27/07/2021

LA Spotlight

Don’t forget LIBOR!

This month we shine a timely reminder on the looming London Inter-bank Offered Rate (LIBOR) transition deadline.  LIBOR is one of the main interest-rate benchmarks used globally in the financial markets, and will be retired on 31 December 2021.

Despite standardised wording being available in the market, the approach adopted to implementing these changes varies considerable between lenders. Lenders with LIBOR based rates in their loans will be contacting borrowers advising them of the changes or requiring their consent to implement them now.

Not only will the LIBOR changes impact direct facilities with banks, but any facility or contractual agreement over which a local authority, higher education provider or NHS Trust has an interest or consent right that includes a LIBOR linked interest rate. Failure to act properly now could result in these changes not being correctly updated and a risk of financial exposure to higher rates going forward or as part of a future action or dispute.

In order to understand your exposure you should review existing contract terms and financial products that may contain a LIBOR linked rate. Some examples of arrangements you should be reviewing are:

  • existing loans from banks and funders
  • on-lending into subsidiaries, joint ventures and registered providers (amongst others)
  • PFI and PPP financing agreements
  • commercial contracts with LIBOR linked default ratesg. hire-purchase agreements
  • bonds, and
  • SWAP agreements.

For further information, take a moment to watch our recent webinar: LIBOR Transition – Practical next steps or contact David Moore.

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Net Zero

The establishment of the UK Infrastructure Bank

In March this year, the government published its Policy Design paper regarding the establishment and operation of the UK Infrastructure Bank (UKIB) (Policy Design of the UK Infrastructure Bank). The UKIB will be established with the express aim of supporting the UK’s transition to a net zero carbon emission economy by the year 2050, as set out in the government’s Ten Point Plan for a Green Industrial Revolution. It is hoped this will be achieved through direct support for the private sector and local authority infrastructure finance market in order to accelerate investment.

Headquartered in Leeds, reflecting the government’s aim to ‘level up’ the UK beyond the confines of London, the UKIB will have an initial pool of £22bn on which to draw to support investment. Specifically targeting the sectors of clean energy, transport, digital interconnectivity, and water/waste treatment, the UKIB is intended to be crucial in supporting the development of fledgling technologies deemed central to establishing the net zero economy.

The aims of this new institution are not limited to the sourcing of financial backing. The UKIB aims to complement existing infrastructure bodies such as the National Infrastructure Commission and the Infrastructure and Projects Authority, as well as to provide a number of financial tools aimed at the target of net zero and the management of investment risk to achieve this.

Recent years have shown that the high initial investment sums required for capital-heavy infrastructure projects have proved a barrier to implementing change towards net zero. It remains to be seen whether the UKIB’s range of products, from senior debt through to equity, guarantees, and hybrid products will encourage private investment in new technologies.

Importantly, the establishment of the UK Infrastructure Bank in statute will also provide legal powers to lend directly to local authorities. If you would like to discuss how the UKIB may be able to help you with your net zero ambitions, please get in touch with any member of our dedicated team of net zero lawyers, including Nadeem Arshad or Phil Roberts.

Legislation

We must protect our children’s health from air pollution
Welsh Government | 17 June 2021
The Welsh Government is pressing ahead with plans to introduce a Clean Air Act for Wales, which will set out a framework for setting targets informed by international best practice and the World Health Organisation air quality guidelines. The Act will also enhance our ability to assess and monitor air quality to help reduce the impact of poor air on the health of current and future generations. View the White Paper on the Clean Air Bill

Court Cases

High court rejects challenge of council's low traffic neighbourhoods
LocalGov | 29 June 2021
A legal challenge against Lambeth Council's low traffic neighbourhoods (LTNs) has been rejected by the high court. Sofia Sheakh had launched the legal challenge arguing the schemes had 'negative impacts' on those with disabilities and the council had failed to consult with residents about the measures. However, the judge has ruled the six LTNs across the borough were a 'a genuine experiment' in response to the pandemic following guidance from the Department of Transport encouraging councils to take 'radical and almost immediate measures' to promote active travel. Read the full judgment

Publications & Guidance

Recognising local authorities as key partners in the Net Zero Strategy | London Councils
London Councils | 1 July 2021
A coalition of LEDNet, ADEPT, Ashden and other local government, environmental and research organisations have set out a blueprint of how the government can accelerate climate action and implement a green recovery from corona virus and the fundamental role of local councils in tackling the climate and ecological crises.

Government responds to Coroner after Ella Kissi-Debrah inquest
Department for Environment, Food & Rural Affairs | 17 June 2021
Following the Coroner’s verdict that excessive air pollution contributed to the death of schoolgirl Ella Kissi-Debrah in 2013, the government has announced extra funding for local authorities to set new air quality targets and prevent further deaths. The government has also outlined six actions it will undertake as part of the response.  Press coverage: Government to set new targets on air pollution | LocalGov

News

Leaders call for new powers to tackle climate change
Local Gov | 13 July 2021
A cross-party group of 32 mayors and local leaders have called for greater powers and resources to deliver net zero. The leaders have signed a joint statement calling for a 'Power Shift' from Whitehall to local and regional authorities to shape local energy markets, decarbonise transport, and tackle emissions from homes and offices.

Net zero could generate £330bn investment into UK, commission finds
LocalGov | 2 July 2021
Meeting net zero in London and the UK’s Core Cities could bring up to £330bn of investment into the UK, new analysis has revealed. Analysis of UK city climate plans by the UK Cities Climate Investment Commission shows that domestic retrofit is likely to present the largest investment opportunity. This is followed by decarbonising transport, the retrofit of commercial buildings, producing renewable electricity, and decarbonising the ways cities collect and dispose of waste.

