29/09/2021
LA Spotlight
Levelling Up takes centre stage
Following the latest Cabinet reshuffle, levelling up has taken centre stage with a rebranding at MHCLG, a can do Secretary State and some key appointments to the taskforce.
Whilst the phrase itself gives a flavour of the overarching aim, the detail is currently lacking on what it means in practice. Potentially policies will cover the full breadth of public sector/services including housing; skills and jobs; public health; transport; communities and high streets; and the environment and net zero.
The forthcoming Conservative Party conference may put some further detail forward. However, the likely white paper, spending review and budget of the Autumn should provide the clearest signals for local government about what to expect. A key issue will be the extent to which levelling up is a priority for all of central Government, including the Treasury, given how far reaching and linked the policy areas are.
As the picture unfolds, some thoughts for authorities to keep in mind:
- What opportunity will local government (including mayors) and communities have for meaningful input into the overall agenda shaping?
- Linked to that, will levelling up mean greater devolution (with or without reorganisation) to enable the levelling up agenda and tailored approaches?
- Where will responsibility for delivery actually rest? Local government, central Government or communities themselves? To the extent it isn’t local government, how will local government interact with those delivering? What reporting and data requirements will be imposed?
- What do the proposals mean for existing authority and service specific plans?
- How will implementation align with current and future rules on public procurement and subsidy control?
- How do we judge whether the policy is a success nationally and locally?
Overview quick links
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- Delivering Value Chris Harper & Kirtpal Kaur-Aujla
- Place & Growth Rebecca Pendlebury
- Governance & Reorganisation David Kitson & Victoria Barman
- Contract Management Richard Lane & Liz Fletcher
- Disputes & Regulatory Support Olivia Carter & Judith Hopper
- Resource Library
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Net Zero
£9 million fund for local authorities to tackle air pollution
At the beginning of September, the Government confirmed that local projects to improve air quality across England will get a £9m funding boost this year, as applications opened for this year’s Air Quality Grant scheme.
The Government’s Air Quality Grant helps local authorities develop and implement measures to benefit schools, businesses and communities and reduce the impact of polluted air on people’s health. Environmental Minister, Rebecca Pow, said they are ‘looking forward to receiving innovative ideas’ for ways to reduce emissions and promote cleaner, greener alternatives which in turn, will reduce our carbon footprint and prepare for COP26.
An objective of the scheme is to improve public awareness in local communities about the risks of air pollution and at least £1m of the £9m available this year will be dedicated to such projects.
In addition, local authorities can bid for a portion of the fund for a wide range of other projects including those which reduce air pollutant exceedances and measures to deal with particulate matter. Since the Government’s Air Quality Grant scheme was established, it has awarded almost £70m to a variety of projects.
The Air Quality Grant also forms part of the wider UK plans to tackle roadside air pollution through investment into air quality and cleaner transport, including investment in low emissions vehicles, and electric vehicle (EV) charging infrastructure.
Applications for the grant opened on Friday 3 September and close on Friday 8 October. Further details on how to apply via Bravo are available on the Air Quality Grants GOV.UK page.
If you would like to discuss the Air Quality Grant or other options to reduce air pollution, including low emissions vehicles and EV charging infrastructure, please get in touch with any member of our dedicated team of net zero lawyers, including Nadeem Arshad or Phil Roberts.
Legislation
Councils throw support behind Climate and Ecological Emergency Bill
edie | 20 August 2021
More than 100 local authorities and councils have publicly backed the Climate and Ecological Emergency Bill, which is set to be debated in Parliament next month and calls for the UK to do more to tackle its contribution to the climate crisis. View the Bill and its progress through Parliament.
Environment Bill, Report Stage, House of Lords, September 2021
Local Government Association | 3 September 2021
This LGA briefing covers the association’s response to the Bill in its current format, as well as amendments made to the Bill in the House of Lords that directly affect local authorities. The Government has also announced further amendments.
News
Government has ‘no understanding’ of local authority net zero challenges
Public Finance | 10 September 2021
Central government has no understanding of the scale and funding challenges facing local authorities in implementing net zero objectives, senior councillors have told MPs. The upcoming Spending Review should stabilise local authority funding, and establish a needs assessment framework for net zero ambitions, Rachel Blake, member of the Local Government Association’s environment, economy, housing and transport board said.
UK’s first Zero Emission Zone to launch next year
LocalGov | 10 September 2021
Britain’s first Zero Emission Zone pilot will take place in Oxford next February, it has been confirmed. Oxford City Council and Oxfordshire County Council have confirmed the new timeline for the scheme to avoid causing disruption to businesses during the run up to Christmas.
League table launched to rank effectiveness of climate plans
Local Government Chronicle | 6 September 2021
The effectiveness of councils' climate action plans is to be assessed and receive a score in a new league table. Climate Emergency UK, a platform which contains an online database of UK local authority climate and ecological emergency declarations, is to create a national council climate league.
CPRE releases groundbreaking new research into hedgerows
Campaign to Protect Rural England | 6 September 2021
The charity’s new report investigates the huge environmental and economic benefits of hedgerows and shows that boosting them by 40% would create 25,000 jobs over the next 30 years and yield almost £4 for every £1 invested. CPRE’s chief executive, Crispin Truman, said: ‘Many of the government’s nature-based solutions to the climate emergency to date have focused on trees, but hedgerows are also crucial in soaking up carbon, protecting against flooding and aiding nature’s recovery.’
