EU fines

EU financial sanctions

The LGA strongly opposed the original Localism Bill provisions on European Union (EU) financial sanctions which would have allowed Ministers to pass on to council tax payers fines legally incurred by the UK government: we pointed out it was unfair, unworkable, unconstitutional and dangerous to local economies to enable ministers to arbitrarily pass on a fine to English councils when UK obligations are not met.

After it became clear the Government would not delete the clauses completely, the LGA, on behalf of our member authorities, and the Greater London Authority, negotiated with Department for Communities and Local Government (CLG) to ensure sufficient safeguards were in place to protect local authorities should a Minister seek to pass on all, or part of an EU fine.

As a result the final Act now requires Ministers to lay before both Houses of Parliament, on a case-by-case basis, details of every council they intend to pass on a fine to, including the EU infraction they are alleged to have breached and the UK obligation. This will be subject to a vote in both Houses. An independent advisory panel, which will include representatives from local government, will advise and recommend on the authority's culpability. Ministers using the EU financial sanctions provisions and any independent panel set up under them must have regard to a policy statement.

• LGA briefing on the Localism Act's EU financial sanctions section (March 2011)
  This EU financial sanctions briefing provides more detail on:
  1. LGA activity to influence Part 2 of the Bill through Parliament
  2. Summary of the Act's EU clauses and proposed Statement of Policy
  3. Questions and answers
  4. Next steps
• LGA proposal for a statement of policy (September 2011) – subject to Government consultation
• Most recent LGA lobbying briefing (September 2011)
• Previous LGA briefings (April 2011)
• Impact Assessment on EU fines – on the CLG website

On 31 January, the Government issued a consultation on the detailed process for the way in which EU financial sanctions policy will work in practice. See: Proposed policy statement for part 2 of the Localism Act 2011 consultation - CLG website

The LGA will respond to ensure the process we have suggested is upheld. We would also encourage our member authorities to respond too. For those wishing to send individual responses, you may find the attached briefing useful which covers some points you may wish to use your response.

LGA suggested points to assist local authority responses to Localism Act EU financial sanctions consultation final

On 20 April, the LGA responded to the Government's consultation on a proposed policy statement on the EU Financial Sanctions provisions of the Localism Act 2011 (Part 2). This consultation is key to determining how the legislation will be used, and the final Policy Statement, when published, must provide clarity on the process, and have the overall aim of avoiding fines ever being imposed. Our response aims to help achieve this by ensuring the protections we previously secured for our member authorities are maintained, and that additional recommendations previously raised with Government are given further consideration.

Access document here:
LGA response to CLG consultation on EU financial sanctions April 2012 (PDF, 7 pages, 46KB)

Councillor Sir Merrick Cockell, Chairman of the LGA, comments on the Government's announcement on EU fines. See Sir Merrick Cockell's response below.
EU fines: LGA response