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United Kingdom - Monitoring report

Date of the monitoring visit: remote monitoring meetings carried out from 21 to 23 June 2021
Report adopted on: 24 March 2022
Files : Report CG(2022)42-18 | Recommendation 474 (2022)
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The present report is the second monitoring report since the country ratified the Charter in 1998. It follows the remote monitoring meetings carried out from 21 to 23 June 2021. The report welcomes the adoption of the Cities and Local Government Devolution Act 2016 that has empowered the Secretary of State to introduce directly elected mayors for English regions comprised of two or more councils. It also welcomes the publication by the UK government of a Levelling Up White Paper that would focus its new investment programmes on local partners and communities across the UK to face common challenges shared by them. Moreover, it refers positively to a legislative initiative that has been taken by the Scottish Parliament to incorporate the European Charter of Local Self-Government into Scottish law.

 

The rapporteurs however express concern, inter alia about the fact that the principle of local self-government is not explicitly recognised in the UK’s domestic legislation, and that local authorities’ capacity to perform local tasks effectively is limited in practice due to the overregulation that narrows local scope of action, a rather heavy supervision by higher-level authorities and significant local government dependence on national funding. The report also stresses that local authorities are limited in their ability to raise and spend financial resources freely and lack adequate and commensurate funding, and that the practice of consultation on financial resources does not fully satisfy the requirements of Article 9.6 as regards the manner in which such consultation is conducted.

 

Consequently, they call the UK authorities to, among other things, explore all possible legal venues in order to recognise the principle of local self-government in domestic law, and enhance local authorities’ fiscal capacity to allow the costs of service delivery to be met and render local authorities’ finances more buoyant. It also encourages them to initiate a reform of the system of local government funding to bring the situation in conformity with Article 9, that would incorporate the principles of adequacy and commensurability of local financial resources into law and provide more room to local authorities to decide on spending priorities. The rapporteurs ask UK authorities to guarantee that consultation on local funding take place in a timely manner before a final decision is made and local authorities have sufficient time and possibilities to contribute meaningfully to the consultation process.

 

Lastly, UK authorities are invited to ratify the Additional Protocol to the European Charter of Local Self-Government on the right to participate in the affairs of a local authority (CETS No. 207).

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Article ratified Ratified with reservation Non ratified
Compliance Partial compliance Non compliance To be determined
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Article 2
Constitutional and legal foundation for local self government - Article ratified

The principle of local self government shall be recognised in domestic legislation, and where practicable in the constitution.

This article requires that the principle of local self-government be recognised at the legislative level, by acts of parliament or equivalent, preferably in the constitution. As a result, according to the Contemporary Commentary on the Charter ,the Charter should not only be a judicially enforceable legal instrument (Article 11) but also a guide for the legislature and possibly for amending the constitution. The recognition of the principle needs to be more than a formality. 

 

As the United Kingdom does not have a written, codified constitution, the rapporteurs acknowledge the impossibility of a constitutional recognition of the principle of local self-government. Alternative arrangements in accordance with the Charter could be to incorporate the Charter’s principles or the entire Charter in domestic law. As the UK is a member of Council of Europe and, as such, signed and ratified the Charter, it is the responsibility of the UK to ensure that the rights contained in the Charter, such as the right to local self-government, must be given effect in domestic legislation. 

 

As previously stated, the UK Government pointed to its constitutional position as a dualist state that it does not directly incorporate international commitments in the domestic law, with the exception of the European Convention of Human Rights. The UK Government pointed out that its internal system requires that all domestic law be compatible with the UK international obligations and commitments. Therefore, it considers that that their domestic law is compliant with their obligations and the spirit of the Charter articles, as set out in the Charter itself.  

 

The rapporteurs have taken note of this position and would like to point to the following. 

 

It is important to remind that monitoring the application of the Charter in the CoE member States is based on the principle that all State parties to the Charter must be treated equally notwithstanding their dualist or monist legal tradition. Under the monitoring procedure, the rapporteurs verify whether the Charter is respected, that is whether the State party complies both with the spirit and the letter of the Charter. Compliance with the Charter means more than (implicit) compliance with its spirit.  

 

The rapporteurs consider that having ratified the Charter, the UK must ensure that the principles and provisions of the Charter are fully applicable under domestic law across the whole country.

 

 In this respect, the rapporteurs remind that in its previous report in 2014 the Congress already concluded that “Constitutional or legislative recognition and entrenchment of (the right to) local self-government does not exist in the UK. Nor are the principles expressly incorporated into domestic legislation. By introducing a “general power” for local authorities, the Localism Act 2011 has taken an important step into this direction in England, but the Charter requirements are not completely satisfied in terms of compliance”. 

 

The rapporteurs have observed no legislative changes that would allow them to conclude that the principle of local self-government has since been expressly translated (recognised) into national legislation to satisfy the requirement of Article 2.

 

During the consultation procedure, the LGA pointed out that the UK is still on a journey towards greater compliance and that full compliance with this Article would represent a historic shift in the UK’s constitutional arrangements.

 

In view of the rapporteurs, the UK should explore all possible legal venues (at the level of the UK and devolved legislations) to ensure that the right to local self-government and other principles set out in the Charter are afforded protection. 

 

In this respect, the rapporteurs would like to refer to the Scottish Parliament attempt to incorporate the Charter to give it effect in the Scottish jurisdiction. The understanding of the rapporteurs is that the devolved legislatures can transpose the Charter in devolved legislation in order to give it full effect.

 

In this connection, several interlocutors underscored the necessity of the Charter’s recognition in domestic law. Indeed, the absence of a clear legislative foundation for local self-government bears the risk for local powers to be limited by ordinary legislation, as the actual scope, degree and extent of local self-government accross the UK is entirely attributed to the discretion of the legislator. Also, local authorities do not have a legal basis for challenging central government decisions regarding their autonomy (self-government) when they consider the latter to be in breach of the Charter. 

 

 Given the above mentioned, the rapporteurs cannot but repeat, with regret, the conclusion already reached in the 2014 Congress report about the absence of recognition of the principle of local self-government in domestic legislation (both at the UK and devolved legislations). Therefore, the situation in the UK is not in compliance with Article 2 of the Charter. 

Article 3.1
Concept of local self government - Article ratified

Local self-government denotes the right and the ability of local authorities, within the limits of the law, to regulate and manage a substantial share of public affairs under their own responsibility and in the interests of the local population.

As the Contemporary Commentary on the Charter argues, there are no absolute indicators for assessing compliance with Article 3, paragraph 1. At the same time, the following key elements should be considered when analysing its application. 

 

•    “right and ability”: formulating a mere formal right without the necessary means will not suffice to comply with paragraph 1,
•    “regulate and manage”: local authorities’ positions will have to be more than acting as agents of higher authorities, and have powers to regulate and make political choices,
•    “substantial share of public affairs: a range of responsibilities with the possibility of drawing up and implementing appropriate and relevant local public policies; no limitation to secondary tasks or routine duties,
•    “under their own responsibility”: political accountability to the local citizenry. 

 

As has been mentioned above, local councils in England, Scotland and Wales (unlike in Northern Ireland) have responsibilities in the areas of social care, education, transport, housing, waste collection, etc.,  which, in the rapporteurs’ opinion, indicates a relative importance of the share of local competences in the UK. 

 

According to data published by the Organisation for Economic Co-operation and Development (OECD) in 2019,  subnational government expenditure in the UK amounted to 24.2% of total public expenditure and to 10% of the gross domestic product (GDP), while the subnational government expenditure across the OECD accounted for 40.4% of total public expenditure and for 16.2% of GDP. Social protection and education were the two largest spending items for subnational governments in the UK. Together, they represented 63% of subnational expenditure, compared to 39% in the OECD area. 

 

The rapporteurs noted that a power of general competence accorded to English local government by the Localism Act 2011, assessed during the previous monitoring visit as a very positive development, has been limited in practice, since local authorities can only carry out functions already regulated by statute. Their discretion is also restricted both by the UK government departments and courts, as the same act simultaneously introduced more legal powers for the Secretary of State to intervene in local government and to supervise local activities. As indicated in point 29, the Secretary of State or appointees may take over any local functions or the running of entire local authorities. The Welsh Government has the same strong powers to intervene in local self-government where local authorities are failing to meet the performance requirements set out in the Local Government and Elections (Wales) Act 2021. In the rapporteurs’ view, this may restrict local authorities’ capacity to manage local affairs under their own responsibility and in the interest of local populations.

 

During the consultation procedure, the LGA noted that the Localism Act 2011 was recognised by the previous monitoring report as an important step forward in introducing a "general power" for local authorities. The LGA however also pointed out that the application of this general power has been limited in practice. 

 

Furthermore, when assessing compliance with Article 3.1, it is important to remember that local authorities cannot regulate “a substantial share of local affairs” effectively if they do not have resources necessary to perform their tasks. Such entities would have the legal “right” but would lack the real “ability” to act as required by the Charter.

 

As for the ability to act, it is therefore relevant to take into account the paragraphs setting the local authorities’ right “to adequate financial resources of their own” (Article 9.1), “commensurate with their responsibilities” (Article 9.2), composed “in part at least” of “local taxes and charges of which, within the limits of statute, they have the power to determine the rate” (see Article 9.3). 

 

As explained further in the report on the assessments of the UK’s compliance with Article 9, the UK local authorities have limited access to adequate financial resources of their own, which are not commensurate with their responsibilities, and the restrictions on their local tax-levying powers do not satisfy the requirements laid down in the Charter. It therefore appears to the rapporteurs that the UK local authorities cannot perform their tasks effectively to meet the requirement of Article 3.1.

 

Given the above, the rapporteurs conclude that the UK partially complies with Article 3.1.

Article 3.2
Concept of local self government - Article ratified

This right shall be exercised by councils or assemblies composed of members freely elected by secret ballot on the basis of direct, equal, universal suffrage, and which may possess executive organs responsible to them. This provision shall in no way affect recourse to assemblies of citizens, referendums or any other form of direct citizen participation where it is permitted by statute.

