Dual-hatted members and local government reorganisation
Geoff Wild looks at how “dual-hatted” members can navigate potential conflicts of interest at a time of local government reorganisation.
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Dual-hatted members are councillors who serve on more than one authority; for instance, a member who is both a county councillor and a district councillor, or both a unitary councillor and a parish councillor. Although soon to be extinct, triple-hatted members sit on all three councils (county/district/parish). The situation can also arise with members who sit on principal councils and separate fire and rescue authorities. All give rise to potential conflicts of interest.
Dual-hatted members may occasionally find themselves in a position where they have made a decision or been consulted on a matter in one authority, which then comes up for consideration in another authority. In those circumstances, they need to balance their legitimate right to express views, whilst protecting the integrity of council decision-making from allegations of real or apparent bias and predetermination, arising from potential conflicts of interest between the two councils they represent.
This note should assist members in deciding whether or not their initial involvement precludes them from taking part in the later decision-making. The specific situation of any particular member is beyond the scope of this note but your local Monitoring Officer is always available to provide assistance.
A. Will I always have an interest or be conflicted in other ways because of my membership of another authority, particularly if I have considered the matter at a meeting of the other authority?
No – you will not automatically have an interest or be otherwise conflicted (e.g. through predetermination or bias) in an item under discussion. However, you should always consider whether you have a Disclosable Pecuniary Interest (DPI) or some other personal interest (as defined in your authority’s Code of Member Conduct) that affects you to a greater extent than other council taxpayers, and whether a reasonable member of the public with knowledge of the relevant facts would believe that your ability to judge the public interest is impaired.
Elected members are bound to comply with the codes of conduct of the authorities to which they are elected or appointed. These contain provisions relating to members’ interests. A DPI is defined as “any employment, office, trade, profession or vocation carried on for profit or gain” and is dealt with in more detail in my Monitoring Officer Bulletin #4.
B. Does receipt of a members’ allowance constitute a DPI?
Elected members are not employees of the councils they serve but instead hold an ‘office’ for these purposes (even though government guidance says that this office taxable as employment for the purposes of HMRC). The question is whether they undertake that office (when considering the various member allowances) for ‘profit or gain’. Whilst ‘profit or gain’ clearly links to financial benefit, the question of whether this extends to member allowances has not been decided by the courts and the Local Authorities (Members’ Allowances) (England) Regulations 2003 are silent on the point.
The enabling legislation (s.18(1) Local Government and Housing Act 1989) allows the Secretary of State (SoS) to make regulations on members allowances and this was achieved with the 2003 Regulations referred to above. Section 18(1) can be contrasted with section 18(2), which says that the SoS may “also” make regulations that allow councils to include within their scheme an allowance for loss of earnings and expenses. No such regulations have been made.
This suggests that the 2003 Regulations are intended to offer members some recompense for their time and effort in being a member, but not intended to put them in the position that they would have been in had they been working, i.e. profiting or gaining from their role. As a result, simply being in receipt of an allowance should not, without more, qualify as a DPI. This principle applies to both Basic Allowances and Special Responsibility Allowances (SRAs) but, as stated above, there is no judicial or ministerial guidance on the point so it cannot be said for certain.
However, the DCLG’s “informal view”, in a letter from Brandon Lewis MP dated 17 January 2013 on Disclosable Pecuniary Interests and Dual-Hatted Councillors, was that where a councillor receives a taxable allowance from any authority of which they are a member, that allowance does give rise to a DPI, which should be entered on the register of interests under ‘Employment, office, trade, profession or vocation’. However, the question of whether a councillor has a DPI in an item of council business related to another authority of which they are a member, was said to depend on the nature of the business to be discussed and could, if necessary, be dealt with by way of a dispensation.
C. When might my membership of another authority give rise to a DPI?
In addition to the question of whether a DPI exists, members must consider whether a DPI relates to the specific matter in question. A member with a Special Responsibility Allowance (SRA) could possibly have a DPI depending on the matter being decided and the link between their SRA and the matter. For example, an observer might consider a dual-hatted member at parish level could be influenced to make a decision on the basis of a desire to preserve their SRA at unitary level. This is something that members should think about but, in general, it is unlikely that the link is strong enough to constitute a DPI in a matter. Given the uncertainty over whether allowances even constitute a DPI, members would be taking a very precautionary approach if they recused themselves on the basis of “what it may look like”.
