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ada gazette SPRING 2014 | LEGAL & GUIDANCE

Local Audit and Accountability Act


The Local Audit and Accountability Bill, now enacted as the Local Audit and Accountability Act 2014, is primarily concerned with replacing the Audit Commission with a new system of local auditing. However, it also contains a clause on council

tax referendums to enable taxpayers to block council tax rises including those parts of the council tax bill determined by other local public bodies, including IDBs. Until the Act became law, although a council

tax increase above a set percentage threshold would trigger a local referendum, the percentage increase trigger had only related to the part of council tax set by the local authority (the element of the council tax bill relating to council services) but had not included payments to levying bodies such as the special levy that an IDB receives from a local authority. However, the Act now includes these in the calculation. Although local authorities are still obliged to pay the special levy, if they wish to avoid triggering a referendum they will have to reduce other services to off set any increase in the IDB special levy or put pressure on the IDB to reduce its levy. The impacts of including the special levy

in the trigger for council tax referendums are already being felt, although the Act has only recently gone onto the statute books. IDBs across the country that desperately need to replace key infrastructure (such as pumping stations), and face signifi cant new and unexpected repair costs following the recent fl ooding, are being forced by local authority representatives on their Boards to cut the increase in the levy needed to pay for this to two percent, which will dangerously impact their work and ultimately the economy and the safety of communities. This problem is compounded because

the reserves that IDBs hold to meet these unexpected costs are currently very low as IDBs have been keeping their special levy as low as possible for some time now, and well before the Bill was introduced, to help ease the fi nancial burden on local authorities. This good working relationship between local authorities and IDBs is being put under increasing strain by the fi nancial pressures imposed by the Bill. Local authority representatives on Boards are taking an increasingly adversarial stance to protect the local authority’s immediate interests, and not necessarily acting in the best interests of the IDB and, ultimately, their communities.

What ADA has done As soon as it was clear that the Bill would

include IDB special levies in the cap that triggers a referendum, ADA began lobbying for IDB levies to be excluded from the trigger. The Bill was announced in the Queen’s Speech on 8 May 2013, and ADA immediately started discussing with the Local Government Association and Environment Agency what it meant for IDBs. ADA worked with the LGA and the Environment Agency (EA) to establish exactly what the council tax referendum clause in the Bill meant for IDBs, and set out the implications for IDBs in a briefi ng note in July 2013. ADA also explored other ways of removing IDBs from

the referendum cap, including changing their status from levying bodies to precepting bodies. However, this was not practical. The Bill started in the Lords and progressed

very quickly. Its fi rst reading was on 9 May and its report stage, following consideration by the Bill Committ ee, was on 17 July. The Bill Committ ee in the Lords did not invite evidence from outside bodies, and we were not able to infl uence any of the Bill Committ ee members to submit amendments to the referendum trigger clause. In order to make a case for amending the Bill

in its passage through the House of Commons, ADA worked with the Environment Agency on a briefi ng note on the impact of the proposals on the EA and IDBs, which the EA published in August. ADA put a briefi ng on the impact in IDBs on its website in August, and also put articles in the Autumn 2013 and Winter 2013 issues of the Gazett e. ADA kept IDB Clerks informed of progress and the implications for IDBs. Responding to pressure from the ADA

Chair and Clerks of various IDBs, MPs wrote to Department for Communities and Local Government and Defra Ministers in September, expressing their concerns. The issue was considered by ADAs T&E and P&F Committ ees, and reported to the Annual Conference in November 2013. The Bill went to the Commons after the

summer recess. It had its First Reading on 29 August and its Second Reading on 28 October. The Bill Committ ee made a call for evidence and ADA submitt ed detailed evidence on 8th November. The Bill Committ ee considered the Bill during November, concluding on 21 November. The Report Stage debate was on 17 December. During the passage of the Bill through its

committ ee stages in the Commons, IDBs put pressure on their MPs to lobby for the removal of IDBs from the referendum trigger, but without success. The best chance to amend the Bill was at the Report Stage debate on 17 December. ADA wrote to Dan Rogerson, the Defra Minister,

and to Huw Irranca-Davies and Hilary Benn, urging that IDBs be removed from the list of levying bodies included in the referendum cap. ADA kept IDB Clerks informed of developments, and urged them to contact their MPs again. The IDBs continued to lobby their MPs, and Stephen Barclay, MP for North East Cambridgeshire, tabled an amendment to Clause 41 for the Report Stage “that any amount levied to provide for the activity of an internal drainage board shall be disregarded for the purposes of calculating an excessive council tax rise”. Unfortunately, Stephen Barclay was not in the

House of Commons for the Report Stage debate, so was not able to introduce his amendment. As he apparently had not asked anyone else to introduce it in his stead it was rapidly passed over by the Deputy Speaker, and Brandon Lewis, introducing the Government amendments, speedily moved the debate on, so Stephen Barclay’s amendment was lost. Huw Irranca-Davies tried to get the IDB levy included in the subsequent debate on the other amendments to Clause 41, making the point that including IDBs in the referendum cap could delay urgent work to protect communities. However, his att empt to get IDBs removed from the cap as part of another amendment to Clause 41 to exempt City deals from the referendum cap failed as Brandon Lewis again moved the debate on. Subsequently that amendment was defeated in a vote.

There was no further opportunity to change

the Bill. ADA did ask Lord Selborne to check if there was any chance of changing the Bill at the Lords’ fi nal consideration of Commons amendments on 21 January 2014. However Lord Selborne confi rmed that no new amendments could be made at this stage, and as the only debated amendment to Clause 41 had been defeated, there was no Commons amendment to Clause 41 that the Lords could respond to. The Bill was enacted on 30 January 2014, making

the IDB levy legally one of the charges included in the cap that triggers a council tax referendum.

Next steps The only opportunity to change the legislation

is to get a clause in another Bill to amend the Local Audit and Accountability Act. This will require support from Defra and a suitable Bill. ADA will monitor the impact of the new

council tax referendum law on IDB budgets and the ability of IDBs to meet their responsibilities for water management, ensure that Defra are aware of those impacts, and continue to look for opportunities for resolving the issue.

River Restoration in Europe:


RESTORE, a LIFE+ funded partnership promoting river restoration, has now published its layman’s report; "River Restoration in Europe: The art of the possible" in English, Finnish, French, Dutch and Italian. Based on the fi ndings and achievements of

their three year project, and the results of the recent European River Restoration Conference, this is an agenda sett ing document highlighting the successes of river restoration, while also stressing the key policy and technical challenges still needed to take river restoration forward. The report provides a direction for future activities in the hope that these will be taken up by policy makers and river basin managers Using artifi cial structures such as fl ood

walls and dams to protect homes, industry and agriculture, they have not solved the problem of fl ooding. Instead this approach has destroyed the river habitats, wetlands and fl oodplains which should give us natural fl ood protection. River restoration and the naturalisation of fl oodplains work with nature to help control fl oods. It also provides improved natural habitats, and enhanced recreational facilities and urban and rural landscapes. RESTORE is a LIFE+ funded project that ran between 2010-2013.

About the RESTORE Partnership RESTORE was a European partnership

which developed the tools and skills for sharing knowledge and promoting best practice on river restoration in Europe. It was set up to encourage the restoration of European rivers and fl oodplains for increased ecological quality and fl ood risk reduction plus social and economic benefi ts. RESTORE ran between 2010-2013 and was funded by the LIFE fi nancial instrument of the European Commission. For more information contact Susan Sheahan from the Environment agency at: Susan.sheahan@, Tel: 0203 263 8199.


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