Shell aims to install 50,000 EV chargepoints
LocalGov | 1 September 2021
The oil and gas company Shell has announced that it aims to install 50,000 on-street electric vehicle charge posts through their company ubitricity across the UK by the end of 2025. For local authorities looking to install ubitricity charge posts, Shell is prepared to cover the remaining costs, subject to commercial terms, in order to drive take-up of ubitricity chargers from the current figure of 3,600 to 50,000.
Trio of mass solar farm projects set to turn town into clean energy powerhouse
The Independent | 31 August 2021
Three massive solar farms are to be built within a five-mile radius of each other on the outskirts of Hartlepool – effectively turning it into the UK’s most unlikely solar powerhouse.
Business rates system 'discourages shift to net zero'
LocalGov | 31 August 2021
Small firms have written to the Government warning that the business rates system is a disincentive to invest in net zero and employee wellbeing measures. In a letter to ministers, sent ahead of the forthcoming business rates review, the national chair of the Federation of Small Businesses, Mike Cherry, describes the tax as ‘regressive and outdated’.
Leeds committed £27.5m to shelved carbon reduction scheme
Public Finance | 25 August 2021
In 2019, £29m of funding was given to the authority to create a clean air charging zone, which included number plate recognition cameras and a scheme to move vehicles to green alternatives. However, Leeds Council scrapped the zone in October, as officials said that air pollution on key routes were below legal limits and not likely to exceed them even if traffic returned to normal levels.
Cutting costs for green energy solutions in the public sector
edie | 25 August 2021
How can public sector bodies continue on the path to reach net-zero and cut carbon emissions in a way that is economically viable but also highly effective? While the answer may seem to lie in large-scale, radical changes, in fact, the opposite is true. Focusing on and investing in small changes will make the biggest difference to long-term carbon cutting, and fundamentally, can be much more budget friendly.
300 Councils have Declared a State of Climate Emergency – But For Many It’s Just Rhetoric
Byline Times | 24 August 2021
Since 2019, 300 councils in the UK have declared a climate emergency. However, recent research by Friends of the Earth and Platform found that councils are still investing billions of pounds in the fossil fuel industry via their pension funds – with Greater Manchester, Strathclyde, West Yorkshire, and the West Midlands accounting for nearly 25% of all investments. All except Strathclyde have declared a climate emergency but, none have set a date for going carbon-neutral.
UK government ‘failing to help local leaders achieve net zero’
The Guardian | 18 August 2021
The Government is failing to provide local leaders with the investment and resources they need to achieve net zero, according to the mayor of Newham. Rokhsana Fiaz, the first woman to become a directly elected mayor of a London borough, said her council’s “appetite [to achieve net zero] is high: we’ve got the knowhow and we know where the problems are” but, she said, the government isn’t providing local leaders with what they need.
Councils to have declared 'climate emergency' still backing road and airport expansion, BBC finds
edie | 16 August 2021
A swathe of councils in England have made 'climate emergency' declarations in recent years, but an analysis from the BBC has found that more than one-third are still planning high-carbon infrastructure. The Local Government Association has used the BBC’s findings to call for more clarity on – and higher levels of – long-term funding for councils.
London boroughs react to the ‘intensifying’ climate crisis
LocalGov | 11 August 2021
Local authorities across London have called on the Government to champion the role of councils in tackling the climate crisis after the UN warned that climate change was ‘widespread, rapid, and intensifying’.
Delivering Value
Subsidy Control
This month, we have published a series of notes on the new Subsidy Control Bill and in our first of four notes, we outline the seven general principles contained in Schedule 1 of the Bill and the comments from the Bill’s explanatory notes, as well as our comments.[1] It is intended to be a useful starting point for anyone who may grant, receive or challenge a subsidy. When considering whether a particular subsidy would be consistent with the general principles, we recommend also considering whether it would be consistent with the Government’s objectives for the regime:
- facilitating interventions to deliver on the UK’s strategic interests
- maintaining a competitive and dynamic market economy
- protecting the UK internal market
- acting as a responsible trade partner.
A - Common interest
Subsidies should pursue a specific policy objective in order to:
(a) remedy an identified market failure, or
(b) address an equity rationale (such as social difficulties or distributional concerns).
“Public authorities will need to consider, explain and assess the policy objective behind the subsidy to ensure there is a benefit to wider society in providing the subsidy. Social equity objectives could include providing transport for residents of remote areas.”
BB comment: this is the most important general principle as all the others will flow directly from it. The key point is for the specific objective to be defined with reasonable clarity against the wording of the definition (Objective). It will be preferable not to simply cross reference to a report as that may not be specific or clear enough. If the Objective is consistent with one of the Government’s examples of “strategic interventions” (for example, levelling up or achieving net zero) then that should provider further evidence that it is a policy objective. Although it now only applies where the State aid rules apply, the General Block Exemption Regulation (GBER) can be a useful reference point in that it sets out various types of policy objectives.
B - Proportionate and necessary
Subsidies should be proportionate to their specific policy objective and limited to what is necessary to achieve it.
“Subsidies should be the minimum necessary to achieve the desired aim. In choosing a subsidy the body granting the subsidy (“the public authority”) must adopt those causing the least possible disruption in pursuit of the public policy objective.”
BB comment: the scale of the subsidy must be closely linked to the Objective and no more than is needed to achieve it. This reflects some of the ideas behind the threshold and intensity limits in GBER. By way of example, if a public authority is providing grant funding for affordable housing, it should consider whether funding 100% of the costs would be proportionate and necessary.
