27/05/2021
LA Spotlight
During April, the High Court dismissed a claim that would have enabled the continuation of local authority virtual meetings. From 7 May all meetings must now take place at a single specified geographical location and be ‘open to the public’ or ‘held in public’. Whilst many within the sector will have found the rulings disappointing, now is the time to focus attention on how councils can safely facilitate meetings moving forward, ensuring they undertake risk assessments and follow the necessary COVID-19 guidance. Governance Partner – David Kitson, has been working alongside Lawyers in Local Government and the Association of Democratic Services Officers of to create a 12 page guidance note to help councils navigate their options, and many of you will have also attended LLG webinars with David to gain further advice. In our Governance & Reorganisation article this month, we briefly outline some of these options available, but please do contact us if we can help you further.
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- Governance & Reorganisation David Kitson & Victoria Barman
- Contract Management Richard Lane & Liz Fletcher
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Delivering Value
Moving towards a state of recovery
Challenging times ahead as authorities move towards seeking some form of recovery and stabilisation as the nation transitions towards the next phase of the pandemic.
Whilst there are some early indicators of support to local authorities as part of the recovery efforts, the measures announced in the Queens Speech have been met with varied reaction. The levelling up agenda in principle is to be welcomed – local authorities are well placed to lead on economic recovery at a regional level and address inequalities exacerbated by the pandemic. This, however, needs to be considered in the context of wider reform in areas of spending that are at crisis point at local and national level – long awaited reforms in adult social care still outstanding.
Early analysis from the National Audit Office Covid-19 Overview - National Audit Office (NAO) Report highlights the funding challenges being faced by local authorities despite the assistance received from central government and coupled with challenges to already stretched front line services, much still needs to be pledged to support a trajectory of recovery. Despite regional challenges and funding shortfalls, local authorities, continue to explore innovative solutions to key services - marking recovery on the agenda.
Cases
Court ruling closes business rates loophole
Public Finance | 14 May 2021
The Supreme Court has allowed a group of local authorities to pursue a claim for business rates against landlords who transferred properties to special purpose vehicles, in a case which could result in millions being paid to councils. Read the full decision.
Council wins extension of time in tribunal case over investment in solar farms
Local Government Lawyer | 22 April 2021
Thurrock Council has been given an extension of time to make its case in a First Tier Tribunal case over disclosures sought by the Bureau of Investigative Journalism (BIJ).
The BIJ won an interim ruling in part last month against the Information Commissioner's Office to require Thurrock to disclose information about its investments in solar farms. It has said that Thurrock borrowed almost £1bn from other public bodies to invest in green energy schemes. This case relates to the same solar park in which a judgment on a dispute between the two companies who bought and sold the park was handed down on 14 April: Court: £85m council solar farm investment made 'on false prospectus'
Read the full judgment.
Publications & Guidance
Connected Places Cyber Security Principles
National Cyber Security Centre | 7 May 2021
This guidance will help authorities build awareness and understanding of the security considerations needed to design, build, and manage their connected places (often referred to as smart cities). More specifically, it recommends a set of cyber security principles that will help ensure the security of a connected place and its underlying infrastructure, so that it is both more resilient to cyber attack and easier to manage.
Covid-19 Overview - National Audit Office (NAO) Report
News
Council proposes multimillion pound investment in new housing company
Public Finance | 17 May 2021
Torbay Council proposes borrowing at least £45m to lend to a recently-created housing subsidiary, to help boost the number of affordable homes in the borough. Standalone housing company Torvista Homes would initially deliver 360 homes, with more than 200 of these for social rent, a council report to be discussed at a cabinet meeting this week said. If the company's business plan is approved, it will spend around £62m, with the majority of funding provided by the council, and will be managed by another authority-owned company, Torbay Economic Development Company.
Council employees' pay offer announced
Local Government Chronicle | 14 May 2021
Council employees have been offered a pay increase of 1.50% from 1 April 2021. The three main trade unions - Unison, Unite and GMB - are expected to meet in May to decide whether or not to accept it. The move comes after negotiating body National Joint Council submitted a pay claim in February, calling for a 10% rise. The National Employers decided to wait until after the local elections had been completed before they responded.
While the new offer falls far short of the unions' demands, it is also more generous than the “public sector pay freeze” pledged by the chancellor last November. Rishi Sunak had announced in the spending review that public sector pay would be frozen except for those earning below the median wage of £24,000 who were "guaranteed a pay rise of at least £250".
The total increase to the national pay bill resulting from the offer is £279m, covering the period to March 2022. It will affect around 1.5m employees but does not apply to council chief executives, senior officers, teachers or firefighters, who are covered by separate national pay arrangements.
Queen's speech pledges planning reform but no details on social care
Local Government Chronicle | 11 May 2021
The Queen’s speech today revealed the government is still intent on overhauling the planning sector this parliament and said “proposals on social care reform will be brought forward” in 2021, while providing few details on these. Local government representatives have expressed disappointment that more specific social care plans were not announced and warned that the proposals lack clarity in other areas.
Council rejects commercial strategy
Public Finance | 11 May 2021
Belfast City Council has rejected a commercial investment strategy, put forward with the aim of helping raise additional funds and finance the authority’s Covid-19 recovery.