Minister Eddie Hughes thanks councils for efforts in tackling climate change
Ministry of Housing, Communities & Local Government | 2 July 2021
In a speech at London Climate Action Week, Eddie Hughes MP (Parliamentary Under Secretary for MHCLG) has recognised the vital work of councils to mobilise their efforts to combat climate change and meet the government’s ambitious net zero targets. Minister Hughes said councils’ expert knowledge of their communities allow them to help deliver net zero across energy, housing and transport in ways most suited to people in their area.

UK 'needs 127,000 charge points by 2025'
Highways Magazine | 2 July 2021
The UK has only 15% of the electric vehicle charging points it needs to meet net zero, according to new analysis. The Committee on Climate Change said there needs to be around 150,000 public charge points operating by 2025 but the research by Labour shows there are currently only 22,790. The research also highlights a 'serious' regional disparity in the number of charging points as there are four times as many charging points in London than in Yorkshire.

Bristol Clean Air Zone delayed
AirQualityNews | 2 July 2021
Bristol’s Clean Air Zone (CAZ) will launch in summer 2022, around nine months later than originally planned.  After a series of delays in submitting its plans to central government, Bristol City Council was ordered to have its system for charging polluting vehicles in place by October 29 this year. However, the council has announced that the CAZ will not launch until the summer of 2022.

UK's waste management sector targets net-zero emissions through £10bn infrastructure overhaul
edie | 30 June 2021
The trade body representing the UK's resource and waste management industry has unveiled a sector-wide commitment to reach net-zero emissions by 2040, through a £10bn investment into new recycling infrastructure and a focus on zero-emission vehicles. The sector, which has reduced greenhouse gas (GHG) emissions by 46% since 1990, will aim to decarbonise non-recyclable waste treatment by diverting organic waste from landfill and into recycling and energy production by 2030. Plastics will also be removed from energy recovery facilities and carbon capture and storage (CCS) technology will be introduced across Energy-from-Waste (EfW) facilities by 2040, where feasible.

Burnham's Clean Air zone accused of having 'blind' spot towards air pollution
LocalGov | 22 June 2021
Greater Manchester (GM) mayor Andy Burnham has ‘put local taxi drivers first’ by adding them to a list of vehicle operators who will initially be exempt from the region’s Clean Air Zone (CAZ), despite claims that it will ‘kick-start the city region's green revolution’. The plan, which is due to come into force on 30 May 2022, already exempts private cars and motorcycles from charges, while vans, minibuses, GM-registered coaches and wheelchair-accessible taxis were already exempt until 2023.

MHCLG official: ‘no coherent strategy’ on local climate change action
Local Government Chronicle | 17 June 2021
The Ministry of Housing, Communities & Local Government’s lead official working on climate change has admitted that the government has “no coherent strategy” that joins up the work that different departments ask of local government. Aaron Gould, the head of local government for climate change at MHCLG, said that “different parts of government ask the local sector to do quite a lot, from charge points to heat networks , trees to council buildings” and that each policy has “a lot of value - but there is at the moment no coherent strategy that joins them all up”. Speaking at LGC’s climate change conference, he explained that four out of five councils have now declared climate emergencies and the “vast majority have some sort of target for their area or at least for their direct emissions”.

LGA: Local leadership crucial in climate change challenge
Local Government Association | 16 June 2021
Councils have a significant role to play to support and advance on the UK’s net zero ambitions in partnership with government, industry and communities, the Local Government Association has said. Following the G7 summit in Cornwall this past weekend and ahead of the COP26 climate conference in Glasgow this November, the LGA is highlighting some of the innovative and proactive work councils are doing across the country to tackle climate change.  The position of councils as place-shapers, conveners of communities and businesses, asset-owners, problem solvers and with significant purchasing and market shaping powers, puts them at the forefront of delivering real, tangible changes in the transition to net zero.

London Mayor calls for a ‘retrofit revolution’ to tackle the climate emergency
Unlock Net Zero | 15 June 2021
Working with London councils and social housing providers, the Mayor has outlined ambitious plans to boost London’s Green New Deal mission and sustain and create new green jobs in the capital. Homes and workplaces in London are responsible for 78% of the capital’s carbon emissions and all will require retrofit work to meet the 2050 net zero targets. The capital’s social housing stock require updates to make them as energy efficient as possible with improvements to insulation, low-carbon heat and clean power sources, to deliver climate targets and tackle fuel poverty.

Turbulence ahead: how Covid and climate concerns have hit council-owned airports
Local Government Chronicle | 15 June 2021
Airports have been a crucial factor in a number of councils’ drives to boost economic growth and generate a commercial income. But the pandemic and environmental concerns mean there are fundamental questions about their future role. Over the long term, reducing carbon emissions in line with the UK government’s target of net zero by 2050 will be “the big issue”, says Mr Forbes. While the industry group Sustainable Aviation claims this ambition is compatible with 70% passenger growth – when combined with new approaches and technology and sustainable fuels – the Committee on Climate Change says the increase must be limited to 25% compared with 2018 levels, lower than some airports were projecting before Covid.

See also: Luton bails out airport with another £140m | Local Government Chronicle

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Delivering Value

Subsidy Control – Freedom or confusion?

On 30 June 2021, six months after we left the end of the transitional period, and the EU State aid regime, the government has published its new Subsidy Control Bill. Ignoring the spin in the announcement, the bill is not a radical departure from the regime that has been in place for the last six months under the UK/EU Trade and Co-operation Agreement (TCA), and indeed as a formal treaty signed up to by the UK government one would not expect it to be.

However, what the bill does seek to do is to amplify the TCA regime, and formally put it into UK law. In doing so, it does provide some additional clarity, although there is also a new set of ambiguities which one hopes will at least in part be resolved by the Parliamentary process, which is intended to be completed in time for the bill to come into force in 2022.

There are some material developments of the TCA position, most obviously in the new role created for the Competition and Markets Authority (CMA) as the independent body with an appropriate role in relation to subsidy control, and in the introduction of an additional principle relating to subsidy decisions of the effect on competition in the UK. There is also a new prohibition on subsidies which facilitate the moving of jobs between areas in the UK.

