29/08/2019

LA Spotlight 

Housing Infrastructure Fund – Complying with State Aid rules
On Saturday 17 August, the Chancellor announced an extra £600 million of government funding to support the delivery of new housing. It is intended to deliver 50,000 new homes in England, and will be available through the Housing Infrastructure Fund (HIF). This is a £5.5 billion grant programme intended to deliver up to 650,000 new homes by funding related infrastructure that will not be provided by the market. It was set up in 2017 when the Chancellor was Secretary of State for Communities and Local Government.

Local authorities who successfully apply for HIF are required to enter into a grant funding agreement with Homes England. A key pre-condition of draw down is demonstrating compliance with the State Aid rules, and most of the agreements require the authority to do so by way of a report from “a firm of reputable solicitors with expertise in EU State Aid law.”  We’ve prepared reports for a number of authorities, as well as provided wider support, for example, advising on the terms of the grant funding agreements.

The obligation to demonstrate compliance with the State Aid rules can be overlooked as one of the many things to be dealt with when planning and delivering a project. However, in our experience of advising for this purpose, it is always preferable to consider State Aid as early as possible. The rules are technical, and how they apply will very much depend on the facts of a particular project. It is always worth recalling that their breach can lead to investigation by the European Commission and an order to repay the aid plus interest, and/or a challenge in the UK courts by way of judicial review, which can include a damages claim. The limitation period for a challenge from the European Commission is ten years, and the process can be initiated relatively easily by a complainant or the Commission itself. It should therefore be seen as a genuine rather than a theoretical risk, but one that can be managed with timely advice.

The State Aid issues in HIF-funded projects often turn on how it is structured, and in our experience some of the main points to consider are:

- Exactly what will the grant be used for?
- Who will spend the grant?
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Could there be any indirect aid?
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How does State Aid fit with any grant recycling obligations on the authority

If you would like to know more please click here to read the full article and feel free to ask questions of the named lawyers.

If State Aid advice is sought early in a project, it is usually possible to address any aid issues there may be without making any fundamental changes to a project’s structure. Our advice is therefore to consider it as soon as possible as doing so should give more scope for ensuring compliance and so satisfying the funding pre-condition mentioned earlier.

- Commercialisation;
- Place & Growth;
- Governance & Reorganisation;
- Contract Management; and
- Disputes & Regulatory Support.

 

 

Commercialisation

Commercialisation – under the spotlight
Focus on supporting local authorities in the implementation of commercialisation continues. In the context of the review of the Code of Audit Practice, the spotlight now is on transparency over the management of assets and liabilities. The NAO’s review highlights the growing trend of utilising commercialisation to raise funds. It is, however, the need for greater accountability for those assets and liabilities, which have a direct and indirect link to the services that is subject to review.

So what are the implications of this focus for the commercialisation agenda? The outcome of the NAO’s forthcoming review to be conducted with regulators, central governance departments and other bodies will be key in influencing the extent of further regulation of the commercialisation agenda. Whilst it appears unlikely that the new Code of Audit practice to be issued in 2020 will address the recommendations of the NAO review, the steer to greater accountability over asset management is likely to come in some form.

In the meantime, it would be prudent for authorities considering new projects (and indeed in the review of existing arrangements) to clarify and confirm the approach to safeguarding their assets and liabilities that have and interface with such projects as part of the financial/risk analysis from a governance and commercial perspective.

 

Publications & Guidance

Government Waste Strategy fails to provide funding and flexibility needed to meet challenging recycling targets
The Housing, Communities and Local Government Committee | 17 July 2019
The Government must give local authorities the freedom to develop recycling strategies tailored to the needs of their communities if the challenging targets in the Waste Strategy are to be met.  In the letter to the Minister for Local Government, the Housing, Communities and Local Government Committee criticises the current approach, set out in the Waste Strategy, as overly prescriptive and urges greater flexibility. The Committee further calls for clarity on the extra funding pledged to support the extra demands placed on local authorities.

 

News

The road to Wigan cheer: the council transforming lives despite £140m cuts
The Guardian | 5 July 2019
The town has tapped into local pride and self-reliance to maintain and even improve public services as austerity bites. Under relentless pressure to do more with less, all councils have had to make cuts. Many also bandy the word transformation around, but few achieve it. A study of Wigan by the King’s Fund makes clear this council is an exception.

NAO chief praises creative councils amid austerity pressures
Public Finance | 9 July 2019
Comptroller and auditor general Gareth Davies has praised local authorities for their management of finances and funding amid the period of austerity. Speaking at CIPFA’s annual conference, Public Finance Live 2019, the newly appointed chair of the National Audit Office said councils had shown extraordinary creativity in raising additional finances and funding their obligations.

District councils increasingly turning to commerciality
Public Finance | 9 July 2019
District councils are juggling a host of financial challenges as they face greater spending commitments at a time when funding is falling and when many of the challenges on the horizon are ‘unknowns’. That was the message delivered at a panel discussion entitled ‘Financial management and commerciality in districts – what next?’ at Public Finance Live 2019.

Further integration of NHS Portsmouth CCG and Portsmouth City Council
Portsmouth CCG | 15 July 2019
Plans have been developed which propose new ways for the city’s council and NHS to work more closely together in future. The plans set out options for further integration of the leadership of Portsmouth City Council and NHS Portsmouth Clinical Commissioning Group (CCG). This marks a continuation of a process of closer partnership which has involved senior joint appointments, and resulted in a range of positive changes such as targeted early health and social care support for children and families, a shared clinical record available to frontline NHS and social care staff, and integrated domiciliary care teams to help people return home after a hospital stay.

