Summary for Library of Congress control number 99214864


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Introduction
1   In the context of taking forward the Government's commitment to introduce a new duty
for local authorities "to promote the economic, social and environmental well-being of their
areas", the Department of the Environment, Transport and the Regions commissioned a
study to establish:
*   up-to-date evidence on the use being made of Section 137 powers;
*   the types of activities on which Section 137 expenditure is being incurred;
*   the reasons why, in practice, Section 137 powers are not seen as an effective means of
promoting community leadership.
2   There were two elements to the methodology adopted for the study:
"*  case studies of 46 principal local authorities in England, including five pilot case
studies using a draft interview checklist;
"*  a postal questionnaire survey of all principal local authorities in England, to which
there was a response rate of 74.5% (292 out of a total of 392 authorities).
Use of Section 137
3   The results of the research suggest that in 1996/97:
*   92% of authorities made use of their Section 137 powers;
*   the average use was 31% of the available expenditure limit, with 57% of authorities
spending above this average and 43% spending below it;
*   6% of authorities spent within 10% of their expenditure limit.
4   However, it is likely that there is a bias in the responses to the questionnaire towards users,
and larger users, of Section 137 and hence that use of the powers is overstated by these
results.
5   Unitary and non-metropolitan district councils and authorities controlled by the Liberal
Democrat Party were larger users of Section 137 in 1996/97. In contrast, county and
metropolitan borough councils and authorities controlled by the Conservative Party were
lower users of their Section 137 powers.
6   Seventy-three per cent of the expenditure declared under Section 137 in 1996/97 was
accounted for by grants to voluntary and community organisations (including the Citizens
Advice Bureau) and the administration of these grants.
7   Authorities generally adopt an unstructured approach to the identification of expenditure
under their Section 137 powers. We estimate that the "real" (defined as excluding
activities for which other powers exist) use of the expenditure limit in 1996/97 by the
authorities responding to the questionnaire survey was 25%, only 81% of the declared
figure of 31%.
8   The overwhelming majority of authorities (84%) currently have no plans to change the
level or type of expenditure made under Section 137. Those authorities which spent above
the average use of the expenditure limit in 1996/97 are most likely to increase their
expenditure under Section 137.
Awareness of Section 137
9   Amongst officers, there is perceived to be a three-level hierarchy of awareness of
Section 137:
"*  high in finance, legal and, to a lesser extent, chief executives;
"*  above average in economic development, although this awareness is somewhat
"historical', relating to the period prior to the Local Government and Housing Act
1989;
"* significantly lower in all other service areas.
10   However, even some of the finance, legal and other senior officers do not possess a full
understanding of Section 137. It was evident in a number of cases that it was a long while
since any consideration had been given to the powers.
11   It is likely that only a small number of the more experienced elected Members are fully
aware of the powers under Section 137. Very few voluntary and community groups are
perceived to have any awareness of Section 137.
Role of Section 137
12   Authorities responding to the questionnaire survey attached the greatest importance to the
promotion of the well-being of their areas and/or residents and the provision of a fallback
or power of last resort as the primary roles of Section 137. Authorities generally do not
regard Section 137 as a vehicle for undertaking new or innovative activities.
13   Whilst few of the case study authorities emphasised the role of Section 137 as being the
promotion of the well-being of their areas and/or residents, this probably reflects their
assessment of the effectiveness of the powers in fulfilling this role. There is a general view
that Section 137 is of limited importance, with many authorities indicating that the
powers are "irrelevant" to the key issues and concerns which they face. Therefore, it is not
perceived as an adequate power for promoting the well-being of their areas and/or their
inhabitants.
14   Section 137 is perceived as a 'negative' and 'grudging' power, rather than a 'positive' power
to undertake a specific activity or to achieve a specific objective. However, there is a
strong view amongst authorities that the powers under Section 137 are useful because they
provide essential flexibility and, subject to the definition of the proposed new duty, should
be retained.
15   Although most of the authorities regard the powers available under Section 137 as being
wide-ranging, they consider that the creation of new specific powers has narrowed the
scope of activities which it is possible to undertake under Section 137 and hence the use
made of the powers.
Barriers to the use of Section 137
16   The key factor underlying the limited use currently being made by authorities of their
Section 137 powers is the availability of a wide range of primary powers. Whilst this does
not represent a 'barrier' to the use of Section 137, its importance indicates that the
spending priorities of authorities are to be found in areas where they possess primary
powers, rather than in activities which are likely to be funded under Section 137. These
primary powers are now wide enough to accommodate most activities which authorities
want to undertake.
17   Only two barriers to the use of Section 137 were identified as being of any significance:
the capping of total expenditure; and the limits on Section 137 expenditure.
18   Only three out of 296 authorities indicated that they had been subject to a legal challenge
regarding expenditure under Section 137.
19   Whilst authorities do not consider that Section 137 is currently an effective mechanism
for promoting the well-being of their areas and/or their inhabitants, the following evidence
suggests that this assessment is not related to any restrictions on the use of the powers:
�   only 7% of authorities stated that they had been prevented from undertaking an
activity under Section 137 by the expenditure limit, whilst only 9% suggested that
they would spend more under Section 137 if the expenditure limit was removed;
"*  only 10% of authorities indicated that they had considered funding an activity under
Section 137 and then not done so as a result of taking internal or external legal
advice;
"*  only 6% of authorities stated that they wanted to undertake an activity under Section
137 but are being prevented from doing so because they consider that it lies outside
their legal powers.
Changes to Section 137
20   Only 23% of the authorities responding stated that they would advocate any changes to
Section 137. The two changes most often suggested by these authorities were the
replacement of the powers by a general power of competence and the removal of, or a
significant increase in, the expenditure limits.
21   The absence of any significant degree of interest in the reform of Section 137 reflects the
limited importance which authorities attach to the powers and, as a result, the limited
consideration which has been given to them over many years. This, in turn, reflects the
new specific powers that authorities have been given, especially in relation to economic
development.
22   Considerably more emphasis is placed by authorities on other changes or clarifications to
the legal position relating to their activities. Some of these have, or could have, an impact
on activities funded through Section 137. For example, the position, and especially the
liabilities, of Members and officers when serving on the boards of companies and trusts is
likely to be an increasingly important issue as authorities become more involved in
community governance.



Library of Congress subject headings for this publication:
Local government -- Great Britain,
Central-local government relations -- Great Britain,
Political planning -- Great Britain,
Great Britain -- Appropriations and expenditures,