A paper introduced at a council meeting last week proposed making better use of council assets by “adopting a commercial culture, while retaining strong public, community and social values”. However, a motion tabled by opposition Green Party councillor Aine Groogan sought to reject the proposals on the ground a commercial focus was “not appropriate”. She told the committee: “We do fully understand that we are heavily reliant on ratepayers in terms of income, and there is definitely a need for us to diversify our income. There are many ways we can do that, including looking at how we use our assets better. We have looked at the pricing policy, which could be an avenue for allowing us to do that. But without the need for a commercial plan.”
Social care spending ‘lower than in 2010’
Public Finance | 6 May 2021
Adult social care spending per head is still lower than a decade ago, despite recent increases to central government funding, a report has said.
New asphalt mix like ‘anti-ageing cream for roads’
LocalGov | 28 April 2021
A section of dual carriageway in Northamptonshire has become the first in the country to be resurfaced with a new asphalt mix which could help roads last significantly longer. More durable road surfaces that require fewer repairs could lead to less money needing to be spent on maintenance, lower carbon emissions caused by maintenance work and less disruption for road users.
Glasgow first to sign circular economy commitment
LocalGov | 22 April 2021
Glasgow City Council has become the first in the UK to sign a commitment to raise awareness of the full benefits of the circular economy. By signing the circular cities declaration, Glasgow will become a member of a network of 40 cities across Europe. ‘We hope that by adopting this method across Glasgow, we will begin to see marked benefits across all aspects of life from improved air quality, new and skilled opportunities within the job market alongside a stimulated local economy which will support Glasgow’s businesses.’
Councils spearheading national climate change effort
Local Government Association | 22 April 2021
Councils continue to be at the forefront of the national response to climate change and have been working hard to put plans into action to help achieve net-zero carbon emissions by 2050 or sooner.
- Reducing food waste has saved UK citizens over £1 billion per year compared to 2015 according to a WRAP report
- Councils have installed over 17,000 electric vehicle charging devices across England - that’s three times higher than the number of car dealerships in the UK;
- In 2019/20, councils in England spent just under £40 million on defences for flooding;
- Councils spent an average of over £125 on environmental services per person in 2019/20.
PM told to 'urgently' reform sleep-in shift rules
LocalGov | 20 April 2021
Unison has warned that a Supreme Court ruling that sleep-in carers should not be paid the minimum wage for the hours they are asleep could be seen by some as ‘an opportunity to cut costs including wages’. Unison and the charity Mencap have written to the Prime Minister urging him to amend the current rules regulating the wages of care workers who undertake sleep-in shifts.
Last month, the Supreme Court ruled that workers should not be paid the minimum wage for hours they are asleep during sleep-in shifts. This marked the end of a four-year legal battle that could have ended with providers being landed with a £400m bill for six years of back pay.
GLA energy company posts almost £900,000 loss
Public Finance | 19 April 2021
London Power, a wholly-owned GLA company, recorded losses of £880,000 during 2019-20, mainly fuelled by the costs of launching and advertising the company, according to documents filed with Companies House.
The firm was set up last year to help address fuel poverty, with private operator Octopus Energy contracted to provide services under London Power's branding. The audit report said: “The company’s expenditure in 2019-20 was predominately related to the set-up and mobilisation of the company, including the development of the brand and launching of the marketing campaign.
£4m bond launch to fund Greater Manchester electric vehicle charging
Public Finance | 19 April 2021
Abundance Investment, a self-styled “ethical investment platform”, is selling five-year secured debentures at 9% interest per year to pay for 50 new chargers, on behalf of Iduna Electric Vehicle Charging Infrastructure.
Working with Transport for Greater Manchester, which aims to help the city become carbon neutral by 2038, Abundance and Iduna hope to encourage electric vehicle usage in the area.
Labour council pressed to insource service
LocalGov | 12 April 2021
Neath Port Talbot CBC has been urged by trade union Unison to bring its leisure services under direct control as it searches for a new operator. Five sports and leisure centres, a swimming pool and an arts centre are currently run by Celtic Leisure on behalf of the council under a contract due to end in September, following a six-month extension. A report to Neath Port Talbot’s Labour cabinet found Celtic Leisure was ‘clearly unable to operate the facilities and services within the existing financial contribution from the council’ and a new operator was required to ensure service delivery, generate efficiencies and reduce the subsidy from the council.
£280m high needs funding boost
Local Government Chronicle | 12 April 2021
Councils will receive £280m from the Department for Education to create new school places for pupils with special educational needs and disabilities.
The investment will help create new places in schools, academies, colleges and early years settings by improving existing provisions to meet the needs of Send children, such as installing ramps, handrails or ceiling hoists, as well as contributing to the costs of new special schools, DfE has said.
Place & Growth
Significant fall in cost of potholes
The Annual Local Authority Road Maintenance Survey produced by the Asphalt Industry Alliance makes for interesting reading.
The survey was conducted with highways departments within local authorities across England and Wales. Among other areas, the report suggests that the cost of dealing with road user compensation claims relating to potholes has fallen, with their figures falling dramatically from £8.1m in 2020 to £3.6m in 2021. This is combined with a fall in the corresponding staff costs from £14.7m in 2020, down to £11.4m.
Ultimately, the reason for the decline in costs is likely to be multifaceted. That said, this is more than a little intriguing bearing in mind that the survey also reported that the number of individual claims actually rose from 491 to 579 across England and Wales.