Please see the following link to our full note, written by Edward Reynolds that includes a review of the other General Principles:
- C - Design to change economic behaviour of beneficiary
- D - Costs that would be funded anyway
- E - Less distortive means of achieving policy objective
- F - Competition and investment within the United Kingdom
- G - Beneficial effects to outweigh negative effects.
Conclusion
The general principles build on those included in the TCA, and so public authorities should already have some experience of how to apply them. We welcome the explanatory notes and government statements around the subsidy control bill as they provide more clarity about how to ensure subsidy is consistent with the general principles, which could be improved further once guidance is issued under the bill. Our main recommendation is to consider to a reasonable but not excessive level of detail whether a proposed subsidy will be consistent, remembering that legal challenge is by way of judicial review. We will consider in a later note what would have to be shown to bring a successful challenge.
[1] Please note that it does not cover the energy and environmental principles.
Publications & Guidance
Digital Connectivity Infrastructure Accelerator (DCIA)
Department for Digital, Culture, Media and Sport | 9 September 2021
The accelerated roll out of advanced wireless networks, including 5G, will bring benefits to the UK economy and communities across the country. As the next major milestone in the DCIA project DCMS will allocate up to £4m of funding to pilots which support the implementation of digital asset management solutions to open up public assets for the roll out of wireless communication networks. Government press release: Street lamps and bus shelters to help boost 5G roll out in £4m trial
Vulnerable children and families better supported through new data sharing projects
Ministry of Housing, Communities & Local Government | 3 September 2021
Vulnerable children and families across England will receive earlier and better support from local services, through a new fund to improve how data is shared between local partners, Rough Sleeping and Housing Minister Eddie Hughes MP has announced. The £7.9m Data Accelerator Fund, will see 10 councils work more closely with police forces, local NHS services and schools to share data to ensure children and families receive the right help at the right time.
News
More than 200 swimming pools forced to close during pandemic
LGC|22 September 2021
Swim England have issued a report warning that local authorities will need £1bn in capital investment to prevent the number of swimming pools in England dropping by 40%.
More delays predicted for major local government finance reforms
LGC | 20 September
Local Government Finance experts predict that the fair funding review will be postponed.
Council withdraws shopping centre purchase plans
Public Finance | 10 September 2021
Swindon Borough Council has scrapped plans to acquire a local retail park, after it was advised the purchase would be “risky”.
Government withholds core funding from LEPs
The MJ | 7 September 2021
The Government is withholding the full year of core funding from local enterprise partnerships (LEP) as it strongly signals the organisations are facing major change. Amid uncertainty around the future of LEPs, a letter from the cities and local growth unit said the Government had decided to only provide the partnerships with an initial six months of funding in 2021-22 – worth £250,000 for each organisation.
News analysis: The councils selling property due to homeworking
Public Finance | 6 September 2021
The success of homeworking during Covid-19 is presenting councils with a new opportunity to save money. The sight of empty desks means some authorities are reassessing their estates and deciding they need less space.
Council proposes commercial investment committee
Public Finance | 31 August 2021
Coventry City Council is set to create a shareholder committee to manage commercial investments, in a bid to avoid financial difficulties experienced by some authorities. If approved, shares of all council-owned investments would move, by the end of October, to a new holding company, which would then be accountable to the committee, the report said.
Big investors back South Tees bid for key English ports
The Guardian | 29 August 2021
A group of powerful investors are preparing a £2bn takeover of one of the UK’s largest port operators in a move seen by some as a vote of confidence in the government’s levelling-up agenda. The South Tees Development Corporation, which is run by the Tees Valley combined authority and headed by the local mayor, Ben Houchen, has reportedly been preparing a bid for PD Ports, which owns 12 ports and distribution sites across the UK.
Warrington defends £151m loan to property developer
Local Government Chronicle | 27 August 2021
Warrington MBC has defended its decision to loan £151m to a billionaire property developer. A report to Warrington’s audit and corporate governance committee last month says that in October 2020, the authority approved a seven-year loan facility of £202.1m to THG (formerly known as The Hut Group). Since then, the company has taken three drawdowns totalling more than £151m.
From inadequate to outstanding in three years: city explains children's turnaround
Local Government Chronicle | 20 August 2021
Sunderland City Council has credited its investment in a permanent workforce and more children’s homes, alongside strong leadership and consistent standards, with creating a remarkable transformation its children’s services revealed.
Council approves £6m plan to stabilise Hammersmith Bridge
LocalGov | 19 August 2021
Hammersmith & Fulham Council has approved an innovative new £6m plan to stabilise Hammersmith Bridge at below the original expected cost with works completing in under a year. The council’s specialist engineers Mott MacDonald devised the alternative stabilisation plan which will bring savings of £24m and has now been chosen to replace the existing Pell Frischmann scheme.
Partly-owned council energy company incurs £4m of losses
Public Finance | 16 August 2021
An energy company partly owned by Warrington Borough Council reported losses of close to £4m last year, according to data filed with Companies House. Ian Marks, finance spokesperson for opposition Liberal Democrats told PF: “We have always been concerned about this investment. We understand the council has to be creative in their commercial operations, given the cuts in funding from national government. We completely understand that – we just believe than an investment in an energy company is probably a step too far.”
Inter-council lending drops sharply
Public Finance | 13 August 2021
In the three months to June, councils borrowed £9.9bn in short-term loans from each other, a sharp reduction on the £11.3bn borrowed in the final quarter of 2020-21, according to outturn data.
Place & Growth
Option agreements - keep your finger on the trigger!
