Local government leaders have welcomed a government promise to create an independent panel, which would ensure any European Union fines levied on councils are reasonable and proportionate.
A policy statement covering Part 2 of the Localism Act was published by the Department for Communities and Local Government on July 13. Part 2 of the Act included a discretionary power for a UK minister to require a public authority to pay EU fines if it had caused or contributed to that sanction.
This had prompted fears that councils would bear the costs of any fines imposed following a contractor’s failure.
But the policy statement made clear that a panel would be set up to arbitrate in such circumstances. ‘The panel would identify the parties involved, the split of responsibilities, culpability, compliance and ensure that the case for both apportionment and recovery of costs from public authorities is fair and robust,’ the policy statement said.
The document also gave assurances that local government representatives would be consulted with ahead of negotiations on future EU directives that could see fines imposed on councils.
Where a council found itself unable to pay a fine levied by the EU, authorities would be able to make representations.
‘If the minister accepts that an authority could not pay its full share of the costs, then the minister may decide that a lower amount would be appropriate or that the payment could be made over a longer period. The UK government would cover the cost of any shortfall, and there would not be any re-apportionment to other organisations involved,’ the policy statement said.
‘The provisions in the Act are not about the recovery of every last pound of any financial sanction imposed on the UK Government but are about consistency in financial and legal responsibility.’
Sir Merrick Cockell, chair of the Local Government Association, said it was ‘positive’ that councils’ concerns had been listened to.
‘It is vital that the public purse isn’t hit by the actions of external organisations and this statement commits the government to ensuring that doesn’t arise,’ he said.
‘The LGA has been clear that EU fines are to be avoided at all costs – and councils are committed to working with the government and other partners to ensure that such situations don’t occur. In future, town halls look forward to working closely with the government ahead of any EU discussions to discuss any implications for local government.’
