5. Will the Minister make a statement on the application of section 137 of the Local Government Act 1972 relating to the powers of local authorities to incur expenditure? OAQ(5)0056(FLG)

I thank Russell George for the question. This section 137 power allows a community or town council to incur a limited amount of expenditure for purposes for which it has no other specific power or duty, and which will bring direct benefit to their area or any part of it.

Cabinet Secretary, Llanfair Caereinion Town Council have been in correspondence with me on this issue for some time. The town council are keen to take on the running of the town library from county council control. If this doesn’t happen then it’s fearful the town library is likely to close.

Now, legal advice provided to the town council actively prohibits them from funding the library under section 137 of the Local Government Act 1972. However, the local authority has received opposing legal advice. I’m grateful to you for writing to me on this matter today in quite some detail—I appreciate that, Cabinet Secretary. Would you agree to provide clarity on the application of section 137 in this regard?

I’m grateful to Russell George for drawing this to my attention and providing copies of the correspondence from Llanfair Caereinion and Powys County Council, which illustrates the point that he is making. My officials have already provided advice to other town and community councils in Powys, and in general, our advice is that the financial restriction set out in section 137(4) continues to apply in circumstances where a town or community council seeks to exercise the well-being power contained in the Local Government Act 2000 to support the required expenditure. However, you do have to apply that general principle in every particular set of circumstances, and that’s the debate that is currently taking place between some town and community councils and Powys County Council itself.

What I will say to the Member is this: I intend to bring forward proposals as part of any consultation on local government reform to clarify the law in relation to the power and capabilities of town and community councils in taking on services and assets. So, even if there is some ambiguity or difference of view at present, I want to support town and community councils in the important efforts they are making to sustain services in local communities. We’ll take advantage of any consultation we bring forward to try and do just that.

Historically, in the pre-poll-tax days, local authorities were able to use the equivalent of the product of the penny rate to carry out activity for the benefit of their local area. Does that Cabinet Secretary agree with me that what is needed, and what local authorities have asked for for as long as I can remember, is a power of general competence for local authorities, so that if it’s for the benefit of their area, it’s what the council votes for, it’s what constituents want, then they can spend money on it.

Mike Hedges is absolutely right and he reminds us that, in the draft Bill on local government that the previous Minister brought forward, there was exactly that proposal: to provide a general power of competence to principle authorities and, indeed, a power of competence to town and community councils that were able to reach a certain threshold of competence in their own affairs. While we’ve not been able, up until now, to reach an agreement on some important parts of reform of local government, that was an aspect that was generally welcomed, and I definitely intend to take it forward if I have an opportunity to do so.