Article 3, paragraph 2, states that local self-government must be democratic, by means of representation. Members of local representative organs (councils, assemblies) are to be elected in free elections, by secret ballot on the basis of direct, equal, universal suffrage. Direct democracy may play a complementary (rather than subsidiary) role, as the Congress’ Contemporary Commentary argues. The primacy of the directly and universally elected council or assembly means that such bodies take the most relevant decisions and that there should be tools to make the executive body accountable to this organ. The minimum that is necessary for the “responsibility” requirement to be met is the introduction of a system of effective supervision of the executive by the assembly, allowing for regular scrutiny of the executive’s activities.

 

For the assessment of the UK’s compliance with Article 3.2, the rapporteurs refer to section 2.1 of this report for the basic relevant information on elections, council terms, voter turnout, and distinct councillors’ roles. In addition, it should be noted that the UK Government has current concerns about the probity of the postal vote system and that the UK Government is exploring the introduction of voter identification for all elections it is responsible for. 

 

All English councils (except those with a somewhat modified committee system) must have overview and scrutiny committees. Overview may concern policy development and review, investigating the work of outside bodies, and performance management and review. Scrutiny mainly entails scrutinising decisions before they are made or implemented, and afterwards. Those special committees are to be supported by scrutiny officers, quite often organised as scrutiny support units. But, as one expert informed the rapporteurs, this is not applied consistently across English local government and scrutiny is always under-resourced compared to the executive. 

 

In practice, overview and scrutiny turn out to be problematic roles. The main cause for this is that non-executive councillors belonging to the majority group find it difficult to publicly hold their (usually senior) party colleagues in the executive to account. This is a barrier to sound overview and scrutiny because, as the LGA stated: “scrutiny councillors need to be committed to making the function work and to developing the conditions necessary for working effectively with the council’s executive and officers, and any other relevant partner organisations. It is also important that scrutiny is seen as impartial and stays separate from party politics.”  In reality, to quote one expert: “the dominance of English local government by the three main national UK-wide parties, holding around 88% of all seats, means that party loyalty and party antagonisms often hinder the scrutiny process”. 

 

According to LGA, scrutiny plays an important part in the local democratic process, but it is not the only part. Regardless of the local governance model, the full council is still responsible in law for setting the budget; for agreeing the main policy direction; for deciding the constitutional framework of the council; and for scrutinising the executive in depth. 

 

The rapporteurs conclude that local elections are free, by secret ballot on the basis of direct, equal, universal suffrage. They also observe that “a system of effective supervision of the executive by the assembly, allowing for regular scrutiny of the executive’s activities” exists. As a result, they conclude that the UK complies with Article 3.2. 

Article 4.1
Scope of local self government - Article ratified

The basic powers and responsibilities of local authorities shall be prescribed by the constitution or by statute. However, this provision shall not prevent the attribution to local authorities of powers and responsibilities for specific purposes in accordance with the law.

This first paragraph regarding the scope of local self-government leaves room for interpretation as to what exactly are the “basic powers and responsibilities” of local authorities. What is clear, as the Congress’ Contemporary Commentary argues, is that such powers and responsibilities are to be prescribed by the constitution or by statute, to ensure predictability, permanence and protection for the benefit of local self-government. The only exception to this rule the Charter allows for is the assignment (“attribution”) of specific tasks not already included in the national legal framework for local government by administrative regulation, with the condition that this must be an exceptional mechanism. This article calls for is a systemised description of powers and responsibilities in statutes or even in the constitution, per country.

 

None of the UK municipal jurisdictions have a systemised description of powers and responsibilities of local government in statutes. Several pieces of sectoral legislation have conferred upon local government a range of powers. Powers may change at will, and they may differ between local authorities and types of local authorities (for instance in England, in the case of negotiated over devolved powers to combined authorities). To quote one of the interlocutors, “individual local authorities legal services have to compile list of the specific powers applicable to them”.   

 

During the consultation procedure, the LGA recognised and expressed its support to the flexibility provided for within the UK’s legislative system. An underpinning principle of their argument for further devolution is that while all local authorities should be provided with the opportunity to take on new powers, it should be down to the discretion of local leaders to determine those aspects that they wish to take responsibility for. 

 

The rapporteurs conclude that the UK complies with Article 4.1 because local governments’ basic powers and responsibilities are described by statute, albeit not in a systematic way. 

Article 4.2
Scope of local self government - Article ratified

Local authorities shall, within the limits of the law, have full discretion to exercise their initiative with regard to any matter which is not excluded from their competence nor assigned to any other authority.

The four paragraphs 4.2, 4.3, 4.4, and 4.5 are linked via several shared concepts: “full and exclusive”, “discretion”, and “localness”. Paragraph 4.2 focusses on local government initiatives, whereas paragraphs 4.3 and 4.4 concern attributed tasks, and paragraph 4.5 addresses delegated powers. In the UK context, where local authorities only very recently gained a (rather restricted) general competence, it is hardly feasible to make a distinction between locally initiated and nationally or regionally attributed tasks, when assessing “full and exclusive”, “discretion”, and “localness”. The rapporteurs therefore decided to carry out an integrated assessment of the UK’s compliance with those four paragraphs.

 

Since the Localism Act 2011, local authorities in England have had a general competence and this can be seen as conferring to them a wider margin of appreciation in law. In practice, this turns out to be a limited competence, as it can only be used to do what is not already covered by any other statute. Consequently, local authorities can carry functions already regulated by statute with limited discretion. In addition, the rapporteurs observed a high amount of local financial dependence on national government. As was the case at the time of the previous assessment (2014), guidelines and directives from national ministries are frequent. 

 

On the issue of subsidiarity, during the consultation procedure, the LGA noted that responsibilities should be passed to local authorities unless there is an overwhelming reason to hold those powers at a national or sub-national level. In practice this is also true within the context of local or parish councils where principal councils have established a wide-ranging programme of decentralisation working with these authorities, where they exist, and their communities to transfer powers closer to people. 

 

In Scotland,  the Local Government in Scotland Act 2003 (LG(S)A 2003) created (in its section 20) a general competence for local government, that is “a new power to do anything which a local authority considers is likely to promote or improve the well-being of its area and/or persons within that area”. In addition, local authorities were obliged to maintain and facilitate a planning and provision process of public services (called a “leadership role”) and to secure “best value”, that is, the “continuous improvement in the performance” of their functions (LG(S)A 2003, section 1). Further restrictions of the application of this general power stem from this 2003 Act obliged local authorities to work collaboratively with other local as well as national bodies operating in the same local area by way of Community Planning Partnerships. This trend has continued with the Public Bodies (Joint Working) (Scotland) Act 2014 that integrated local social services with those of health boards of the National Health Service and with Community Empowerment (Scotland) Act 2015 that required municipalities to devolve assets, such as land and buildings, to community groups, but also to better involve them public decision-making including participatory budgeting.  The outcomes of such partnerships as well as the Local Outcome Improvement Plan (LOIP) that each local authority is required to prepare, must be in accordance with “national outcomes” determined by the Scottish Ministers most recently via the 2018 National Performance Framework, which in turn aims to localise the UN Sustainable Development Goals.  

 

In Wales, the Local Government and Elections (Wales) Act 2021 gives local authorities a general power of competence as well as “new tools and powers to deal with some of the many challenges facing the sector”.  At the same time, this act enables local authorities to establish corporate joint committees (CJCs), to exercise specified functions. The power for Welsh Ministers to instigate the exercise of functions by a CJC in a limited number of areas could be seen as restricting the free application of local authority competences. 

 

In Northern Ireland, it seems the traditional ultra vires regime still rules. The Northern Irish Government published an (extensive) list of local authority responsibilities and an overview of areas where local councils do not have responsibilities.  

The rapporteurs heard from many interlocutors that the UK context does not generally provide for the delegation of powers from a central or regional authority in a manner found in other European countries and therefore Article 4.5 (that aims to safeguard local self-government in the case of higher-level authorities delegating new tasks to local authorities) doesn’t apply to the UK context. 

 

The rapporteurs conclude the UK complies with Articles 4.2 and 4.3, as general competences do exist nowadays. They however conclude that the UK is in violation of Article 4.4, considering the restrictions imposed on local authorities with respect to locally initiated activities. As the assessment of the UK’s compliance with Article 8 (supervision over local authorities) and Article 9 (local funding) will show, national interference in local policies (by rather heavy and unspecified supervision) and local dependence on national funding are significant. To quote one of the interlocutors: “the UK remains one of the most centralised countries (…), with central government prescribing and closely monitoring the actions of local government in many areas. (…) as even where local authorities have competences over certain areas, this is often limited or controlled by the imposition of duties from central government setting out how services should be delivered.” 

Article 4.3
Scope of local self government - Article ratified

Public responsibilities shall generally be exercised, in preference, by those authorities which are closest to the citizen. Allocation of responsibility to another authority should weigh up the extent and nature of the task and requirements of efficiency and economy.

Consult reply indicated at article 4.2

Article 4.4
Scope of local self government - Article ratified

Powers given to local authorities shall normally be full and exclusive. They may not be undermined or limited by another, central or regional, authority except as provided for by the law.

Consult reply indicated at article 4.2

Article 4.5
Scope of local self government - Article ratified

Where powers are delegated to them by a central or regional authority, local authorities shall, insofar as possible, be allowed discretion in adapting their exercise to local conditions.

 

Consult reply indicated at article 4.2

Article 4.6
Scope of local self government - Article ratified

Local authorities shall be consulted, insofar as possible, in due time and in an appropriate way in the planning and decision-making processes for all matters which concern them directly.

 

Higher-level government is expected to consult local authorities on the planning and decision making in all matters that concern the latter. The Congress’ Contemporary Commentary sets out three basic factors to assess compliance with this article:

  • local authorities should be able to obtain full information on decisions and policies that concern them directly, and this information should be available at the initial stage of the decision-making process;
  • local authorities should have the possibility of expressing their opinion on decisions and policies before these become legally binding documents; 
  • local authorities should have the time and ability to prepare recommendations or alternative drafts and submit them for consideration. 

 

England

 

The UK Ministry of Housing, Communities and Local Government informed the rapporteurs that in England, many mechanisms for consulting local government exist, some of which have a legal foundation (consultation on the core spending power; consultation in matters of council mergers and of establishing combined authorities). The ministry also pointed out the UK Government’s consultation principles guidance and the “new burdens” doctrine.  

