Local Authorities (Contracting Out of Community Infrastructure Levy Functions) Order 2011

My Lords, the community infrastructure levy allows local authorities to choose to charge a levy on new development in their area in order to raise funds needed to meet the demands of hosting that development and, in turn, to enable growth. The levy was introduced by the previous Government through the Planning Act 2008. Part 2 of that Act provides for regulations to allow the imposition of the levy. The Community Infrastructure Levy Regulations 2010 made the first use of those powers bringing the levy into effect from 6 April 2010. The instrument before the Committee today allows local authorities, if they so wish, to contract other parties to deliver most of the activities they carry out under the community infrastructure levy regulations. The draft instrument is entirely consistent with other contracting-out legislation, made under the same powers, for contracting out of functions concerning the administration and enforcement of the business improvement district levy and council tax and non-domestic rates. Both instruments were considered by this Committee. The objective of the order is to provide levy authorities with the scope to contract out specified functions and thereby give them the means to meet their responsibility to ensure best value. The order is of interest primarily to community infrastructure levy charging and collecting authorities. We consulted the Local Government Association and representatives of other levy authorities which welcomed the approach proposed by the draft order. Where an authority chooses to contract another body to undertake a function, that body then does so on the authority’s behalf; that is, the contractor acts as an agent of the authority to undertake the function it is contracted to deliver. Article 3 makes this fact clear by requiring that where a contractor, in doing the work that the authority has contracted him to do, enters into an agreement with another person, that agreement has to make it clear that the agreement is between the authority and the person, not the contractor and the person. It is possible to contract out only functions that an authority can delegate to a committee, sub-committee or officer, not functions that the authority itself must carry out. Where legislation requires a meeting of the authority—or, in the case of the Mayor of London, the mayor—to approve, that function cannot be contracted out. Article 4 of the draft order reflects these restrictions and reiterates that such functions may not be contracted to another party. The effect is that an authority cannot contract out its functions to propose, implement or withdraw a community infrastructure levy charge in its area or delegate its power to ask a court to consider imprisoning a levy debtor. These safeguards mean that decisions concerning whether to raise a charge, including at what level the charge should be set and whether to continue to do so, are for the authority and it cannot delegate it. The draft instrument has no effect concerning the spending of levy receipts; the community infrastructure levy regulations already provide for authorities to pass funds to any person they choose and, where they do so, the authority remains responsible for ensuring they are applied appropriately. The functions that this order allows to be contracted out include: gathering evidence to support consideration of whether and at what rate to apply a charge; the administration of the charge, including processes for notifying, collecting and enforcing liabilities; and the administration of the resultant funds. The order provides local authorities with the flexibility to ensure that their responsibilities are delivered in the most effective and efficient manner possible, be that in-house or through another party. It allows for a competitive process to be undertaken, which will provide authorities with the scope to drive down costs and drive up standards. Importantly, the order does not allow for decisions concerning whether and at what rate to charge a levy on development in an area to be delegated or create scope for another body to spend the proceeds. I am satisfied that the order is compatible with the rights contained in the European Convention on Human Rights. I beg to move.