As expected, there is no formal enforcement role for the CMA, and challenges are to be taken by way of judicial review, but heard by the Competition Appeal Tribunal.

There is no provision formally for the creation of block exemptions / safe harbours, although there is an under developed concept of streamlined subsidy schemes, which it seems may have some degree of exemption, although the drafting of the bill and the explanatory notes are not consistent on this point.

There are a number of relatively small points, set out below, where the drafting of the bill seems in need of improvement, and if not improved may give rise to some unintended consequences, which our governance Partner, David Owens considers in further detail.

We will be publishing more detailed notes on the following as well as updates as the bill progresses:

  • the operation of the principles
  • the role of the CMA
  • the introduction of competition and job preservation rules
  • enforcement and remedies.

Legislation

Subsidy control: designing a new approach for the UK
Department for Business, Energy and Industrial Strategy | 30 June 2021
Following a consultation that saw 234 responses, including from some local authorities, the government has released its response: Government response to the consultation on subsidy control. On the same day, the government also released policy papers relating to the regime: Subsidy Control Bill 2021: policy papers and the bill received its first reading in parliament. The bill, along with its impact statement and report from the Regulatory Policy Committee.

The progress of the bill can be followed: Subsidy Control Bill | UK Parliament. Further press coverage: Councils to have power to award subsidies under new state aid plans | Local Government Lawyer

Publications & Guidance

Partnerships for People and Place
Ministry of Housing, Communities & Local Government | 12 July 2021
The MHCLG is inviting expressions of interest from local authorities for the project, which will pilot a new approach of design and delivery, focussing on place-based initiatives, which create better cross-government coordination. It has also released further guidance for local authorities wishing to go through the process.

New apps to simplify extension application process for homeowners
Ministry of Housing, Communities & Local Government | 30 June 2021
Two new apps, announced by Housing Secretary Robert Jenrick, will be a step towards a fully digital planning system and will save time and money for developers, architects and homeowners by speeding up and simplifying the application process. The second app will help council planning officials manage permitted development applications – tracking progress and putting the information they need to make decisions in a user-friendly format. It puts the focus on data rather than documents, helping planners make decisions much more quickly and efficiently.

Engaging with the public about algorithmic transparency in the public sector
Centre for Data Ethics and Innovation | 21 June 2021
Making decisions about individuals is a key responsibility for many parts of the public sector, and there is increasing recognition of the opportunities offered through the use of data and algorithms in this decision-making. But these opportunities will only be realised if data is used in accordance with the highest standards of ethics, privacy and security, in a way that engenders public trust.

Transparency around how data is collected, stored and used is essential to build the public’s trust in these data-driven processes. In the centre’s review into bias in algorithmic decision-making, they recommended that the government should place a mandatory transparency obligation on all public sector organisations using algorithms when making significant decisions affecting individuals. This would require the proactive publication of information about the algorithms. By increasing transparency on how algorithms are used in decision-making in the public sector, the government can promote responsible innovation in the use of AI, as well as help to facilitate public oversight and work to mitigate potential bias.

Using targets to improve public services
The Institute for Government | 16 June 2021
The government has added new targets to existing ones across key public services such as the NHS, schools and the police, which it hopes will improve performance in those services hit by the Covid-crisis. This report reveals the way that targets have been used for easy wins, have ignored important issues and manipulated data. For example, the government’s target to process 100,000 corona virus tests a day by 30 April 2020 was only achieved by encouraging testing of low-priority cases and reclassifying what counted as a test.

News

Council set to close offices in work-from-home drive
Public Finance | 13 July 2021
A Home Counties council is set to close of two of its offices and pay staff working from home a bonus of £150 a year under plans expected to save it up to £200,000 a year.

Council creates checklist for lending to other authorities after negative attention
Public Finance | 12 July 2021
A Scottish local authority has adopted a checklist for assessing prospective loans to other councils after receiving negative publicity over lending to the struggling London Borough of Croydon.

Jenrick pledges to rein in councils pursuing ‘risky commercial strategies’
Local Government Chronicle | 6 July 2021
The communities secretary has revealed the government will publish plans “very soon” to “protect taxpayers' money from the minority” of councils pursuing “risky commercial strategies”, and has also spelt out plans for his ministry to take less of an "England only" approach to local government. Speaking at the Local Government Association online conference, he said “some councils” such as Croydon LBC and Slough BC - both of which have been forced to issue section 114 notices in the last eight months after funding themselves unable to balance their budgets - have “damaged the good name of local government and have wasted millions of pounds of taxpayers' money”.

Council chiefs launch campaign to ‘Build Back Local’
LocalGov | 6 July 2021
Local authority leaders have insisted that the Government must guarantee long-term investment for local services in order to ensure the country’s economic and social recovery after the pandemic. At its virtual Annual Conferenc, the Local Government Association (LGA) will launch its Build Back Local campaign to demonstrate the vital role councils must be able to play to help communities recover after COVID-19. Read the LGA announcement

Council's beach check app goes nationwide
LocalGov | 5 July 2021
An app to check if beaches are too crowded has been launched across the UK following a successful development by BCP Council. The council developed the app last year after it was forced to declare a major incident after thousands of people flocked to its beaches despite corona virus restrictions. The app provides a live traffic light system to show which beaches are busy and which areas have plenty of space to ensure social distancing.

Landlords who leave homes empty could face 400 per cent council super-tax
Manchester Evening News | 5 July 2021
Landlords who leave homes empty for long periods could be hit with a 400% council super-tax. Bury Council has put aside £1m to acquire homes which have stood empty for more than six months and plans to convert them to affordable housing. The £1m, taken from monies from developers who had previous projects approved in Bury, has been ring-fenced for the purpose of acquiring empty properties. At a cabinet meeting, council leader Eamonn O'Brien also said that the authority took the matter so seriously that a levy of council super-tax, four times the existing bills could be imposed on errant landlords.