 

During the consultation procedure, the UK government underlined that according to the new burdens doctrine, UK Government departments are required to engage with local government as part of the new burdens process. New burdens assessments are not approved until relevant local government actors have been consulted and their views documented. There are also meetings scheduled by the responsible UK Government department with the Local Government Association (England) to discuss new burdens issues. 

 

The position of the LGA as a key player in representing the interests of local authorities and lobbying the UK Government on bills seems to be unquestioned. It works to influence and set the political agenda on the issues that matter to councils, so they can deliver local solutions to national problems. It is, however, one of the many organisations lobbying for their respective interests. Or, as put by one interlocutor: “(…) any ‘needs’ of local governments are a result of lobbying on each issue in a crowded atmosphere of lobbying by all stakeholders on all policy areas”.

 

The Greater London Authority expresses some satisfaction with its position: “Despite some challenges, productive working relationships exist at all levels between the Greater London Authority and Government Ministers and Officials, and the [UK] Government frequently consults with us on matters relating to London.”

 

During the consultation procedure, the UK Government underlined that there is a wide range of other mechanisms for engagement, both formal and informal, leading to co-design and ongoing policy discussion and development. Local authorities are also specified in statue as consultees. As examples were provided the following sections of the pieces of legislation:

-     from the Domestic Abuse Act 2021 that requires the Secretary of State to consult local authorities on regulations to make provision about the preparation and publication of strategies in respect of support provided by those authorities to victims of domestic abuse, 

-    the Local Transport Act 2008 requires the Secretary of State to consult representatives of local authorities when making regulations to limit the actions of sub-national transport bodies; 

-    Local Government, Planning and Land Act 1980, which requires the Secretary of State to consult such associations of authorities to whom section 2 above applies as appear to him to be concerned, and any such authority with whom consultation appears to him to be desirable; 

-    Section 5(7)(a) and (b) of the Localism Act 2011 requires the Secretary of State to consult such local authorities and representatives of local government as he considers appropriate when making regulations under sections 5(1), (2), (3) or (4) to remove or change statutory provisions that prevent or restrict use of the general power or which overlap with the general power of competence conferred by section 1 of that Act, or to restrict what a local authority may do under the general power or to make its use subject to conditions 

-    and the Local Government Act 1999 that requires the Secretary of State when issuing guidance under Part 1 of that Act to best value authorities generally, or to or in respect of one or more particular best value authorities, to consult the authorities concerned or persons appearing to him to represent them. 

 

Wales

 

According to the Welsh Minister for Finance and Local Government, there is a commitment under the local government scheme that as soon as practicable, and within the constraints of proper confidentiality, the Welsh Government will consult the representative associations of Welsh local government (that is the Welsh Local Government Association, One Voice Wales and bodies and representatives of the police, fire and rescue, and national park authorities) on all matters of common concern affecting local government (with the exception of matters relating to national security and proposals which affect only particular authorities).The UK Wales Office’s interlocutor offered examples of co operation between national offices and Welsh local authorities and underscored that the former support the latter in many ways. During the consultation procedure, the delegation was informed that the statutory Partnership Council for Wales brings together representatives of Local Government, Welsh Government other public sector and third sector bodies. The Senedd Cymru Committees regularly invite representatives of local government to provide evidence.

 

The WLGA informed the rapporteurs that the Welsh Government has guidelines for the length of consultations, with most major exercises allowing 12 weeks. The Welsh Government summarises and reports the consultation responses received. WLGA observed some successes in instances where local authorities’ responses have helped to influence outcomes.

 

The rapporteurs conclude that consultation takes place, that practical guidelines exist and that responses by local authorities and/or the WLGA can be successful. A number of individual pieces of Welsh legislation include an express requirement to consult with the representatives of local government, for example, section 4 of the Local Government Act 1986. Nevertheless, the rapporteurs did not see a formalised right of local authorities to be consulted. 

 

Northern Ireland

 

Northern Ireland Assembly committees regularly invite representatives of local government to provide evidence, as the assembly interlocutor informed the rapporteurs. The Department for Communities adds that it “has a range of fora through which it liaises with and consults with local authorities on matters which concern them (…) in addition to statutory consultation with Councils which the Department undertakes in connection with new policies or legislation.”

 

The interlocutors of the Northern Ireland Local Government Association recognised that the Northern Irish Executive does consult local authorities, but also stated that there is no legal procedure for consultation. 

 

The rapporteurs conclude that in Northern Ireland local governments are consulted, although there is no legal duty for the UK Government to consult local authorities. 

 

General

 

During the discussions with interlocutors, the rapporteurs did not hear of any serious complaints regarding consultation processes although some concerns were expressed on the level of continuity and predictability of consultation since consultation of local authorities and their representative associations is of a rather ad hoc character.  

 

In general, consultation of local authorities takes place in practice. Moreover, during the consultation procedure, pieces of relevant legislation requiring consultation were provided to the delegation by the UK Government. 

 

Therefore, the rapporteurs conclude that the UK generally complies with Article 4.6.

Article 5
Protection of local authority boundaries - Article ratified

Changes in local authority boundaries shall not be made without prior consultation of the local communities concerned, possibly by means of a referendum where this is permitted by statute.

 

It is deemed a mandatory procedural requirement that no change in local boundaries may be adopted without consultation, which must take place at a timely stage before a final decision on the matter is made (cf. Congress’ Contemporary Commentary). The three basic conditions for sound consultation as formulated with respect to Article 4.6 apply to Article 5 as well. In this case, however, local “communities” are to be consulted, including citizens and local civil society in general and not just the local authorities concerned. So, full information should be available at the initial stage of the decision-making process; local communities should have the possibility of expressing their opinion on decisions and policies before these become legally binding documents, and they should have the time and ability to prepare recommendations or alternative drafts and submit them for consideration. 

 

At present, local authority boundaries are being changed only in England. The rapporteurs noted that, in some parts of the UK, reorganisation of subnational government has taken a different route. In Wales, regional partnerships of local authorities have emerged, and the Local Government and Elections (Wales) Act 2021 introduced a power to establish corporate joint committees (CJCs) in some regions, comprising the leaders of the constituent local authorities. They will have duties in relation to strategic land use planning and transport planning, and powers in relation to economic well-being. In England, there is a movement towards the creation of Combined Authorities (“Metroregions”, most of which have a directly elected mayor). In time, such plans and developments may influence local authority boundaries, but they are not relevant in the present assessment of the UK’s compliance with Article 5. 

 

In England, according to the Ministry of Housing, Communities and Local Government, every boundary change requires a parliamentary decision. The ministry also stated that there is no obligation, nor even pressure, for local authorities to merge. Councils may produce proposals; proposals need local consultation. The ministry “welcomes everyone’s views”. 

 

Other interlocutors shared relevant information. The UK Government has set out guidance for applications for new local authorities in England in transition from two tier to a single tier unitary local government – for example, on minimum population size (300 000 inhabitants). This does restrict the ability of a local area to truly self-determine boundaries and local government structure. It is also clear that the initiative may also be taken at the national level. Some recent examples were brought to the rapporteurs’ attention of areas being invited to propose a single tier of local government. They were asked to submit an outline proposal within a month and a full proposal within two months. It should be noted that such proposals were expected to improve local government and service delivery, provide greater value for money, generate savings, provide stronger strategic and local leadership and be sustainable structures. In addition, they must also consider: local government structures and how they will achieve such requirements; evidence and analysis to support and explain the outcomes they will achieve; the impact on other local boundaries and geography, including police and fire and rescue authority boundaries and include the views of the relevant Police and Crime Commissioners/Fire authorities; and any wider context around promoting economic recovery and growth, including future devolution deals and Mayoral Combined Authorities. During the consultation procedure, the UK Government clarified that the invitation is a formal part of a process of continual dialogue between central and local government in England, the invitation follows many discussions between concerned area and central government and brings clarity to areas who have been exploring local initiatives for change to local governance arrangements. 

 

There are no provisions for local referendums on mergers. Examples exist of the Secretary of State trying to prevent a referendum when local authorities organise one. Where there have been local mergers held in England on boundary changes, each one has returned a “no” vote – sometimes overwhelmingly – against retaining smaller local government, but the rapporteurs heard that in each case the government did not act on the votes and imposed larger unitary councils against the wishes of the voters. 

 

During the consultation procedure, the UK government argued that any proposals on boundary changes must be made by one or more democratically elected councils. Decisions on whether to implement a proposal for restructuring local government are based on three criteria: 1) whether the proposal will improve service delivery and local government, 2) whether it has support in the round across the area and 3) whether it has a credible geography.  Those are cumulative criteria to be met.

 

The UK Government has also underlined that it can make a boundary change only where the Local Government Boundary Commission for England has undertaken a review and recommended the change. 

 

During the consultation procedure, the LGA confirmed that in England the Local Government Boundary Commission is responsible for boundary reviews, and local authorities can propose coming together to form a combined authority. Changes to boundaries require consultation with the local authorities involved. 

 

The interlocutors informed the rapporteurs that, in Scotland, at present, no plans to change municipal boundaries exist. 

 

Over the last decades, in Wales, several proposals to reform local government, including changes in local authority boundaries, have been on the agenda. At present, no such plans exist. Instead, as the Welsh Local Government Association informed the rapporteurs, the Local Democracy and Boundary Commission is systematically reviewing electoral areas within each local authority and levels of representation in each ward, in line with a statutory 10-year review programme. As per the consultation: “there is some consultation involved but ultimately it is [the] Welsh Government that takes the decisions on local authorities and ward boundaries”.  There is a statutory process set out in the Local Democracy Act 2013 which involves the Commission undertaking almost two years of process and consultation with a principal council before it produces its final recommendations. There is then a further minimum six-week consultation period before the Minister can make a decision on the recommendations and the Minister’s power to make any amendments to the final recommendations are limited to a very narrow set or criteria set out in the Act. 

 

In Scotland, though the size and powers of the 32 local authorities -already the largest in Europe on average by population, and some of them the largest by geographical area as well, including Highland Council, has been a matter for policy and academic debate, proposing either by cutting their number by half, arguing efficiency grounds, or to triple their number, to improve their democratic representativeness, the main political direction of travel has privileged improving services and empowering communities within existing municipal structures, as extensively discussed in the ‘Local Governance Review’ led by  the Scottish Government and COSLA.  