Leveraging council land value: the joint venture approach
Room 151 | 18 July 2019
Last year, London Borough of Haringey made national newspaper headlines after scrapping controversial proposals to regenerate a major housing estate through a joint venture with developer LendLease. However, since then, at least three other councils have committed to similar proposals – aiming to use the value of land they own to lever in cash from developers.

Legal services joint venture collapses
Room 151 | 23 July 2019
A joint venture between four councils which had promised £1m in efficiency savings has fallen apart after the largest partner announced its withdrawal. Surrey County Council has announced that it is withdrawing from the Orbis Public Law (OPL) partnership, set up in 2016 with Brighton and Hove City Council, East Sussex County Council and West Sussex County Council. As recently as April, the partnership had been predicting it would save £682,000 for the partner councils this financial year. A report by Leigh Whitehouse, executive director of resources at the council, said: “Surrey County Council has taken the decision to focus on an internal review of its legal services function over the next 12 months. “As a consequence, it is not currently intended to fully integrate Surrey’s legal services within the Orbis Public Law (OPL) partnership.” The report went on to say that each authority would retain its own legal service.

Nottingham Council to supply its own water
LocalGov | 26 July 2019
Nottingham City Council is set to become the first council to run its own water services in-house, saving an estimated £64,000 a year. Using new powers, the council is moving to a self-supply model and will buy water directly Severn Trent Water.

NAO focuses in on local government commercialisation
Public Finance | 1 August 2019
It is becoming increasingly important to account for assets and liabilities in the public sector because of the rise of commercialisation, the spending watchdog has said. The National Audit Office has also pledged to discuss the rise in commercialism in local government with CIPFA and relevant government departments. 

In a review of the Code of Audit Practice, published on Monday, the NAO pointed to the growing trend of local authorities undertaking commercial activities to raise funds. “The number of local public bodies entering into various arrangements with other organisations (including private companies), and the number looking into ‘commercial’ activities aimed at generating income streams in future to support the delivery of services is also increasing,” it said. “When entering into these more ‘commercial’ activities, the need to account properly for assets and liabilities – including those which do not directly impact on service delivery – is becoming more and more important.” 

Council charity to run Hertfordshire's libraries
LocalGov | 2 August 2019
Hertfordshire County Council is set to save £500,000 in business rates by transferring its libraries to a charity it set up for the purpose. It has awarded Libraries for Life the contract for the provision of its 46 libraries in a five-year contract worth about £10m a year.

District looks to offload theme park to avoid ‘unsustainable’ costs
Room 151 | 8 August 2019
Thanet District Council in Kent has agreed to dispose of a theme park it rescued almost a decade ago to stop the attraction from exposing the council to “unsustainable” future costs. The Dreamland heritage theme park in the seaside town of Margate, which dates back 100 years, was closed and fire-damaged when Thanet agreed to co-ordinate its Compulsory Purchase Order driven restoration in 2011.In a report to an extraordinary meeting of Thanet’s cabinet last week, council S151 officer and deputy chief executive Tim Willis said the authority’s actions had brought an iconic theme park “with a very troubled past” back to life. But Wills said Dreamland was now ready to be returned to private ownership to secure its long-term future.

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Place & Growth

The future is modular
Off-site construction (also known as “modern methods of construction” or MMC) is enjoying a surge of interest from the construction industry. However, due in part to wariness among lenders in relation to lending on standard residential terms, many of those using MMC are organisations who will hold a portfolio of MMC properties, including local government and social housing providers. Owners will be keen to ensure the asset they have constructed or purchased retains its value, both in terms of what they paid for it initially and its relative position against other comparable properties (both MMC and traditional construction). These MMC properties will also need to fit into those organisations’ wider asset management strategy and MMC properties raise some additional considerations:

- What is the design life for the MMC elements?
- Where the MMC properties are not installed by the manufacturer who is responsible for rectifying the defects?
- What is the landlord’s position in carrying out maintenance if the contractor and manufacture are in dispute?
- Where a landlord has a required defects response times, have these been factored into the arrangements with the manufacturer as well as the contractor?
- Is there a product warranty on the MMC element?
- Are there any proprietary parts involved? Could these be obtained in an emergency?

These considerations are in the detail rather than the fundamental differences in the way landlords approach asset management. However, these points should be deliberated at the outset when considering the use of MMC so that landlords do not find that the devil is indeed in the detail.

 

Legislation

The Community Infrastructure Levy (Amendment) (England) (No. 2) Regulations 2019
Part 11 of the Planning Act 2008 provides for the imposition of a charge known as the Community Infrastructure Levy (“the Levy”). The Community Infrastructure Levy Regulations 2010 (“the CIL Regulations”) (S.I. 2010/948) implement the detail of the Levy. These Regulations amend the CIL Regulations and come into force on 1st September 2019. The CIL Regulations and these Regulations apply in relation to England only.

 

Publications & Guidance

Creating space for beauty: interim report of the Building Better, Building Beautiful Commission
Ministry of Housing, Communities & Local Government | 9 July 2019
Interim report on how to promote and increase the use of high-quality design for new build homes and neighbourhoods.

Compulsory purchase process and the Crichel Down Rules: update
Ministry of Housing, Communities & Local Government | 16 July 2019
Updated guidance on the compulsory purchase process and the Crichel Down Rules. It has been revised to include guidance in relation to new town development.

A Home for the Ages: Planning for the Future with Age-Friendly Design
RIBA | 16 July 2019
This report challenges the current failure in England to meet the need for housing that is suitable for the older generation. By identifying the costs associated with this failure and the potential benefits that could be achieved through action, the report makes the case for how policymakers focusing on increasing age-friendly housing provision could play an important role in tackling the extensive issues in both housing and social care. The report includes data from Centre for Towns which reveals the places in England getting oldest, fastest and a detailed survey carried out by ComRes which reveals what matters to over 55s.

