Clause 20 - Directions
Local Government Bill
3:15 pm
Mr Christopher Leslie (Parliamentary Secretary, Cabinet Office; Shipley, Labour)
Amendment No. 45 deals with the three powers to issue directions. Clause 2(2) allows the Secretary of State by direction to waive any national borrowing limit for an individual authority. Under clause 4(2), the Secretary of State could impose a local borrowing limit on an authority by direction. Finally, under clause 16(2)(b), a direction could be used to allow revenue expenditure to be used as capital expenditure. The powers are essential to the Bill and the operation of the chapter. Directions are issued by writing a letter to an authority. They enable action to be taken quickly, but also sensitively, in individual cases. However, the amendment would remove them and require regulations to be made instead. That process could lead to unacceptable delays and reduce flexibility.
I asked officials in my Department to look for other examples in previous local government legislation to see whether there were precedents for powers to direct. Lo and behold, they discovered at least 16 direction powers, not least in those provisions enacted between
1980 and 1997 under legislation passed by the previous Administration. Section 40(6) of the Local Government and Housing Act 1989 issues directions that particular expenditure may be treated as capital expenditure. Taking the example set by the previous Administration, we believe that in certain circumstances direction powers are important. The clause defines how the directions would operate.