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Local Government and Public Involvement in Health Act 2007

Introduction

494.This Part replaces Part V of the Local Government and Housing Act 1989, which places propriety controls in relation to certain categories of local authority companies. Part 12 ensures that propriety controls may now be applied in relation to the wider range of entities through which local authorities in England and Wales now operate, rather than just to local authority companies. This Part allows for propriety controls to be applied to those entities in respect of which financial information must be included in the local authority’s statement of accounts. Provision is also made to define terms in other enactments that currently rely on definitions in Part V of the 1989 Act.

Sections 212 and 213: Entities controlled etc by local authorities; Trusts

495.Section 212 provides power for the Secretary of State, or Welsh Ministers (in relation to Welsh local authorities), to make an order requiring, prohibiting or regulating the taking of specified actions by entities connected with an English local authority. An Order may also require, prohibit or regulate the taking of specified actions by a local authority or certain members or officers of a local authority.

496.Orders made under the power may relate to all English (or Welsh) local authorities, authorities of particular descriptions or particular authorities. Orders may make provision in relation to all entities connected with a local authority or entities of a particular description.

497.Local authorities are defined as those bodies which are required to prepare a statement of accounts by regulations made under section 27 of the Audit Commission Act 1998 or section 39 of the Public Audit (Wales) Act 2004 in accordance with proper practices and are local authorities for the purposes of section 21 of the Local Government Act 2003 (accounting practices). Proper practices under section 21 of the Local Government Act 2003 are defined, by virtue of secondary legislation, as including the Code of Practice on Local Authority Accounting in the United Kingdom – A Statement of Recommended Practice (“SORP”) as published by the Chartered Institute of Public Finance and Accounting (CIPFA).

498.An entity is stated to be “connected with” a local authority if financial information about that entity must be included in the local authority’s statement of accounts. For the purposes of this Part, a local authority itself does not qualify as such an entity.

499.It is intended to use the Order making powers to enable propriety controls to apply to the wider range of entities through which local authorities in England and Wales now operate rather than just to local authority companies as currently defined in Part V of the Local Government and Housing Act 1989 (and the Local Authorities (Companies) Order 1995 made under this part).

500.Section 213 brings trusts and trustees within the provisions that can be made under Section 212.

Section 214: Further provision about orders

501.Section 214 makes further provision as to what an Order made under Section 212 may include. An Order may require an entity, a local authority or trustees to obtain the consent of the Audit Commission (in England), or the Auditor General for Wales (in Wales), before taking a particular action.

502.Under Section 214(3) an Order may also require a local authority to make arrangements for enabling questions to be put to certain members or officers of the authority including those who are members, directors or holders of specified positions with the entity concerned. An Order under this power may prescribe circumstances in which a local authority would be prohibited from taking action which would permit a person becoming a member, director, or holder of a specified position in relation to an entity. An Order may also require an authority to ensure that, as far as practicable, entities connected with that authority comply with the provisions of any Order applicable to them. Section 214(4) makes provisions in relation to trusts and trustees which corresponds to the provisions in Section 214(3).

503.Where an Order makes provision in relation to entities, trusts, or trustees, of a particular description it may provide for any expression used in identifying the description of the entity to have the meaning given, for the time being, by a “relevant document” identified by the Order. Section 214(7) defines a relevant document as a document which has been identified as proper practices for the purposes of section 21(2)(b) of the Local Government Act 2003 by regulations made under section 21 of that Act. The intention is that descriptions are able to be based on documents such as those setting out standard local authority accounting practices, for example SORP, without needing to amend the Order where changes are made to such documents.

Section 215: Exemptions from orders

504.Section 215 provides the Secretary of State (in England), and Welsh Ministers (in Wales), with a power to give a Direction exempting an entity or a particular description of entities from any Order made under Section 212. A Direction may be time limited, may contain conditions and is capable of being varied or revoked by a subsequent Direction. A Direction may also be made in relation to trusts or trustees.

Section 216: Consequential amendments

505.Section 216 repeals Part V of the Local Government and Housing Act 1989 and brings into effect Schedule 14 (other consequential amendments). Section 216(3) – 216(5) provide that amendments made in statutory instruments as a result of the repeal of Part V of the 1989 Act may provide for an expression used to have the meaning given, for the time being, by a document which has been identified as proper practices for the purposes of section 21(2)(b) of the Local Government Act 2003 by regulations made under section 21 of that Act. The intention, as with Orders made under section 212, is that descriptions are able to be based on documents such as those setting out standard local authority accounting practices, for example SORP, without needing to amend the Order where changes are made to such documents.

Sections 217 and 218: Definition of certain terms in amended enactments: England and Wales

506.Schedule 14 to the Act makes a number of consequential amendments to replace references in other legislation to Part V of the Local Government and Housing Act 1989. Section 217 provides a power for the Secretary of State by Order to define the terms included, by Schedule 14, in those other enactments. The Order may provide for the definitions inserted by Schedule 14 to have the meaning given, for the time being, by a document which has been identified as proper practices for the purposes of section 21(2)(b) of the Local Government Act 2003 by regulations made under section 21 of that Act. The intention, as with Orders made under section 212, is that descriptions are able to be based on documents such as those setting out standard local authority accounting practices, for example SORP, without needing to amend the Order where changes are made to such documents. Section 218 makes similar provision for Welsh Ministers to define expressions for the purposes of other enactments.

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