Building regulations and fire safety: consultation response and connected issues
Housing, Communities and Local Government Committee | 18 July 2019
In the two years since the Grenfell Tower fire, the Government has been “far too slow” in reforming the building and fire safety regime and is still not doing enough to remove dangerous cladding from existing buildings. In a report published today, the Housing, Communities and Local Government Committee has called on the Government to recognise the need for urgency.

Reforming private renting in London
Mayor of London | 19 July 2019
The Mayor of London believes the private rented sector needs fundamental reform to make it more stable, secure and affordable for the two million Londoners who rely on it for their home. Despite having no formal powers over the sector, the Mayor is committed to improving the lives of London’s private renters. He is calling on the Government to change tenancy laws to make it harder for landlords to evict tenants without good reason, and for asking powers to bring rents down.

DfT injects £348m into boosting local roads quality
Department for Transport | 20 July 2019
The Department for Transport has announced nearly £350m is being made available for councils to improve local roads up and down the country. Two sets of funding, totalling £348m across 4 years, will be available for local authorities to bid for in an effort to tackle issues on major local roads, from easing congestion through to sorting out potholes.

Street manager and street works permit scheme changes
Department for Transport | 20 July 2019
Consultation closes at 11:45pm on 13 September 2019
Proposals to implement the street manager digital service plus conditional changes for street works permit schemes and the framework for road restrictions. Consultation proposing:

- altering secondary legislation to implement the new street manager digital service
- one new and one amended national condition for street works permit schemes regarding temporary traffic lights and the location of works
- changing the framework for road restrictions

A new deal for renting: resetting the balance of rights and responsibilities between landlords and tenants
Ministry of Housing, Communities & Local Government | 21 July 2019
Consultation closes at 11:45pm on 12 October 2019
On 15 April 2019, the government announced that it will put an end to so called ‘no-fault’ evictions by repealing section 21 of the Housing Act 1988. Under the new framework, a tenant cannot be evicted from their home without good reason. The government also proposed to strengthen the section 8 eviction process, so landlords are able to regain their property should they wish to sell it or move into it themselves. This consultation seeks views on how section 21 of the Housing Act 1988 has been used in the past, and the circumstances in which landlords should be able to regain possession once it has been abolished, including what changes may be necessary to the existing grounds for possession in Schedule 2 of the Housing Act 1988. We are also inviting views on the implications of removing the ability of landlords to grant assured shorthold tenancies in the future, how the processing of repossession orders through the courts could be improved, and whether the reforms should be extended to other types of landlords, most notably, to housing associations.

Rogue landlord database reform
Ministry of Housing, Communities & Local Government | 21 July 2019
Consultation closes at 11:45pm on 12 October 2019
This consultation is seeking views on widening access to the database to allow tenants and prospective tenants access to the database. To ensure that the database is a useful tool for local authorities and tenants, we are also seeking views on expanding the scope of offences and infractions which could lead to entries on the database.

Sale of public land
Public Accounts Committee | 24 July 2019
The UK is in the grip of a housing crisis, with a severe shortage in some areas of affordable homes specifically social homes for rent. Despite these pressing issues, the government has failed to use its position as a major land owner to develop and execute an effective strategy to meet land disposal targets. In summary:

- Severe shortage in some areas of affordable homes, particularly social homes for rent.
- Government has failed to develop and execute an effective strategy to meet land disposal targets.
- The Department estimates it will have failed to sell the land needed for 91,000 of the homes promised under the Land For New Homes target, equivalent to 57% of the overall target

 

News

LEPs ‘lack transparency’ despite receiving £12bn of Government funding
LocalGov | 5 July 2019
The Government has ‘no real understanding’ of the impact which the Local Growth Fund has had on local economic growth despite investing £12bn of taxpayers’ money, MPs say. The Ministry of Housing, Communities and Local Government (MHCLG) claims that every £1 of local growth funding paid to Local Enterprise Partnerships (LEPs) could generate £4.81 in benefits. However, a new report from the Public Accounts Committee has criticised the MHCLG for a lack of transparency and accountability, and argued that the £4.81 claim is an ‘unsubstantiated estimate’.

Local authorities to pilot recovery scheme for unpaid council tax
Local Government Lawyer | 5 July 2019
A group of 29 local authorities in England and Wales are to take part in a pilot scheme aimed at helping with the recovery of unpaid council tax. Manchester City Council and Salford City Council are among those asked to be part of the trial working with the Department of Work and Pensions (DWP) and Revenue and Customs (HMRC) to be the first to use powers introduced by the Digital Economy Act 2017.

Enterprise zones 'failed to deliver' jobs boost in England
BBC Online | 11 July 2019
A multimillion-pound government policy to boost job creation has failed to deliver, research has revealed.

In 2011, the government announced "enterprise zones" in England to try to improve economic growth, forecasting 54,000 new jobs between 2012 and 2015. BBC-commissioned research found by 2017 only 17,307 jobs had been created in 24 zones around England - and in two areas the number of jobs had fallen.

The government said it had created 38,000 jobs since 2012. The research, conducted by think tank charity Centre for Cities using data from the Office for National Statistics (ONS), showed the number of jobs created fell short by nearly three-quarters of the amount predicted in the government's initial announcement in 2011.

West Midlands Combined Authority to redefine ‘affordable housing’
Public Law Today | 17 July 2019
The West Midlands Combined Authority (WMCA) has said it wants to redefine ‘affordable’ housing as the average house price in the region is seven times higher than the average annual salary. The WMCA’s Housing and Land Delivery Board this week agreed an approach to define affordable housing “in a more localised and bespoke way”. This will involve combining the national definition with specific local weighting and criteria within the WMCA.

