An Introduction to Key Facts for Local Councils in Wales

The Local Government and Elections (Wales) Act 2021 (the Act 2021): Part 2 allows eligible town and community councils (local councils) in Wales to resolve eligibility and then to adopt the General Power of competence (GPoC).

The Freedom of GPoC

Local councils no longer need to ask whether they have a specific power to act. The Act 2021: Part 2 (s24) gives the “power to do anything that individuals generally may do” as long as other laws aren’t broken. It is a ‘power of first resort’; this means that when searching for a power to act, the first question you ask is whether you can use the GPoC.  To find the answer, you ask whether an individual is normally permitted to act in the same way.  For example:

  • An individual can’t put someone in prison – and neither can a local council (although, like an individual, the council can press for a prosecution).
  • An individual can’t impose taxes on other people – so a local council can’t use the GPoC to raise taxes.

Sometimes a local council can do things that an individual can’t do – such as creating byelaws, raising a precept or issuing fixed penalty notices – but it must do so using the specific original legislation.   The GPoC does not mean that the council can delegate decisions to individual councillors – this is a procedural matter that remains enshrined in law.

GPoC gives local councils confidence to act for their communities.  It encourages councils to use this power to work with others in providing cost-effective services and facilities in innovative ways to meet the needs of local people. If another authority has a statutory duty, then it remains their duty to provide that service (eg education, waste collection, social services) but local councils can still help out.  For example, a local council can support a school in many ways, just as an individual might.  It could even help a community trust to run a local school.

The council can undertake activities using the GPoC anywhere – not just in the parish. The Act 2021: Part 2
s24 (2).  It isn’t necessary to worry whether the activity is for the benefit of the council, the area or the community although, in practice, parishioners might object if they can’t see the benefit!  Unlike the Local Government Act (LGA) 1972, s137, it doesn’t matter whether there are any other specific powers permitting the council to take action. So, for example, a council can use the GPoC to build a sports facility even though there is another power enabling it to do the same thing (Local Government (Miscellaneous Provisions) Act 1976 s19).

Criteria for Eligibility

The freedom of GPoC is available to local councils that meet three criteria for eligibility set out in The Act 2021:Part 2:s30 that came into force in May 2022.

A local council must decide, at a full meeting of the council, that it meets the criteria for eligibility at that particular point in time.  A resolution to this effect must be written clearly in the minutes of that meeting. The council is then required to revisit that decision and make a new resolution at every ‘relevant’ annual meeting of the council to confirm that it still meets the criteria (if it does).  This means that eligibility remains in place until the first annual meeting of the council after the ordinary election even if the condition of the eligibility criteria has changed.

 

The Three Criteria for Eligibility

1. Elected Councillors
At the precise moment that the council resolves that it meets the criteria, the number of councillors elected at the last ordinary election, or at a subsequent by-election, must equal or exceed two thirds of its total number of councillors.

Elected councillors include all councillors who stood for election (including at a bye-election) whether or not the election was contested. Co-opted or appointed councillors do not count as they are not elected.

The total number of councillors means the number of seats on the council including those that might be vacant.

If two thirds is not a whole number, then it must be rounded up to the next whole number. For example, if the number of councillors in total is 8 and two thirds is approximately 5.3, then the number of councillors that must be elected is 6.

2. A Qualified Clerk
The clerk must hold at least one of the sector-specific qualifications and should have completed the relevant training designed as part of the National Training Strategy for local council. From April 2012, this training is undertaken as part of a clerk’s preparation for one of the recognised sector-specific qualifications. Where a clerk studied for one of these qualifications before May 2022, they are advised to undertake additional training to confirm that they understand how the general power of competence operates. The Society of Local Council Clerks provide the standalone unit for assessment. Clerks who hold a CiLCA certificate without this module would benefit from completing this prior to the council passing a resolution that it is an eligible community council.

The recognised sector-specific qualifications are:
• The Certificate in Local Council Administration (CiLCA)
• A Certificate of Higher Education in Community Governance
• A Certificate of Higher Education in Community Engagement and Governance
• A Certificate of Higher Education in Local Policy

The Eligible Community Councils (General Power of Competence) (Qualifications of Clerks) (Wales) Regulations 2021 (s2)

3. Unqualified Accounts
The local council must confirm that the last two sets of accounts is unqualified in the opinion of the Auditor General for Wales and that the most recent set of accounts was received by the council during the period of 12 months ending on the day the council will (if it passes a resolution) become an eligible community council.

Since the GPoC can be used for most of the activities of the council rather than for unusual one-off projects, the council cannot employ a clerk on a short-term contract specifically for using the power.  If the council loses its qualified clerk or has insufficient elected councillors, then it must record its ineligibility at the next ‘relevant’ annual meeting of the council (after the ordinary election).  If it has already started an activity under the GPoC for which there is no other specific power, it remains eligible for the purpose of completing that activity, but it can’t start anything new under the power until it is in a position to make the formal decision that it meets the criteria.  The council must go back to identifying whether it has a specific power to act and use the restricted LGA 1972 s137 if there is no appropriate specific power.  When entering into a contract under the GPoC, a council should be cautious if the contract lasts beyond the next annual meeting when the council might no longer be eligible to use the GPoC.  There is a risk of legal action if the council ends the contract unexpectedly.  It is wise to seek legal advice when setting up the contract.