Option agreements are useful for developers as they can hedge their bets by taking an option over land which has not been identified for development, but which has a reasonable chance of being allocated or released for development in the future. It may also enable a developer to buy land at a discount before the land is market tested.
Once planning permission has been granted, the landowner may have second thoughts about selling the land at an undervalue, which is when the terms of an option are carefully scrutinised to see if the sale can be avoided.
The case of Fishbourne Developments Ltd v Stephens [2020] highlights the importance of drafting an option agreement to ensure that it can be exercised. In this case, the claimant argued that a planning permission for a pitched roof on an existing farm building would trigger an option to purchase an entire 117 acre farm at a 30% discount as the drafting in the option agreement did not define what counted as a “development”.
The Court of Appeal dismissed the appeal and held that it would not be the intention of the original parties for an inconsequential planning permission to constitute “development” as this would make very little commercial sense.
The events which trigger an option should be carefully considered so the parties do not end up in expensive litigation arguing over the meaning of the terms. The outcome in this case would have been different had the parties considered three main points:
- the specific type of development that would trigger the option, for example, residential development or a wider mixed use
- whether the option applied to the whole or part of the farm by clarifying the extent of the land included; and
- whether the grant of planning permission would suffice or the physical implementation of it, for example whether reserved matters approvals are to be obtained or pre-commencement conditions discharged.
There are a number of key issues which landowners and developers need to think about when entering into an option agreement and, as this case shows, taking specialist legal advice should not be considered as optional.
Legislation
Councils to have ‘bigger role’ in building safety
The MJ | 20 August 2021
In a letter to chief executives, communities secretary Robert Jenrick said local authorities will have additional responsibilities under new legislation. With both councils and fire authorities holding enforcement powers against unsafe cladding, Mr Jenrick said he expected a ‘shared, multi-disciplinary approach’.
Publications & Guidance
Government launches public consultation to make outdoor measures for high streets permanent
Ministry of Housing, Communities & Local Government | 5 September 2021
Temporary measures that have given a huge boost to high streets and hospitality during the pandemic could be made permanent following a new public consultation. The permitted development rights introduced over the past year and that the government are now consulting on include:
- Right for markets to be held by or on behalf of local councils
- Right for moveable structures in the grounds of pubs, cafes, restaurants and historic visitor attractions
National local growth assurance framework
Ministry of Housing, Communities & Local Government | 2 September 2021
The Government has updated its national local growth assurance framework. This framework sets out government’s guidance for places that are required to develop their own local assurance framework. It applies to Mayoral Combined Authorities with a Single Pot and Local Enterprise Partnerships.
Homes England’s Strategic Partnerships for the Affordable Homes Programme 2021-26
Homes England | 1 September 2021
Homes England’s 31 new strategic partners will deliver nearly 90,000 grant-funded affordable homes over the next five years. Under the Affordable Homes Programme 2021-26, Homes England is committing almost £5.2bn in affordable housing grant to 31 strategic partnerships with 35 organisations. The Mayor of London has also released a press statement about the scheme. Inside Housing has published a comparator to the last funding round.
Independent review into scaling up self-build and custom housebuilding: report
Ministry of Housing, Communities & Local Government | 21 August 2021
In the review’s report Richard Bacon MP makes recommendations to government on how to support growth in all parts of the custom and self build market, helping to boost capacity and overall housing supply in our housing market. These aim to support more competition and innovation within the housebuilding industry, as well as our Net Zero housing ambitions.
Business rates revaluation 2023: the central rating list
Ministry of Housing, Communities & Local Government | 16 August 2021
This consultation seeks views on changes to the central rating list for the 2023 business rates revaluation. It covers the following areas: the current principles of the central rating list, hereditaments suitable for moving to the central rating list for the 2023 revaluation, interaction with the Business Rates Retention Scheme and next steps. The LGA response is available.
Multimillion-pound initiative to improve local roads across England
Department for Transport | 13 August 2021
Drones and 3D printing technology being explored to fix potholes while councils receive funding to improve traffic light systems to cut congestion and emissions. Additional press coverage
News
Councils to be given power to set new single Infrastructure Levy locally, says Jenrick
Inside Housing | 10 September 2021
Local authorities are to be given the power to set their own rates under the new single Infrastructure Levy that will replace Section 106, the housing secretary has said. Speaking at the Housing 2021 conference in Manchester, Robert Jenrick said he would be responding to the feedback on last year’s Planning White Paper within “weeks” and hinted at how the new Infrastructure Levy proposed in the paper might work.
Districts call for government intervention over supported housing
LocalGov | 3 September 2021
Three out of five district councils fear they do not have enough good quality supported housing for the next five years, a new survey has found. Councils currently lack the tools to compel supported housing providers to work with them. The DCN called on the Government to intervene to force these providers to improve.
Council chiefs warn rural communities risk missing out on vital services
LocalGov | 31 August 2021
Rural communities are at risk of missing out on vital services due to a surge in the number of barns being converted into homes, local authority leaders have warned. Permitted Development Rights allow developers to bypass the planning system, which means that developers are not required to contribute towards local infrastructure, such as roads, schools and GP surgeries, nor do they have to provide any affordable housing.
Shorter business rates valuation cycle ‘positive’ if other reforms come alongside it
Public Finance | 27 August 2021
Introducing a time limit on appeals and a requirement for businesses to provide more information to speed up the process would make three-yearly valuations “viable”, according to the Local Government Association. In its response to a government consultation on a three-year business rates cycle, the LGA also said that while property “continues to provide a good basis for a local tax on business”, the tax cannot solve council funding problems alone.
