Report of the Commission on Local Government and the Scottish Parliament:
The Scottish Executive's Response

Chapter 2: Questions for consideration

41. This chapter deals with a miscellany of recommendations, on each of which Ministers wish to hear a wide range of views before coming to conclusions.

A power of general competence

42. The McIntosh report recommended that legislation should be introduced to provide councils with a statutory power of general competence. The report describes the current position on the powers of local authorities. Local government legislation sets out the constitution of authorities and a variety of other Acts give them specific powers, duties and functions. But there is nothing in legislation that embodies the authorities’ role as a champion for its community. Local government in Britain may do only those things which statute empowers it to do. This is said by some to prevent authorities from engaging in activities that would benefit their communities since anything for which they do not have specific powers could be deemed "ultra vires" (i.e. outside the legal scope of their powers). This also has a close read-across to local authorities’ community planning role where the type of activities in which they become involved may stray into areas where the legal basis for their actions in at best unclear.

43. At its broadest, a power of general competence would allow an authority to do anything that it believed to be of advantage to its area that was not otherwise specifically reserved or prohibited. Such unfettered power has obvious dangers and most agree that there would need to be some form of built-in control. That is where the problems begin: how could we give enough power and enough certainty to the scope of that power to make it effective without providing carte blanche for authorities to interfere in the work of other public bodies, Government Departments, agencies and the voluntary sector? What sort of financial controls would there need to be and how would that impact on our present systems? While we see that there is a case for something to be done, we need to be careful not to make the situation worse by creating a new set of uncertainties.

44. There are arguments both for and against giving local authorities a power of general competence. In its favour:

• it would help with the community planning role in that:-
  • councils could identify things that would be of benefit to their area that are not being done by another agency and take action without the need for specific statutory powers to be created; and
  • councils would have more freedom to take part in joint action in partnership with other agencies.
• it would encourage innovative solutions to problems that could help deliver the Best Value agenda
• it would express in statute for the first time the fundamental purpose of local authorities as democratically elected champions for their communities.
• it would symbolise the new trust that exists between local and central government, expressing the belief that local authorities will make responsible decisions about how to promote the interests of their area without the need for close statutory controls.
• the McIntosh report notes that it would give specific form to the principle of subsidiarity.
• it would reduce the need for authorities to spend resources checking the vires of proposed actions to be taken in the interests of their area.

45. Against:

• it could increase the pressures on councils to spend which would lead either to less resources going to other services or to an increase in council tax.
• it could lead to a duplication of provision unless the council engage in a careful reassessment of priorities, particularly at the margins as local authorities overlapped with the services that others provide.
• there could still be a problem with vires if councils were thought to be using their powers irresponsibly.
• it is not entirely clear that current legislation is a real bar to useful local activities so there may be no need for new legislation.

46. The Government at Westminster announced last year ⁴ that it intends to introduce legislation for England and Wales to place on councils a duty to promote the economic, social and environmental well-being of their areas and to strengthen councils’ powers to enter into partnerships. That legislation will not apply in Scotland since local government is a devolved matter. It will enshrine in law the role of the council as the elected leader of their local community. The legislation will require councils to take a long-term view of the well-being of their areas and will put sustainable development at the heart of council decision making. They will be required to weigh up decisions against the three elements - economic, social, and environmental - and if necessary strike a balance between them. As well as the new duty, councils will also be given a discretionary power to promote the well-being of their areas providing that it is not used in ways that prejudice other council functions or the functions of other statutory bodies. The Government will also retain a reserve power to exclude particular activities or to set a financial limit where national interests might need to be protected. A Bill will be introduced to provide for these matters as soon as Parliamentary time allows.

47. The proposals for England and Wales represent a more tightly drawn power of general competence. Here, COSLA have suggested that the power should be couched in terms of a Power of Community Initiative which they would like to see complementing and mirroring a Duty of Community Planning. In their response to the McIntosh Commission’s second consultation paper COSLA suggested some of the safeguards that might be put in place to control the use of such a power:

"Where the statute requires a council to do certain specific things and prohibits it from doing others the council would still have to comply with those requirements and prohibitions in the exercise of its power of community initiative. It would mean, in effect, that the council only had the freedom to do things in fields where the law did not already set out what councils can and cannot do."

"Secondly, the new power would be prescribed by a requirement that it did not prejudice the functions of other statutory bodies in the area."