Risks and Restrictions Limiting GPoC

There are some risks and restrictions associated with using the GPoC.  Inadequate community support or insufficient funding are significant risks while there are several statutory or legal restrictions that a local council should consider before using the power.  Clerks and councillors should be aware of the following restrictions that potentially could limit the use of the GPoC.

  • One restriction for undertaking a commercial venture in Wales is the need to comply with legislation within the Act 2021 and to be clear that an activity is not just being done for commercial reasons, ie there is a benefit to the community. Any commercial venture must be delivered through a company and must have a business case covering specific items which has been approved by the council. The council can charge for services provided under the GPoC.
  • If a council is already subject to a statutory duty, then that duty remains in place. So, for example, a local council that is eligible to use the GPoC must continue to abide by its duties.  For example:-  The council has a duty to act with regard to the likely effect on crime and disorder and to do all it
    can to prevent crime and disorder in its area (Crime and Disorder Act 2006 s17).
    –  The Environment (Wales) 2016 s 6 imposes a duty on local councils to consider conserving
    biodiversity in exercising its functions.
    –  The Smallholding and Allotments Act 1908 s23(1) gives councils a duty to provide allotments if
    they are of the opinion that there is a demand for them.
  • There are also many procedural and financial duties that remain in place for regulating the governance of a local council.
  • Furthermore, the council must comply with employment law, Health and Safety legislation, equality legislation and duties related to data protection and freedom of information for example.
  • Remember, if another authority has a statutory duty, then it remains their duty to provide that service (eg education). If you are worried that you might be encroaching on another authority’s duty, then ask whether an individual, a private company or a community trust might be able to step in and help. If they can, then so can the local council (although it might need to set up an appropriate delivery body first).
  • If the action the council wishes to take is also covered by a specific power then any restrictions that apply to the overlapping power are still in force. So if existing legislation requires the council to ask permission before acting, then it must do so.  For example, the council asks permission from the Highways Authority before doing work on roadside verges. 

The GPoC is a power and not a source of money.  It cannot be used to raise the precept and if loans are needed then normal procedures apply.  The council can seek other sources of finance such as the Community Infrastructure Levy, grant funding, sponsorship, commercial activity and agreements with other authorities. As always, the council should ensure support from local taxpayers.

So local councils cannot use the GPoC primarily to raise money but they can receive income as a consequence of using the power for a different primary purpose.  For example, a council could give financial assistance to a struggling local enterprise by purchasing share capital just as any individual could. Similarly the council could lend money to support a local activity and earn interest on the loan and it can raise sponsorship for a community project.

Although councils are encouraged to be innovative, they should be aware of the risks involved in using the power in addition to a lack of money or community support.  For example:

  • There is a risk of being challenged
  • Trading activities could damage competing local activities

The council risks its reputation and public money if a project goes wrong

S137 and How it relates to the GPoC?

A council that is eligible to use the GPoC can no longer use s137 as a power for taking action for the benefit of the area or its community (Localism Act 2011: Sch 1(1). The money that can be spent under the LGA 1972 s137 is limited while the power is restricted by regulations for use and scope; for example, councils must keep specific accounts for s137, they cannot use the power to give money to individuals and spending must be commensurate with the benefit gained. In addition a council can’t use s137 if another specific power exists.

CiLCA Section LO7 ‘General Power of Competence’ in Isolation for Wales

LO7 only applies to those who hold a recognised sector-specific qualification and those that applied for CiLCA prior to May 2022.
CiLCA forms part of the criteria for the council to exercise the General Power of Competence.
Complete LO7 and claim one CPD point.

Eligibility to take Section LO7 in Isolation
If a clerk in Wales holds the following they can take LO7 in isolation CiLCA a stand-alone module in order to understand how to exercise the General Power of Competence (GPoC).
• Hold CiLCA prior to May 2022 or registered for CiLCA in Wales prior to February 2022
• You hold the tailored qualification from the University of Gloucestershire (but not /CiLCA)
• Hold a recognised sector-specific qualification (see qualified clerk section above)

If you do not hold any qualifications presently you are required to pass CiLCA in its entirety

Training
For those students who are eligible to take section LO7 in isolation it recommended that you attend training on section 7 to assist you in completing the in isolation module.
SLCC also provides training for The GPoC LO7 Wales – click here to view SLCC’s available training.

Please note that the cost for the Section 7 training course is separate to the GPoC in isolation module.
Students must register for the GPoC in isolation module separately

Portfolio Guide
Once you have booked onto section 7 the GPoC Wales training, download the CiLCA Portfolio Guide Digital 2021 / Canllaw Portffolio CiLCA It is advisable to read the portfolio guide assessment criteria for LO7 prior starting your training.

Apply for The GPoC in Isolation Module
Applications are made online for the Wales Section LO7 GPoC in Isolation module
The cost of the module is £30 (non-vatable)

Click here to enrol for the Wales GPoC L07 in Isolation Module

Important: Please ensure that, when you apply for The GPoC in isolation module online, you login and register for yourself and not on behalf of someone else.
If you have a colleague who wishes to register for CiLCA please ask them to setup a user account here.

As soon as payment has been received and processed, you will have access to the EMMA system to complete The GPoC in isolation module online.