Gef Explains: Why Local Authorities Are Worried Your Rates Could Go Up

Right, gather round everyone, as we try and simplify why local authorities are a bit twitchy. Actually, very twitchy.

They’re warning MHKs that a single clause buried in a new law could quietly land households with bigger rates bills, without anyone properly agreeing to it, paying for it, or even debating it properly.

The clause in question is Clause 5 of the Local Government (Amendment) Bill 2023, and councils across the island want it either binned completely or seriously rewritten before the Bill’s final reading today (Tuesday).

But proponents, including Infrastructure Minister Dr Michelle Haywood, say it will prevent local authorities from ‘walking away’ from services.

So What’s the Problem?

In simple terms, local authorities say Clause 5 would give the Department of Infrastructure (DoI) the power to tell councils to do new things, change the rules they work under, meet set standards, and pay for it all, using regulations rather than full new laws.

When the Bill came before LegCo in November, evidence was received from more than a dozen Commissioners boards and Douglas City Council who all oppose the move.

MLCs subsequently voted to introduce new safeguards and protections. These aim to ensure local authorities are consulted before any such changes are made, and financial impact reports provided to show how functions will affect their budgets.

But this has not gone far enough to allay the concerns of local authorities.

The big worry? Those extra costs could end up being dumped straight onto local rates.

And no, there’s no guarantee of extra funding to go with it.

‘That Sounds Expensive’

Exactly.

Writing to MHKs, Mark Kemp, Acting Clerk and Finance Officer at Port St Mary Commissioners, said the clause carries a ‘clear risk’ of shifting centrally-driven costs onto local ratepayers, without consent and without funding.

And because rates aren’t based on income, he warned the impact would fall hardest on lower-income households and pensioners.

In other words: everyone pays the same rate increase, whether they can afford it or not.

A Big Constitutional No-No?

Local authorities say this isn’t just about money, it’s about how this small island is governed.

They argue Clause 5 represents a major constitutional shift, because it would allow central government to impose duties and costs on local authorities without bringing new primary legislation to Tynwald.

It also includes what’s known as a ‘Henry VIII power’, which sounds medieval, and sort of is, allowing ministers to change existing laws using regulations instead of full parliamentary debate.

Councils say that’s a step far too far.

Double Whammy for Ratepayers?

There’s also concern about a ‘double payment’ risk.

It warns that people could end up paying for services through national taxation, then paying again locally through rates if councils are required to fund those same services.

And if rates go up, councils say the public won’t blame authorities or departments, they’ll blame their MHKs.

What About Scrutiny?

Ah yes. This is where eyebrows are really being raised.

Local authorities claim Clause 5 didn’t get the level of scrutiny you’d expect, pointing to:

• No formal evidence-gathering in Legislative Council

• A very rushed clauses stage

• Government involvement in local authority evidence sessions

• A departmental rebuttal after evidence, with no right of reply

They also say the clause clashes with the government’s own past thinking, including a 2018 DoI review which warned against compulsory, one-size-fits-all reform.

Future Plans Already Waiting in the Wings?

Councils also note that strategies like the Isle of Man Waste Strategy 2025–2035 already assume new duties for local authorities, paid for through rates, and could be pushed through using Clause 5 if it becomes law.

Which is why they’re sounding the alarm.

What do the Local Authorities Actually Want?

They’re asking MHKs to:

• Remove Clause 5 altogether or fundamentally amend it

• Require consent, not just consultation

• Guarantee funding for any new duties

• Remove the Henry VIII power

• Add independent oversight and an appeals process

As Mr Kemp puts it, once the clause is passed, rate rises driven by regulation can’t be undone by reassurance.

And with an election year looming, councils say this is a decision with very real consequences for households, and it now sits firmly with the House of Keys.

It might be called Clause 5, but councils reckon it could be a clause too far.

Dr Haywood’s Response

However, Infrastructure Minister Michelle Haywood has pushed back strongly against the concerns, describing them as ‘ill-informed scaremongering’.

Referring to evidence given by the Attorney General during the Legislative Council’s final hearing, she said the clause cannot be used to create new duties for local authorities.

The Attorney General stated that the Department could only require a local authority to carry out a function where it already has the legal power to do so, adding that imposing a duty without that legal basis would be unlawful.

He said it was ‘not correct’ to suggest the clause could be used to introduce new responsibilities.

Dr Haywood said the purpose of Clause 5 is to protect essential services in local communities, preventing councils from withdrawing services, rather than shifting new responsibilities or costs onto them.

All the Fun of Keys

The House of Keys returns for 2026 at 10am today. You can follow along live on Tynwald Listen feature HERE.