D. Can I participate in the discussion and vote on an item in which I have a DPI?
Only if you have been granted a dispensation to speak, or to speak and vote. Otherwise, you must withdraw from the meeting room during the debate and not vote on the item.
Remember to declare at the beginning of the meeting, or as soon as you become aware of the interest, the existence and nature of the interest and how the business under consideration relates to your membership of the other authority.
The risk of failing to declare a DPI is on the member and it is potentially a criminal matter. Members should think about their position in light of the above but, on balance, it is unlikely that simply being a dual-hatted member would give rise to a DPI.
E. Do I need to consider whether my membership of another authority raises other conflicts?
Yes – even though you may not have a DPI, you may still be conflicted because of actual or perceived predetermination or bias.
Dual-hatted members should bear in mind that their position may change once they have voted for or against a particular decision. If, for example, at a parish council meeting, a dual-hatted member votes in favour of particular matter, then it is possible that they will be predetermined or have the appearance of being predetermined. This may affect their ability to participate at subsequent district, county or unitary meetings (and vice versa).
Dual-hatted members will therefore need to consider a number of questions in each specific situation relating to bias and predetermination, including:
- The decision that they are being asked to make at a particular meeting
- Any votes they have cast as member of another council
- Any public statements that they have previously made
- The need to have regard to relevant advice
- The need to give reasons for their decision
- The requirement to make choices based on merit
- Not bringing the authorities into disrepute
- Consideration of the Nolan principles re. integrity, openness, etc
Depending on the definition in their authorities’ codes of conduct, dual-hatted members may also have a personal interest in items discussed at parish level regarding district, county or unitary proposals (and vice versa). This is because as well as being a parish member, they are also a member of a body exercising functions of a public nature; namely the other council.
Members with a personal interest should declare the same, but can usually remain in a meeting, take part in a debate and vote unless to do so would compromise their impartiality or any other obligations set out in the code of conduct.
The risk of failing to declare a personal interest or taking part in a decision when any other element of the code of conduct has potentially been compromised falls on the member themselves, as it could lead to a complaint being made under the code of conduct.
F. Can I represent my constituents if I have a DPI or if I am conflicted in other ways?
Yes, by:
- Making written representations addressed to officers
- Arranging for another member to represent the views of your constituents
G. Which code applies if I am on more than one authority or if I represent the council on another body?
You must abide by the code of conduct that applies to the authority whose business you are carrying out at the time. So, for example, if you are a parish councillor and also a unitary councillor, you will be bound by the unitary council’s code of conduct when carrying out unitary council business (and vice versa).
If you represent the unitary council on any other body, you must comply with the unitary council’s code of conduct – except where it conflicts with any other legal obligations by which the other body is bound. You should seek your Monitoring Officer’s advice if you consider that the provisions of the council’s code of conduct conflict with other legal obligations. These circumstances will not arise very often.
H. If I serve on more than one authority, do I need to register my interests for each authority?
Yes.
Conclusion
When considering taking part in meetings to decide matters of relevance to both principal and local councils, all members should consider whether any of the above matters apply to them. Dual-hatted members will need to think particularly carefully – especially once they have voted in a particular way – but all members should be aware of the possible conduct issues.
As a result of the Minister's letter, members would be advised to declare membership of all principal and local councils on their notification of DPIs form. Members would then need to consider on an individual basis whether the item of business under consideration triggered this DPI. For most members, it is unlikely that the DPI would be triggered unless any allowance received in respect of their principal or local council position represented a significant proportion of their income.
The risk of taking part in a decision where there is a DPI, bias or predetermination is that the decision may be challenged by way of Judicial Review. Members should consider the above issues and guidance on whether they should take part in meetings in order to ensure that sound decisions are made and reduce the likelihood of any challenges being brought.
The individual circumstances of each member will be unique. For example, a member who is closely involved in proposals being put forward by one of their councils will be in a different situation to one who has no such close involvement. This note therefore sets out the underlying legal principles to be taken into account but each member should consult their Monitoring Officer if they have questions on their own particular circumstances.
Geoff Wild is a Legal and Governance Consultant. He is celebrating his 40th anniversary as a local government lawyer.
This is the latest in a series of articles Geoff has written – previous contributions include:
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