Changes on the way to the Councillors’ Code of Conduct?

On Monday 12 December 2016 the Scottish Government opened a consultation on a proposed amendment to the Councillors’ Code of Conduct (the “Code of Conduct”) and issued the consultation paper, ‘The Councillors’ Code of Conduct - Consultation on possible amendments of provisions on conflicts of interest’ (the “Consultation Paper”).

What is the Code?

The Code of Conduct originally came into force in May 2003 after the Scottish Parliament passed the Ethical Standards in Public Life etc (Scotland) Act 2000 requiring the Scottish Ministers to issue a code of conduct for councillors. Following a review by the Scottish Government in 2009, the revised Code came into force on 21 December 2010.}

The Code of Conduct sets out the principles and rules governing the conduct of councillors and applies to each councillor elected to the 32 local authorities in Scotland. It can be found here.

The Existing Rules on Conflicts of Interest

The Code of Conduct deals with the key principles of integrity, honesty and openness. These are given practical effect by the requirement that councillors must declare interests at meetings which they attend.

It is up to the inpidual councillors to make decisions about whether they have to declare an interest or are prevented from taking part in any discussions or voting due to a declared interest. Although councillors themselves are responsible for these decisions, they must always comply with “the objective test”, which is “whether a member of the public, with the knowledge of the relevant facts, would reasonably regard the interest as so significant that it is likely to prejudice your discussion or decision making in your role as a councillor”.

It is common practice across Scottish local authorities that councillors serve on other bodies as a result of express nomination or appointment by their Council. Outside bodies include boards and management committees of limited liability companies, public bodies and other organisations.

At present, councillors who have been appointed to outside bodies cannot participate in discussion and voting on matters relating to these bodies which are of a quasi-judicial or regulatory matters in which the outside body is applying to the local authority for a licence, consent or an approval, is making an objection or representation or has a material interest concerning such matters. Usually in these circumstances the councillor would withdraw from the meeting during the relevant matter. Quasi-judicial or regulatory matters most commonly relate to planning and licensing decisions.

The Proposed Amendment

The Scottish Government is consulting on a proposal to amend the Code of Conduct so that, in the circumstances described above, a councillor who is a member of a public body established by enactment or in pursuance of statutory powers would only have to declare an interest in respect of any matter of a quasi-judicial or regulatory nature where the body in question applies to the local authority for a licence consent or an approval or has a material interest in a matter. The key point is that the councillor would not need withdraw from the meeting or refrain from taking part in discussions and voting.

In terms of the rationale for this proposed change, it is noted in the paper that the issue has been raised with the Standards Commission by a local authority in relation to Nestrans (which is one of seven regional Transport Partnerships in Scotland and established by statute). If the proposed change is reflected in the Code of Conduct, it will enable councillors on the boards of regional Transport Partnerships to take part in their Council’s consideration of discussions or taking decisions on quasi-judicial or regulatory matters of which these bodies have an interest.

As the amendment has been specifically suggested in relation to councillors’ appointments to Nestrans, the paper asks for suggestions on which public bodies the amendment should apply to and on any limitations to the cases in which the amendment applies.

Next Steps

The consultation is scheduled to close on 20 March 2017. Responses will be analysed to inform the Scottish Government’s report and decision making process. As the Scottish Ministers can only revise or re-issue the Code after it has been laid before and approved by the resolution of the Scottish Parliament, it may be some time before any changes come into force.

Final Thoughts – Councillors appointed to Companies

Notably, the consultation focusses on outside bodies that are “public bodies”. There is no suggestion at this stage that the change would apply to a councillor appointed as a member or director of a company that has been established wholly or mainly for the purpose of providing services to that councillor’s local authority.

It will be interesting to see how this consultation develops and resulting changes, if any, to the Code of Conduct.