"Thirdly, a council would be required to ensure that the power was not exercised contrary to the provisions of the Human Rights Act 1998 or that it was in breach of a council’s fiduciary duty towards its council taxpayers and ratepayers."

"Lastly, there will be a requirement to set a sensible limit on the expenditure. This would be best expressed as a percentage of the council’s general fund expenditure; 1% would be an appropriate level."

48. Since local government is a devolved matter, the Scottish Parliament is free to decide what will work best in the Scottish context. It may be that given our different legal system and different traditions, a different approach to that being adopted in England and Wales would be appropriate. Equally, many of the fundamental issues are the same and that is an argument for developing similar legislative proposals to those which the Government has put forward for England and Wales. Views on these questions are invited.

The term of office for councils, and the timing of local elections

49. McIntosh recommended that councils should be elected for a four-year term, and that elections should be arranged to fall at the mid-point of the term of a Scottish Parliament. (8)

50. The case for a four-year term rests on the argument that there is a need for reasonable stability for planning purposes and enough time for the council’s policies to be seen to take effect. The fact that the Scottish Parliament is also elected for four years is also relevant. However there remains the question whether the local elections should be held at the same time as the parliamentary election or at mid-term. There are potential advantages and disadvantages to each and commentators have suggested the following as relevant factors:-

Turn-out.

51. Turn-out at parliamentary elections is normally much higher than for local elections; but when the two coincide most voters in the parliamentary election use their local government vote as well. That was also borne out in the recent elections to the Scottish Parliament. Thus the local government poll is augmented, which is desirable; but arguably the increase is for the wrong reason. The democratic mandate of local government ought to be a strong one in its own right.

Voting on local rather than national issues

52. It is argued that when national and local elections are held simultaneously, the voters will vote on the same set of issues, i.e. national ones, in both. As against that, there is evidence that local elections held in the mid-term of a government are used to express a protest at unpopular aspects of government policy. Perhaps more to the point, parties campaigning in a national election tend to have little time or resources to spare for a distinct local campaign.

Voter confusion, and administrative issues

53. In the elections of May this year, voters were faced with three ballot papers. On the whole the electorate seems to have proved able to cope with this, helped by a public education campaign. If however the local elections had been held on the same system as the Scottish Parliament election - an option which the Renewing Local Democracy is to consider - there would have been four ballot papers; and the consequence of that is unknown.

54. A combined poll is more expensive; but overall the costs of combining elections are probably smaller than those of separate elections.

55. The May elections this year put a very heavy strain on the administrative arrangements of the returning officers. In the future, if local elections are held on any other system than the traditional first-past-the-post, the administrative problems - and the risk of breakdown - will be magnified.

Implications for the political parties

56. A combined poll in effect forces candidates to choose which election they will stand in, and some will be casualties and end up with nothing. It is a question for the parties whether they have access to enough good candidates who will want to have to run this risk at every major election.

Voter fatigue

57. The choice of timing of elections also affects how many separate polls there will be over the coming years. Voters in Scotland are asked to vote in elections for local government, for the Scottish Parliament, for Westminster, and for the European Parliament. The table on the following page sets out how those elections might fall in the next 12 years (one cannot of course be certain that the various legislatures will run for the maximum possible period before a new vote is taken).

58. The table shows that if the local government elections are held at the same time as the Scottish Parliamentary elections, voters will be asked to turn out 6 times over the next 12 years. If the McIntosh recommendation of mid-term elections were adopted, voters would be asked to turn out 8 times (assuming that the local government and European elections were held on different days in 2009 when both would be due). Under the McIntosh recommendation and given our Westminster assumption, they would be asked to turn out every year for the period 2001 to 2005.

Timing of elections

	Scottish Parliament	European Parliament	Westminster	Local Government (present legislation)	Local Government (McIntosh recommendation)	Local Government (phased with Parliament)
99			.
00	.	.	.	.	.	.
01	.	.	.	.	.	.
02	.	.	?			.
03		.	.	.	.
04	.		.	.	.	.
05	.	.	.			.
06	.	.	.	.	.
07		.	?	.	.
08	.	.	.		.	.
09	.		.	.		.
10	.	.	.	.	.	.
11		.	.		.

(The dates for the Westminster elections are particularly uncertain and, purely for the purpose of illustration, the table assumes that each administration runs for its maximum 5-year term.)