Housing for a fairer society: the role of councils in ensuring stronger communities
Town and Country Planning Association | 26 July 2019
Fifth in a series of annual reports between the TCPA and APSE (the Association for Public Service Excellence) considering how UK councils perceive and are responding to the housing crisis. It shows that, for the fourth consecutive year, over half of UK councils are reporting ‘severe’ shortages in affordable housing, with those in England and Wales claiming that they are heavily reliant on developer contributions to create homes for low-earning people. Among the report’s recommendations is the suspension of the Right to Buy in England; the reinstatement of a definition of affordable housing which links affordability to income; and the adoption of ‘community benefit clauses’ in planning policy to ensure that local authorities consistently maximise the wider benefits of the construction and development process.

Towns to receive £3.6bn to ‘level up’ power across England
LocalGov | 29 July 2019
Local authority leaders have welcomed the prime minister’s announcement that 100 towns will receive £3.6bn in funding, but warned councils still face an £8bn funding gap. Boris Johnson said he intended to start ‘answering the pleas of some of our left behind towns.’ Mr Johnson told his audience that his Government would bring forward plans on the UK Shared Prosperity Fund and expand Growth Deals in Scotland, Northern Ireland and Wales. He also said that the £3.6bn Towns Fund, that would be made available to an initial 100 towns, will help improve transport and broadband connectivity and give a boost to ‘vital social and cultural infrastructure’, such as libraries. The new PM also said that he would give greater powers to council leaders and communities.

Whitehall urged to develop £10bn ‘regeneration strategy’
LocalGov | 2 August 2019
The Government should develop a £10bn ‘national regeneration strategy’ to help boost towns and cities across the North and Midlands, a new study says. The recommendation has been made by the Great Places Commission, which was launched last year by the National Housing Federation. The report urged the Government to give local authorities a sustainable future funding settlement that would help them rebuild their capacity and skills, allowing them to lead placemaking.

Brentwood Council signs £1bn joint venture
LocalGov | 2 August 2019
A £1bn joint venture to deliver new homes, public spaces and local facilities has been agreed between Brentwood Borough Council and Morgan Sindall Investments .The Brentwood Development Partnership will deliver a programme of developments over the next 30 years. The council will contract through its wholly owned property company, Seven Arches Investments Ltd. It will also act as a central purchasing body through which other local contracting authorities in Essex can procure a similar partnership with Morgan Sindall Investments.

Government welcomes plans to create West Midlands national park
LocalGov | 8 August 2019
Whitehall has welcomed proposals to create a new West Midlands urban national park that would span more than seven cities and open up hundreds of miles of green space. The interim findings of the Government’s Landscapes Review said officials would like to see ‘the encouragement of a wider range of non-designated systems of landscape protection,’ such as the plan to build a national park in the West Midlands Combined Authority region.

 

Cases

Livewest Homes Ltd (formerly known as Liverty Ltd) v Bamber [2019] EWCA Civ 1174
In the case of Livewest Homes Ltd (formerly known as Liverty Ltd) v Bamber [2019] EWCA Civ 1174 the Court of Appeal sanctioned the use of a break clause in a fixed term AST, allowing early termination of the fixed term on two months’ notice. The appeal judge found that Livewest were not required to give 6 months’ notice pursuant to Section 21(1B) of the Housing Act 1988 as the exercise of their contractual right to break the tenancy during the probationary period meant that the tenancy “was no longer a fixed term tenancy for a term certain of not less than two years”.

Yildiz v Hackney London Borough Council [2019] EWCA Civ 1331
The Court of Appeal was called upon to decide whether possession proceedings which are brought on ground 15A of Schedule 2 to the Housing Act 1985 (HA 1985) (ground 15A) (under occupation by a tenant who has succeeded to the tenancy upon the death of the former tenant) can only be brought within twelve months of the former tenant’s death, or whether the court can circumvent this twelve months’ time limit by dispensing with the need for HA 1985, s 83 notice to be served. The Court of Appeal ruled in favour of a strict twelve months longstop date for the bringing of possession proceedings, meaning that if a landlord does not serve HA 1985, s 83 notice or issue possession proceedings within 12 months of learning of the former tenant’s death, they will be unable to bring any possession proceedings based on ground 15A. This decision will affect how local housing authorities approach succession cases where there is potential under-occupancy.

Forward v Aldwyck Housing Group Ltd [2019] EWCA Civ 1334
The Court of Appeal had to consider whether a possession order can still be made in favour of a social landlord where the landlord has failed to comply with the public sector equality duty (in section 149 of the Equality Act 2010). The court held that if compliance with the duty would have been unlikely to make any difference to the public body’s decision, then a court can still grant the public body the relief they are seeking notwithstanding their breach of the duty.

Adesotu v Lewisham London Borough Council [2019] EWCA Civ 1405
The Court of Appeal has held that an appellant, in a statutory based on section 204 of the Housing Act 1996 (HA 1996), homelessness appeal to the County Court, cannot raise allegations of disability discrimination within the context of such an appeal. Ms Adeotsu, the homeless applicant, alleged that Lewisham Council had discriminated against her on the basis of her disability in the way that it had dealt with an offer of accommodation which it made to her under the main housing duty. The Court of Appeal held that an HA 1996, s 204 appeal is not a suitable forum for disability discrimination arguments. Such arguments will require findings of fact which cannot be made without the testing of witness evidence at trial. See also Local Government Lawyer

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Governance & Reorganisation

Finance matters
It will come as no surprise that the Government has announced it is postponing the Spending Review until next year in order to focus on Brexit. The Chancellor has however said that in the interim the Government will complete a one year spending review in September. Although this will be of some relief and is certainly a step in the right direction, it is still a long way short of addressing the considerable financial anxiety permeating the local government sector.

