Sections 93 to 98: Charging and Trading
Introduction
264.The sections provide a new power for best value authorities to charge for discretionary services and enable new trading powers to be conferred on such authorities.
Section 93: Power to charge for discretionary services
265.This provides power for best value authorities, as defined in the Local Government Act 1999, to charge for discretionary services. Discretionary services are those services that an authority has the power but not a duty to provide. An authority may charge where the person who receives the service has agreed to its provision. The power to charge under this provision does not apply where the power to provide the service in question already benefits from a charging power (93(2)(a)) or is subject to an express prohibition from charging (93(2)(b)).
266.Section 93(3) and (4) place a duty on best value authorities to ensure that, taking one year with another, the income from charges for each kind of discretionary service does not exceed the costs of provision.
267.Section 93(5) provides that, within the framework set by section 93(3) and (4), a best value authority may set the charges as it thinks fit, and may in particular charge only certain people for a service or charge different people different amounts.
268.In carrying out their functions under section 93, best value authorities are required to have regard to any guidance that may be issued (93(6)) by the Secretary of State in relation to England and the National Assembly for Wales in relation to Wales.
269.Section 93(7) provides that certain prohibitions in other legislation preventing authorities from raising money are specifically disapplied in relation to the exercise of the charging power.
Section 94: Power to disapply section 93(1)
270.This section allows the Secretary of State, or (in relation to authorities in Wales) the National Assembly for Wales, to make orders disapplying the power to charge in section 93(1) in relation to particular authorities or descriptions of authority or particular services. Disapplication may be indefinite or for a particular period.
Sections 95 and 96: Power to trade in function-related activities through a company; Regulation of trading powers
271.Section 95(1) provides power for the Secretary of State, or (in relation to authorities in Wales) the National Assembly for Wales, to make an order enabling best value authorities (with the exception of those listed in subsection (7)) to trade in any of their ordinary functions. An order authorising trading may make provision about the persons with whom authorities may trade.
272.The power may not be used to authorise best value authorities to trade in a statutory service which they are already obliged to provide with a person to whom they are already obliged to provide it, or to use the new powers where there are existing trading powers.
273.Orders made under the power may relate to all best value authorities or to particular best value authorities or descriptions of best value authority. They may also relate to all activity in relation to a function, particular activities, or descriptions of activity. This will enable the scope of the trading powers to be related to an authority's performance categorisation under the Comprehensive Performance Assessment regime, where appropriate (sections 99(4) and 100(1) and (2)(e)).
274.The power to trade conferred by these provisions is only exercisable through a company within the meaning of Part 5 of the Local Government and Housing Act 1989 (“the 1989 Act”) (companies in which local authorities have interests). Part 5 of that Act shall for the purpose of these provisions be deemed to apply to a best value authority which is not otherwise a local authority. Furthermore, that application of Part 5 is restricted to companies through which a best value authority operates the power under section 95(1) and limited to trading activities undertaken by such companies.
275.Section 96 provides an order-making power to impose conditions on the exercise of any trading power by a best value authority, including where this is undertaken through a company. Best value authorities are required to have regard to any guidance that may be issued about the exercise of their trading powers.
Section 97: Power to modify enactments in connection with charging or trading
276.This section confers powers enabling the Secretary of State to modify or exclude the application of any enactment, except sections 93(2) and 95(2) of this Act, that restricts a best value authority's ability to charge for the provision of a discretionary service or carry out trading in its functions. The section also permits the Secretary of State to modify or exclude the application of any enactment that confers power on a best value authority to charge for a discretionary service. The effect of excluding such a power will be to substitute for the specific provision in question the general power to charge under section 93.
277.An order made under this provision may apply differentially to different authorities and different functions. It may not be used to authorise best value authorities to trade in a statutory service that they are already obliged to provide with a person to whom they are already obliged to provide it.
278.Orders made under this provision would be subject to the affirmative resolution procedure in both Houses of Parliament.
279.The section also makes provision about the Parliamentary procedure applicable to orders that amend earlier orders just for the purpose of causing them to apply, or not apply, in relation to particular authorities or authorities of a particular description. Orders amending earlier orders in this manner are to be subject to the negative resolution procedure in both Houses of Parliament.
280.The powers under this section will not be exercisable by the National Assembly for Wales (NAW). But the Secretary of State may not make any provision which has effect in Wales without consulting the NAW and may not make provision in relation to legislation made by the NAW without the consent of the NAW.
281.The NAW may submit its own proposals to the Secretary of State to the effect that any order made under these powers with provisions affecting Wales, should be in accordance with those proposals.
Section 98: Procedure for orders under section 97
282.The section describes further the affirmative resolution procedure the Secretary of State is to follow in making an order under section 97. He is required to consult such best value authorities or persons as appear to him to be representative of interests affected by his proposals and to lay before each House of Parliament for 60 days a document explaining his proposals, together with a draft order and details of the consultations that have been conducted including those with the NAW where the proposals relate to best value authorities in Wales. Thereafter, in preparing a draft order, the Secretary of State is required to consider any representations made during the 60 day period during which his proposals have been before the Houses of Parliament. The draft order laid before Parliament for approval must be accompanied by a statement by the Secretary of State, with details of the representations that he has considered and any changes made to his proposals.