Governance & Reorganisation
Permission granted for legal challenge to ‘Levelling-Up Fund’ formula
The High Court has granted a two-day hearing to determine whether there should be a judicial review of the way funds are allocated through what has been described as the centrepiece of the Government’s levelling-up agenda, the £4.8bn ‘Levelling-Up Fund’. The fund is billed as being designed to invest in a range of high value local investment priorities, including town centre and high street regeneration, local transport schemes and maintaining and regenerating cultural, heritage and civic assets.
A challenge to the way in which different local authority areas are prioritised for support has been brought by the Good Law Project who allege that the Government is using the fund as a way to further the Conservative party agenda.
The Government’s Policy Paper, ‘Levelling Up Fund: Prioritisation of places methodology note’, sets out that local authorities are placed into categories 1, 2 or 3, depending on their identified level of need, with category 1 representing places deemed most in need of investment through the fund. Category 1 areas will be eligible to receive targeted capacity funding to ‘support them in preparing high-quality bids’.
The Good Law Project accuse the Government of engaging in ‘pork barrel politics’ with the fund. They point out that 22 of 26 areas receiving funds from the Towns Fund are represented by Conservative MPs, and that Barnsley - which in 2019 was ranked as the 38th most deprived area in England - does not appear in Category 1, whereas Richmondshire, represented in Parliament by the Chancellor and ranked in 2019 as the 256th most deprived area in England, is a Category 1 area.
When granting the Project’s application for permission to apply for judicial review, Mr Justice Bourne stated: ‘the grounds are arguable, subject to the observation that the existence of a free-standing principle of a duty of transparency (or good administration) upon which a judicial review challenge can be founded is at best debatable. However, it is appropriate for the issues about transparency to be explored at the substantive hearing along with the other grounds’.
The application hearing is sure to include some interesting arguments, particularly in relation to the existence or otherwise of any duty of transparency upon which a judicial review application can be founded. The Government maintains that the way in which areas are categorised is both fully transparent and contained within the methodology note mentioned above. Should the Court find in favour of the Project, (which it should be noted is some distance away in terms of both time and legal argument), the Government may ultimately be compelled to redesign the categorisation formula before making any decisions in relation to the allocation of funding.
Legislation
Legislative Scrutiny: Elections Bill
Joint Committee on Human Rights | 2 September 2021
A report on the impact of the Elections Bill which focuses particularly on the requirement to provide photo ID when voting. The Committee recommends that the Government should conduct further research and produce plans that will outline how they will mitigate the discriminatory impact of the photo ID requirement, as well as produce the draft regulations that will govern the Voter Card scheme. View press coverage.
The House of Commons Library has also released a research briefing on the subject, including pilot schemes and case studies. The second reading of the Bill was held on 7 September. The House of Commons Library has produced a helpful guide to the Bill.
Court Cases
High Court grants permission for ‘Levelling Up Fund’ legal challenge
LocalGov | 24 August 2021
The High Court has granted permission for a legal challenge to the ‘Levelling Up Fund’ after campaigners accused the Government of using the fund for political purposes. The Good Law Project argues that the Government is using the £4.8bn fund to funnel money into regions and towns of political benefit to the Conservative Party. See also: Over a third of the most deprived areas will not benefit from Levelling Up Fund | LocalGov
Publications & Guidance
Councils' role in supporting the exports industry
Local Government Association | 7 September 2021
The exporting industry is complex and difficult to navigate. The Local Government Association has therefore commissioned this guide to provide a resource to councils looking to support local firms to increase their level of exports.
Build Back Better: Our Plan for Health and Social Care
HM Government | 7 September 2021
The Government will ensure local authorities have access to sustainable funding for core budgets at the Spending Review. We expect demographic and unit cost pressures will be met through Council Tax, social care precept, and long-term efficiencies; the overall level of Local Government funding, including Council Tax and social care precept, will be determined in the round at the Spending Review in the Commission on Funding of Care and Support, 2011. Fairer Care Funding. The Report of the Commission on Funding of Care and Support. We will invest £5.4bln in adult social care over the next three years to deliver the funding and system reform commitments set out in this document. View press coverage.
Unitary authorities: the larger local government becomes, the greater the damage to local democracy
London School of Economics British Politics and Policy | 6 September 2021
With four new unitary councils looming, Steve Leach and Colin Copus write that the process of replacing existing councils with a single unitary authority is founded on two assumptions: that ‘bigger is better’ for local government; and that unitary councils are better than a two-tier county/district system. They argue both these assumptions are erroneous.
‘Operation Warm Welcome’ underway to support Afghan arrivals in the UK
Home Office & Ministry of Housing, Communities and Local Government | 1 September 2021
A significant cross-government effort is underway, dubbed ‘Operation Warm Welcome’, to ensure Afghans arriving in the UK receive the vital support they need to rebuild their lives, find work, pursue education and integrate into their local communities. The support for Afghan arrivals follows the largest and most complex evacuation in living memory. It includes £5m funding for councils in England, Wales and Scotland to support Afghans coming to the UK via the ARAP scheme and provide a top up to help meet the costs of renting properties, and the Communities Secretary will convene a roundtable with council leaders from across the country in the coming days. Read the Local Government Association briefing.
