25/08/2022
LA Spotlight
Rising costs and inflationary pressures
The pandemic, Brexit, supply chain issues, Ukraine and risking demand have all contributed to an unprecedented level of cost and other pressures on local government on top of the impacts of austerity over the last decade. Inflation is going to hit existing contracts which are often linked to Autumn index rates at the same time as the cost of living crisis drives up demand for local authority support into Winter and continues to put pressure on public sector wage discussions (with further cost pressures if alternative provision has to be put in place during strikes). With new contracts, awards may have been made on one basis but suppliers now turnaround and point to substantial cost increases since bidding that make that basis unviable.
All the while central Government is in something of a hiatus whilst we wait to see the outcome of the Conservative Party leadership election. Whichever candidate wins, it is unclear what their policy is going to be (especially with promised tax cuts) and in particular what, if any, support they would offer to local government to fund inflationary and increased service demand pressures.
With that difficult picture in mind, in this Spotlight we want to focus on contracts and inflation. As we mention above, we are reaching the point in the year when many reference indices are due to be published that will then be converted into contractual indexation rates. There are some key points to consider:
- What does the contract actually say?
- Is there a right to indexation or a discretion to award?
- Is there a specific formula or index? and
- Is there a cap on the rate of indexation?
- Can you afford it in the current Budget proposals? If not, can the Budget change or is redesign of the service needed (or possible) to make savings?
- If there is a discretion, what would the impact of not awarding be on the supplier and the service they offer? Understanding the market and financial operating model here is crucial both in terms of the supplier’s operation but also whether you would be able to secure alternative provision at the same/similar (unindexed) cost.
- If there is no right to indexation or only a capped right, is the supplier seeking to renegotiate? The previous two bullet points are relevant here but there will also be a need to consider whether renegotiation would be permitted by public procurement and subsidy control law.
- If there is a permitted renegotiation, what do you need from the supplier to consider (i.e. build a reasonable (and rational) case) and agree any indexation? Do you need costs evidence (and do you already have a right to any of this information under the contract) and evidence that they have sought to mitigate?
- Are you being consistent in your approach to suppliers who are in the same situation?
At Bevan Brittan our team of commercial, public procurement and subsidy control specialists can assist local authorities in navigating through this difficult period. If you would like to discuss this further please contact: David Hutton or Alex Lawrence.
Net Zero
SFT guidance for pathways to net zero for assets delivered under PPP contracts
Policy and target dates for achieving net zero (NZ) are fast approaching and participants within the PPP sector are beginning to consider ways in which the targets can be met for assets delivered through existing PPP contracts.
In June 2022, the Scottish Futures Trust (SFT) published Guidance on pathways to net zero for assets delivered under PPP contracts to assist Scottish public sector PPP practitioners, private sector providers and investors by providing direction on the adoption of a systematic approach in order to deliver NZ in the PPP sector. There are around 120 PPP projects across multiple sectors within the current Scottish Public Estate and the Scottish Government has a committed target for all Scotland’s Public Sector buildings achieving NZ emissions by 2045 (and for all publicly owned buildings to meet zero emission heating requirements by 2038 (compared to the UK Government’s commitment to achieve NZ emissions by 2050).
The guidance provides both technical and non-technical guidance (including case studies) and focuses on improvements which can be achieved under PPP arrangements, acknowledging that “a step change in attitudes to energy use in the built environment is required” and that there are “multiple pathways which can be adopted in the net zero transition”. Setting out a decarbonisation process for operational PPP projects and assets (from Pre Stage 1 (Preparation/Develop NZ governance structure) through to stage 5 (implementation, measurement and verification)), the guidance further outlines how measures should be implemented within the contract lifetimes, including as part of the expiry and handback process.
Whilst the guidance does focus on the change provisions of PPP projects and how they can be utilised to achieve changes (including in respect of NZ), the guidance also emphasises that establishing a partnership approach between all relevant parties as soon as possible to agree a “collective approach to NZ” is a key factor.
Although this guidance has been published by the SFT, the issues raised and resulting guidance is of relevance to the many operational PPP projects (including the 600+ existing PFI projects) across all sectors in England & Wales.