59. The decision on when local government elections should be held is also to some extent dependent on the conclusions that are reached by the Renewing Local Democracy Group. If they recommend an electoral system that is different to that used for the Scottish Parliamentary elections, that has implications for the voting arrangements and timing, as noted above. The question for decision then is whether the electorate will be able to cope with casting three or four votes at once using different types of voting system. The choice of voting system also has implications for the speed with which it can be introduced. For these reasons Ministers will not decide on the timing of elections until the Group has reported. We would however like to hear views on the timing of elections.

Delegation of powers to a single member

A directly elected council leader

60. The McIntosh report says that the Commission found "only slight interest" in the idea of delegation to a single councillor and "not much evidence that it has been worked out in any detail". It says the same about the concept of a directly elected leader (mayor or provost) (15). Nevertheless it does not entirely close the door on these ideas. Ministers too believe that they should not rule out anything that may help councils put in place structures that fit their particular circumstances and at the same time help to fit local government for the 21^st Century. Councils will be working closely with the Leadership Advisory Panel to develop their ideas and identify structures appropriate to them. It may be that when new organisational frameworks are worked out in detail some councils want to adopt structures that require delegation to single councillors. The most common form of such a structure would be one where single councillors hold executive portfolios and form the membership of an Executive Group. Ministers will therefore keep closely in touch with the work of the Leadership Advisory Panel as councils develop their schemes. If, having studied the matter, there is a demand from councils for legislative change it will be considered at that time.

61. Direct election of a council leader would also require legislative change. It is possible that some councils and some voters (particularly in urban areas) would find it an attractive option. Equally, Ministers are aware that in other areas there is little enthusiasm for the idea. Ministers are committed to giving local voters a strong voice in the decision about the type of political management structure that should be adopted for their Council. Various political management structures incorporating a directly elected leader are possible. The leader could for example select an executive group with individual portfolios from the council or could work in tandem with a council manager to whom strategic policy and day to day decision making would be delegated under the political guidance of the leader.

62. The Department of Environment, Transport and the Regions has published a Local Government (Organisation and Standards) Bill, for England and Wales, that will require that a referendum be held to allow the electorate to accept or reject any scheme put forward by the council that includes a directly elected mayor. The results will be binding on the council. It also provides a means whereby local people can call for the introduction of a directly elected mayor if the council has not itself come forward with such proposals. If 5% or more of the electorate sign a petition demanding a directly elected mayor, the council would be under a duty to draw up a formal detailed proposal on that basis and to hold a referendum on this within a given period.

63. There are both potential advantages and disadvantages in having directly elected leaders. A directly elected leader can raise the profile of the council, act as its champion and provide strong and clear leadership that is highly evident to the electorate. There is also the possibility that a directly elected leader would re-invigorate local politics and help increase turnout at local elections. However, Ministers also recognise and appreciate the concern that many have about the concentration of so much power in the hands of one person and the risk that presents for the misuse of that power and patronage. There are also concerns that such a leader could distance local communities further from the decision making process. Given the strong powers that would be vested in a directly elected leader, those local views could be ignored with impunity.

Election of council employees to the council; and political restrictions on council officers

64. McIntosh has recommended that, subject to appropriate safeguards, employees other than the most senior and those in politically sensitive posts should be permitted to stand for election and to serve as elected members (22).

65. There are two separate ways in which local government employees may be restricted in their political activities. Firstly, under the Local Government (Scotland) Act 1973, no local government employee may stand for election to the council that employs them. If they wish to stand, they must resign their job. There is no bar under this Act preventing employees of one council standing for election to or becoming members of another.

66. Secondly, under the Local Government and Housing Act 1989 local government officers in certain "politically restricted" posts ⁵ are barred from standing for election to any local authority or the House of Commons or European Parliament. The Local Government Officers (Political Restrictions) Amendment Regulations 1998 also bar Scottish local government employees from standing for election to the Scottish Parliament. Such employees are further barred from acting as election agents or sub-agents, becoming an officer of a political party or branch (if that involves participating in the general management of the party or acting for the party with those outside that party), canvassing for a political party or a candidate for election or speaking to the public at large in favour of a political party.

67. The net effect of this is that the majority of local government employees may stand for election to authorities other than their own, but that there is a class of employee whose political activity is more closely restricted and who may not become a member of any authority.

