Localism Bill

My Lords, these are complex matters, and I am advised that I should read it all out. Subsection (8) of new Section 52ZN provides the Secretary of State with the power to modify or disapply a billing authority’s entitlement to recover costs in connection with a council tax referendum from a precepting authority. Amendment 129LAC would remove this provision. This power is needed so that the Secretary of State may make different provision for the recovery of costs in a situation in which a number of billing authorities are required to hold a referendum on a major precepting authority’s increase in council tax but one billing authority fails to do so. In this situation, it would not be appropriate for those billing authorities to recover their costs from the major precepting authority. Provision may instead be made for the billing authorities to recover their costs from the defaulting billing authority. We are aware that the Delegated Powers and Regulatory Reform Committee’s report on this part of the Bill recommended that this power should be subject to the affirmative procedure. We will consider that recommendation carefully and will return to the matter in due course, if required. Amendment 129LE seeks to limit the matters the Secretary of State may make provision for in regulations regarding the conduct of council tax referendums. The regulations would include setting out what is acceptable in terms of publicity, expenditure, the conduct of authorities, their members and officials, and the counting of votes, so these are significant issues. We consider that it is important that these matters be prescribed in regulations, as an authority will be bound by the result of the council tax referendum, in contrast to a local referendum. It is intended that the regulations made under these powers will be modelled on the Local Authorities (Conduct of Referendums) (England) Regulations 2007, which make provision in relation to the conduct of referendums on local government executive arrangements. I can assure the noble Lord that the regulations will be subject to consultation with the Electoral Commission. Amendment 129LABA removes the requirement for a billing authority to hold a referendum on a precepting authority’s excessive council tax increase. We consider that billing authorities are the appropriate bodies to arrange council tax referendums, as they are responsible for administering the council tax system. They also have experience of organising local elections, whereas there are some precepting authorities, such as police and fire and rescue authorities, that do not have any experience of this. Billing authorities will also be best placed to co-ordinate referendums where more than one authority covering the same area sets an excessive increase in council tax. Where a major precepting authority sets an excessive increase in council tax, it follows that all billing authorities to which it issues a precept, will need to organise a referendum. In these circumstances, to ensure the referendum is held on the same day by billing authorities across the major precepting authority’s area, billing authorities are required to hold the referendum on the ordinary day of local elections. Provision is made so that billing authorities may recover the expenses they incur in connection with the referendum. Amendments 129LF and 129LG relate to new Section 52ZR, which is a reserve power for the Secretary of State to disapply the council tax referendum provisions and would only be used in exceptional circumstances. It may, for instance, be used in a situation where the High Court has exercised its powers to appoint a receiver, because an authority has failed to service its debt. The amendment would mean that an authority which sets an excessive council tax can seek an independent assessment, and the Secretary of State would be compelled to give a direction to disapply a council tax referendum if that assessment comes to a particular conclusion. It is inappropriate for an unelected and unaccountable person to make the decision, since it will involve factors beyond a simple financial assessment of the authority’s position. It will, for example, involve a judgment about whether local taxpayers should be entirely unprotected from excessive increases for a financial year. Depending upon the precise timing, one outcome could be for the Secretary of State to refuse to issue a direction but to treat the authority as a separate category when setting excessiveness principles. For these reasons, the Secretary of State expects the power of direction will genuinely be used only in exceptional circumstances. These are very complex but important matters, and if I may I will write if there are any points which I have not covered. In the mean time, I hope noble Lords will feel able to withdraw the amendments at the appropriate point.