If you would like to discuss any aspect of the SFT’s advice or net zero/energy efficiency on PFI/PPP projects in more detail, please get in touch with one of our Net Zero legal and commercial specialists, Olivia Blessington, Nadeem Arshad or Nathan Bradberry.
Publications & Guidance
House of Commons | 9 August 2022
Household energy bills increased by 54% in April 2022, a record increase, and are likely to rise substantially again in October. This briefing looks at how and why prices have changed.
Energy Bills Support Scheme: Government policy and FAQs
House of Commons | 9 August 2022
The Government’s Energy Bills Support Scheme will provide a £400 discount on electricity bills to help households with the rising cost of energy. This briefing summarises the policy, first announced in February and updated in May and July 2022, as well as the reaction to it. It also provides information on eligibility for the scheme and answers to frequently asked questions.
Empowering communities – what works and why it matters
The MJ | 1 August 2022
A report published in Groundwork’s 40th year sets out what works in helping to empower communities to take action on poverty and the environment. Graham Duxbury highlights the key findings. Read the report here: Supporting community action will help us level up and tackle the climate and nature emergencies – here’s how - Groundwork
Air quality: policies, proposals and concerns
House of Commons Library | 27 July 2022
A House of Commons Library Briefing Paper on air quality in the UK, including current law and policy, trends in air pollutants and information on the UK Government and devolved Governments' plans and ambitions to improve air quality.
Hard to decarbonise social homes
Local Government Association | 20 July 2022
This report examines the decarbonisation of social homes, looks at why some are harder to decarbonise than others and explores the changes required to make hard to treat social homes easier to decarbonise.
Department for Environment, Food & Rural Affairs | 20 July 2022
George Eustace, the Secretary of State for Environment, Food and Rural Affairs, has responded to the first monitoring report from the Office for Environmental Protection (OEP) on the government’s 25 Year Environment Plan.
25 Year Environment Plan: progress reports
Department for Environment, Food & Rural Affairs | 20 July 2022
The Department for Environment, Food & Rural Affairs (Defra) has published the 25 Year Environment Plan progress report for the period April 2021–March 2022. The report sets out the progress that the Government has made during this period in improving the environment through its 25 Year Environment Plan and indicator framework.
The Local Delivery of Clean Heat
Regen | 19 July 2022
Heat decarbonisation is the biggest challenge on the path to net zero. But it also has the potential to bring the most immediate benefits – from warmer homes and healthier communities to independence from global fossil fuels and protection from rising gas prices. This paper provides a framework for how national and local government can best work together to take the most cost-effective, place-based approach to addressing this challenge.
Digitalising our energy system for net zero: strategy and action plan
Department for Business, Energy & Industrial Strategy | 19 July 2022
BEIS, Ofgem and Innovate UK have published a joint response to the Energy Digitalisation Taskforce’s report, highlighting progress and setting out next steps for future work.
Decarbonising transport: one-year-on review
Department for Transport | 14 July 2022
Report reviewing Decarbonising transport: a better, greener Britain in the 12 months since its publication and outlining upcoming milestones. The report summarises:
- what has been achieved to reduce emissions from transport and
- next steps the Government will take to support decarbonisation of the transport sector.
City region decarbonisation 'lacks cohesion'
Local Gov | 13 July 2022
A more cohesive approach to accelerating the uptake of zero emission vehicles across the UK’s city regions is vital if decarbonisation targets are to be achieved, a new report argues. The report, commissioned by the Urban Transport Group (UTG) and Connected Places Catapult and prepared by Arup, suggests that a fragmented approach to decarbonising urban vehicle fleets is putting city-wide and national targets at risk.
Local Net Zero Delivery Progress Reports 2022
UK100 | 12 July 2022
UK100's Local Net Zero Delivery series of reports aim to assess local government progress against the UK's Net Zero targets. The eight sector-based reports from UK100 complement the latest Climate Change Committee report to Parliament on national Net Zero progress but focus on local and regional action. They find that local government ambition is not being mirrored or adequately enabled at the national level, and urgent attention is needed to support local leaders to deliver Net Zero. The progress reports are listed below:
Key organisations failing to tackle threat of cascading climate risks
Climate Change Committee | 11 July 2022
Many of the UK’s critical energy, water, digital and transport providers are struggling to take account of the climate-related risks to connected infrastructure systems which could lead to cascading failures in service provision if not addressed, the Climate Change Committee (CCC) says. That’s one of the findings of a new independent report by the CCC for the UK Government, assessing submissions from 90 organisations on the actions they are taking to tackle climate-related risks to their operations.