The financial situation has also been reiterated by the MHCLG Select Committee who have recently published a report into local government finance, in which it states that there “is now significant urgency in delivering a solid future for the funding of local government in England. A decade of expenditure reductions has both service-delivery and constitutional implications.”

 

Legislation

The Coroners and Justice Act 2009 (Commencement No. 20) Order 2019
SI 2019/1105 brings into force section 18 of the Coroners and Justice Act 2009 (c. 25).

Section 18 confers a power on the Lord Chancellor to make regulations requiring a registered medical practitioner, in prescribed cases or circumstances, to notify a senior coroner of a death of which the practitioner is aware. Date made 8 July 2019.

The Notification of Deaths Regulations 2019
SI 2019/1112 impose a duty on registered medical practitioners to notify a senior coroner of a person’s death under certain circumstances. The senior coroner to be notified is the senior coroner appointed for the area in which the body of the deceased person lies. Coming into force on 1st October 2019.

Children and Social Work Act 2017 (Transitional and Savings Provisions) (Social Workers) Regulations 2019
SI 2019/1140. Part 2 of the Children and Social Work Act 2017 (“the Act”) made changes to the way in which social workers in England are regulated. In particular, the Act established a body corporate, Social Work England (“SWE”), as the regulator of social workers in England in place of the Health and Care Professions Council (“HCPC”), and made provision for various functions related to the regulation of social workers to be transferred to SWE. The Social Workers Regulations 2018 (S.I. 2018/893) (“the Principal Regulations”) are made under Part 2 of the Act and set out the detail of SWE’s functions in relation to social workers in England. These Regulations, which come into force at the same time as the Principal Regulations, make transitional and savings provisions which are necessary to facilitate the transfer of functions from the HCPC to SWE.

 

Publications & Guidance

Audit quality of councils will face examination in new independent review
Ministry of Housing, Communities & Local Government | 10 July 2019
Review into the quality of local authority audits and whether they are spotting warning signs early enough.

Policing and fire governance: guidance for police and crime panels
Local Government Association | 11 July 2019
This guidance has been produced for police (fire) and crime panel chairs, members and support officers and those with whom they work. It is intended to provide information about the statutory roles of panels and to highlight good practice that has been developed over the years since panels were first established.

Devolution to English cities in the light of Lord Heseltine’s report ‘Empowering English cities’, House of Lords, 17 July 2019
Local Government Association | 12 July 2019
Local leaders should be given the responsibility and funding to address long-standing challenges and maximise opportunities. Bringing power and resources closer to people is the key to delivering better outcomes for communities and inclusive growth across the country. The Local Government Association (LGA) is calling for a new localism settlement for England that empowers local communities and revitalises our democracy. Our recommendations would support local government to deliver the best outcomes for their local places.

£100m migration fund helps alleviate council pressures across England
Ministry of Housing, Communities & Local Government | 13 July 2019
Councils across England are set to receive a further £28m to help ease pressures on local services resulting from recent migration. This brings total funding from the government’s Controlling Migration Fund to over £100m. The latest funding, announced by Communities Minister Lord Bourne, will be allocated to 123 projects across England.

Where do you draw the line? Local administrative boundaries in England
House of Commons Library | 15 July 2019
A review of policy and practice influencing the creation and change of local government and other local administrative boundaries in England.

Consultation outcome: Allowing joint committees and combined authorities to hold meetings by video conference
Ministry of Housing, Communities & Local Government | 16 July 2019
The government is satisfied that, with appropriate safeguards to maintain town hall transparency, there are clear benefits to giving local authorities operating joint committees and combined authorities the ability to hold formal meetings by video conference. The government now intends to speak with the sector, with a view to extending the use of video conferencing in formal meetings to other local authorities, before making a final decision on what to include in the legislation.

The Impact and response to the funding levels of public services that interact with young adults - House of Lords, 18 July 2019
Local Government Association | 17 July 2019
Many of the services that impact young adults are delivered by local government. The challenges facing them span a range of issues. It is vital that the Government uses the Spending Review to deliver truly sustainable funding for local government. Investing in local services is good for the nation’s prosperity and overall wellbeing.

The future definition of public service mutuals
Department for Digital, Culture, Media & Sport | 19 July 2019
Consultation closes at 9am on 30 September 2019
Public service mutuals are currently defined as organisations that have left the public sector (spun out), continue to deliver public services and have a significant degree of employee ownership, influence or control. Evidence suggests that there are a number of challenges with this definition, and that it may benefit from revision. The government believes that the contribution that public service mutuals can make to public services can be strengthened by creating a more robust definition and brand identity.

Government readies whole nation for Brexit with every council to have a designated Brexit lead
Ministry of Housing, Communities & Local Government | 3 August 2019
Councils should be fully prepared to leave the European Union by the end of October, the Communities and Local Government Secretary Rt Hon Robert Jenrick MP said today (3 August 2019). Mr Jenrick thanked councils for all the work they have already done, but said they must step up vital preparations and committed £20m for councils across England to prepare for delivering Brexit. He has asked each council to designate a Brexit lead to work with central government and oversee teams in every community who will work with stakeholders in their area to plan intensively for Brexit.  The new funding comes in recognition of the central role councils will play to make sure their residents are ready for Brexit, and is expected to support a range of activity including communications, training and the recruitment of staff.

 

News

£5.3bn EU cash countdown: regional aid funding to run out in 18 months
Local Government Association | 5 July 2019
Local areas in England are at risk of losing out on £5.3 billion in just 18 months if the Government does not act fast and put in place replacement funding arrangements once the UK leaves the EU, council leaders are warning.