Warwickshire launches recovery and investment fund
Public Finance | 2 July 2021
Warwickshire County Council has approved plans to borrow up to £130m over the next five years, which it intends to pass on to businesses to help their long-term recovery from Covid-19. The authority approved the fund at a cabinet meeting, with borrowing from the Public Works Loans Board added to its capital programme up to 2025-26. A commercial risk reserve of £7.5m will be created to provide additional cover should the level of loan repayment defaults be higher than those expected in the business plan, a council report said.

District applies for credit rating to undertake commercial investments
Public Finance | 29 June 2021
Uttlesford District Council is applying for a credit rating to allow it access to a greater range of borrowing to fund its multi-million programme of out-of-borough commercial investments. Last year, the authority invested £87m in commercial properties outside of the district, which it said are necessary to fund core services, a treasury management report to be discussed at cabinet meeting this week said. Restrictions imposed by the Treasury in November to prohibit borrowing primarily for yield from the Public Works Loans Board, have led to the authority seeking alternative means to fund £125m of projects earmarked for this year.

Authority to lend £800,000 to aid loss-making shopping centre
Public Finance | 25 June 2021
Sefton Council has approved plans to borrow £800,000 over the next three years to help improve the performance of an authority-owned shopping centre. The authority purchased the Strand shopping centre in Bootle in 2017 for £32.5m to help reverse the properties fortunes with rental income covering the loan costs and to fund council services and regeneration. However, Covid-19 and the associated restrictions have led to a sharp fall in income at the centre, and a revised business plans approved at a cabinet meeting yesterday recommended the additional finance.

Let councils sharpen commercial edge to level up locally, new report urges
Localis | 17 June 2021
Councils should have the confidence to engage in well-run commercial activity that benefits residents, improves local public services and generates much-needed revenue independent of central government, a report issued by consultants Human Engine and the think-tank Localis has advised today. In a research paper issued today entitled ‘The Commercial Edge – renewing the case for the local investment state’ Human Engine and Localis argued that when carried out professionally and with risks properly-managed, council commercialism can unlock immense latent place potential and deliver many clear benefits to galvanise economic and social recovery.  Read the full report

Bank of England code ‘protects’ authority-to-authority borrowing
Public Finance | 17 June 2021
Bank of England protections are available to help protect local authorities lending to their peers, according to a senior advisor at the bank. The Commercial Markets Code was launched in 2017, to restore faith in the financial markets following the 2008 recession and the London Interbank Offered Rate scandal. Speaking to the CIPFA Treasury Management Conference, Jonthan Pryzer senior advisor at the BoE, also said that code also covers repurchasing markets and stock trade, relevant to pension funds.

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Place & Growth

Protective measures for tenants extended and to be expanded upon

On 16 June the Government announced its intention to extend and expand upon the existing protective measures for tenants of commercial property implemented in response to the pandemic.

It is the intention to introduce legislation to ringfence outstanding unpaid rent that has built up when a business has had to remain closed during the pandemic. The current position held by the Government is that landlords and tenants should continue to seek to resolve these debts through negotiation (such as by agreeing long-term repayment plans or the waiver of some of these rent arrears). As a backstop, in case negotiations are not successful, the legislation will provide for landlords and tenants to enter into a binding arbitration process.

In addition to the above, there have been extensions to the various measures put in place to protect tenants:

  • An extension of restrictions on the forfeiture of business tenancies based on rent arrears by nine months to 25 March 2022. For landlords it is worth remembering that the current restrictions only apply to forfeiture for non-payment of rent and landlords can still forfeit for other breaches of lease
  • An extension of restrictions on commercial rent arrears recovery (CRAR) by nine months to 25 March 2022 (it is worth noting, however, that the total number of days’ outstanding rent required to exercise CRAR will remain at 554 days), and
  • An extension of restrictions on statutory demands and winding up petitions by three months to 30 September 2021.

The above measures will be in place until the proposed legislation is on the statute book which will then hopefully provide clarity as to the extent of any ringfencing, and the mechanism for any arbitration.

Legislation

Building Safety Bill - Collection
Ministry of Housing, Communities & Local Government | 5 July 2021
The Building Safety Bill will create lasting generational change and set out a clear pathway for the future on how residential buildings should be constructed and maintained. The Building Safety Regulator will oversee the new regime and will be responsible for ensuring that any building safety risks in new and existing high rise residential buildings of 18 metres and above are effectively managed and resolved, taking cost into account.

These changes will simplify the existing system to ensure high standards are continuously met, with a ‘golden thread’ of information created, stored and updated throughout the building’s lifecycle, establishing clear obligations on owners and enabling swift action to be taken by the regulator, wherever necessary. The changes will apply retrospectively. This means that residents of a building completed in 2010 would be able to bring proceedings against the developer until 2025.

Read the full text of the Building Safety Bill and track its progress

Press coverage: Bill aimed at improving safety standards for high-rise buildings published | LocalGov; Fire safety regime should be based on ‘overall risk profile’ and not a building’s height, warn London councils | Social Housing; LGA responds to Building Safety Bill | Local Government Association

Homelessness code of guidance for local authorities and Allocation of accommodation: guidance for local authorities
Ministry of Housing, Communities & Local Government | 5 July 2021
The government has made a number of updates to the statutory guidance relating to homelessness and social housing allocation. Updates to both sets of guidance reflect changes for guidance that affect EEA citizens in line with the UK’s Withdrawal Agreement with the EU.