News
Levelling up too focused on infrastructure, claims report
The MJ | 14 September 2021
Ministers’ ‘levelling up’ agenda is too focused on new infrastructure projects at the expense of improving key public services, councils representing English towns and cities have warned. The Special Interest Group of Metropolitan Local Authorities also says the project is beset by a ‘Whitehall knows best’ philosophy and a lack of focus on the areas actually most in need of ‘levelling up’.
North of England may get three more mayoralties in devolution agenda
The Guardian | 12 September 2021
New mayoralties could be created in Cumbria, North Yorkshire and East Riding of Yorkshire, the communities secretary has said, as he announced a renewed commitment to “widen and deepen” the devolution agenda. Speaking to the Financial Times, Robert Jenrick reaffirmed the government’s “full devolution” approach, outlined in the Conservatives’ 2019 manifesto, despite concerns Boris Johnson had soured on the idea after a high-profile spat with Andy Burnham, Labour Greater Manchester mayor, over coronavirus last year.
Devolution 'exactly the right thing to do' says Essex leader
Local Government Chronicle | 6 September 2021
The leader of Essex County Council has written to all the district councils in the county to discuss possibilities for a possible devolution deal. Kevin Bentley has said that while his authority had not submitted an expression of interest in a devolution deal after the government asked councils to send through proposals for 'county deals' in order to access more powers. However, it will now commence discussions with its districts about options to better improve the delivery of services and experience of the county's residents.
Cabinet dispute over social care tax rises
Public Finance | 3 September 2021
Reports emerged on 3 September that health secretary Sajid Javid has pushed for a 2% increase to national insurance contributions to pay for care. However, five cabinet ministers will oppose any national insurance rise, warning that the young should not shoulder the cost of social care for older people, according to the Times.
Councils ‘reluctant’ to return to face to face meetings
Local Government Chronicle | 2 September 2021
Many councils are reluctant to return to holding face to face meetings, amid growing scepticism that the government is inclined to make the legislative changes required to enable remote meetings to take place in the future.
South Essex districts discuss formalising partnership
Local Government Chronicle | 31 August 2021
The Association of South Essex Local Authorities (Asela) is considering formalising its structure to become a joint committee. Asela is a partnership between six councils in south Essex – the unitaries Southend-on-Sea Borough Coouncil and Thurrock Council; Brentwood, Castle Point and Basildon Borough Councils; and Rochford District Council – as well as Essex County Council. In January 2018, the councils agreed to work together and signed a memorandum of understanding.
Somerset districts accept unitary plans
Local Government Chronicle | 26 August 2021
District councils in Somerset have confirmed that they will not challenge the communities secretary’s decision to reorganise the county into a single unitary. Earlier this month, South Somerset District Council had told LGC that it was waiting for a meeting with the Ministry of Housing, Communities & Local Government before taking a decision on whether to proceed with legal action.
£3bn gap looms for councils
LocalGov | 24 August 2021
Councils in England, Wales and Scotland are grappling with huge budget deficits totalling more than £3bn for the next financial year, according to research published by trade union Unison today. The union warned the shortfall in 2022-23 would lead to ‘huge service and staff cuts’ at local authorities across Britain unless the Government urgently found extra money.
County areas chase devo dream
LocalGov | 17 August 2021
County areas are lining up to strike one of the first tranche of devolution deals. Far more authorities than expected are understood to have written to local government secretary Robert Jenrick ahead of the deadline to express an interest.
Contract Management
The relationship between contractual termination and repudiatory breach
Digital Capital Ltd v Genesis Mining Iceland EHF [2021] EWHC 2462 (Comm)
This case relates to a dispute arising from an agreement for the development and maintenance of a cryptocurrency software platform that would allow for the use of crypto assets (e.g. Bitcoin) in ordinary commercial transactions, through conversion of the relevant crypto tokens into traditional currency such as dollars or sterling. The claimant (Digital Capital Ltd) was responsible for the production of the ‘back-end’ of the software (i.e. the core banking platform) and the defendant (Genesis Mining Iceland) was responsible for the ‘front-end’ crypto platform allowing for the exchange of cryptocurrency assets.
The agreement was concluded in January 2017, with a target go-live date of July 2018. The target date was not achieved and the parties were locked in negotiations until June 2019 when the Genesis Mining Iceland sought to terminate the agreement on the basis that Digital Capital had failed to provide the services it was contractually obliged to provide. Genesis Mining argued this was a repudiatory breach (see below). They did notrely on the agreement’s termination clause (which required notice and the opportunity to remedy the breach). Digital Capital denied it was in breach, alleged that the termination was invalid and that this action constituted a repudiatory breach in itself. Digital Capital sought associated damages, primarily in the form of payment of certain invoices allegedly payable by the Genesis Mining under the agreement.
The common law gives innocent parties the option to terminate a contract on grounds of a breach so serious that it effectively renders the contract useless – this is known as ‘repudiation’ or a repudiatory breach. However, identifying a repudiatory breach of contract can be difficult. Both parties in this case claimed that the other had repudiated the agreement. A clause in the contract giving a right to terminate does not necessarily replace or exclude this right, and the word ‘termination’ can be applied equally to ending a contract under a termination clause or by accepting a repudiation. Whilst there is no set rule on what constitutes a repudiatory breach nor whether they are excluded from a given contract, there are indicative factors to assist with interpretation, including labelling a clause as a ‘condition’ of the contract (being a term whose every breach, no matter how small, triggers the right to terminate).
The contract gave a right to terminate in respect of ‘material’ breaches only (noting not all material breaches are repudiatory), the court found that the wording of the contract did not exclude the common law right to terminate for repudiatory breach of contract (including on the basis that a clause protected ‘any other right or remedy’ available to the parties in respect of a breach).