LGiU calls on next PM to set out funding plans for local government in first 100 days
Local Government Information Unit | 15 July 2019
The Local Government Information Unit (LGiU) launches the final report of the Local Finance Taskforce and calls on the next Prime Minister to address local government funding in his first 100 days in office.

The final report, a roadmap for the future sustainability of local finance, sets out a plan (and timeline) for developing a fair and sustainable funding system that includes: a commitment to a one year emergency local government finance settlement; a national strategy for health and social care funding and the removal of the council tax referendum requirement. In the report, the Taskforce challenges the next Prime Minister to set out a plan for local government finance that considers the following: quantum, uncertainty and risk, adult social care, business rates, council tax, other sources of funding and local government’s place within the wider public sector.

Surge in annual borrowing pushes PWLB closer to liabilities cap
Room 151 | 18 July 2019
Local authorities ramped up their borrowing from the Public Works Loan Board (PWLB) in the year to April, increasing the statutory body’s liabilities by 10.5%, according to the body’s annual report.

Figures in the PWLB’s 2018/19 accounts, released this week, show liabilities of £78.34bn, up from £70.88bn the year before – driven by a 76.9% increase in new loans advanced to councils and other bodies in the 12 months. HM Treasury sets a cap on the PWLB’s maximum liabilities, which is currently £85bn. A current-year increase in the magnitude of liabilities on a par with last year’s would breach the existing cap.

England rated UK’s worst performer in devolving power
Public Finance | 19 July 2019
Devolution has “struggled to take root in England” compared to other UK countries, according to Akash Paun, senior fellow at the Institute for Government think tank. Speaking at an event in London to launch a collection of essays on devolution by a number of experts yesterday, report co-author Paun said: “Devolution has struggled to take root in England because there’s no bottom up pressure the way we see in the regions.” 

Communities Secretary sets out circumstances in which unitary proposals would be considered
Local Government Lawyer | 24 July 2019
The Communities Secretary, James Brokenshire, has set out the circumstances in which he would be prepared to issue a formal invitation to councils under the Local Government and Public Involvement in Health Act 2007 to submit proposals for the establishment of new unitary councils. Brokenshire said in a written ministerial statement yesterday that he would also set out how he intended to assess any unitary proposals councils make in response; and the Government’s continued approach to any proposals two or more district councils may make to merge in order to form a new larger district council. The Secretary of State said: “Locally-led changes to the structure of local government, whether in the form of unitarisation or district mergers, can – with local support – be an appropriate means of ensuring more sustainable local government and local service delivery, enhanced local accountability, and empowered local communities. This statement …continues the Government’s commitment to supporting those councils that wish to combine, to serve their communities better and will consider unitarisation and mergers between councils when locally requested. 

Struggling tourist attraction causes council cashflow problems
Room 151 | 25 July 2019
Brighton & Hove Council is to restructure a multi-million pound loan to the operators of the BAi360 tourist attraction after agreeing to defer receipt of a repayment due to falling visitor numbers. The council’s policy, resources and growth committee this week agreed to defer up to £1.34m of the £1.49m payment due from the operators – after agreeing similar deferments twice last year. The council, which is repaying almost £1m every six months to the Public Works Loan Board on the debt it took out to finance construction of the viewing tower, is set to return with options for a restructuring of repayments from BAi360.

Redditch issued with section 24 notice and told to save £1.5m
Room 151 | 31 July 2019
Auditors have issued an adverse audit report for Redditch Borough Council, telling the council it needs to save £1.5m over the next three years and is at risk of breaching its statutory duty to set a balanced budget.

The report by Grant Thornton revealed that it has issued a section 24 notice, recommending urgent action to prevent both its general fund and housing revenue account balances being exhausted by the end of 2020/21

It also expressed concern the council had failed to properly plan to deal with its financial woes.

Chancellor announces fast-tracked Spending Review
LocalGov | 9 August 2019
The Government will rush through a one-year Spending Round to help prepare for Brexit. Chancellor Sajid Javid said the announcement will ensure departments and devolved administrations have the financial certainty needed to deliver on the prime minister’s recent spending promises. The fast-tracked Spending Round will be completed in September and the Spending Review will be delayed until 2020

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Contract Management

Are you assessing your market?
In February 2019, the Government published “The Outsourcing Playbook - Central government guidance on outsourcing decisions and contracting”, which we discussed earlier this year. The accompanying Guidance Note Market Management has been produced to assist Government organisations in their understanding of what healthy markets are, why they are important, and how to assess the health of a market whilst still under contract with suppliers. Given the current financial instability in the market, it is important to understand the current market and to be able to assess performance and act quickly in a financial distress event or to identify areas for service improvement.

What makes a healthy market? In short, where buyers are clear about their requirements and are able to select from a pool of suppliers, each actively competing to provide buyers with what they actually want. Coupled also with the ability to switch to suppliers which offer the best value for money. 

But why is this important? Where these conditions are present it requires suppliers to make attractive bids to win work and deliver value for money, otherwise there is every possibility that buyers will look elsewhere. A healthy market ensures that if a buyer does need to find a new supplier at short notice then it can be confident in obtaining value even when faced with a time pressured purchase.

Assessing the market is a process that government organisations are encouraged to do continually, firstly as part of developing its commercial strategy, but also throughout the life of current contracts.  However the question arises as to how market testing can be viewed by those suppliers an organisation is currently contracting with. For example, from a suppliers perspective, it could be suggested that by viewing the market in this fashion, a buyer is actively looking for new suppliers and as a consequence considering ending its current supply agreement. This is where the Outsourcing Playbook and the accompanying Market Management note take on added importance.