68. The McIntosh Report concerned itself primarily with the first of these types of restriction - the ban on employees standing for their own authority. The report sets out the main issues for consideration. They note:

• the ban bites more strongly since the 1994 re-organisation introduced unitary authorities. It is a particularly acute problem in more rural areas where the council can be the largest employer (and has always been an issue in the islands authorities);
• there may be implications under the European Convention on Human Rights;
• there may be scope for conflicts of interest;
• it is important that the public perceive that there can be no conflict of interest; and
• there could be particular problems if the majority of a council were also its employees (although the report dismisses this, as a matter which the electorate could settle at the ballot box).

69. There are strong arguments in both directions. Ministers have noted the submissions made on the subject by COSLA, SOLACE and SOLAR who all expressed opposition to the idea of lifting the ban. Equally, Ministers are aware that the ban can cause more difficulty in some areas - notably the Highlands and Islands - than others, and this may not be equitable

70. The McIntosh report suggests that employees in non-politically restricted posts could serve as members if there were "appropriate safeguards". The difficulty is however to devise appropriate safeguards. While some rules are easy to conceive (that for example prevented teachers from taking on the education portfolio), it is more difficult to envisage a scheme that avoided all potential conflicts of interest. For example, should an employee be allowed to join in the debate and vote on the budget when this could affect his own job? If not, does that provide fair representation on a key issue for those he represents? On the other side of the equation, is it sensible to bar all Council employees from membership, particularly in areas where the local authority is the largest employer, when such people would have valuable skills to bring to the councillor role? Given that Ministers are shortly to introduce legislation to implement the New Ethical Framework that will enforce high ethical standards amongst councillors, is the threat of conflict of interest really so great?

71. Ministers are also aware that there could be potential operational difficulties. In their response to McIntosh, SOLAR note " even where it is a relatively junior member of staff who is a member of the Council, that employee’s manager will encounter very serious problems in fulfilling their rôle vis-à-vis that person." However, it may be possible that some form of code or guidance could be developed to govern the working relationship.

72. If it were to be thought that the general ban should not be lifted, there may still be scope for some relaxation of the rules relating to non-politically restricted employees standing for election. At present, the employee must resign at the time of nomination. It could be that employees would stand for election if the rules meant that they would only have to leave their job if they were successfully elected to the council that employed them. It would be possible either to:

(i) amend the 1973 Act to allow employees to stand for election to their own council without resignation, but maintain the requirement for resignation if they are successfully elected; or

(ii) amend the terms and conditions of appointment such that employees who resign to stand for election to their own council are given a guaranteed right of return to their post within a fixed timescale after the election if they are unsuccessful. This would also need to include provisions with regard to continuity of service with respect to pension and other rights.

73. Option i. is clear cut and would not require any consequential changes to protect pension rights and so on, but it could be seen as inviting employees to express views in public that may be at variance with the policies of the council that they as an employee are required to implement. There is however no ban at present on those in non politically restricted posts stating political views, and indeed those who are employed by one council but are a member of another clearly and publicly demonstrate their political affiliations. Option ii. is more complicated since the employee would have a gap in service, but would mean that the candidate was not an employee of the council during the time they were canvassing and publicly expressing political views about the activities of their own council. Option ii. maintains the greatest distinction between employee and employer.

74. There is little hard evidence to show whether the requirement to resign on nomination is actually a problem for employees and therefore whether any amendment to the current requirements would be worthwhile.

75. The issues to be considered in relation to holders of politically restricted posts are rather different. Problems of the potential for conflict of interest are more acute and for that reason, McIntosh agrees that the ban should remain. Politically restricted posts account for only some 2% of local government staff in Scotland. There is in any case a statutory appeal mechanism whereby any officer caught by the ban may apply to the Local Government Political Restrictions Adjudicator for an exemption. Ministers do however recognise that the legislation introducing the ban was introduced some time ago and that there is a case for reviewing its operation to date. In particular, they are considering whether to increase the salary threshold at which the ban begins to bite.

4. In the White Paper "Modern Local Government: In Touch with the People" July 1998 ISBN 010 140 1426

5. Section 2 of the Local Government and Housing Act 1989 sets out a number of posts that are classified as politically restricted. The definition covers chief executives, chief officers such as Directors of Finance, deputy chief officers, the council’s monitoring officer, anyone on point 44 or above of the Administrative Professional and Technical pay scale, any member of staff who regularly gives advice to councillors and any member of staff who speaks on behalf of the authority to journalists or broadcasters.