Revitalising High Streets and Town Centres
Hansard | 1 July 2021
Robert Jenrick announced changes to the National Planning Policy Framework, which took place with immediate effect. This written ministerial statement sets out measures the government is taking to ensure that our policy on article 4 directions is used in a highly targeted way to protect the thriving core of historic high street areas, but does not unnecessarily restrict the ability to deliver much needed housing through national permitted development rights. The new policy will apply to all article 4 directions. Further press coverage: Fresh limits on councils' ability to curtail unwanted PDR development | Local Government Chronicle

Councils can issue traffic fines from December
LocalGov | 15 June 2021
Powers to enforce moving traffic offences will not be extended to local authorities in England outside London until the end of the year, a Department for Transport (DfT) minister has said. Baroness Vere told the Traffex event: ‘Local authorities will need the tools to manage roads in the way that best serves local needs, which may vary in different parts of the country, and it is this ethos of localism that lies behind our decision to give more powers to local authorities under the Traffic Management Act.’ Read a summary of the powers

Publications & Guidance

Business Rates Revaluations Consultation Launched
HM Treasury | 29 June 2021
The businesses rates system in England will be made fairer and more streamlined with more frequent property revaluations, under proposals unveiled by the government today. Under the plans, revaluations of non-domestic properties would take place every three years instead of the current system of five - ensuring they better reflect changing economic conditions. The proposals were set out in a government consultation that will form one part of its Fundamental Review of Business Rates, which will be published later this Autumn.

Fire safety and high-rise residential buildings (from 1 August 2021)
Ministry of Housing, Communities and Local Government | 24 June 2021
Measures to ensure fire safety matters are incorporated at the planning stage for schemes involving a relevant high-rise residential building.

Information about the Social Housing Decarbonisation Fund
Department for Business, Energy & Industrial Strategy | 16 June 2021
The government has announced around a further £160m for the first wave of the £3.8bn manifesto commitment available in financial year 2021 to 2022. The bidding window is intended to open in autumn 2021 with funded projects delivering up to March 2023.

News

Three more boroughs join London's e-scooter rental trial
LocalGov | 5 July 2021
The number of e-scooters available to rent in London is set to double after three more boroughs joined the trial. The City of London, Lambeth and Southwark have joined the capital's trial of rental e-scooters, increasing the number of vehicles available from around 600 to 1,200 across London.

430% increase in B&B spend for people who are homeless reveals urgency for more social housing
Local Government Association | 3 July 2021
Rising numbers of people who are homeless are being placed in bed and breakfasts due to a severe shortage of housing meaning councils are being forced to spend over five times as much money on accommodation as they were a decade ago, new analysis by the Local Government Association has revealed. Latest figures show that councils in England spent £142m placing homeless households in bed and breakfasts in 2019/20, compared with £26.7m in 2010/11 - a 430 per cent increase. An overview article  Social housing shortage blamed for rising bed and breakfast use | LocalGov;  Council to buy Bunkabins and park homes to house homeless people | LocalGov

Lords built environment chair to examine government’s 300,000-home target
Inside Housing | 30 June 2021
Baroness Neville-Rolfe, chair of the new House of Lords committee on the built environment, has said her first inquiry will examine whether the government’s target for 300,000 homes per year is still relevant. She said: “The government’s hoping to build 300,000 [homes], maybe that’s the right number, maybe that’s too low or too high. We’ve got to look at what councils are able to do…And I think we want evidence on what’s actually happening [with housing supply demand] as statistics can take time to work through and [see] what the new trends are.”

Study warns private landlords are reducing their housing benefit lettings
LocalGov | 24 June 2021
The number of private landlords willing to let to housing benefit tenants is falling due to the way Universal Credit is administered, a study has warned. The research, published by the University of York’s Centre for Housing Policy and funded by the Nationwide Foundation, shows landlords outside of housing benefit dominant markets are unhappy with the long delays with initial payments of housing benefit and problems with managing Universal Credit when tenants fell into arrears.

UK Infrastructure Bank opens for business
HM Treasury | 17 June 2021
UK businesses and communities will have billions of pounds available as Chancellor Rishi Sunak opens the new UK Infrastructure Bank to support local growth and tackle climate change. First announced by the Chancellor alongside the Spending Review, the Bank will help to finance important projects in every region and nation of the UK in sectors including clean energy, transport, digital, water and waste.  Read the UK Infrastructure Bank Policy Paper

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Governance & Reorganisation

LGA issue guidance on Model Code of Conduct

Following the Model Councillor Code of Conduct published in December 2020, the Local Government Association (LGA) has now released its much anticipated Guidance, aimed to help understanding and consistency of approach towards the code.

The code is a template for Local Authorities to adopt in whole or with amendments to take into account local circumstances. The guidance is extensive, running to 42 pages with examples included to aid practical interpretation.

The guidance is separated into three parts.

  • Part 1 Introduction sets out the general principles of Councillor conduct and provides examples of when the code of conduct applies.
  • Part 2 General obligations of the Code provides detail on the ten obligations under the model code together with links to further guidance and reading including the legal position on matters such as harassment, bullying and discrimination, and a particularly helpful section on the ‘impartiality of officers’.
  • Part 3 Protecting your reputation and the reputation of the local authority covers the registration and declaration of interests, bias and predetermination.

Legislation

Elections Bill publications
UK Parliament | 5 July 2021

A Bill to make provision about the administration and conduct of elections, including provision designed to strengthen the integrity of the electoral process; about overseas electors; about voting and candidacy rights of EU citizens; about the designation of a strategy and policy statement for the Electoral Commission; about the membership of the Speaker's Committee; about the Electoral Commission's functions in relation to criminal proceedings; about financial information to be provided by a political party on applying for registration; for preventing a person being registered as a political party and being a recognised non-party campaigner at the same time; about regulation of expenditure for political purposes; about disqualification of offenders for holding elective offices; about information to be included in electronic campaigning material; and for connected purposes.

Read the Elections Bill. Press coverage: Elections Bill introduced in Parliament | LocalGov

Court Cases

Seven people charged with electoral offences as part of police investigation into missing £10.25m council loan to football club
Local Government Lawyer | 18 June 2021
Seven individuals will appear in court next month in connection with a long-running Northamptonshire Police investigation into the disappearance of a £10.25m football club loan made by Northampton Borough Council. The hearings will come almost six years after detectives began a criminal investigation into the disappearance of cash loaned by the council to Northampton Town FC to pay for the re-development of their East Stand. Seven people will appear before Northampton Magistrates Court on Friday, July 16 in respect of offences under Section 54(7) of the Political Parties, Elections and Referendums Act 2000.