Regardless, in what has been an especially difficult and traumatic year, the report paints a picture of welcome consistency for the highway network of England and Wales. This is despite previous fears that Covid-19 could significantly impact on staffing levels and statutory service. In fact the amount of potholes filled over the year actually increased in comparison to the previous year to a total of 1,674,236.
Whilst the report makes encouraging reading for local authorities and other stakeholders, it is worth noting that maintaining the UK road network is of course a continuous project. Although there has been a significant increase in the budget for road works, it is evident that a significant amount of this fund has come from central government by way of short-term funds. At the risk of stating the obvious, these funds are not guaranteed. The financial security of the highway network of England and Wales, and by association, local authorities’ exposure to liability claims, remains an uncertain, political, consideration.
Legislation
Grenfell: Fire safety bill to become law
BBC News | 29 April 2021
Legislation to make it clear who is responsible for fire safety in tower blocks is on the verge of becoming law, four years after the Grenfell blaze. MPs voted 242 to 153 to defeat an amendment of the Fire Safety Bill - so it could receive royal assent later. The bill has gone through many rounds of votes as the House of Lords tried to ensure residents would not have to pay for required safety upgrades.
The House of Commons Library have produced a research briefing on the bill and its progress through parliament.
Planning (Local Authority Housing Developments)
Hansard | 20 April 2021
A Private Members’ Bill was introduced to Parliament on 20 April by Paul Holmes MP. The full text of the bill is not yet available. It aims to establish an independent local planning process to determine housing development planning applications submitted by local authorities, and for connected purposes. The process would be triggered either by a local authority bringing forward any development of 300 units or more in its administrative boundary, or if 10% of the electors of an affected council ward signed a petition that the authority would be obliged to put on its website. Updates on the Bill.
Guidance & Publications
Government to publish Levelling Up White Paper
Cabinet Office | 4 May 2021
The Government will publish a landmark Levelling Up White Paper later this year, articulating how bold new policy interventions will improve opportunity and boost livelihoods across the country as we recover from the pandemic. The White Paper - which will be led by the Prime Minister - will focus on challenges including improving living standards, growing the private sector and increasing and spreading opportunity.
Two funds to support the uptake of neighbourhood planning
Ministry of Housing, Communities and Local Government | 24 April 2021
Closes on 31 May 2021
Neighbourhood planning was introduced in 2011 through the Localism Act. Neighbourhood planning allows local residents and businesses to have their own planning policies in a Neighbourhood Plan that reflect their priorities, deliver tangible local benefits and have real weight in planning decisions. The recent Planning for the future white paper, sets out the ambition to retain neighbourhood planning as an important means of community input, and indeed further support communities through improving use of the digital tools available. It also sets out the desire to spread neighbourhood planning into more towns and cities, so through this prospectus are establishing two funds to support this. One fund will allow local authority led pilots to test a lighter touch approach to neighbourhood planning, while the other will provide direct financial support to local authorities to support neighbourhood planning in under-represented areas.
Chief Planner letter on additional support for neighbourhood planning
A summary of the funds
Independent experts to review safety of construction materials
Ministry of Housing, Communities and Local Government | 20 April 2021
Housing Secretary Robert Jenrick has appointed two experts to lead an independent review of the system for testing construction products. Former government adviser and construction expert Paul Morrell OBE will be the chair of the independent panel, along with legal expert Anneliese Day QC. The review will examine how to strengthen the current system for testing construction products to provide confidence that these materials are safe and perform as marketed. The review forms part of the government’s ongoing programme of work to reform and strengthen building safety regulation and comes after testimony to the Grenfell Tower Inquiry exposed evidence of testing irregularities and potential gaming of the system by some manufacturers.
The terms of reference. The review is accompanied by a consultation on a new code of practice for assessing cladding systems.
The Treasury has also launched a consultation of a new Residential Property Developer Tax, which it would use to fund the replacement of unsafe cladding.
Finally, as part of its fire safety measures the Ministry of Housing, Communities and Local Government has launched a new building regulations approach.
As building safety continues to be a focus of the government’s agenda, Inside Housing have also written an analysis on the cuts to building controls team in Local Authorities.
News
Queen’s Speech: New law to ‘modernise’ planning system
LocalGov | 11 May 2021
The Government has pledged to push ahead with reforms to the planning system in order to meet house-building targets. Under the reforms, councils will use a zoning system to assign ‘growth’, ‘protection’ or ‘renewal’ zones in their local plans. In growth areas, automatic planning permission will be given to developments that meet certain criteria replacing the current system of deciding planning permission on a case-by-case basis. Background briefing notes
Councils seek new powers to push through housing delivery
The Construction Index | 10 May 2021
The Local Government Association (LGA) wants to charge developers full council tax for every un-built development from the point the original planning permission expires. It also wants councils to have compulsory purchase powers to acquire sites where developers fail to build out to contractually agreed timescales. Both are policies for which the LGA has been pressing, without success, for several years.
Four more councils become registered providers
Inside Housing | 30 April 2021
North Northamptonshire Council and West Northamptonshire Council have successfully registered as social housing providers with the English regulator this month, while Reigate & Banstead Borough Council and Gedling Borough Council registered in March. The news of these local authorities successfully registering as social housing providers takes the number of councils to do this in the past 18 months to 15. Of those 15 to register so far, the majority said they have signed up so that they can access grant through the government’s Next Steps Accommodation Programme (NSAP).