 

In Northern Ireland, there are no plans to change local authority boundaries. There is, however, an independent institute, the Local Government Boundaries Commissioner (LGBC). Its role is “to review and make recommendations in respect of the number, boundaries and names of local government districts and the number, boundaries and names of the wards into which each district is divided”. Consultation is one of the activities the LGBC undertakes as part of the reviewing and recommending processes. It is too soon to evaluate those activities and their results. 

 

In light of the above mentioned, the rapporteurs conclude that the situation in the UK, seems to be compliant with Article 5. 

Article 6.1
Appropriate administrative structures and resources for the tasks of local authorities - Article ratified

Without prejudice to more general statutory provisions, local authorities shall be able to determine their own internal administrative structures in order to adapt them to local needs and ensure effective management.

This article sets out several standards for translating formal local autonomy into local authorities’ powers to decide over the ways in which they prefer to organise their internal processes. According to the Congress’ Contemporary Commentary, “determining their own internal administrative structures” (paragraph 1) implies having the powers to: 

  • decide on their internal local organisation;
  • establish independent bodies, such as local companies or agencies, to improve the delivery of local services; 
  • conclude agreements with other local authorities (assessed under Article 10);
  • establish subordinate units and structures (such as municipal districts) to ensure that their responsibilities are discharged as effectively as possible. 

 

The Congress’ Contemporary Commentary also formulated the indicators for assessing the compliance with paragraph 2:

  • discretion and freedom of each and every local authority to determine, in particular, the conditions of service of employees (i.e., defining and implementing their own human resources policy);
  • power to hire their own staff, that is, high-quality staff, based on merit and competence, and set employee remuneration;
  • adequate training opportunities for employees; 
  • adequate career prospects for employees.

 

The rapporteurs noted that local authorities in all UK nations can freely determine their own internal administrative structures. The pay and terms and conditions of employment for local government employees are determined by the National Joint Council (NJC) for Local Government Services. This is part of the support the LGA offers local authorities. In 1997, this NJC “agreed a national framework with potential for local modification to suit local service requirements”.  COSLA and NILGA exercise the same role in their respective jurisdictions.

 

The rapporteurs did not hear of any dissatisfaction from the local elected representatives they met regarding local authorities’ powers to regulate their administrative structures and resources nor about any inadequacy of the conditions of service of local government employees. 

 

Given the above, it can be concluded that the UK complies with both paragraphs of Article 6.

Article 6.2
Appropriate administrative structures and resources for the tasks of local authorities - Article ratified

The conditions of service of local government employees shall be such as to permit the recruitment of high-quality staff on the basis of merit and competence; to this end adequate training opportunities, remuneration and career prospects shall be provided.

Consult reply indicated at article 6.1

Article 7.1
Conditions under which responsibilities at local level are exercised - Article ratified

The conditions of office of local elected representatives shall provide for free exercise of their functions.

According to the Congress’ Contemporary Commentary, Article 7.1 seeks to ensure that citizens are free to serve as elected representatives and are not prevented from holding political office owing to financial or material considerations. Nobody should be deterred from standing for election at a local level; once elected, local councillors should not be prevented from effectively discharging their duties. 

 

The question of adequacy of monetary compensation for the time spent in office will be considered further, in light of the assessment of Article 7.2 in section 3.6.2 below. 

 

At the meetings, local government interlocutors did not express overall dissatisfaction regarding freedom to exercise their functions. However, they pointed to a (potential) threat that the time-consuming workings of codes of conduct for councillors  may pose in this respect. For example, in England, formulating such a code and deciding over alleged conduct breaches is the duty and responsibility of every single local authority. No higher authority may interfere.  Local codes, however, must use criteria set out in the Localism Act 2011 and in line with the “Nolan principles” for public life. Scotland, Wales and Northern Ireland each have their own national codes of conduct for councillors. In Scotland and Northern Ireland, allegations are scrutinised by national institutions, whereas in Wales this is left to the local authorities themselves (except for serious alleged breaches of the code). The Standards Commission for Scotland is an independent body that handles complaints on the behaviour ofn Councillors of the potential breach of Councillors’ Code of Conduct. 

 

During the consultation procedure, the UK Government underlined that it is for local authorities to determine their own procedures for investigating alleged breaches of the code of conduct. In the vast majority of cases, this involves the formation of a Standards Committee to investigate claims and where appropriate recommend sanctions; these sanctions must then be agreed by full council. 

 

Given the above, the rapporteurs conclude that the UK generally complies with Article 7.1. 

Article 7.2
Conditions under which responsibilities at local level are exercised - Article ratified

They shall allow for appropriate financial compensation for expenses incurred in the exercise of the office in question as well as, where appropriate, compensation for loss of earnings or remuneration for work done and corresponding social welfare protection.

This paragraph mentions four criteria to assess a country’s compliance (cf. Congress’ Contemporary Commentary): 

  • appropriate compensation for expenses incurred in the exercise of the office, which implies that remuneration should reflect the workload and that remuneration schemes for mayors (or other elected executive positions) may differ from those for ordinary elected representatives; 
  • “where appropriate”, compensation for loss of earnings incurred by the local representative in discharging their duties for the local authority; 
  • “remuneration for work done”, that is, a proper salary (or the like) for the job;
  • finally, social welfare protection (e.g., health insurance, pension fund contributions) based on the same principles as for elected representatives at the national level. 

 

Regarding the exact allowances and setting them, there is variation across the UK. In England, this is a decision to be taken by the local authorities. Scotland and Wales have established a standard basic allowance and Northern Ireland has a maximum basic allowance for councillors.

 

In England, the rapporteurs heard multiple complaints concerning remuneration. Some interlocutors stated that the allowances did not reflect councillors’ workload. A consulted expert  informed the rapporteurs that the present remuneration schemes deters those in full-time work from standing for council. The Greater London Authority serves as an exception. The elected members (mayor and assembly members) are remunerated in such a way that they can fulfil their role full-time. In addition, they may claim expenses (these are all published for reasons of transparency). The rapporteurs were informed that, since January 2018, there is a Master Trust Pension Scheme; councillors can join this on a voluntary basis. 

 

During the consultation procedure, the LGA underlined that in England the law provides for councillors to receive an allowance for their role in their local authority, which broadly covers compensation for loss of earnings. 

 

During the consultation procedure, the UK Government pointed out that it is ultimately for the individual local authority to determine an appropriate scheme of allowances. Local authorities must establish an Independent Remuneration Panel to provide recommendations as to their scheme of allowances. The Panel can, and should, take into account ‘workload’. A local authority can also make provision for ‘special responsibility allowances to reflect the increased workload associated with leadership roles. The vast majority of local authorities make provision for expenses in their scheme of allowances.

 

In Scotland, the government sets the standards of councillors’ allowances. The basic salary of a councillor is currently £18 604 (this is said to be based on an assessment of the work burden anticipated for an average councillor and to represent around 75% of the average Scottish wage). Council leaders and senior councillors receive higher amounts (depending on which council band the council is in). In addition, all councillors can claim reimbursement of allowance and expenses incurred in undertaking their duties. Since 2017, councillors’ basic salaries have increased annually in line with the percentage increase in the median annual earnings of public sector workers in Scotland. Women are underrepresented among Scotland’s councillors, with 29% of all councillors being women, compared to 51% of the population. COSLA reports the development of a family leave policy for elected members. The current situation is that elected members have no legal right to parental leave, which may discourage some people from standing for election and the salary is not commensurate for what is very often a full-time job. The Scottish Government and COSLA are working together to identify the range of factors that are barriers to local elected office.

 

In Wales, there is an Independent Remuneration Panel for Wales –an independent statutory body responsible for determining the remuneration for elected members of principal councils, national park authorities, fire and rescue authorities, and community and town councils in Wales.  It has set a basic salary for elected members of principal councils (£14 368 in 2021/2022) and a differentiated scheme of salaries for various kinds of elected members, per size category (numbers of inhabitants). Elected members may claim reimbursement for travel and subsistence costs where these have arisen as a result of undertaking official business or approved duties. In addition, they are entitled to receive compensation for necessary additional costs for the care of dependent children and adults. No provision exists for members of local government to receive resettlement grants/payments if they lose office, but this matter is currently being explored. The WLGA interlocutors informed the rapporteurs about the WLGA’s long-standing position that the vital role local representatives play “is not adequately recognised and they are not adequately remunerated, especially compared to other elected representatives”. Elected members are also entitled to statutory family absence for parental leave.

 

In Northern Ireland, a maximum allowance is set by the Northern Irish Executive (currently £15 486 per year). Maximums allowances are also set for carers' dependants, travel, special responsibilities and subsistence. 

 

The rapporteurs conclude that the UK generally complies with the second paragraph of Article 7. However, the rapporteurs note that the situation woth financial compensation should be improved in Scotland and Wales, including as regards social welfare protection that should be based on the same principles as for elected representatives at the national level. 

Article 7.3
Conditions under which responsibilities at local level are exercised - Article ratified

Any functions and activities which are deemed incompatible with the holding of local elective office shall be determined by statute or fundamental legal principles.

The issue at stake in this paragraph (the Congress’ Contemporary Commentary) is to prevent potential conflicts of interest and to involve a commitment that prevents local representatives from discharging their duties for the local authority in a professional way. Restrictions on holding elected office should be as limited as possible and set out in national laws, which means they should apply to all levels of government. Finally, the wording of the paragraph implies that it is not recommended to simultaneously hold more than one office at the same or at different levels of government or in public enterprises. 

 

No local elected position is a formal barrier to standing as a candidate for the UK House of Commons or the devolved parliaments/assembly.  It is possible to have dual mandates, for instance combining being an MP with the office of an elected Metro Mayor, member of the Greater London Assembly, or councillor. 

 

The rapporteurs conclude that the UK generally complies with Article 7.3, as restrictions on holding elected office are limited, set out in national laws, and apply to all levels of government. On the other hand, dual mandates are widely permitted,  which may lead to conflicts of interest as national (party) considerations may easily stand in the way of local duties. 