Publications & Guidance

Timeliness of local auditor reporting on local government in England
Public Accounts Committee | 14 July 2021
The committee has published its inquiry into the timeliness of auditor reporting on English local public bodies’ financial statements in the 2019/20 financial year. Read a summary of the Committee Report - System of local government audit close to “breaking point”

Independent reviewers appointed for councils requesting financial support
Ministry of Housing, Communities & Local Government | 30 June 2021
The government has appointed independent reviewers to undertake assurance reviews into 8 councils, following decisions earlier this year to provide exceptional financial support to these authorities. The government has formally appointed the Chartered Institute of Public Finance and Accountancy (CIPFA) to undertake the financial element of these external assurance reviews. This follows a decision to provide exceptional financial support packages to 8 councils subject to an external review. These authorities are Bexley, Copeland, Eastbourne, Luton, Peterborough, Redcar & Cleveland, Slough and Wirral councils.

Further press coverage: Council finances to be reviewed pending support | Public Finance; Whiteman: Councils that agreed capitalisation loans could follow Slough | Local Government Chronicle  

Strengthened local government Prudential Code to be published | CIPFA
CIPFA | 24 June 2021
Following consultation with local government finance professionals, a strengthened Prudential Code will be published by the end of 2021, CIPFA has announced. The Prudential Code is a professional code of practice that aims to ensure local authorities’ financial plans are affordable, prudent and sustainable. Over 100 participants responded to the consultation earlier this year which set out CIPFA’s proposals for a revised Code. Press overview: Strengthened local government Prudential Code to be published by end 2021: CIPFA | Local Government Lawyer; CIPFA to provide further clarity on borrowing restrictions | Public Finance

News

Johnson puts counties in devolution driving seat
Local Government Chronicle | 15 July 2021
The prime minister has announced a new “more flexible approach to devolution” and spoken of the “need to rewrite the rule book with new deals for the counties” in a speech setting out the government’s vision for levelling up the country. The speech, which has been enthusiastically welcomed by the County Councils Network, positioned devolution as a key element of the government's levelling up agenda.

Newham launches innovative Citizen's Assembly
LocalGov | 9 July 2021
Newham LBC is launching the first permanent Citizen’s Assembly in an effort to hand more power to local people. Fifty residents from across the borough will take part in the first event, which will focus on finding ways to green the borough – a topic chosen by public vote.

Whitehall overestimates contributed to billions in unpaid business grants
Local Government Chronicle | 5 July 2021
Inaccurate government estimates about the support needed to help businesses through Covid restrictions explain why billions of pounds allocated to councils for this purpose remain undistributed. Any unpaid grant money will be returned to the government. However, one senior council figure expressed concern the government’s handling of the figures created a narrative that councils were sitting on business grant money, leading to reputational damage.

‘Material uncertainty’ over future of bonds agency
Public Finance | 1 July 2021
The Municipal Bonds Agency – aimed at providing cheap borrowing to local authorities – faces doubts over its future after racking up pre-tax losses of £650,000 last year. The agency, set up in 2014, last year launched two bonds with Lancashire County Council but is yet to meet its original aim of creating a pooled bond on behalf of a number of authorities. In a board commentary in the company’s accounts ending 2020, the board said that the complex and changeable nature of the bond market means that future bond issues may not be possible 'if competitive margins are unachievable'. Further press coverage about the agency’s future plans: UKMBA chairman: ‘No prospect of agency closure’ | Public Finance

Call to make virtual councils meetings permanent
LocalGov | 1 July 2021
Councils should be given the freedom to hold remote meetings permanently in the future, the National Association of Local Councils (NALC) has argued. In response to a government consultation on the issue, NALC said a hybrid approach to local councils meetings was ‘inevitable’. Lawyers in Local Government have also called for the permanent ability to hold virtual meetings: LLG calls for ability of local authorities to hold virtual meetings to be made permanent | Local Government Lawyer;  Virtual meetings have boosted local democracy, survey finds | LocalGov

In addition, Cheshire West and Chester Council will note its next full meeting virtually, despite government policy: Council to hold virtual full meeting due to Covid rise | Local Government Lawyer . The government has also issued a response to a petition calling for remote council meetings to continue. 

Slough becomes second council to issue Section 114 in a year
LocalGov | 1 July 2021 
Slough Council has become the second local authority in less than a year to issue a Section 114 notice. The confirmation today comes despite the council being granted a capitalisation direction for the current year worth £15.2m. Slough – as one of eight councils granted ‘exceptional support’ from the Government – was already due to undergo an independent review of its finances by the Chartered Institute of Public Finance and Accountancy (CIPFA). Further press coverage: Slough's chief executive apologises over section 114 notice | Slough Observer; Finance director praised over section 114 notice | Public Finance; Eight councils to undergo independent financial reviews | LocalGov

Theresa Grant reveals the inside story of failing Northamptonshire CC’s metamorphosis
Local Government Chronicle | 1 July 2021
During her three years as chief executive of Northamptonshire CC, Theresa Grant’s strapline for her beleaguered authority was “the council that keeps giving”. As well as fixing Northamptonshire’s depleted finances and steering the county and its seven districts through reorganisation, Ms Grant was also tasked simultaneously with building a children's trust from scratch and leading the council’s Covid response.

Covid-19 fuels five-fold increase in reserve usage
Public Finance | 24 June 2021
Increased grant funding related to Covid-19 has led to a 500% increase in councils' forecast reserve spending this year, according to latest figures. Councils in England have forecast £2.7bn in reserve spending this year, a £2.3bn rise on the £442m spent last year, according to a report published today by the Ministry for Housing, Communities and Local Government. A contributing factor behind the rise is that authorities placed unspent grant funding for Covid-19 into reserves at the end of last year, which was then spent on services this year, according to Geoff Winterbottom of the Special Interest Group of Municipal Authorities.