Cladding loan scheme must be abolished and replaced with 'comprehensive' fund, say MPs
Inside Housing | 29 April 2021
A new report by the Housing, Communities and Local Government (HCLG) Select Committee has called on the government to scrap a controversial loan scheme that would see affected leaseholders paying up to £50 per month for remediation works. MPs said the loan scheme “fails to satisfy the principle that leaseholders should not have to pay for fire safety remediation work”, which ministers have repeated on a number of occasions. “The loan scheme should be abolished. Instead, costs should be fully met by [a] Comprehensive Building Safety Fund, paid for by the government and the industry,” the report said.
Inside Housing has also reported on the delay in introducing the scheme: Cladding loans scheme unlikely to be fully implemented for at least a year
In related news, there is further coverage of EWS1 forms: EWS crisis: homeowners face huge fire safety bills on newly bought flats despite cladding assurances before purchase
City of London to convert offices into homes in post-Covid revamp
BBC News | 27 April 2021
The City of London is planning to convert empty offices into housing in a bid to revive the area after the Covid crisis. The City of London Corporation, which looks after the Square Mile, is aiming for at least 1,500 new homes by 2030. Its policy chair said firms had told them their operations will change to accommodate flexible working. The Corporation said this would include at least 35% affordable housing "with an ambition to deliver higher levels of affordable housing where this is viable".
All-female team create new guide to support safer public spaces
LocalGov | 26 April 2021
A new guide to help local authorities create safer journeys for women has been published. The guide, which was developed by an all-female team of transport planners in Atkins, sets out six areas that local authorities can focus on to improve the safety of public spaces, with particular focus on creating safer first and last mile journeys for women.
Bids open for Self and Custom Build Land Release Fund
LocalGov | 19 April 2021
Councils are being urged to bid for a share of the £75m Brownfield Land Release Fund. The money includes the £25m Self and Custom Land Release Fund, which is available on greenfield sites. The scheme provides capital grant funding to bring forward local authority land for housing developments. It will help unlock sites with viability issues for custom and self-build projects such as site preparation, provision of small-scale infrastructure and addressing environmental constraints.
£4m bond launch to fund Greater Manchester electric vehicle charging
Public Finance | 19 April 2021
Abundance Investment, a self-styled “ethical investment platform”, is selling five-year secured debentures at 9% interest per year to pay for 50 new chargers, on behalf of Iduna Electric Vehicle Charging Infrastructure. Working with Transport for Greater Manchester, which aims to help the city become carbon neutral by 2038, Abundance and Iduna hope to encourage electric vehicle usage in the area.
Governance & Reorganisation
An end for virtual council meetings
The High Court ruling of 28 April announced that ‘meetings’ under the Local Government Act 1972 taking place on or after 7 May must take place at a single, specified geographical location; that attending a meeting at such a location means physically going to it; and that being 'present' at such a meeting involves physical presence at that location. This was followed on 4 May, when the Court handed down the second part of its ruling, in which it stated that a requirement that meetings must be ‘open to the public’ or ‘held in public’ meaning members of the public must be admitted in person to the place where the meeting is being held.
This will put pressure on councils’ ability to provide a suitable physical space for meetings, whilst managing capacity in line with COVID-19 restrictions. However, there are options which can be considered as an alternative to reverting to the pre-pandemic position. Councils should however, consider the democratic implications of such steps, taking into account risks, and satisfying themselves that they have met base requirements.
Some alternative options:
- Virtual quasi-meetings - virtual informal meetings, which are not actual meetings of an authority. These require officer decisions to be taken following members giving an ‘in principle’ decision in the virtual meeting.
- Hybrid meetings - whereby some members are physically present, and others are in attendance remotely. Those joining remotely would not be lawfully present and could not make decisions. Those attending physically would make decisions, and attendance must be quorate.
- Resuming in person meetings after 21 June - after this stage in the government’s roadmap out of lockdown, it is likely greater numbers may be able to meet indoors.
- Councils operating executive arrangements will be aware that all executive powers vest in the Leader or elected Mayor who can take all executive decisions, or delegate those decisions to other executive members or officers. As such, there is no need for meetings of the executive to be held at all, and so a virtual discussion between executive members prior to an individual decision could allow all executive members to have their say.
It is also important to involve the community on all levels by continuing to provide remote access by live streaming and access to recordings until at least 21 June, when it is anticipated that all restrictions on indoor gatherings will be lifted further.
Publications & Guidance
The Investment Funds Programme
Ministry of Housing, Communities and Local Government | 10 May 2021
The government has published a list of devolution deals, city deals and growth deals, all of which are long-term grants agreed by the government. The includes the most recent addition – the West Yorkshire devolution deal from March 2021.
Government to publish Levelling Up White Paper
Cabinet Office | 4 May 2021
The Government will publish a landmark Levelling Up White Paper later this year, articulating how bold new policy interventions will improve opportunity and boost livelihoods across the country as we recover from the pandemic. Despite the challenges of Covid-19, levelling up and ensuring that the whole UK can benefit from the same access to opportunities remains core to the Government’s vision. The White Paper - which will be led by the Prime Minister - will focus on challenges including improving living standards, growing the private sector and increasing and spreading opportunity. See also: Devolution White Paper to be replaced by levelling up proposals
Welcome Back Fund
Ministry of Housing, Communities and Local Government | 23 April 2021
The Welcome Back Fund is providing councils across England a share of £56m from the European Regional Development Fund (ERDF) to support the safe return to high streets and help build back better from the pandemic. This funding builds on the £50m Reopening High Street Safely Fund (RHSSF) allocated to councils in 2020 and forms part of the wider support government is providing to communities and businesses. This guidance builds on and replaces the previously published RHSSF guidance. The purpose of this guidance is to provide details of the activities that can be supported through the Fund and an overview of how it will be administered, as well as key ERDF contractual requirements.