The court then considered the alleged breaches relied upon by the defendant, to determine whether a repudiatory right to terminate had arisen. Whilst Digital Capital had been in breach of the agreement, the court concluded it had not been in repudiatory breach when the notice of termination was issued, and Genesis Mining therefore did not validly terminate the agreement. Digital Capital’s claim for unpaid invoices (in the sum of £2,484,046) succeeded, with further determination of damages arising from termination to be assessed at a later date.
This case highlights the perils of relying on the common law right of repudiation and the importance of drafting termination clauses with repudiation in mind. Whilst Genesis Mining could have used its contractual termination right in respect of Digital Capital’s alleged material breaches, its downfall in this case came from a failure to follow the requirements of giving notice or allowing remedy, instead mistakenly relying on repudiation.
Legislation
Welsh Government agrees provision for Welsh contracting authorities can be made within UK Government Bill
Local Government Lawyer | 23 August 2021
The Welsh Government has agreed that provision for Welsh contracting authorities can be made through the UK Government’s procurement Bill. It said it made its decision after receiving written guarantees that this would not fetter its ability to achieve the policy outcomes it seeks through its own Social Partnership and Public Procurement (Wales) Bill. Read the Welsh Government statement
Court Cases
Coronavirus (COVID-19) PPE, CE conformity and the Sale of Goods Act 1979
Local Boy’z Ltd v Malu NV [2021] EWHC 2439 (Comm)
This case concerned the sale of two types of Chinese-manufactured facemasks by a Belgian defendant to a UK-based claimant. The claimant claimed to be entitled to reject the masks on a number of different grounds. The claimant requested summary judgment, and was partially successful, but failed because the contract had (i) not specified which regulatory regime applied to the masks, nor (ii) which party was responsible for compliance with the relevant regime. The case provides a clear illustration of the confusion caused by different applications of UK and EU law in relation to PPE.
The judgment is significant because it addresses the question of who should be responsible for ensuring compliance with EU and UK regulatory standards, and highlights the danger of failing to address the issue clearly in a written agreement at the outset.
Are we exclusive? High Court reviews key contractual principles in the context of ‘casual’ commercial relationships
Zymurgorium Ltd v Hammonds of Knutsford plc [2021] EWHC 2295 (Ch)
This case relates to a dispute arising in the context of a longstanding commercial arrangement, the terms of which had never been reduced to writing. The court considered whether an overriding agreement had been expressly entered into by the parties, as well as whether a number of terms formed part of the agreement between them, either by implication or subsequent variation (including an agreement on exclusivity, a duty to act in good faith, and a duty to use best endeavours, among others).
The case also explores the requirements for a relational contract by reference to the overriding agreement and a number of Specific Supply Agreements (SSAs), and serves as a useful reminder for parties entering commercial arrangements of the pitfalls of failing to reduce their agreement to writing. Failure to do so could cause the parties considerable headache if a relationship subsequently deteriorates or develops in a way in which the parties had not originally anticipated. Even though a contract may be implied by conduct, the case serves as a reminder of the high threshold that must be met, and particularly the importance of being able to establish a common intention.
Publications & Guidance
Procurement Policy Note 11/20: Reserving below threshold procurements
Cabinet Office | 3 September 2021
Originally published in December 2020, this procurement policy note set out the options that may be considered by Contracting Authorities when procuring contracts for goods, services and works with a value below the applicable thresholds. An update was issued on 3 September 2021 to provide additional clarification on the application of the policy for other contracting authorities, reservations by supplier location and transparency requirements. The FAQs have also been updated to reflect common questions raised by contracting authorities since the policy was published.
News
£4m trial to use street furniture to boost 5G roll out
LocalGov | 9 September 2021
Local Councils are being urged to bid for the £4m competition to make it quicker and easier for mobile companies to use roadside infrastructure to host 5G radio equipment as part of a two-year government trial.
Whilst the trial aims to enable local councils to more easily share the data mobile companies need to accelerate their roll out plans (such as location, physical dimensions, proximity to the street or access to a power source), many local councils have existing and often exclusive arrangements in relation to their street furniture/assets. These existing arrangements may have implications or place limitations on the ability to make such assets available. We would encourage a review of existing arrangements and the ability to renegotiate the terms of such arrangements prior to making commitments to make any infrastructure accessible to third parties.
English council to sell 'unsustainable' Scottish hotel
Public Finance | 2 September 2021
Mansfield District Council is set to sell a hotel it owns in Edinburgh, after the Covid-19 shutdown led to the operator saying the site was ‘unsustainable’. A council report to be discussed on Friday said: “Travelodge have advised that the contractual rent is unsustainable for their business. “Travelodge are highly likely to break their lease, and this provides the council with very little income security.”
City of London Corporation issues contract to reduce energy costs by £500,000 annually
edie | 27 August 2021
The City of London Corporation has awarded a contract to Vital Energi to carry out energy-related retrofits of iconic buildings such as the Barbican Centre and Guildhall School of Music and Drama that will save almost £500,000 each year.
Council cancels SEND transport service over safeguarding concerns | Public Finance
Public Finance | 23 August 2021
Birmingham City Council terminated its agreement with North Birmingham Travel after an urgent meeting of its cabinet, following concerns the provider had misrepresented information about Disclosure Barring Services certificates – which the company denies.