The Market Management note in particular contains helpful questions and pointers to enable buyers to formulate their own market assessment and lists the types of evidence that should be viewed to help with analysis. Whereas the Outsourcing Playbook, viewed as a guide containing rules and principles to assist professionals across government organisations and prevent them from making commonly seen errors in outsourcing projects, is increasingly finding support amongst suppliers. This level of support that the Playbook is finding, should provide buyers who follow the rules with the confidence that their market assessment activities do not fall foul of any restrictive terms of their contract.

 

Publications & Guidance

Taking account of a supplier’s approach to payment in the procurement of major contracts
Procurement Policy Note PPN 04/19
Cabinet Office | 23 July 2019
The Cabinet Office has issued Procurement Policy Note (PPN 04/19), updating its guidance for contracting authorities on taking suppliers’ payment approaches into account in the procurement of major government contracts. PPN 04/19 sets out how payment approaches can be taken into account in the procurement of major government contracts. This note applies to all central government departments, their executive agencies and non departmental public bodies. In-scope organisations must take action to apply the provisions of this Procurement Policy on all procurements above £5m per annum, advertised on or after 1 September 2019.

 

News

Council backs campaign for procurement reform
LocalGov | 11 July 2019
Oxford City Council has become the first authority to back a fair tax campaign. The council has called for changes to procurement laws, enabling the public sector to factor firms' record on paying tax into contract awarding decisions.

Birmingham CC and Capita ‘dissolve’ long-standing partnership
LocalGov | 2 August 2019
Birmingham City Council has announced that its 13 year joint venture with Capita has been ‘largely ended’, reportedly saving taxpayers £44m.The Service Birmingham Partnership was established in 2006 with Capita as the major shareholder in a move aimed at saving the council £500m and generating 800 jobs. The contract covered tech and comms systems and council tax collection services and costs an estimated £70m a year to run. A joint statement between Birmingham CC and Capita said that most services will be brought back in-house, with ICT services returning to council management after a four-month transition period. The statement added that Capita will continue to support the council in providing a range of hosted and off-site services, such as data centre hosting, until the contract naturally expires in March 2021. Around 167 staff were transferred to the council from Capita recently.

Council defeats High Court bid for declaration of ineffectiveness over development agreement
Local Government Lawyer | 6 August 2019
A High Court judge has dismissed a property investment company’s bid for a declaration of ineffectiveness claim for lack of an OJEU notice. Basingstoke and Deane Borough Council entered into a contract for a major regeneration scheme. The proceedings in AEW Europe LLP & Ors v Basingstoke And Deane Borough Council [2019] EWHC 2050 (TCC) concern the regeneration of Basingstoke Leisure Park.

County council and Veolia terminate waste contract
Hertfordshire County Council | 8 August 2019
Hertfordshire County Council and Veolia ES Hertfordshire Limited have agreed to terminate the long term contract to dispose of Hertfordshire’s residual waste. The contract would have provided for Veolia to build an Energy Recovery Facility in Hoddesdon, to take the waste that Hertfordshire residents produce that cannot be reused, recycled or composted. Following the Secretary of State’s decision to refuse planning permission for Veolia’s proposed Energy Recovery Facility in Hoddesdon, Hertfordshire County Council discussed the way forward with Veolia and have agreed to terminate the contract.

Whitehall commits £20m to help councils prepare for Brexit
LocalGov | 5 August 2019
Council chiefs have welcomed the Government's announcement that £20m will be made available to help with Brexit preparations, but warned there are still 'information gaps' relating to the UK's exit from the EU.

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Disputes

Green Paper to White Paper - Is a social care paper imminent?
Earlier this year the 2019 State of Local Government Finance survey said that almost half of local authorities were planning to cut services. Furthermore, in 2019/20 nearly all would raise council tax and increase charges to stay afloat.           

Against this backdrop, it is perhaps unsurprising that local authorities have recently come under criticism for writing off unpaid debts, including outstanding care home fee debts. Where a local authority arranges a care home placement, it generally pays the full fee and then collects from the client the amount they have been assessed to pay towards their personal budget. However, local authorities often face challenges in seeking reimbursement of such fees.

The long awaited Green Paper on social care remains outstanding, indeed it has recently been reported by the Financial Times that the Green Paper has been “ditched” and instead a White Paper setting out the new Government’s social care policies will be published in the autumn of 2019. Amongst this ongoing uncertainty, it has also been reported that families are spending twice as much on care home fees for relatives than they were a decade ago. Care costs have increased significantly while local authority funding has broadly remained static despite an ageing population. In this context, it is not surprising that local authorities are facing issues in recouping care home fees. Such difficulties are often exasperated if someone in receipt of care dies and the local authority has to reclaim the monies from the deceased’s estate.

The Care Act 2014 provides that any sum due to a local authority in respect of care home fees is recoverable as a debt. We have experience in assisting local authorities in recovering care home fees from the estates of deceased clients. We adopt a tried and tested methodology of triaging claims by assessing the status of the debt in terms of limitation and the financial position of the estate (whether solvent or insolvent and the value of any known assets and other debts) and advising on appropriate next steps in the context of probate law. We are also experienced in various other forms of debt recovery. If you would like to discuss a portfolio of debts with us, please get in touch.

 

News

Councils vow to fight £2.35bn business rates court challenge
Room 151 | 11 July 2019
The Local Government Association (LGA) will support 45 councils defending a challenge to business rates levied on NHS hospital properties that could see £2.35bn clawed back and set a significant precedent.

Consultants advising a group of 17 NHS trusts challenging the business rates on their properties said this week that a High Court trial has now been set for a test case in which Derby Teaching Hospitals NHS Foundation Trust and the others will seek 80% relief on its rates bill. The move aims to gain the same charitable-status rates relief enjoyed by many private healthcare operators and, according to property firm Altus Group, would see the affected trusts get mandatory relief on their business rates backdated to April 2010 – costing town halls and the government around £2.35bn.