Article 8.1
Administrative supervision of local authorities' activities - Article ratified

Any administrative supervision of local authorities may only be exercised according to such procedures and in such cases as are provided for by the constitution or by statute.

“Administrative supervision’’ means “any form of intervention in the decision-making process of a local entity by which a higher administrative level explicitly or tacitly approves, clears, agrees, suspends or annuls a proposal or a final decision, rule or plan approved by a local entity” (the Congress’ Contemporary Commentary). 

 

Compliance with this first paragraph of Article 8 is established, if 

  •  such supervision and the exact methods of supervision are provided for by the constitution or by statute (legality principle); 
  • supervisory authorities strictly comply with the procedures established by law for the exercise of such supervision (time, manner, competence, etc.). 

 

 As highlighted in the Congress’ Contemporary Commentary, the following principles and guidelines should govern administrative supervision: the activities subject to supervision should be clearly specified by law; compulsory automatic administrative supervision should be limited to activities of a certain significance; administrative supervision should normally take place after the exercise of the competences (a posteriori); a priori administrative supervision should be kept to a minimum and normally be reserved for delegated competences; and the law should define the time limit or period granted for the supervisory authority to perform the supervision; in the case of a priori supervision, absence of a decision by the supervisory authority within a specified time should mean that the planned activity may take effect. 

 

England

 

The UK Ministry of Housing, Communities and Local Government informed the rapporteurs of the following (referring to official documents).  Based on the Local Government Act 1999, “the Secretary of State has powers to inspect and intervene in an authority if [they are] concerned that it is failing in its ‘best value’ duty. In particular, section 15 of this Act states that the Secretary of State is entitled ‘to take any action which [they consider] necessary or expedient to secure its [the authority’s] compliance with the requirements’ of the best value duty.” The supervision may even go as far as taking over all or some of the functions of the authority. The practice has been to use the latter powers to nominate commissioners to take over some or all of an authority’s functions. 

 

In addition, the ministry told the rapporteurs that “the Secretary of State can also intervene on a non-statutory basis”. During the consultation procedure, the UK Government noted that at the moment of consultation there were 2 non-statutory interventions by the Department for Levelling up, Housing and Communities out of 331 councils and these interventions are set out via directions to keep them to a minimum. Other departments do have powers of intervention such as the Department for Education in relation to children’s services. 

 

The UK government also underlined that there is transparency when intervention takes place on a non-statutory basis and on the terms of that action. In Croydon and Nottingham the Secretary of State has appointed an Improvement and Assurance Panel and Board, whose Terms of Reference and quarterly reports are published. The Councils have welcomed the action and the additional support that this non-statutory intervention provides. In Wirral and Peterborough, the UK Government has asked the councils to set up improvement arrangements (following a review prompted by their request for exceptional financial support) and they have done so. 

 

The rapporteurs would like to remind that any intervention on non-statutory basis obviously questions the application of the legality principle (even if – and this seems to be undisputed - such measures are considered to be of last resort) and should be avoided. 

 

Scotland

 

Information from the Scottish Minister for Social Security and Local Government revealed the following. The Local Government (Scotland) Act 1973 (section 211) contains a provision “for circumstances where a complaint is made, or Ministers consider that a local authority has failed to fulfil a statutory duty. Ministers may then, if they so wish, arrange to hold a public inquiry and, if the inquiry finds the authority to have failed, have the power to issue a direction to the authority requiring it to remedy the default.” 

 

The ministry also informed the rapporteurs that the Accounts Commission “is the public spending watchdog for local government, helping to ensure that public money is spent properly, efficiently and effectively. It is responsible for the financial and Best Value audit of all local authorities. Audit Scotland supports the Accounts Commission and can consider correspondence it receives raising concerns about the organisations it audits, as information that can help it in its audit work, rather than as complaints.” 

 

COSLA added that councils’ external audit is compulsory and that the Accounts Commission is only one of the many audit and scrutiny bodies. It also stated that the scope of supervision of the latter and its supporting agency, Audit Scotland, “is much greater than mere financial audit (…). In addition to the annual reports for each local authority Audit Scotland (…) provides detailed reports on specific topics such as value for money, performance of individual policies managed by local government such as skills or local authorities.” 

 

Wales

 

The Welsh Minister for Finance and Local Government informed the rapporteurs that “the Local Government and Elections Act (Wales) 2021 provided for new performance arrangements with a focus on self-assessment and peer review, not ministerial oversight. The arrangements are being co-designed with local government.” According to the WLGA, “generally, [local authorities] are left to make their own decisions and administer the funding received via the Revenue Support Grant. Specific Grants have been used by [the Welsh Government] to try and direct [local authority] spending”. The Welsh Government notes that specific grants (which can only be used for the specified purpose) are often used at the development stage of an activity and can be subsequently transferred into the unhypothecated Revenue Support Grant.

 

Northern Ireland 

 

The Northern Ireland Department for Communities observed having “very few oversight/supervision powers”. Such powers are set out by the Local Government Act (NI) 2014 (Control of councils by Northern Ireland Departments). This act creates powers for any Northern Irish department (a) to require a council to make reports and returns and provide information in relation to the exercise of its functions specified in a direction to that department, (b) to instigate an inquiry or an investigation into the administration of any statutory provisions relating to the functions of any council or any committee or sub-committee of a council, (c) to intervene in the operation of a council if the department is satisfied following an inquiry or investigation that a council has failed to discharge any of its functions (this intervention may take the form either of a direction requiring the council to take certain actions within a specified timeframe, or – if such a direction is not complied with – to arrange for the exercise of those functions other than by the council); and (d) to direct a council not to take an action that would be incompatible with any international obligation, or to require it to take any action for the purpose of giving effect to an international obligation. 

 

During the consultation procedure, the LGA informed the delegation that the powers to carry out the administrative supervision of local authorities have been properly laid down in statute. Local authority services are also regularly inspected by regulatory bodies for legal compliance and efficiency (e.g. CQC, Ofsted). While there is a clear statutory code for supervision, these additional inspections combine to form a complex administrative ecosystem.  It appears to the rapporteurs that this system seems to be rather unique in Europe. 

 

Considering the above, the rapporteurs conclude that the situation in England, Scotland and Northern Ireland is compliant with Article 8.1 since the supervision has a legal basis and the law establishes the procedures for the supervisory authorities. 

 

As regards Wales, the rapporteurs welcome the discussed development in Wales, but they refrain from formulating a conclusion regarding compliance with Article 8.1 at present, as it is still too early to assess how the new arrangements will function in practice. 

Article 8.2
Administrative supervision of local authorities' activities - Article ratified

Any administrative supervision of the activities of the local authorities shall normally aim only at ensuring compliance with the law and with constitutional principles. Administrative supervision may however be exercised with regard to expediency by higher-level authorities in respect of tasks the execution of which is delegated to local authorities.

According to the Congress’ Contemporary Commentary, this paragraph proclaims a general preference for checks on legality over checks on expediency, the former being the only checks that, in general, comply with the Charter. Administrative supervision based on expediency should be limited to the tasks that higher-level authorities (the supervisory bodies) have delegated to local authorities. Intervention because of the necessity of co-ordination is allowed for, as is co-decision making. 

 

The rapporteurs observe that almost all local government’s tasks are of the attributed kind, as meant in Article 4.1 of the Charter. That is, they are competences attributed by statute, leaving room for local policy making, rather than a delegated (mandatory) local execution of supranational services. Nevertheless, in general, UK supervision is being exercised with a view to expediency (cf. supervision over “value for money”; as if accounting for that to the local communities were insufficient). Considering the rather heavy supervision in most parts of the UK regarding expediency, the rapporteurs conclude that the situation in the UK is not compliant with Article 8.2. 

Article 8.3
Administrative supervision of local authorities' activities - Article ratified

Administrative supervision of local authorities shall be exercised in such a way as to ensure that the intervention of the controlling authority is kept in proportion to the importance of the interests which it is intended to protect.

The main indicator for assessing the compliance with this paragraph is (the Congress’ Contemporary Commentary) that the supervisory authority should intervene only to the extent necessary, and proportionately to the importance of the interests it intends to protect, that is, considering the relevance of the public interest at stake or the seriousness of the legal violation allegedly committed by the local authority.

 

National departments have their own supervisory systems to oversee services run by local authorities. They all publish statements that explain providing any other grants to local authorities, and relevant legislation and regulation in relation to delivery of those services, including the Department for Education (DfE), Department of Health & Social Care (DHSC), Department for Transport (DfT) and Department for Business, Energy & Industrial Strategy (BEIS).  LGA, for instance, explicitly stated that “central government has authority to intervene when it perceives a council to be failing in its duties but treats this as a last resort, which is compliant with the requirement of proportional supervision of local authorities’ activities under Article 8”. On the other hand, it also observed “(…) central government having significant oversight in how local authorities are funded and how these funds are spent”. 

 

In Scotland, COSLA witnessed “very strict external supervision provided by a range of national bodies, namely Audit Scotland”. It stated that this body’s scope of supervision goes beyond financial audit and that its agency Audit Scotland “provides detailed reports on specific topics such as value for money, performance of individual policies managed by local government such as skills or local authorities”. The interlocutors for the Scottish Minister for Social Security and Local Government, underscored the independence of the national bodies with specific responsibilities in relation to local authorities (Scottish Public Service Ombudsman, Accounts Commission, Audit Scotland, Standards Commission, and Commissioner for Ethical Standards in Public Life in Scotland). The Local Government (Scotland) Act 1973 (section 211) does provide for circumstances where a complaint is made, or ministers consider that a local authority has failed to fulfil a statutory duty. Ministers may then, if they so wish, arrange to hold a public inquiry. If the inquiry finds the authority to have failed, ministers have the power to issue a directive to the authority, requiring it to remedy the default. In addition, the Inquiries Act 2005 allows Scottish ministers to set up an inquiry where it appears that particular events have caused public concern, or there is public concern that particular events may have occurred. Such interventions are “incredibly rare and, in the main, are unlikely to occur other than in the most serious of cases, for example”, as the ministry concluded. 

 

In Wales and Northern Ireland, the rapporteurs did not hear similar worries. They conclude that the UK partially complies with Article 8.3, because in practice the proportionality principle of supervision over local authorities in England and Scotland is not always respected. 

