dispensations should not be exercised at local authority level, and that the full devolution of the process would sooner or later be a sensible reform.

31 We can see the arguments for dispensations being a matter, covered by the Code of Conduct, which would be handled within a council. Given the significance of dispensations, however, we also see that there are strong arguments for the continued involvement in relation to direct pecuniary interests of an external, independent body. It may be that the proposed Standards Commission would have a role to play here, rather than the Secretary of State as under the present arrangements.

Q7. The Government would welcome views on the approach to dispensations. Is it practicable for the handling of dispensations to be largely devolved to local level? What would be the most appropriate and cost effective role of the proposed Standards Commission for dispensations?

The New Framework for Personal Interests

32 To give effect to their analyses and proposals the Nolan Report recommended a new framework for the handling of councillors’ personal interests.

R10 Unless they have a dispensation, councillors who have a direct pecuniary interest in a matter under consideration should have to declare that interest, withdraw from the meeting or discussion, and take no further part in the business in question.

R11 Councillors should have to declare any interest which is not of a pecuniary kind, and which members of the public could reasonably think could influence their actions, speeches or votes.

R12 Unless they have a dispensation, councillors should withdraw from consideration of matters where they have an interest whose existence creates a real danger of bias, that is where they or their close family are likely to be affected more than the generality of those affected by the decision in question.

R13 All the existing primary legislation on conflicts of interest in local government should be repealed and be replaced by a provision giving effect to the common law principles set out above.

R14 Regulations under the statute should be confined to requiring councils to have rules covering declaration, withdrawal, and disciplinary procedures.

33 We agree that the existing legislative framework needs to be replaced. On the basis of the approach to which we are attracted, including the test described in paragraph 28 above, we envisage new arrangements along the following lines. The Code of Conduct would contain requirements on councillors as to the declaration of interests, and subsequent withdrawal from meetings, including provision for dispensations in particular circumstances. This would provide that where a councillor had – § a direct pecuniary interest in a matter under discussion, he or she should declare the nature of the interest and withdraw from the room, unless there is a dispensation to speak; § any other interest in a matter under discussion, which meets one or both elements of the test described in paragraph 28 above he or she should declare the nature of the interest and withdraw from the room, unless there is a dispensation to speak; and § any other interest in a matter under discussion, which meets neither of the elements of the test described in paragraph 28 above, he or she should declare the nature of the interest, but may remain in the room, participate in a discussion, and vote if he or she wishes. Any failure to declare a direct pecuniary interest and to withdraw subsequently from the meeting would be a criminal offence.

34 Any failure to follow the requirements of the Code of Conduct would fall to be dealt with by the new disciplinary arrangements described in the next Chapter. We are also envisaging that in addition to being a breach of the Code, a failure to declare and withdraw where a councillor has a pecuniary interest would continue to be a criminal offence. We envisage this being achieved either through specific statutory provision, or through the application of the proposed new statutory offence of misuse of public office.

Q8. The Government would welcome views on the approach it envisages for the handling of councillors’ personal interests.