Supreme Court to hear key case on village greens and land held by public authorities
Local Government Lawyer | 15 July 2019
The Supreme Court is this week hearing a village green registration case that is said to have the potential “to radically affect the status of publically accessible land held by public authorities pursuant to statutory powers”.

Last year, the Supreme Court granted permission to appeal against the decision of the Court of Appeal in the co-joined appeals of Timothy Jones v NHS Property Services Ltd & R(Lancashire County Council) v Secretary of State for Environment, Food and Rural Affairs [2018] EWCA Civ. 721.

Guildford councillors’ vote £20K for local plan review
Local Government Lawyer | 26 July 2019
Guildford Borough Council has voted to spend up to £20,000 on appointing a Queen’s Counsel to give a second opinion on whether its local plan is sufficiently robust in the event of it being challenged in the High Court. The money has been allocated to ensure that the processes used in the determining the local plan, which was adopted in April 2019 and is set to be place until 2034, would withstand a judicial review being brought against it. The development of the local plan proved controversial amongst some residents due to the extent of green belt land that was included and members also voted to carry out a review of whether more of the 10,678 homes it needs to build can be on brownfield sites instead of green belt land.

 

Cases

L (An Infant), R (On the Application of) v Buckinghamshire County Council [2019] EWHC 1817 (Admin) (12 July 2019)
The case concerns the lawfulness of a decision taken by BCC to close 19 of its 35 children’s centres, whilst ensuring their continuing use for early years and community benefit. The meaning of the ‘sufficiency duty’ in S.5A of the Childcare Act 2006 is examined in detail. Also discussed in Local Government Lawyer

R (on the application of Williams v Caerphilly County Borough Council [2019] EWHC 1618 (Admin)
The decision to close the Pontllanfraith Leisure Centre was quashed because Caerphilly County Borough Council failed to meet its obligations under section 149(1) of the Equality Act 2010 in relation to the public sector equality duty.

Councils can investigate parents’ complaints without consent of minors
Local government and Social Care Ombudsman | 11 July 2019
Lancashire County Council has agreed to apologise to a father after it told him it could not investigate his children’s services complaint without the consent of his son. The Local Government and Social Care Ombudsman has said parents have a right to complain, the council has a legal obligation to consider a complaint and it does not need a child’s consent to investigate a complaint made by their parent.

Autistic man had no schooling due to council’s lack of support, Ombudsman finds
Local government and Social Care Ombudsman | 18 July 2019
Derbyshire man missed most of his secondary education because the county council did not support his special educational needs sufficiently, the Local Government and Social Care Ombudsman has found.

Because of the lack of support the man received throughout his entre time at secondary school, Derbyshire County Council has agreed to pay his mother more than £22,000 to reflect the impact this has had on him. In addition to the council’s own findings, the Ombudsman’s investigation found the council’s annual reviews of the man’s education were “wholly ineffective” and did not take place after Year 10.

Council defeats judicial review challenge over changes to school transport and SEN transport policies
Local Government Lawyer | 22 July 2019
Leicestershire County Council has defeated a High Court challenge brought by a 17-year-old, severely disabled girl over proposed changes to its school transport policies. The claimant in Drexler, R (on the application of) v Leicestershire County Council [2019] EWHC 1934 attends a special school for pupils with special educational needs. At present, Leicestershire provides her with free home to school transport. The claimant challenged the council's decision, taken by its Cabinet on 9 March 2018. The Cabinet resolved to accept the changes proposed, to come into effect from the beginning of the 2019-2020 academic year. The changes would, save in exceptional cases, remove transport for eligible pupils aged 16-18 and instead provide their families with direct payments to arrange their own travel. Following the hearing of the claim the council decided to delay implementation of the revisions to the policies until the beginning of the 2020-2021 academic year.

Fire authorities lose legal bids to stop PCC takeovers
Local Government Lawyer | 30 July 2019
Fire authorities in Peterborough and the West Midlands have lost a combined judicial review of the Home Secretary’s decision to allow their respective Police and Crime Commissioners (PCCs) to take over responsibility for the governance of their local fire and rescue services.

In Shropshire And Wrekin Fire Authority & Ors, R (On the Application Of) v The Secretary of State for the Home Department [2019] EWHC 1967 (Admin) (29 July 2019) the court upheld the Home Office’s decision to allow Cambridgeshire Police and Crime Commissioner Jason Ablewhite to take over the governance role of the Cambridgeshire and Peterborough Fire Authority. In the West Midlands, the court also upheld the decision to transfer the powers of both the Herefordshire and Worcestershire Fire Authority (HWFA) and the Shropshire & Wrekin Fire Authority to the West Mercia Police and Crime Commissioner, John Campion.

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Events

Junior Housing Network
Wednesday 25 September 2019
London, From 6pm
Are you a junior housing professional seeking to increase your network? Meet other housing professionals, including the new members to our own housing development team at an informal drink event at The Gherkin.

Collaborative Contracts Don't Work... Do They?
Thursday 3 October
London, 4pm
What is the reality of collaborative contracts? In this session we will discuss the pros and cons – do certain standard terms encourage a more collaborative approach? Do they go far enough? How much is the success of a project dictated by attitude and process and how much is down to the contract terms?

Healthcare Estates Breakfast Briefings
Various dates & topics
Leeds, 8.30am
Throughout 2019 and 2020, we are running a series of Breakfast Briefings focusing on key themes affecting healthcare estates. Our specialist lawyers will be joined by guest speakers at these engaging and interactive sessions, designed to explore issues of relevance to those involved in healthcare estates, whether in acute settings, in the community or in the provision of mental health or primary care and whether in the NHS or private sector.