Article 9.2
Financial resources of local authorities - Article ratified

Local authorities' financial resources shall be commensurate with the responsibilities provided for by the constitution and the law.

Revenues and mandatory tasks of local authorities should be balanced to ensure that the financial resources available to those authorities are satisfactory in comparison to the tasks assigned to them by law (cf. Congress’ Contemporary Commentary). Also, new tasks assigned or transferred to local authorities must be accompanied by the corresponding funding or source of income to cover the extra expenditure. 

 

England

 

As was discussed in the case of Article 9.1, the main instrument for calculating local government funding is through the Local Government Finance Settlement, which determines funding baselines for every authority by an assessment of the relative needs of areas, including measures of deprivation. In addition, national department interlocutors also – univocally – point out the “New Burdens” doctrine. This forces all government departments to assess new burdens on local government and to engage with relevant local stakeholders, “to ensure local government receives the funding they need to deliver new activities”.  They also mention several “devolution deals” and the accompanying transfer of funding to the directly elected mayor in such regions. One expert provided further information on the latter and stated that there is no autonomy over taxation levels and that there are no new taxation or spending powers for combined authorities and their elected mayors.

 

Interlocutors for local government observe several flaws in the financial system. They mention inadequate funding of attributed tasks, significant cutbacks, and medium- and longer-term uncertainties. The LGA calculated a predicted funding gap of several billion pounds by 2024/25. Some interlocutors even observe national political preferences in funding local government. Part of the funding is to be obtained by competitive bidding, which allegedly is easier for richer authorities to win. Some bids seem to need a sign-off from MPs.

 

During the consultation procedure, the government highlighted that bids provided a detailed application form and were assessed impartially by officials against four critical components: value for money, strategic fit, deliverability and characteristics of place. 

 

The rapporteurs consider that the general mechanism for allocating resources over local authorities (LGFS - determining the funding baselines) and the “New Burdens” doctrine have positive aspects. They also observe that, in practice, the results of those efforts are not sufficient. In addition, much funding is nowadays allocated via ad hoc deals and competition. The rapporteurs cannot consider this is sound mechanism for ensuring that local government funding will be commensurate with the responsibilities provided for by the constitution and the law. That leads them to conclude that, with respect to England, the situation is in breach of Article 9.2.

 

Scotland

 

In Scotland, too, attention is being paid to new burdens on local government finances resulting from a transfer of tasks. As the Scottish Minister for Social Security and Local Government states, the new burdens policy “requires any new statutory function which imposes a new financial burden on local authorities to be fully funded”. The ministry informed the rapporteurs that the way to determine the amount of any additional funding and its distribution between local authorities is the subject of negotiation between the Scottish Government and COSLA officials together with local authority Directors of Finance and that final recommendations needed ultimate approval from Scottish Government ministers and COSLA political leaders.

 

COSLA interlocutors point out the projected budget gaps (estimated by auditors at £185 million for 2020/21, prior to Covid-19 costs). They declare that “demand for local services has long outpaced the available funding”. 

 

The rapporteurs consider that the general mechanism for allocating resources among local authorities (indicators for the general revenue grant) and the new burdens goal (fully funding new financial burdens) have positive aspects. They also observe that, in practice, the results of those efforts are not sufficient (considering the projected funding gap), and that, regarding new burdens, additional funding seems to be the result of negotiations between national and local government (including COSLA), rather than of sound and non-partisan calculation of the costs of new tasks assigned or attributed to local governments.  The rapporteurs do not consider this to be a mechanism for ensuring that local government funding will be commensurate with the responsibilities provided for by the constitution and the law. That leads them to conclude that, the situation in Scotland does not comply with Article 9.2.

 

Wales

 

The Welsh Minister for Finance and Local Government informed the rapporteurs that when legislation assigns or delegates new tasks to local government, such a bill is accompanied by a regulatory impact assessment that sets out the financial and other impacts of the proposed legislation, and that this is subject to both stakeholder consultation and scrutiny through the Senedd.

 

The WLGA interlocutors acknowledge that they agreed with the Welsh Government “several years ago” that any new responsibilities or requirements on local government should be met with adequate resources: regulatory impact assessments must be undertaken for any new legislation, to identify cost implications. 
But they also state that “the [revenue support grant] settlement is a rather opaque process”. To illustrate this opinion, they argue that the overall settlement could be reduced in any year, effectively cancelling out any notional “increase” in the settlement to deal with these new responsibilities.

 

The rapporteurs were informed that pressures on local government are real (according to a report received by the finance sub-group (a joint Welsh Government and WLGA meeting); by 2023/24 will increase to £821 million).

 

The latter, combined with the observation that the regulatory impact assessments are not sustainable, leads the rapporteurs to conclude that, with respect to Wales, Article 9.2 has not been complied with.

 

Northern Ireland

 

The Northern Ireland Department for Communities presented what happened when functions (i.e., parking and planning) were transferred to local government in 2015. A transferred functions grant was established, to be paid by the Department for Communities. In general, so the department stated, “funding is reviewed by departments if and when functions are transferred to councils.” 

 

Considering the compliance with Article 9.1, the information provided by the Northern Ireland Department for Communities, and the lack of counter-indications, the rapporteurs conclude that the UK, with respect to Northern Ireland local government, the situation complies with Article 9.2.

Article 9.8
Financial resources of local authorities - Article ratified

For the purpose of borrowing for capital investment, local authorities shall have access to the national capital market within the limits of the law.

The Charter formulates having access to the national capital market as a right, but (the Congress’ Contemporary Commentary) a restricted one. The law may establish requirements, procedures, criteria, limits or ceilings concerning local authorities’ financial activities. Such restrictions should be aimed to prevent excessive debt among local and regional authorities and ensure their financial viability and liquidity.

 

Local authorities in England, Wales and Northern Ireland have access have access to the Public Works Loans Board - PWLB (lending via the Treasury) but they can borrow from any willing lending. They tend to borrow from PWLB as they charge low rates. 

 

The Treasury provides loans to local authorities to undertake capital projects through the Public Works Loans Board (and, since 2021, the UK Infrastructure Bank, an additional borrowing source for infrastructure to achieve net-zero emissions or support regional and local economic growth). As the Treasury informed the rapporteurs, legislation (the Local Government Act 2003, in particular) sets out that local authorities can borrow and invest for any of their functions, in line with prudent financial management. Restrictions are set: all borrowing must be affordable (i.e., local authorities must be able to service and repay the debt from revenue), local budgets need to be balanced each year, borrowing is only acceptable against revenue streams, not assets.

 

Scottish local authorities are entitled to borrow money (Local Government (Scotland) Act 1973). The purposes for which they may borrow are limited (Local Authority (Capital Finance and Accounting) (Scotland) Regulations 2016), especially: capital expenditure of the local authority (including grants to third parties in specific circumstances), temporary borrowing and lending for cash management purposes, and loans to other statutory bodies as set out in the Regulations. If a local authority wishes to borrow money for other purposes, it needs the consent of Scottish ministers.

 

Local interlocutors did not mention any specific issues concerning local authorities’ access to the capital market. The English Local Government Association even considered the arrangements in the 2003 Local Government Act “a major step in freeing local government from centrally imposed borrowing controls and the Government placing genuine trust and reliance in local government’s ability to manage its own affairs according to the sector’s own professional standards”.

 

As the restrictions fall within the parameters set out in Article 9.8, the rapporteurs conclude that the UK complies with Article 9.8.

Article 9.7
Financial resources of local authorities - Article ratified

As far as possible, grants to local authorities shall not be earmarked for the financing of specific projects. The provision of grants shall not remove the basic freedom of local authorities to exercise policy discretion within their own jurisdiction.

Paragraph 9.7 formulates a clear preference for unconditional, non-earmarked grants from higher-level authorities to local and regional authorities. The allocation of specific grants should be based on objective, transparent criteria justified by spending needs and criteria for the allocation of general grants should be specified by law and be predictable.

 

The rapporteurs assessed the UK’s compliance with this seventh paragraph of Article 9 with using first paragraph. They concluded that, in England, about one third of local resources consist of earmarked grants, that the core council grant is significantly smaller than the sum of the earmarked grants and that this general grant is partly earmarked as well. In Scotland and Wales, the general grants are more general than the English one, and a smaller part of local resources is formed with specific grants. The latter also holds for Northern Ireland, where national grants form only 8% of local government resources. 

 

The conclusion is that with respect to England, Article 9.7 has not been complied with, with respect to Scotland and Wales it has been partially compliant, and complient with with respect to Northern Ireland. 

Article 9.6
Financial resources of local authorities - Article ratified

Local authorities shall be consulted, in an appropriate manner, on the way in which redistributed resources are to be allocated to them.

Under Article 9.6 (the Congress’ Contemporary Commentary), consultation of local authorities and, preferably, their national associations is a compulsory procedure, to be enshrined in national legislation and that has to take place in a timely manner before a final decision is made. Such consultation must cover the decision, the way a decision is made and the criteria for doing so. Sufficient time must be available for consultation based on adequate information provided to local authorities. 

 

The assessment of compliance with this paragraph partly overlaps with the one made for Article 4.6. It is also more stringent, as Article 9.6 requires a legal foundation and specifies which topics should be part of the consultation. 

 

The rapporteurs observed that, in general, consultation with local authorities takes place. It appears also that the legal foundation in England of consultation over the core spending power exists. However, the rapporteurs found that the Local Government Finance Act 1988 (sections 78 and 78A) does not contain a legal duty to consult local authorities and/or their representative associations. Section 78, subsection 5 of the very act states that the Secretary of State “shall consult such representatives of local government as appear to [them] to be appropriate”. They also observe that the time available for such consultation is rather short; four weeks, sometimes including the Christmas break  or other public holiday periods. 

 

Occasionally, a specific legal foundation exists (England and Wales), sometimes practical guidelines (Wales). But this practice does not fully meet the requirements meant in Article 9.6. The rapporteurs therefore conclude that the UK only partially complies with this sixth paragraph of Article 9. 