Redmond Review response - Changes to the Local Audit (Appointing Person) Regulations 2015
Ministry of Housing, Communities & Local Government | 20 April 2021
The Ministry of Housing, Communities and Local Government is consulting on updating the Local Audit (Appointing Person) Regulations 2015.
Summary of proposals for consultation:
- To amend the date by which the appointing person is required to consult on and set the fee scale from before the start of the financial year to 30 November of the financial year to which the fee scales relate.
- That the appointing person should be able to propose and consult on a standardised additional fee for all or groups of bodies for elements of work based on its own independent research.
- To enable the appointing person to approve additional fee proposals from audit firms for additional elements of work completed during the audit rather than after completion.
- To ensure that the appointing person is able to appoint auditors for the period that it considers to be the most appropriate, up to the maximum length of the appointing period, subject to consultation with the relevant bodies. This includes enabling the appointing person to have audit contracts that are shorter than an appointing period.
- The consultation also seeks any more general comments about proposed changes to these regulations.
News summary: Government proposes extension to audit fee deadline
Cases
Virtual council meeting challenge dismissed by High Court
LocalGov | 28 April 2021
Councils will not be able to continue to meet virtually after 6 May after High Court Judges dismissed a legal challenge by local government. The Association of Democratic Services Officers (ADSO), Lawyers in Local Government (LLG) and Hertfordshire CC launched a judicial review after the Government refused to extend emergency legislation to allow virtual meetings beyond the 6 May deadline. Judges have ruled a ‘physical presence’ is needed for remote meetings under existing legislation. They claimed: ‘The decision whether to permit some or all local authority meetings to be conducted remotely… involves difficult policy choices on which there is likely to be a range of competing views.’ Those decision, they concluded, ‘are for Parliament, not the courts’. LLG response: Judgment on Virtual Meeting Provisions
The Local Government Association has also issued a summary of the survey it conducted with Local Authorities on the use of remote meetings.
Finally, the government has also updated its guidance in light of the decision and issued a letter to councils on the judgment.
Bevan Brittan’s analysis of next steps for local authorities can be read in the Local Government Lawyer: Council meetings beyond 7 May 2021.
In a follow up meeting, the court ruled that the Requirement for meetings under Local Government Act 1972 to be “open to the public” means members of public must be admitted in person
News
Liverpool puts forward improvement plan
LocalGov | 12 May 2021
Liverpool City Council has drafted an improvement plan and letter in response to the Caller report, which called for an intervention in the city. The plan, and covering letter, will go before an extraordinary council meeting on 19 May. In the letter from chief executive Tony Reeves, the council accepts the directions made in Max Caller Best Value Inspection report, which was ordered by secretary of state Robert Jenrick after the arrest of former mayor Joe Anderson.
Queen's Speech: Controversial voter ID plans roll forward
The MJ | 11 May 2021
Voter ID is expected to be introduced by May 2023 after the Government pledged to introduce legislation to ‘ensure the integrity of elections’. The Queen’s Speech said the Government would ‘strengthen and renew democracy and the constitution,’ which is expected through an Electoral Integrity Bill. The Government made a manifesto commitment to introduce voter ID, arguing it would protect voters from having their vote stolen, and insisting it would not have a negative effect on turnout nor participation.
Voters back committee system in Sheffield referendum
LocalGov | 11 May 2021
Sheffield City Council will move towards a new committee system following a referendum to change how the council is run. In the referendum, 89,670 out of 140,186 people voted in favour of moving from the current leader and cabinet model to a committee system made up of elected councillors. The new constitution will be implemented in May 2022.
Local elections 2021: Voters back mayors in referendums
LocalGov | 10 May 2021
Tower Hamlets and Newham LBC have both voted to keep the post of directly elected mayor in referendums run alongside the local elections. Newham, where voters were offered the choice of maintaining their current model or shifting to a committee model, 56% of voters opted to keep the mayor. Turnout was 37.6% of eligible voters. In Tower Hamlets, 63,029 residents voted to keep the mayoralty, compared with 17,951 who voted against, with a 41.8% turnout.
Council creates standalone monitoring officer roles as part of new operating model
Local Government Lawyer | 7 May 2021
Slough Borough Council said the move followed the recent conclusion of a consultation exercise on the model and staffing structure. The council said it “recognises the importance of good governance and this post reflects its commitment to continuous improvement of our governance environment. “This is a critically important role in the council’s leadership team and at the heart of our decision-making environment.” It added that the post would have a highly focused remit and will not initially line manage staff. It will however hold responsibility for the council’s external Legal Services contract with HB Public Law.
Auditors criticise overpayments to former council chief executive
Public Finance | 23 April 2021
Government officials are monitoring the situation at City of York Council after auditors found it overpaid severance and sick pay to a former chief executive amid threats of tribunal claims. Audit firm Mazars released a public interest report into the payments this week due to their “concerns about the regularity and propriety” of payments made when Mary Weastell’s employment was terminated. Mazars’ report suggested the authority was worried about a claim against the council and its leader Keith Aspden that Weastell had issued in an employment tribunal. “The amount paid has not been properly approved and is arguably an unlawful payment,” the report said.
