LGA hails revised Government approach to passing on EU fines PDF Print E-mail
Monday, 16 July 2012 12:10

The Local Government Association has hailed changes to the Government’s policy on passing on EU fines to local authorities.

The Department for Communities and Local Government last week published the final form of its policy statement to accompany Part 2 of the Localism Act 2011, insisting that it set out “a fair, proportionate and reasonable approach”.

Part 2 introduced a discretionary power for ministers to require a public authority to pay some, or all, of a financial sanction from the Court of Justice for the European Union where the public authority has caused or contributed to that sanction.

The policy statement sets out key principles relevant to all public authorities:

  • Working in partnership: the Government, as a matter of good practice, will "seek to engage with affected parties when negotiating and transposing EU laws”.
  • Transparency and no surprises: authorities will be given the time and opportunity to put things right before being asked to pay. Ministers will consult any public authority “in good time” before seeking to designate it by Order, normally giving at least one month notice prior to laying the Designation Order in Parliament. Only actions, or inactions, by an authority which occur following designation will be taken into account when passing on a financial sanction.
  • A fair, reasonable and proportionate process: there will be an independent advisory panel which will make recommendations to the minister. “Authorities would not be held responsible for breaches of EU law that were not within their power to avoid, and would only be fined if they have demonstrably caused or contributed to the infraction in relation to which the financial sanction was imposed.” Authorities will have opportunities to make representations.
  • Ability to pay: once the apportionment of responsibility for payment of the financial sanction has been decided, authorities will have a further opportunity to make representations, this time on their ability to pay. Where a minister decides that an authority could not pay its full share of the costs, they can decide that a lower amount would be appropriate or that the payment could be made over a longer period. The Government would cover any shortfall and not seek to re-apportion it to other authorities. “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.”

The DCLG argued that public authorities had been given more powers and freedoms, and would be subject to less oversight by central government.

“Public authorities must, therefore, accept responsibility for the consequences of their actions or omissions,” it said.

The Department added: “The UK has never to date been fined for an infraction, and we hope that it never will.”

Cllr Sir Merrick Cockell, Chairman of the LGA, said: “It is positive that many of the concerns council leaders raised with the Government over EU fines have been taken on board.

“Any attempts to pass on an EU fine to councils will now have to withstand scrutiny from both Parliament and an independent fines advisory panel. This is something which town halls pressed for and is a positive step.”

The LGA chairman said fears had existed that councils would be suffer financially as a result of failure of duty by contracted-out firms. However, Sir Merrick said assurances had been provided that if councils acted reasonably this would be considered a factor by the fines advisory panel.

“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,” Sir Merrick 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.”

Information on the policy statement, including the final version, can be found here

Philip Hoult

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