Scape names seven for £14bn construction framework
The Construction Index | 23 August 2021. Seven contractors have been chosen for a public sector construction framework that is expected to be worth £14bn to them over the next four years. Scape, a local authority owned procurement group, has chosen Kier, Morgan Sindall, Graham, Willmott Dixon, McLaughlin & Harvey, John Sisk & Son and Mace for its revamped construction framework.
Disputes & Regulatory Support
How can local councils separate regular complaints from unlawful harassment?
In Ashford Borough Council v Wilson [2021] EWHC 2542 (QB) the Court has granted an anti-harassment injunction against an individual who sent the Council numerous letters of complaint over a number of years, including “454 pieces between February 2016 and July 2020”.
The Court held that the conduct of the Defendant went beyond that permitted within the terms of the Protection From Harassment Act 1997 (“the 1997 Act”) which states that:
"1) A person must not pursue a course of conduct -
(a) which amounts to harassment of another, and
(b) which he knows or ought to know amounts to harassment of the other.”
As the 1997 Act does not contain a statutory definition of harassment, Daryl Allen QC (Sitting as a Deputy Judge of the High Court) provided an indication of when the limits of valid complaint can fall on the wrong side of the law. He highlighted the difference between “annoyance and irritation” or “oppressive or genuinely offensive” correspondence, the latter being capable of amounting to harassment under the 1997 Act.
For an example of the types of conduct which could be deemed as “oppressive or genuinely offensive”, the content in question included suggestions that a particular councillor should commit suicide, personally offensive comments about the appearance, intelligence and capabilities of employees, and unfounded allegations of professional misconduct and criminal conduct.
Given that many Councils receive complaints that may relate to legitimate concerns e.g. regarding perceptions of Council services, it is of relevance that Judge Allen stated that “A course of conduct may amount to harassment even where the defendant's initial conduct was legitimate and lawful.” The “ frequency and content of the subsequent correspondence” in this case had taken the conduct beyond that permitted by the law.
The case provides an example for Councils to consider at which point regular complaints (even those based on legitimate concerns) can become within the parameters of unlawful harassment.
Court Cases
London borough defeats judicial review challenge over introduction of low traffic neighbourhoods
Local Government Lawyer | 3 September 2021
Hackney Council has successfully defended a judicial review claim over the decision of its Cabinet in September 2020 to adopt an emergency transport plan (ETP). The claimant was particularly concerned about the proposals within the plan to introduce Low Traffic Neighbourhoods ("LTNs") as one of the suite of alternative traffic management measures included within the ETP's proposals. Read the full decision
News
Former employees convicted of fraud against council
LocalGov | 13 September 2021
Two women have been found guilty of creating a 'phantom' employee to defraud a council and a charity out of more than £40,000. Kalvinder Garcha used her position as head of corporate resources at Oadby and Wigston Borough Council to help Lynn Middleton, head of human resources, to create an employee that existed but never did any work for the council.
Bath: Councillor opposed to city's counter-terror 'ring of steel' makes appeal
BBC | 2 September 2021
A councillor opposed to the creation of a "ring of steel" around a city centre has appealed to the government's transport secretary for support. The leader of the Conservatives on Bath and North East Somerset Council has written to Grant Shapps over planned counter-terror measures in Bath.
Court of Appeal agrees to hear appeal in dispute over interpretation of ‘ordinary residence’
Local Government Lawyer | 31 August 2021
The Court of Appeal has granted the Department of Health and Social Care permission to appeal a key ruling on the issue of ‘ordinary residence’ for the purposes of s.117(3) of the Mental Health Act. The main issue in R (Worcestershire County Council) v Secretary of State for Health and Social Care was which local authority – Worcestershire or Swindon – should pay for the after-care services which had been provided to JG following her discharge from her second period of detention on 12 November 2015 and, subsequently, from hospital. Read the original decision.
Council sends planning application back to committee after parish legal threat
Local Government Lawyer | 27 August 2021
Basingstoke and Deane Borough Council is to send a full planning application for a storage and distribution warehouse near the M3 back to its Development Control Committee, after a parish council challenge wrote to challenge the legality of the decision.
High Court gives green light to legal challenge over decision by county to restructure of education system
Local Government Lawyer | 23 August 2021
Two families have been granted permission by the High Court to challenge a decision to restructure the education system in South Somerset. The joined judicial review claims relate to Somerset County Council’s decision to change its three-tier education system of first, middle and upper schools, to a two-tier model for primary and secondary schools.
Three unions head to pay ballots
The MJ | 20 August 2021
Unions have recommended members reject the pay offer tabled to local government workers as they open consultative ballots. GMB was the first to put the employers’ offer of a 1.75% pay rise to workers in England, Wales and Northern Ireland this week. The offer falls far short of the 10% asked for by GMB, Unite and Unison at the outset of negotiations.
Council serves notice on polluting landfill site
Local Government Lawyer | 20 August 2021
Newcastle-under-Lyme Borough Council has served a Statutory Nuisance Abatement Notice on a landfill site operator, requiring the organisation to abate the statutory nuisance created from a foul odour it said has been affecting residents' health and wellbeing. The notice comes as a local family has lodged a judicial review application at the High Court against the Environment Agency (EA) over its failure to force the landfill operator to reduce the emissions from the site.
High Court gives go-ahead for discrimination claim to protect teenagers in care
Article 39 | 17 August 2021
The High Court has given the go-ahead for a judicial review of secondary legislation made by the Education Secretary, Gavin Williamson, which provides that children in care in England must always live in regulated settings where they receive day-to-day care from adults – but only to the age of 15.
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