Long read: The beginner’s guide to freeports
Public Finance | 22 April 2021
What powers will freeports have? What impact will they have on public finances and 'levelling up'? Two experts tell you everything you need to know.
Councils face wait for capitalisation clarification
Public Finance | 21 April 2021
Nine local authorities have applied for capitalisation directions for 2021-22, which would allow them to use capital resources to fund day-to-day services, external reviews need to take place prior to approval. However, Alex Skinner director of local government finance at the Ministry for Housing Communities and Local Government, said some authorities may have to wait until almost halfway through the year for approval.
Growth opportunity: Five tips to improve your business case
Public Finance | 16 April 2021
The ability of the Green Book to enable the government’s ‘levelling up’ agenda has been a matter of contention for some time. Many critics see the UK Treasury guidance as a mechanism that leads to government funding being concentrated in areas of higher economic output, while regions more in need of development miss out. Last year, the government reviewed the Green Book. While the core methodology was not, by itself, found to skew outcomes, changes were recommended to the way it is used to develop business cases.
Scale of council deficits due to pandemic is revealed
LocalGov | 14 April 2021
Councils are facing a budget deficit of nearly £1.2bn by the end of the financial year due to the impact of COVID-19, research has revealed. The research, published by Unison, shows that in December top-tier councils predicted funding gaps totalling over £1bn by the end of the 2021 financial year. At the same time, district and borough councils projected a collective deficit of £179m due increased spending and reduced income caused by the pandemic.
County rejects Bay Unitary proposal
LocalGov | 13 April 2021
Lancashire County Council has rejected proposals to create a new Bay Unitary Council. The council has voted not to support the proposal - which would include the Lancaster and Morecambe areas - arguing it fails to meet all of the Government’s tests for it to be considered further. Instead, council members said they would only back the proposal for a single unitary authority submitted by Cumbria County Council.
Government allocates almost £4m after ransomware attack
Public Finance | 8 April 2021
Cleveland and Redcar suffered a ransomware attack in February 2020, leaving its website inoperable and workers resorting to pen and paper to keep services running. The additional funding was agreed in a letter sent to the council at the end of March from the Ministry of Housing, Communities and Local Government, with the grant being paid in a single payment. Under the terms of the grant, Cleveland will be allowed to use the money to cover costs related to the attack incurred over the course of last financial year.
Contract Management
Procurement – how government buys services from the private sector
The Queen’s Speech has set out the UK Government’s priorities for the year ahead. Economic recovery was a key theme of the Queen’s Speech.
There were also announcements relating to education, the NHS, procurement and Carbon Net Zero. In addition, another post-Brexit piece of legislation, the Procurement Bill is to be introduced in the next session of the UK Parliament. This will replace EU rules on how the government buys services from the private sector. The Queen, in her speech, said the law would simplify procurement in the public sector.
Emily Heard, Partner and Head of procurement has explained: “The cabinet office published a Green Paper on Transforming Public Procurement, and the consultation period in relation to this closed on 10 March.
“The main objectives are to streamline and simplify the various different sets of regulations which apply to public procurement, whilst still operating in accordance with the WTO Agreement on Government Procurement, the Trade and Cooperation Agreement and other Free Trade Agreements.”
Whilst the government is still analysing responses, the bill is expected to be introduced from September 2021.
Legislation
Historic Trade Act becomes law
Department for International Trade | 29 April 2021
The Trade Act, which bestows powers necessary to bring new trade deals into being, is granted Royal Assent, has formally become law. It contains provisions to implement the Word Trade Organization’s Government Procurement Agreement, including the power to bring in the changes to domestic legislation needed to meet the UK’s new obligations under the agreement. This means the trade deals with 67 countries worth £218bn we have already signed and can become part of UK law permanently. The Agreement on Government Procurement’s coverage schedule for UK local authorities can be found here: United Kingdom | Sub-Central Government Entities | WTO
Following the enactment, amendments were made to regulations.
Court Cases
High Court judge criticises “disproportionate” costs estimate for one-day procurement legal challenge hearing
Local Government Lawyer | 28 April 2021
The Cabinet Office’s £450,000 estimated likely costs for defending a legal challenge over its award of a contract for the provision of polling services during the pandemic appeared – without further explanation from the defendant– to be “disproportionate for a one day hearing, even in a complicated procurement case”, a High Court judge has said. The claimant’s judicial review challenge concerns the Cabinet Office's decision on 30 June 2020 to award a contract to the interested party, Hanbury, for provision of online and telephone polling and ancillary services. The full decision: Good Law Project Ltd v Minister for the Cabinet Office [2012] EWHC 1083 (TCC) (16 April 2021) (bailii.org)
Mott Macdonald Ltd v Trant Engineering Ltd [2021] EWHC 754 (TCC) (30 March 2021)
BAILII | 1 April 2021
In this High Court ruling, HHJ Eyre QC ruled that any clauses which exclude or limit liability should be read using the normal rules of contractual construction, so “strictly, but without any presumption”, and that no particular form of words was required even for a deliberate and fundamental breach of contract. The clauses in this contested contract were broad enough to cover such breaches. As a result, the claimants will be able to rely on them when the counterclaim comes to trial.
