When elected members or external appointees have an ‘interest’
Every elected member or external appointee has a number of professional and personal interests. Conflicts of interest at times cannot be avoided and can arise without anyone being at fault. They need not cause problems when they are promptly disclosed and well managed.
At the beginning of each triennium elected members are asked to disclose interests and these are held within the Elected Members Interests Register 2013-2016. ‘Interests’ is also a standing item in all meeting agendas as this is considered best practice.
The Local Authorities (Members’ Interests) Act 1968 has two main purposes:
- ensuring that members are not affected by personal motives when they participate in decisions of their local authority, and
- preventing members, in contracting situations, from using their position to obtain preferential treatment from the authority.
There are two types of interests that elected members or external appointees may have: pecuniary interests* (financial interests) and non-financial interests.
The Local Authorities (Members’ Interests) Act 1968 makes it clear that elected or externally appointed members must not vote or take part in a council discussion if they have a pecuniary interest.
The Local Authorities (Members’ Interests) Act 1968:
- controls the making of contracts worth more than $25,000 in a financial year between members and their authority, and
- prohibits members from participating in matters before the authority in which they have a pecuniary interest, other than an interest in common with the public.
Members who have declared a pecuniary interest in matters that are due to be considered at a Council or Committee meeting should declare that they have an interest in the matter, and leave the room for the discussion of that item.
These rules also apply to any business activities/contracts with the Council undertaken by the spouses or partners of any elected or externally appointed members.
*A pecuniary interest is not defined in the Act but the recommended test to use is: Whether, if the matter were dealt with in a particular way, discussing or voting on that matter could reasonably give rise to an expectation or a gain or loss of money for the member concerned.