Article 9.5
Financial resources of local authorities - Article ratified

The protection of financially weaker local authorities calls for the institution of financial equalisation procedures or equivalent measures which are designed to correct the effects of the unequal distribution of potential sources of finance and of the financial burden they must support. Such procedures or measures shall not diminish the discretion local authorities may exercise within their own sphere of responsibility.

This paragraph deals with the necessity of financial equalisation in favour of financially poorer authorities. This may take different forms (the Congress’ Contemporary Commentary), usually involving a system of transfers to the poorer authorities. The Charter also calls for transparent and predictable financial equalisation mechanisms that must respond to changes in the economic climate and that do not limit poorer local authorities’ spending discretion.

 

The most visible equalisation mechanism  is in the calculations of the general grants (known as the revenue support grants in England and Wales and as the general revenue grant in Scotland). Relative needs (for instance, deprivation, population growth, pupil numbers) are taken into account when determining the grants per local authorities. In England, additional equalisation takes place with some of the specific grants to local authorities, which, according to the Treasury, have included equalisation components in their allocation methodology to account for the varying ability of local authorities to raise revenue. Contrary to this, as local interlocutors underscore, the present use of competitive funding and tenders may make local resources increasingly dependent on central government priorities and running the risk of political interference. In Wales, the redistribution of business rates is said to have an element of equalisation. According to the WLGA, some businesses are also eligible for business rate relief and local authorities can grant hardship relief to businesses when in the interests of the local community. At the same time, the council tax is, as the WLGA stated, “generally regarded as a regressive tax”.

 

During the consultation procedure, the UK Government refuted the allegation that there has been any political interference. It added that here is an objective and carefully constructed index of priority places for the Levelling Up Fund (a competitive fund) to target funding to places most in need of the kind of investment that the LUF provides. The index uses metrics such as GVA per hour, unemployment rate, average journey times and commercial vacancy rates, amongst others. For round one, the majority of successful projects from the LUF went to places judged most in need (category 1 places in LUF parlance).

 

In view of the rapporteurs the situation presents a mixed picture. Financial equalisation does occur, but opposite tendencies and risks exist as well. It appears to them that what is required, but lacking, is a transparent and predictable financial equalisation mechanism. The rapporteurs therefore conclude that the UK partially complies with Article 9.5.

Article 9.3
Financial resources of local authorities - Article ratified

Part at least of the financial resources of local authorities shall derive from local taxes and charges of which, within the limits of statute, they have the power to determine the rate.

Tax-levying power is considered a key part of local authorities’ financial autonomy, whether it concerns general taxes (such as property taxes) meant to cover the set of local government expenses, or taxes meant as payments for specific local services (see in this respect A contemporary commentary by the Congress on the explanatory report to the European Charter of Local Self-Government). It is mandatory to derive “at least” part of local government’s resources from local taxes and charges. In addition, local authorities must be entitled to determine the rate (that is, “within the limits of statute”). Central government controls over local taxation should be aimed solely at preventing excessive debt among local authorities and helping them to cope with their financial situation.

 

In all parts of the UK, local government has tax-levying powers. All the sub-national governments (and the UK Government in the case of England) set framework for local taxation (for instance, by deciding on the way to determine property values, setting a threshold on tax rate increases, or setting the rates).

 

The rapporteurs note that in Scotland and Wales, local taxation reforms are being discussed.

 

Considering that local government is at least partly funded by local taxes and that the aim of the restrictions on local taxes by national and sub-national government is not to prevent debt among local authorities or to help them to cope with their financial situation, but to limit excessive tax increases and to promote ideas about “value for money”, the rapporteurs conclude that the UK partially complies with Article 9.3.

Article 9.1
Financial resources of local authorities - Article ratified

Local authorities shall be entitled, within national economic policy, to adequate financial resources of their own, of which they may dispose freely within the framework of their powers.

This first paragraph establishes basic principles in the area of finance: local authorities have a right to their own financial resources and they should be free to decide how to spend those resources. Such “own resources” need to be adequate. Local authorities’ fiscal capacities can be achieved by incorporating the principle of adequate financial resources in the constitution or the law and by relying on inclusive consultation procedures between associations of local authorities and central government based on memorandums of understanding (the latter to be assessed with paragraph 6). 

 

In the UK, deciding over local government resources is a devolved matter, but the UK Government retains some powers which can be used to provide direct funding to local government in Scotland, Wales and Northern Ireland under specific circumstances or for specific purposes. An example of this is the Industrial Development Act 1982 (sections 7 and 8) and more recently, the UK Internal Market Act 2020 (sections 50 and 51). 

 

England 

 

In England, local government financial resources essentially encompass council tax , retained business rates, and several key government grants (such as the un-ringfenced revenue support grant), apart from charges. Government grants form about half of local resources, as do local taxes; Table 4 shows the breakdown. Some grants are grants meant for particular services or functions, and some of those are earmarked for specific services. The council tax (a domestic property tax) is a local matter, but it is limited by considerable restrictions. Councils can offer discretionary council tax discounts, where they consider them appropriate. Council may set their schemes for CT reduction/support. The UK Government sets a threshold on tax increases each year. Authorities are required to hold a referendum if their council tax rise for 2021-22 is more than 5%, of which 3% must be for social care – so, it is ringfenced. If the authority is not a social care authority, then council tax can only rise by 2% without a local referendum. The business rates are a local tax, within strict boundaries set by the UK Government. The “rateable value” of premises (above which businesses must pay taxes) is decided by the national “Valuation Office Agency” (property valuations are reviewed and updated every five years and from 2023 this will be every three years). The UK Government decides which businesses must pay business rates and which are entitled to a discount; the funding is collected locally but the central government decides how it is allocated among councils.  There is a continuing debate about re-localising the business rates in England and allowing councils to retain all, or a proportion of their own business rates. Currently, the system is centralised and there seems to be no haste at the centre to re-localise business rates. 

 

Table 4. Breakdown of local government resources 

Resource    % (2019/20)
General government grant (“core council grant”)    17
Specific (“ringfenced”) grants    34
Council tax    32
Retained income from business rates    17

 

The Ministry of Housing, Communities and Local Government (MHCLG)  bears the main supervision responsibilities, the Treasury supports the department’s oversight of the financial sustainability of local government. 

 

The Local Government Finance Settlement (LGFS) is the determination of funding to local government (to be approved by the House of Commons). The Spending Review process sets out the total amount of money the UK Government plans to spend on departments and public services, including local government. The rapporteurs were informed that this LGFS is the mechanism through which the UK Government sets out the allocation of central government resources to local authorities in England, and the level of locally retained business rate income. In providing this resource, funding baselines for each authority are determined by an assessment of the relative needs of areas, including measures of deprivation, according to the MHCLG. 

 

Interlocutors from central government departments informed  the rapporteurs that, through the most recent LGFS, the UK Government has made available an increase in core spending power in England, from £49 billion in 2020/21 to up to £51.2 billion in 2021/22, a 4.6% increase in cash terms, and that “this recognised the resources councils need to meet their pressures and maintain current service levels.” During the consultation procedure, the UK government updated the rapporteurs that this Settlement makes available an additional £3.5 billion to councils, including funding for adult social care reform. This is an increase in local authority funding for 2022/23 of over 4% in real terms which will ensure councils across the country have the resources they need to deliver key services. In total, the UK government expects Core Spending Power to rise from £50.4 billion in 2021/22 to up to £53.9 billion next year. 

 

The LGA stated that “local authorities are limited in their ability to raise and utilise financial resources freely, with central government having significant oversight in how local authorities are funded and how these funds are spent.” It also mentioned a huge increase in the number of small grants “which are often very specific, short-term, and competitively assessed”. During the consultation procedure, the UK Government pointed out that ringfences are usually introduced for new funding streams rather than ringfencing previously un-ringfenced funding.

 

The LGA calls for sustainable long-term funding and clarity about how local services will be funded in the next few years and beyond. A consulted expert adds that most of the funding received from the centre is ringfenced for specific uses, so councils cannot use that funding as they see best. A significant amount of central funding goes directly to schools.

 

During the consultation procedure the LGA reiterated that local authorities are limited in their ability to raise and utilise financial resources freely, with central government having significant oversight in how local authorities are funded and how these funds are spent.

 

The rapporteurs observe that, at first sight, English local government resources are “financial resources of their own”, to a considerable degree, as only one third of local resources are earmarked. A more thorough look, however, leads to the conclusion that the core council grant is partly earmarked as well and, moreover, that local government taxes are local almost by name only (due to the nationally set restrictions – some of which are set per local authority – mentioned above). The rapporteurs therefore conclude that, with respect to English local government, the UK does not comply with Article 9.1. 


Scotland

 

The local finance system in Scotland resembles the English one, as local resources consist of charges for local government services, grants by the Scottish Government, and local taxation (“council tax”). The Scottish Government annually publishes a Local Government Finance (Scotland) Order, which gives information about the general grant. The grants are designed and calculated to reflect the needs of local authorities.  The most important criteria are the population and the local tax-raising capacity. This block grant forms about 85% of local government expenditure and has three parts: 

  • A general revenue grant (formerly known as the revenue support grant): its size is calculated considering the amount needed for a standard service level and the sum of resources obtained from national non-domestic rates and council tax. The Scottish Government determines the exact amount per local authority (using “grant-aided expenditure” calculations and projections and indicators such as population, pupil numbers, and deprivation).
  • Specific vevenue grants: these specific grants are also set by the government and are meant to fund the execution of national policies. They are earmarked/ringfenced. Examples from 2018/19 are specific grants for Gaelic, the Pupil Equity Fund, the early learning and childcare expansion, and criminal justice social work.
  • Non-domestic rates income: this is generated locally, but set and pooled centrally, and is distributed back to local authorities. 

 

COSLA calculated that in 2019/20, funding from the Scottish Government accounted for 77% of net revenue expenditure, council tax for 20%. It observes that Scottish local authorities are highly dependent on national government for resources. They also point to the lack of statutory protection of local government funding and are of the opinion that Scottish local government has “significantly less ability to raise and control resources locally compared with the rest of Europe”. Furthermore, and although this has changed for 2022/23, for the previous 8-9 years Local Authorities have not been able to set their local Council Tax either because it had been frozen or in some instances because the Scottish Government has capped the level of increase that councils could set. Finally, it perceives increasing amounts of funding via specific grants (“ringfenced for specific purposes”). 