Lincolnshire districts set to join forces with eye to unitarisation
Local Government Lawyer | 24 June 2021
Councillors at South Holland DC, Boston BC and East Lindsey DC will consider plans to enter a strategic alliance, which they believe will “position themselves well” for future devolution and reorganisation. Boston and East Lindsey have been in a formal alliance since July last year, which involves sharing a chief executive, monitoring officer and section 151 officer and is intended to eventually lead to a “joint workforce”. Details of the proposal: Council Preferred Partner Report A new local strategic alliance for South-East Lincolnshire | South Holland District Council

Public confidence in elections at highest level for 10 years
Electoral Commission | 22 June 2021
Public confidence in the running of elections is at its highest level since data collection began in 2012. New findings, published by the Electoral Commission, show that four out of five respondents are confident that elections in the UK are well run, up from 71% last year. Satisfaction with the process of voting (86%) and registering to vote (86%) were also at record highs.

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Contract Management

Procurement Policy Note 07/21: Update to Legal and Policy requirements to publish procurement information on Contracts Finder

On 24 June, the Cabinet Office published PPN 07/21 – “Update to legal and policy requirements to publish procurement information on Contracts Finder”, with new consolidated “Guidance on transparency requirements for publishing on Contracts Finder”. This replaces an earlier PPN and guidance.

The guidance has been reissued to reflect changes following the end of the transition period and to provide further clarity on meeting transparency obligations. The key changes applicable to all contracting authorities relate to new references to the Find a Tender Service and further definition of the term “Contract award” - which triggers the time period for publication. The definition of “central government” has been aligned with the Public Contracts Regulations 2015. For central government authorities, there are provisions concerning voluntary adoption of the transparency policy for agencies and bodies not explicitly listed and an amended requirement to publish details of award within 30 calendar days of award. Further clarity is provided on redactions of contract documents, publication of award notices relating to contracts awarded under framework agreements and DPS and contract modification notices.

The Guidance is in two parts and applies with immediate effect.

Part 1 Guidance applicable to all ‘in-scope organisations’ (the term “in-scope organisations” is used to describe all contracting authorities, with limited exceptions. PPNs usually use the term “in-scope organisations” to describe central government departments, their executive agencies and non-departmental public bodies) replaces PPN 07/16 and the associated guidance. It applies to all contracting authorities, with a few exceptions listed in Part 1, section 6.

Part 1 sets out the requirements for publication on the Find a Tender Service, relevant contract values, publication triggers, minimum data requirements and timing of publication as well as exemptions from requirements to publish.

Part 2 Additional policy guidance for central government authorities replaces previous guidance on publication of central government tenders and contracts. It applies to central government authorities as defined in Schedule 1 of the Public Contracts Regulations 2015.

The PPN confirms that NHS Trusts are sub-central contracting authorities for the purposes of Part 1 and are exempt from applying Part 2.

Part 2 addresses issues relating to publication of contract (tender) documentation at the opportunity stage and at award stage. It provides notes on preparing documents for publication including use of transparency clauses, exemptions and redaction and handling of commercial information. It also contains a section on extenuating circumstances where delay in publication may be permitted and confirms the option of quarterly publication of notices for high volume transactional frameworks and DPS.

There are three annexes:

  • Annex 1 summarises “Requirements to publish on Contracts Finder” in table form
  • Annex 2 contains 18 FAQs on publishing central government contracts
  • Annex 3 is a flowchart showing “How to calculate timescales”

Publications & Guidance

Procurement Policy Note 07/21: Update to Legal and Policy requirements to publish procurement information on Contracts Finder
Cabinet Office | 24 June 2021
This note reminds In-scope Organisations of the requirements to publish procurement information on Contracts Finder. See above article for more information. An overview article: New tenders must be published on ‘Find a Tender’ website first: Cabinet Office | Local Government Lawyer

News

Cardiff Council to manage procurement services for Monmouthshire
LocalGov | 8 July 2021
Cardiff Council will manage Monmouthshire County Council’s procurement operations and functions for the next three years, in a bid to allow both authorities to combine resources and to drive the recovery of their local economies. It is hoped that the partnership will lead the way in delivering major collaborative procurement arrangements for the Welsh public sector.

City council to defer loan repayment due on local attraction
Public Finance | 5 July 2021
Brighton and Hove City Council has deferred a £1.2m loan payment from Brighton i360, a 530ft viewing tower, to help with its cash flow – over fears the attraction’s failure would cost more in the long run. The council lent Brighton i360 Ltd £36.2m in 2014 with money from the Public Works Loan Board, and interest has pushed the outstanding figure to over £41.1m. Covid-19 has had a “massive impact” on i360, with lockdowns and reduced tourism harming visitor numbers, assistant director for city development and regeneration Max Woodford told the authority's policy and resources committee last week.

Croydon seeks to hold onto its beleaguered housing company
Local Government Chronicle | 2 July 2021
Croydon LBC is planning to abandon the sale of its troubled housing firm Brick by Brick and will instead appoint a contractor to develop 23 of the 29 sites in its pipeline, and sell off the other six. Brick By Brick will be slowly wound down until the completion of the final developments in 2023. The company has been plagued by financial problems in recent years, and there is ongoing concern over whether it can turn a profit due to ongoing construction and contractual issues.

Tonbridge: Household recycling destined for incinerator
BBC News | 2 July 2021
Recycling that is left out for collection in a Kent district will be burned alongside general waste due to a shortage of refuse lorry drivers. Tonbridge and Malling Borough Council apologised to residents and said its contractor Urbaser had been "particularly hard hit by the national shortage of HGV drivers". Meanwhile, Urbaser staff working in neighbouring Tunbridge Wells have faced disciplinary action after being repeatedly caught on hidden cameras throwing recycling in with general waste.