News
PFI review ‘could lead to contract termination’
Public Finance | 11 May 2021
A government review of a hospital private finance initiative could lead to a termination of contract, according to rating’s agency Moody’s. In a credit opinion, the agency said that the performance of services undertaken by Central Nottinghamshire Hospitals has suffered since 2019, as numerous “service failure points” have emerged, leading to reductions in contract costs.
Last month, the government’s Infrastructure and Projects Authority launched a review into the running of the services, which is expected to be published next month.
The report said: “In Moody’s view, depending on the outcome of such review, there could be an increased risk that the trust applies formal contractual remedies which could ultimately lead, in an extreme scenario, to termination of the project.”
All things to all people: exploring social value approaches in public procurement
Public Finance & Crown Commercial Service | 7 May 2021
Charlene Maginnis, Crown Commercial Service’s head of policy delivery – supply chain and service offering, explains how the Government’s rules on social value are shaping the public sector’s buying decisions.
Concerns raised over council procurement
Public Finance | 4 May 2021
The London Borough of Barnet’s internal audit team has found the council failed to hold accurate records of higher-value procurement contracts, against the authority’s procurement policy Procurement services at Barnet are partly outsourced to Capita under a customer and support group contract. Ashley Hughes, assistant director of finance at Barnet Council, said an improvement plan is no in place to help rectify the issues outlined in the report.
Local councils complain about poor banking services
LocalGov | 30 April 2021
The National Association of Local Councils (NALC) has warned it has received a groundswell of complaints about poor banking services across England. NALC said local councils have complained about a range of problems including continuous change requests to bank mandates, long waits, and unresolved problems with telephone banking.
Birmingham City Council spends nearly £200m in local economy
LocalGov | 26 April 2021
Birmingham City Council has spent £194,619,328 in its surrounding areas as part of an effort to improve the social value of its commissioning and procurement. In 2013, the council adopted a Social Value Policy and a Living Wage Policy, and established the Birmingham Business Charter for Social Responsibility. Social value considers how a proposed procurement might improve the economic, social and environmental well-being of the relevant area, and is used as one of the tools that helps the council award contracts to businesses and organisations.
Labour council pressed to insource service
LocalGov | 12 April 2021
Neath Port Talbot CBC has been urged by trade union Unison to bring its leisure services under direct control as it searches for a new operator. Five sports and leisure centres, a swimming pool and an arts centre are currently run by Celtic Leisure on behalf of the council under a contract due to end in September, following a six-month extension.
A report to Neath Port Talbot’s Labour cabinet found Celtic Leisure was ‘clearly unable to operate the facilities and services within the existing financial contribution from the council’ and a new operator was required to ensure service delivery, generate efficiencies and reduce the subsidy from the council.
Disputes & Regulatory Support
Rossendale and Wigan Council win Supreme Court test case regarding non-domestic rates on empty properties
The Supreme Court in Hurstwood Properties (a) Ltd and Others v Rossendale Borough Council [2021] UKSC 16 recently allowed an appeal regarding liability to pay business rates on empty properties.
The case concerned schemes designed to avoid the payment of business rates on empty properties; this was done by setting up a special purpose vehicle or ‘SPV’ to which the owner of the property granted a lease, pursuant to which the SPV was placed into voluntary liquidation so as to avoid the liability for business rates. Upon dissolution, the SPV’s property passed to the Crown as bona vacantia (unowned property) and the Crown became liable for the rates as owner (section 65A(2)(b) of the 1988 Act).
It is relevant that pursuant to the leases, the SPVs had to have the legal right to possession of the properties, as this would mean the SPVs would be the “owners” of the properties under section 65(1) of the Local Government Finance Act 1988 (1988 Act), which defines “owner” as "person entitled to possession of it".
The Supreme Court found in favour of the local authorities, in determining that the SPVs had no control over whether the property was left unoccupied and consequently had no real or practical ability to exercise its legal right to possession. Consequently, on proper interpretation of section 65(1) of the 1988 Act, the SPVs did not become “entitled to possession” and were not the “owners”. Further, if the respondent companies (i.e. the real owners) found a tenant or acquired a use for the property, they could terminate the leases, and consequently the companies had sole control over whether the property was left unoccupied.
Lord Briggs said in his ruling that the “whole purpose of the schemes was to avoid payment of the empty rate, rather than to transfer the responsibility for its payment. Apart from the rates avoidance, the schemes had no separate business purpose of any kind”.
The case is significant as it was a test case for 55 similar cases in which the value of unpaid rates varied from a few thousand to millions of pounds. The Supreme Court’s decision confirmed that there is a triable issue as to whether the companies remained liable for the rates throughout the duration of the leases and therefore we must now wait for the outcome of the trial on that issue.
Publications & Guidance
Apply for the Regulators’ Pioneer Fund
Department for Business, Energy and Industrial Strategy | 20 May 2021
The Regulators’ Pioneer Fund aims to keep the UK at the forefront of regulatory thinking and experimentation. The fund will sponsor projects led by regulators or local authorities which aim to help create a UK regulatory environment that encourages business innovation and investment. You can apply for funding of up to £200,000. Projects must end by 31 March 2022 and must run for at least 6 months.
