After years of campaigning, local councils are likely to be freed of the need to double sign cheques for all financial transactions
At a time when parish and town councils want to move the new localism agenda forward by taking more control over public services, it may come as a surprise to learn that their efforts are being hampered by arcane legislation from the 19th century.
All 9,000 parish and town councils have to adhere to financial payment rules set out in the 1894 Local Government Act, which requires the signatures of two members of the council on every payment or cheque. Hardly a fine example of modern 21st-century local government. Fortunately, the government appears to be moving to change this frustrating situation.
The National Association of Local Councils (NALC) has waged a decade-long campaign, with successive governments, to change this historic oddity. We want parish and town councils to be able to carry out electronic banking and modernise the way they make payments in the same way as other parts of the public sector: the 1972 Local Government Act allowed other tiers of local government to make their own arrangements for the proper administration of their financial affairs.
Town and parish activities fall into three main areas: representing the local community, delivering services to meet local needs, and striving to improve quality of life and community wellbeing. If they are to be placed at the heart of localism, finding new ways of connecting communities to the levers of power, then surely it makes sense that they should be freed of outdated legislation that prevents them working efficiently and effectively?
The use of cheques is declining fast. They made up just 3% of UK payments in 2010 – a 59% decline since the start of the century. The two-signature rule also adds to the costs of businesses and other public bodies that receive cheques from local councils.
It is time for a change, and it appears the coalition government is finally going to do something about this anomaly. It has issued a consultation on a legislative reform order, which could make the changes that NALC has been calling for.
However, this change should not be dictated from Westminster. There should be a flexible approach, allowing town and parish councils to choose the payment methods that suit them. Some are likely to continue with the tried and tested process of two signatures, but the majority will move to new electronic systems.
Proper safeguards will be necessary and normal banking arrangements now allow for remote approval of payments. Local councils will hopefully shortly be in a position to work towards the abolition of cheques for all payments.
This reform has been on the agenda for many years and finally the government is listening to us. We expect local councils to express strong support for these proposals. This is an important step forward in reforming the many outdated rules that prevent local councils operating in modern and efficient ways.
Alan Jones is head of communications for the National Association of Local Councils
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