Council to shut down joint venture | Public Finance
Public Finance | 30 June 2021
Powys County Council has agreed to wind down a housing maintenance joint-venture next year, halfway through the original contract term, and insource the services.  Heart of Wales Property Services, a 10-year partnership with construction firm Kier to provide repairs and maintenance to the authority’s housing stock, went live in July 2017. However, councillors agreed, in a restricted cabinet meeting last week, to trigger a break clause in the contract, bringing services back under the authority’s control from July 2022.

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Disputes & Regulatory Support

Are you up to date on recent immigration updates?

Two major developments have been announced, changing the ways in which employers need to deal with immigration issues.

Following the June updates to the Employer’s guide to right to work (RTW) checks, the Home Office has now issued an updated Right to Work Checklist. Employers should make sure that they consider this checklist and replace any previous checklists they may have been using as part of their recruitment processes.  Where cases arise that cause any potential uncertainty, employers should seek appropriate legal support to make sure they are not exposing the organisation to any unnecessary risks, particularly if the organisation holds a Sponsor Licence. 

Additionally, the Government has issued further information around the Graduate Visa route. The new Graduate Route allows eligible international students to work, or look for work, for two years after completing their courses. For employers this is an opportunity to recruit international talent regardless of whether or not they have a sponsor licence. It also provides a potentially cost effective route for recruitment without incurring the usual costs involved in sponsoring a migrant worker (at least for a short period of time).

Court Cases

Definition of Gypsy or Traveller is not discriminatory: High Court
Local Government Lawyer | 30 June 2021
The definition in Annex 1 of the Planning Policy for Traveller Sites 2015 of who is a Gypsy or Traveller is not discriminatory, the High Court has found. Mr Justice Pepperall ruled in Lisa Smith v the Secretary of State for Housing, Communities and Local Government and others that the definition used retained a functional test of nomadism.

High court rejects challenge of council's low traffic neighbourhoods
LocalGov | 29 June 2021
A legal challenge against Lambeth Council's low traffic neighbourhoods (LTNs) has been rejected by the high court. Sofia Sheakh had launched the legal challenge arguing the schemes had 'negative impacts' on those with disabilities and the council had failed to consult with residents about the measures. However, the judge has ruled the six LTNs across the borough were a 'a genuine experiment' in response to the pandemic following guidance from the Department of Transport encouraging councils to take 'radical and almost immediate measures' to promote active travel. Read the full judgment: Sheakh, R (On the Application Of) v London Borough of Lambeth (Rev1) | BAILII

Council prosecutes firm over traffic jams
LocalGov | 23 June 2021
Thames Water has been prosecuted by a London borough after creating what the council said were unnecessary traffic jams three times in less than a fortnight. In two separate magistrates' court hearings the utility firm was ordered to pay £8,254 in fines and costs after it admitted three breaches of the law by failing to obtain a valid permit to carry out works on the public highway.

Khan wins Bishopsgate appeal
Highways Magazine | 17 June 2021
London mayor Sadiq Khan has celebrated a Court of Appeal victory for his flagship Streetspace programme - designed to reduce motor traffic across the capital and boost active travel - in the face of fierce opposition from taxi drivers. The mayor said the Court of Appeal decision, which was focused on a scheme in Bishopsgate though has wider ramifications, was 'a vindication of our policies'.

News

Case for Grenfell bereaved, survivors and rescuers heads to the high court
The Guardian | 6 July 2021
More than 800 bereaved and survivors from Grenfell Tower and 102 firefighters are seeking up to tens of millions of pounds in compensation from organisations involved in the disastrous refurbishment in a case that reaches the high court on Wednesday. The victims of the 14 June 2017 fire and emergency responders have filed civil claims against defendants including Arconic, the US metals giant which made the combustible cladding, Rydon, the main contractor and the Royal Borough of Kensington and Chelsea, landlord of the 24-storey west London council block.

Plans for 700 homes reviewed after legal threat
BBC News | 29 June 2021
A decision to approve controversial plans for almost 700 homes in Dorset will be reviewed after councillors were threatened with legal action. Hundreds of people objected to the scheme of 695 homes built on 79 acres of former green belt land in Bearwood. Despite the opposition, Bournemouth Christchurch and Poole (BCP) Council granted planning permission in March. The council will now reconsider the application after it was warned it had not correctly considered the proposals. Bearwood Action Group raised concerns about the impact the development would have on traffic, calling it an "unproven assumption" that new residents would not use cars.

Councils reported 700+ data breaches to Information Commissioner in 2020: report
Local Government Lawyer | 24 June 2021
UK councils reported an estimated 700+ data breaches to the Information Commissioner’s Office in 2020, according to research by cyber security services company Redscan. Its report, Disjointed and under-resourced: Cyber security across UK councils, was based on analysis of Freedom of Information (FOI) data supplied by more than 60% of borough, district, unitary and county councils.

Council prosecutes firm over traffic jams
LocalGov | 23 June 2021
Thames Water has been prosecuted by a London borough after creating what the council said were unnecessary traffic jams three times in less than a fortnight. In two separate magistrates' court hearings the utility firm was ordered to pay £8,254 in fines and costs after it admitted three breaches of the law by failing to obtain a valid permit to carry out works on the public highway.

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Resource Library

All Bevan Brittan articles and news
Bevan Brittan COVID-19 Insight Information Hub


ON DEMAND WEBcasts

Fit for Purpose Structures series
Joint ventures – asking the key questions upfront

Employment Law Update - June
Immigration: Right to Work Checks - a refresher

Public Procurement Bootcamp
Roundup of recent developments – policy and case law
Evaluation – choosing the evaluation criteria and scoring methodology
Evaluation – conducting the scoring and moderation process
Evaluation – documenting the evaluation process
Procurement Bootcamp: Q&A Webinar

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Webinars

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