DHSC’s position on the determination of ordinary residence disputes pending the outcome of the Worcestershire case
Department of Health & Social Care | 21 April 2021
This note sets out the Department of Health and Social Care’s (DHSC’s) position in regard to the determination of questions of ordinary residence for the purposes of section 117(3) of the Mental Health Act 1983 that have been referred to the Secretary of State under section 40 of the Care Act 2014. This note is to be read alongside DHSC’s guidance to local authorities on ordinary residence in chapter 19 of the care and support statutory guidance. It is intended to clarify the status of that guidance in the light of the Worcestershire case, but nothing in this note is to be read as constituting legal guidance to local authorities. Nor does this note provide legal advice by, or on behalf, of DHSC in respect of the matters covered by the note.
Coronavirus (COVID-19): reopening outdoor hospitality safely
Ministry of Housing, Communities & Local Government | 16 April 2021
Letter from Secretary of State for Housing, Communities and Local Government Robert Jenrick to local authorities on how they should apply measures for reopening outdoor hospitality safely, including at listed buildings and historic visitor attractions. News coverage: Secretary of State calls on councils to show pragmatism, avoid “overzealous interpretations” of rules on outdoor hospitality | Local Government Lawyer. This guidance comes at the same time as a new order that inserts a new right, which expires on 1st January 2022, to provide movable structures within pubs, bars, cafés, restaurants and listed buildings operating as visitor attractions. Read the full order.
Cases
Court: Councils obliged to meet burdensome finance data requests | Public Finance
Public Finance | 29 April 2021
A council acted unlawfully by refusing a resident access to thousands of financial documents on the grounds it would have taken five weeks of staff time, a court has ruled. In written judgement, Mrs Justice Thornton, said that under the Local Audit and Accountability Act 2014 “there is no provision for a relevant authority to refuse to process an inspection request on the grounds of the time it would take to do so”. She said section 26 of the Act, which grants access to documents to interested parties during the audit process, “says nothing about the time or cost of compliance to a relevant authority”. Read the full decision
Birmingham council's homeless housing deemed unlawful
BBC News | 27 April 2021
High Court judges have said Birmingham City Council was operating an unlawful system for providing temporary accommodation. Families in need of temporary housing, it said, were left in unsuitable homes while the council sought properties. The council said it will appeal against the ruling and said there was a national housing shortage. In the High Court judgement, judges found the council "had been operating an unlawful system for the performance of its main housing duty under the Housing Act 1996" by leaving tenants in unsuitable housing while it looked for alternative accommodation.
Council wins Supreme Court appeal over claim of £1.2m from heirs of school benefactor
Local Government Lawyer | 23 April 2021
The Supreme Court has allowed Oxfordshire County Council's appeal in a case in which a family said the sale of school land worth £1.2m, which was gifted to the council by their late family member, was unlawful. The claimants, who are heirs of the late Robert Fleming who conveyed land to Oxfordshire County Council in 1914 and 1928 under the School Sites Act 1841, said that since the council sold the land after (and not before) moving the school to another site, it had "reverted" to Mr Fleming's estate. The Supreme Court unanimously allowed the appeal as the Fleming site had not ceased to be used for the purposes of the school, even after the school had moved, as it was always the council's intention to use the proceeds of the sale to pay off the cost of the new school premises.
Upper Tribunal awards £22k costs against council in dispute over EHC plan
Local Government Lawyer | 15 April 2022
Judge West said Wirral had acted unreasonably in attempting to bring A’s placement into the dispute and that this justified him making an order for costs, summarily assessed at £22,000.00 including VAT. Judge West said: “The behaviour and conduct of both parties fell far short of what the Tribunal would expect and the parties sought to conduct matters in a hostile adversarial manner contrary to the approach the Tribunal would expect.” He agreed with Judge McCarthy’s criticisms of the costs application as original drafted as these should be “pithy, succinct and focussed; this one was not.” Read the full judgment.
News
Supreme Court agrees to hear battle over termination of fixed term secure flexible tenancies
Local Government Lawyer | 28 April 2021
The Supreme Court has granted Croydon Council permission to appeal in a dispute over the termination of fixed term secure flexible tenancies. In Croydon London Borough Council v Ms Chipo Kalonga the Court of Appeal (Arnold LJ, King LJ and Asplin LJ) concluded – “albeit for different reasons” – that Mrs Justice Tipples was correct to hold that such a tenancy can only be terminated by the landlord if the tenancy agreement contains a forfeiture clause. On 19 April a Supreme Court panel comprising Lords Briggs, Leggatt, and Stephens JJSC granted Croydon permission to appeal.
Newham to appeal loan fraud claim verdict
Public Finance | 27 April 2021
London Borough of Newham has been granted permission to appeal a High Court decision which rejected its claim against Barclays Bank over historic Lender Option Borrower Option loans. The councils’ original case argued that Barclays had committed fraud by making the loans while wrongly implying that the London Interbank Offered Rate (LIBOR) – on which the loans’ repayments were based – was being set honestly. However, the judge in the original hearing agreed with Barclays’ defence that the councils “cannot show that they relied on the representations which they allege were made”.
Kent council fined after mother and son left to live in tent in pandemic
The Guardian | 23 April 2021
A council has been fined after it removed a homeless teenager and his mother from temporary housing during the pandemic, leaving them to sofa surf and live in a tent for two months. Medway council in Kent subsequently missed five clear chances to help the family despite being informed repeatedly that they were sleeping rough and at risk, the local government ombudsman said. Although the family – referred to as Ms E and Mr F – were not formally tenants, and so were not covered by the government’s Covid eviction ban, officials had failed to consider whether their removal would cause them hardship. Read the full decision.
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