Media Factsheet - Town Councils (Amendment) Bill 2017

The Town Councils (Amendment) Bill 2017 will be introduced in Parliament today for first reading by Senior Minister of State for National Development, Mr Desmond Lee.

Background

The Town Councils Act was enacted in 1989 to give elected Members of Parliament (MPs) significant autonomy and latitude to run the Town Councils so that they could decide how best to serve their residents’ needs and be directly accountable to their constituents for their performance.

The current legislative framework sets out broad rules to ensure proper governance of TCs and interest. Within this framework, TCs, run by the elected MPs, operate autonomously in the management of their respective estates. For example, each TC has the power to make its own by-laws, set its service & conservancy charges (S&CC), and determine its enforcement policy.

Overview of the Bill

The Bill preserves the core principles of autonomy and latitude that underpin the current while strengthening the overall governance and regulatory framework of TCs. While TCs are autonomous, their powers are not unfettered and should not be left unchecked. The Bill will enable the regulator, the Ministry of National Development (MND), to exercise more effective oversight of TCs on residents’ behalf, without undermining the TCs’ roles and responsibilities in managing their towns.

Notably, the Bill will improve transparency and performance, and require greater accountability from TCs and their key management personnel, to give residents the confidence that their housing estates are properly managed, and that S&CC monies are put to good use for their benefit. This is necessary to protect public/residents’ interests and hold TCs to account for the management of the millions of dollars they receive from residents and the Government.

The key features of the Bill are as follows (see Annex for summary ):

a) Clarify the roles and functions of TCs

The Bill gives greater clarity to the functions of TCs, and their roles vis-à-vis HDB and other public agencies to ensure that all parties are better aligned in how they carry out their statutory functions.

b) Improve TC governance and accountability

The Bill sets out the minimum standards for how conflicts of interest should be managed within the and improves transparency by requiring key TC appointments to be made known to the public. The Bill also allows MND to make rules in relation to the governance of TCs such as requiring TCs to disclose their compliance with governance and to make orders on post-election transitions for TCs to ensure a smooth handover and any service disruptions to residents.

c) Strengthen financial management in TCs

The Bill requires TCs to establish a separate Lift Replacement Fund to ring-fence funds for lift-related replacement and allows MND to require TCs to prepare and submit financial projections.

d) Enhance MND’s regulatory oversight

The current Act does not provide MND with any levers to ensure compliance from TCs, with the exception of offence provisions in three narrow areas[1]. The Bill empowers MND to appoint inspectors to conduct reviews and investigations on TCs’ compliance with the TCs Act and its Rules, and to issue rectification orders to TCs for non-compliance where warranted.

MND held a public consultation on the proposed changes to the Act from 18 Oct to 17 Nov 2016. We received feedback from TCs and members of the public through emails, mainstream and online media reports, as well as discussion forums such as REACH. We thank all respondents who have taken the time to contribute to the public and have considered the suggestions carefully in the finalisation of the Bill (see link for MND’s responses to the feedback received).

Issued by: Ministry of National Development

Date: 6 February 2017

[1] The three areas are the misuse of the TC sinking and operating funds, the contravention of TC-Lift Upgrading Programme Rules, and the failure to provide information to the auditor without any reasonable cause.