Uncle Eric’s Parish Precept Pickle


scheming eric pickles

It’s that time of year again — all across the country, local authorities are setting their budgets for 2013/14. From the big county councils and unitary boroughs, right down to the tiniest of parish councils, and Wargrave is no exception.

Last week, I and the other councillors on Wargrave Parish council debated and discussed our own budget. Decisions were made on the rates charged for services like the youth centre, and spending on upkeep of areas within our remit. We also made a decision on the precept, the element of council tax set at parish level.

Now, Uncle Eric (Secretary of State for Communities and Local Government, Eric Pickles) has already said that local authorities of city, borough and council level have to hold a referendum if they want to raise their council tax by more than 2% (a blog will be forthcoming in the near future on that, believe me). This doesn’t yet apply to parish level, but there are fears it will do  next year.

Anyway, in the course of setting the precept for the next financial year, an interesting problem has come to light in the drafting of the Localism Act.

Almost all parish councillors will live in the parish. Most will pay council tax in the parish. Some may even own property in the parish. Thus, they all have a personal and pecuniary interest in the level of the precept.

In the normal course of parish council business, if I have an interest in a matter under discussion (say, a planning application by my neighbour, which will potentially impact upon the value of my own house) I must declare it and leave the room for the duration that it is under discussion.

The old parish council code of conduct, under schedule 1, paragraph 10 of the Local Authorities (Model Code of Conduct) Order 2007, contained an exemption from the declaration rules in the case of setting the precept:

You do not have a prejudicial interest in any business of the authority where that business — … (c) relates to the functions of your authority in respect of— … (vi) setting council tax or a precept under the Local Government Finance Act 1992.”

However, that code of conduct was replaced under the Localism Act 2011. Now the provision dealing with declarations of interest is as follows:

(2) If the interest is not entered in the authority’s register, the member or co-opted member must disclose the interest to the meeting, but this is subject to section 32(3).

The member or co-opted member may not — (a) participate, or participate further, in any discussion of the matter at the meeting, or (b) participate in any vote, or further vote, taken on the matter at the meeting — but this is subject to section 33.

As you may notice, the exemption for setting precepts is gone. But it does mention s33 of the act, so what does that say?

(1) A relevant authority may, on a written request made to the proper officer of the authority by a member or co-opted member of the authority, grant a dispensation relieving the member or co-opted member from either or both of the restrictions in section 31(4) in cases described in the dispensation.

(2) A relevant authority may grant a dispensation under this section only if, after having had regard to all relevant circumstances, the authority — (a) considers that without the dispensation the number of persons prohibited by section 31(4) from participating in any particular business would be so great a proportion of the body transacting the business as to impede the transaction of the business…

So an exempting disposition can be granted, but it has to be done so specifically. Hence the Wargrave Parish Council clerk rushing around forms for us to sign so that we could decide the budget, last week. So when we approve the new budget tomorrow, it will be entirely legal — but how many parish budgets across the country won’t be?

Most people won’t have read the Localism Act, and won’t notice this change. Indeed, the lack of comment on it suggests that it might have escaped the notice of many who really ought to know.

To me it looks like either Uncle Eric has laid a cruel and unusual trap for parish councils, or he has no idea what effect his flagship piece of legislation has. Neither of which is encouraging…

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5 comments

    1. I’d hope so Pauline. I really don’t see what purpose it could serve.

      But you’d surely hope that an experienced politician like Eric, with an army of civil servants at his disposal, would have noticed.

  1. I think having no automatic dispensation for setting precepts at parish level (or for setting Council Tax on higher level local authorities) is due to the poor quality drafting of the legislation which weren’t corrected. Another one is use of the word “vacation” instead of “vocation” which is also in the bit of the act dealing with declarations of interest.

  2. This letter (written after the blog was published) expresses the DCLG’s view – note that they have forgotten that parish councils might be involved (again)

    Brandon Lewis MP
    Parliamentary Under Secretary of State
    Department for Communities and Local Government
    Eland House
    Bressenden Place
    London SW1E 5DU
    Tel: 0303 444 3430
    Fax: 0303 444 3986
    E-Mail: brandon.lewis@communities.gsi.gov.uk
    http://www.communities.gov.uk
    5 February 2012
    To all Local Authority Leaders
    Dear Colleague,
    REMOVING UNNECESSARY RED TAPE: COUNCIL TAX SETTING
    As you will know, the Localism Act 2011 abolished the last Administration’s bureaucratic and controversial Standards Board regime. We have intentionally sought to move to a lighter-touch regime which focuses on openness and transparency.
    In August 2012, we published a practical guide for councillors, to complement the illustrative local code of conduct we published in April 2012. However, as highlighted in a recent Parliamentary debate on the topic, we are keen to avoid unnecessary and bureaucratic gold-plating of the new regime.
    That debate and associated correspondence has highlighted that some council monitoring officers are informing their councillors that being a council tax payer is a disclosable pecuniary interest in any Budget debate. Councillors are then informed they would be committing a criminal offence if they speak or vote in that debate unless they obtain a formal dispensation.
    Whilst my department does not issue legal advice, in our opinion, such dispensations are unnecessary. Council tax liability applies to the generality of the population; councillors have no unique position in that regard.
    Being a council taxpayer or being eligible for a discount under the new local arrangements for council tax support are pecuniary interests, but are not disclosable pecuniary interests as specified in regulations. Therefore a councillor does not need to seek a dispensation in order to participate in discussions or vote on decisions in the council tax setting process or local arrangements for council tax support. I made this clear in the Parliamentary debate, which I would encourage you to read.
    Holders of public office should be guided by the Nolan Principles. I believe that the blanket act of every councillor declaring the obvious (that residents are liable for council tax) adds nothing to that cause. Indeed, Section 106 of the Local Government Finance Act 1992 prohibits councillors who are in council tax arrears (by two or more months) from voting on Budgets. So there is a clear expectation that the generality of councillors are paying council tax.
    I hope this is helpful in reducing your council’s administrative paperwork and we will shortly be updating our practical guide for councillors to reflect this view.
    Yours faithfully,
    BRANDON LEWIS MP

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