Out with the DIP, in with the IP

April 1, 2015

The Communities Secretary has unveiled a new regime for the disciplining and dismissal of senior staff, to replace what he called the "unnecessary and costly bureaucratic process" that currently applies. Olwen Dutton analyses the key issues for councils.

Every local authority will have to take a report to its first Council meeting after its Annual Meeting in May 2015, to amend its Standing Orders to make changes to the procedure for disciplining and dismissing senior officers.

This follows from the publication of finalised new regulations on local authorities' disciplinary procedures for removing a senior officer. The Local Authorities (Standing Orders) (England) (Amendment) Regulations 2015 (SI 2015/881) require local authorities to amend their Standing Orders so incorporate the new arrangements for taking disciplinary action against the most senior council staff. This modification must be made by the first ordinary council meeting held after the 7 May 2015 elections.

Consultation on draft regulations

Early in 2013 the Department for Communities and Local Government wrote to a limited number of stakeholders seeking their views on draft Amendment Regulations that would remove the requirement for a Designated Independent Person (DIP) to investigate allegations of misconduct by senior local government officers in England.

The Government's rationale for these changes was that the existing DIP process was bureaucratic and time-consuming, and that it often led to authorities making inflated severance payments to senior officers in order to avoid taking the costly DIP route.

It therefore proposed that any decision to dismiss top staff was to be taken by full Council, and that full Council would be required to consider any report about the proposed dismissal which a panel drawn from members of the Council’s Independent Remuneration Panel thought fit to put before the council.

Respondents raised concerns about the dilution of the protection of statutory officers, who may be required to make unpopular statutory reports, and about the skill set of the panel members, and the detailed prescription about how the panel might operate. It was suggested that the Independent Persons appointed under s.28(7) of the Localism Act 2011 would be better placed than members of the IRP to fulfil the role of the proposed new panel, given that their role related to the consideration of disciplinary matters.

Independent Panel

The Government has broadly accepted this suggestion, and it has also accepted that the proposed process should be simplified.

The finalised Regulations now provide that where the final decision to dismiss any statutory officer (and not just the Head of Paid Service as now) must be taken by full Council, before taking that decision, Council must invite at least two Independent Persons to be members of a Panel, and Council must take into account any recommendation of that Panel before taking a final decision to dismiss.

The invitations should sent in accordance with the following priority order:

an Independent Person who has been appointed by the council and who is a local government elector;
any other Independent Person who has been appointed by the council; and
an Independent Person who has been appointed by another council or councils.

The Regulations provide that the Panel is to be a committee of the authority and so it is subject to all the legal requirements for committees, including the proportionality rules.

Presumably it is not intended that full Council itself carries out the disciplinary hearing so this will have to be delegated from Council to the relevant committee, sub-committee or officer – this could, one supposes, be the same Panel, although the regulations are woefully unclear who will have responsibility for doing so – and then report to full Council with their recommendation, which would include the views of the Independent Persons.

To ensure that the new process will not involve high costs, the Regulations limit the remuneration that should be paid to Independent Persons on the panel to the level of the remuneration which they would normally receive as an Independent Person in the conduct regime, i.e. a modest annual allowance or small meeting fee.

Amendment of Standing Orders

Local authorities must now modify their Standing Orders to give effect to the new arrangements.

Whilst the Monitoring Officer may have delegated powers to amend the Constitution to take account of changes of fact and law, this is required to be incorporated in Standing Orders, and under the Local Government Act 1972, only "the authority" may change Standing Orders.

So Council must approve the changes. The Regulations require that this be done at the first ordinary Council meeting held after the 7 May 2015 elections, so it could be swept up into any other constitutional alterations required.

It would also be sensible for authorities to have a word with their Independent Persons about their new role, ensure that they know what will be required and are happy to carry this out, and provide them with a briefing as to the roles of the three statutory officers to whom this will apply.

Simpler and cheaper?

DCLG considers that these changes will make the performance management of the most senior staff both more effective and efficient with potentially lower costs in the case of departures or dismissals than currently.

However, there was never any empirical evidence that the cost of dismissing statutory officers under the DIP procedure was any higher than the cost of dismissing non-statutory officers, and considerable anecdotal evidence that high compensation costs resulted from the employing authority not having grounds for dismissal which would survive in an Employment Tribunal.

The new Regulations will give rise to a number of difficulties:

The current DIP process is incorporated into statutory officers' contracts of employment, so authorities will need to agree variations to such contracts if they are not to find themselves complying with the new Regulations, but in breach of contract;
The Regulations only apply to appointment and dismissal of a statutory officer and not to disciplinary action short of dismissal, so providing only limited protection for statutory officers;
The Panel is required to be a committee of Council, so it is subject to normal proportionality rules. The Regulations provide that the authority does not have to appoint more than two Independent Persons, but may do so if it wishes. But, as a committee, the inclusion of at least two Independent Persons as voting members of the Committee would require a minimum membership of four members of a majority party to one other member of Council, unless Council resolves by a "nem con" vote to depart from proportionality. So the Independent Persons will ordinarily be very much a minority voice on the Panel, comprising only two out of seven members of the committee.

Olwen Dutton is a partner at Bevan Brittan. She can be contacted on 0870 194 5006 or This email address is being protected from spambots. You need JavaScript enabled to view it..