 

The rapporteurs observe that the larger part of local income stems from national grants, acknowledging that some parts of the grants are general and that those, to quote a scholar, “notionally at least, may be spent in accordance with a council’s own priorities.”  Others, however, are earmarked and leave little room to be called “financial resources of their own”. Local taxes account for only about 20%. The rapporteurs therefore conclude that, with respect to Scottish local government, Article 9.1 has not been complied with.

 

Wales

 

Welsh local funding contains four major sources: 

  • A general (“un-hypothecated”) grant: this revenue support grant comes from the Welsh Government and accounts for 43% (2019/20) of gross revenue expenditure.
  • Specific (“ringfenced and hypothecated”) grants: these account for 26% of gross revenue expenditure (2019/20).
  • Council tax, a local tax on residents: local authorities set the rates (on a property’s rateable value set in 2003); the Welsh Government determines the ratios between the charges applied to different bands. This tax accounts for 18% of gross revenue expenditure (2019/20).
  • Non-domestic (business) rates: a tax collected by local authorities, pooled by the Welsh Government and redistributed among local authorities alongside the revenue support grant. It accounts for 13% (2019/20) of gross revenue expenditure.

 

According to the Welsh Minister for Finance and Local Government, the council tax and the non-domestic rates form most significant portion of local authorities’ own income. Decisions on the level of council tax are made by local authorities.

 

The Welsh Local Government Association (WLGA)  points to local authorities having suffered from austerity measures, because of which “several discretionary [local authority] functions ceased in that period or services were outsourced/assets transferred”. It also suggests that local authorities might play more significant roles in addressing huge current societal challenges, if only they had the funding to do so. 

 

 The rapporteurs observe that grants form national government in Wales are more of the general kind than those in England, in particular. The reliance on central grants is also greater.  On the other hand, local taxation is less significant, and, in Wales as in England and Scotland, partly restricted by national (Welsh) government. The rapporteurs therefore conclude that, with respect to Welsh local government, the 
Article 9.1. has not been complied with.

 

Northern Ireland

 

According to the Institute for Government , funding local government in Northern Ireland differs from the rest of the UK. The larger part consists of income from district rates (a property tax, accounting for 70%), grants from the Northern Ireland Executive (8%) and fees for services (22%). The figures provided by the Northern Ireland Department for Communities show that “all the local authorities have considerable usable reserve balances”. The district rates are capped; the Northern Irish Government sets a maximum capital valuation for a domestic property. 

 

The rapporteurs did not receive any contrary indicators during the monitoring meetings, nor found any afterwards.  So, Northern Ireland, to some extent, is the UK’s odd one out, although here, too, national government constrains the use of local taxes. The rapporteurs conclude that, with respect to Northern Ireland, Article 9.1 has been partially complied with.

Article 9.4
Financial resources of local authorities - Article ratified

The financial systems on which resources available to local authorities are based shall be of a sufficiently diversified and buoyant nature to enable them to keep pace as far as practically possible with the real evolution of the cost of carrying out their tasks.

The financial systems need to be “sufficiently diversified”, implying (the Congress’ Contemporary Commentary) that local authorities’ finances should not be based solely on taxes or transfers and should be bolstered by all possible sources of local income. They also have to be “buoyant”; they should allow local finances to rise to meet the costs of the delivery of services, i.e., local finances should be able to adapt to new circumstances, needs and macroeconomic scenarios and be sufficient to cover service delivery. The latter can be measured as an equal development of prices for service delivery and of transfers from higher levels of government, the freedom to adapt tax rates to inflation, and new financial resources covering additional costs imposed on local government by higher-level authorities (assessed according to Article 9.2). 

 

Local government funding in all four UK nations consists of local taxes, various grants, as well as sales, fees and charges. The second indicator for compliance with this fourth paragraph of Article 9 is “buoyancy”. On this point, the rapporteurs found their assessment on the considerations formulated above. It stems from the exchange of views with some interlocutors during the remote meeting that the UK lacks a sustainable and predicable framework for funding local government. Only part of the national grants is calculated by applying objective criteria. Specific grants are set by national governments (albeit after consultation) and may change every year, some funds are only available for some regions (the English devolution deals, for instance), and local taxation is restricted. 

 

In this respect, it appeared to the rapporteurs from their discussion that local government has little financial freedom to adapt to new circumstances, needs and macroeconomic scenarios and the funding system does not provide any guarantee that national governments will grant such freedom. Local government funding is not systematic. The rapporteurs conclude that the UK’s financial systems of local government funding are diversified, but also that most of the resources are restricted by national governments and that they are far from being buoyant. 

 

It seems to the rapporteurs that the situation in the UK does not comply with Article 9.4. 

Article 10.1
Local authorities' right to associate - Article ratified

Local authorities shall be entitled, in exercising their powers, to co-operate and, within the framework of the law, to form consortia with other local authorities in order to carry out tasks of common interest.

The Charter (cf. Congress’ Contemporary Commentary) grants local authorities a general right to co-operate with one another to deliver local services or discharge their responsibilities and to create separate organisations for those purposes. The procedures, requirements and steps that must be followed for the latter should be regulated by national (or regional) legislation.

 

All over the UK, local authorities have statutory powers that allow for co-operation. Such co-operation may take several forms: informal co-operation (of neighbouring authorities or with authorities elsewhere in the country) to share best practice and promote innovation; formal, contractual arrangements to provide joint services and administrative functions; or formal legislative measures where two or more councils come together in a merger to form a new municipality. In England, local authorities may also come together as constituent members of a combined authority. The latter requires approval by the national government and is contingent on conditions like the creation of a mayoral role to oversee the combined authority. 

 

The rapporteurs were presented several examples of inter-local co-operation in all parts of the UK and conclude that the UK complies with Article 10.1. 

Article 10.2
Local authorities' right to associate - Article ratified

The entitlement of local authorities to belong to an association for the protection and promotion of their common interests and to belong to an international association of local authorities shall be recognised in each State.

The second paragraph within Article 10 entitles local authorities to associate nationally and internationally for the promotion of common interests. 

 

Local authorities in each of the constituent parts of the UK are represented by their respective local government associations (the LGA, the WLGA, COSLA and NILGA) as well as other regional forums and interest groups (e.g. Core Cities, London Councils). With respect of international engagement, the Local Government Overseas (Assistance Act) 1993 enables them to operate internationally as they do on an individual basis and through their respective national association in the Council of Europe, the EU, the UN System and international umbrella organisations.

 

The rapporteurs conclude that the UK complies with Article 10.2. 

Article 10.3
Local authorities' right to associate - Article ratified

Local authorities shall be entitled, under such conditions as may be provided for by the law, to co-operate with their counterparts in other States.

This paragraph formulates local authorities’ right to start and engage in transnational co-operation. Domestic legislation may establish steps, procedures or requirements concerning the exercise of such a right, unless such requirements seriously limit the possibility of fruitful transfrontier co-operation. When transnational co-operation threatens to overlap or conflict with the conduct of foreign affairs, then consultation and negotiation are the ways to solve this.

 

Many interlocutors gave examples of local authorities co-operating internationally. Some concerned twinning, others civic relationships, city networks, and even having overseas offices. Transnational co-operations appear to be bilateral or multilateral, and sometimes are co-operations of the national local government associations.

 

The rapporteurs conclude that the UK complies with Article 10.3. 

Article 11
Legal protection of local selfgovernment - Article ratified

Local authorities shall have the right of recourse to a judicial remedy in order to secure free exercise of their powers and respect for such principles of local self-government as are enshrined in the constitution or domestic legislation.

Article 11 demands local authorities have access to either a properly constituted court of law or an equivalent, independent, statutory body (the Congress’ Contemporary Commentary). The courts will then have to protect, on the one hand, the “free exercise” of local authorities’ powers; on the other hand, the principles of local self-government “as are enshrined in the constitution or domestic legislation”. Compliance with Article 11 only exists if such judicial remedies are made possible. As the Congress’ Contemporary Commentary declares, it is not enough for local authorities to be granted the right to bring legal actions in a court of law in the same manner as any other legal entity to defend its private rights or property. 

 

The latter right exists throughout the UK. Local authorities may legally challenge the decisions of the UK Government and other organisations exercising functions of a public nature in the courts. An actual example is challenging the legality of the government’s decision to expand Heathrow Airport on various grounds affecting their functions and inhabitants, including traffic and air and noise pollution. Another example is the application to the High Court to ask whether Schedule 12 of the Local Government Act 1972 could be read as allowing an updating interpretation (and so allowing for an extended possibility of having remote council meetings). A local authority in Northern Ireland challenged the national government’s use of a conversion factor to calculate the wealth factor in calculating the rates support grant. 

 

However, as already concluded in the previous Congress report, “although the UK has ratified the Charter without any reservation, the Charter’s principles are neither expressly nor specifically incorporated in legislation. The principles are neither directly applicable nor can local authorities refer to the Charter in case of judicial review. Courts might use the Charter, as should the legislator, as an aid to interpretation regarding domestic legislation in local affairs”. 

 

It is difficult for the rapporteurs to see how the UK courts may give full legal effect to the provisions of the Charter when it is not expressly incorporated into domestic law or the devolved legislations. 

 

The Charter is not part of UK domestic law, nor are its principles (as was concluded when considering Article 2). So, as the LGA rightfully stated, it cannot be relied upon by councils as a source of substantive rights (as noted in the Congress’ 2014 report). 

 

The rapporteurs conclude that The right to local self-government is not recognised in the domestic legislation and cannot receive effective protection in the UK courts.

 

UK local authorities do not have adequate recourse to a judicial remedy within the meaning of Article 11 read in conjunction with Article 2.  

ACCESSION

to the Council of Europe 5 May 1949

RATIFICATION

of the European Charter of Local Self-Government 24 April 1998

CONSTITUTION | NATIONAL LEGISLATION

At present, the United Kingdom does not have a written constitution, or any specific legal guarantees for the principles of local self-government.



30Ratified provision(s)
0Provision(s) with reservation(s)
0 Unratified Provision(s)
16Compliant Provision(s)
7Partially Compliant Articles
6Non-compliant Provision(s)