Local authorities have issued a stark warning to MHKs, urging them to intervene against a controversial clause which they say risks shifting central government costs onto household rates without consent, funding, or proper scrutiny.
A comprehensive briefing pack, seen by Manx.News, calls on MHKs to remove or fundamentally amend Clause 5 of the Local Government (Amendment) Bill 2023 ahead of its final reading on Tuesday.
The authorities say the clause grants the DoI the power to impose new duties on local authorities, amend existing legislation, set service standards and compel financial contributions, all through secondary legislation.
In a letter to MHKs, Mark Kemp, Acting Clerk & Finance Officer for Port St Mary Commissioners, wrote on behalf of multiple authorities: “Clause 5 carries a clear risk of shifting centrally driven service costs onto local rates, with no funding guarantee and no requirement for consent.”
He emphasised the impact on households, adding: “As rates are not an incremental or income-based tax, the impact would fall hardest on lower-income households.”
Constitutional
The authorities argue the clause represents a fundamental constitutional shift that “allows central government to impose duties and costs on local authorities by regulation, without primary legislation”.
This includes what is known as a “Henry VIII power,” enabling ministers to alter primary legislation via regulation.
Serious concerns are also raised about the financial impact on ratepayers.
“Clause 5 enables new duties to be imposed on local authorities without funding guarantees, forcing costs onto local rates,” the summary says.
It highlights the regressive nature of rates, stating, “low-income households and pensioners are hit hardest by rate increases” and warns of a “double payment risk” where taxpayers fund services nationally only to see them charged again locally.
Scrutiny
The briefing pack levies significant criticism at the legislative scrutiny process.
It claims there was “no Legislative Council formal evidence-gathering on Clause 5,” a “very compressed Clauses stage,” and “executive involvement in Local Authority oral evidence session”.
It also notes a “post-evidence rebuttal by the Department without a right of reply”.
The authorities also point to a conflict with the government’s own policy evidence, citing a 2018 Department of Infrastructure review which “rejected compulsory reform and warned against ‘one-size-fits-all’ approaches”.
Furthermore, they warn that policies like the Isle of Man Waste Strategy 2025-2035, which anticipates new local authority duties funded through rates, are “already lined up for use of Clause 5”.
“If rates rise as a result of Clause 5, ratepayers will look to their MHKs for accountability, not to local authorities,” Kemp’s letter states.
He concludes, “Once Clause 5 is enacted, rate increases driven by regulation cannot be undone by reassurance. This is a decision with real household consequences in an election year… and it now rests with the House of Keys”.
Local authorities are asking MHKs to either remove Clause 5 entirely or amend it to require consent rather than consultation, guarantee funding for any new duties, remove the Henry VIII power, and introduce independent oversight and appeal mechanisms.