UK local authority and regional greenhouse gas emissions national statistics
Department for Business, Energy & Industrial Strategy | 30 June 2022
BEIS has published national statistics on local authority and regional greenhouse gas emissions across the UK. The statistics provide a reliable and consistent breakdown of greenhouse gas emissions using nationally available datasets dating back to 2005 that cover territorial emissions of carbon dioxide, methane and nitrous oxide. The estimates will assist local authorities, non-profit organisations, academia and government departments to track their greenhouse gas emissions trends over time and measure progress against any targets they have.
Cases
Government’s climate strategy deemed "unlawful" in historic ruling
Friends of the Earth | 18 July 2022
In a judgment published on the 18 July 2022– amid the Met Office’s first ever red alert for extreme heat – Mr Justice Holgate finds that the Net Zero Strategy, which sets out plans to decarbonise the economy, doesn’t meet the Government’s obligations under the Climate Change Act to produce detailed climate policies that show how the UK’s legally-binding carbon budgets will be met. It also finds that parliament and the public were effectively kept in the dark about a shortfall in meeting a key target to cut emissions. For the full judgement, click here: Friends of the Earth Ltd & Ors, R (On the Application Of) v Secretary of State for Business, Energy and Industrial Strategy [2022] EWHC 1841 (Admin) (18 July 2022)
News
Government to face legal challenge over Sizewell C’s nature and water impact
edie | 8 August 2022
Campaigners supported by Friends of the Earth have begun a legal challenge against the Government’s decision to approve the Sizewell C nuclear power plant, arguing that its potential nature impacts have not been properly considered.
South Cambridgeshire District and Cambridge City Council: Zero carbon fleet drive
Local Government Association | 5 August 2022
As part of their fleet decarbonisation drive, the shared service between South Cambridgeshire District and Cambridge City Council took delivery of a fully electric Faun Zoeller E-Rotopress in July 2022. The councils are working to replace bin lorries with electric or alternative fuel vehicles as existing diesel trucks come to the end of their working lives.
Government needs ‘cohesive strategy’ to help council EV roll-out
Local Gov | 3 August 2022
Only 14% of local authorities in the UK have a dedicated resource for implementing a new electric vehicle (EV) infrastructure, EV charging experts warn. A new study from Liberty Charge shows local strategies are falling behind Government ambitions with only 10% (30,290) of the 300,000 charge points wanted by Government so far installed.
Further taxpayer savings with green upgrades for public buildings
Department for Business, Energy & Industrial Strategy | 2 August 2022
Up to £635m of funding will be made available to public sector organisations so they can install low carbon heating and energy efficiency measures.
Area energy planning – it’s not just another modelling feast
Local Gov | 1 August 2022
The race to decarbonise is well and truly on, with both the ticking climate clock and rising energy bills placing additional pressures on national and local government businesses, and the public alike.
£400 energy bills discount to support households this winter
Department for Business, Energy & Industrial Strategy | 29 July 2022
Millions of households across Great Britain will receive non-repayable discounts on their energy bills this winter, as the UK government sets out further details of the Energy Bills Support Scheme.
£54m heat network funding helps households ditch fossil fuels
Department for Business, Energy & Industrial Strategy | 29 July 2022
Nearly 28,000 homes and businesses will be shielded from costly fossil fuels as the Government awards over £54m to 4 heat network projects in England.
£7m fund for local action to cut air pollution
Department for Environment, Food & Rural Affairs | 26 July 2022
New round of Air Quality Grants for local authorities opens to benefit communities and reduce the impact of polluted air on people's health.
Local Government Lawyer | 22 July 2022
Developers will be able to purchase 'nutrient credits' that will discharge the requirement to provide nutrient pollution mitigation in order to be granted planning permission under new Government plans. Alongside the credit scheme, the Government has also announced a new legal duty on water companies in England to upgrade wastewater treatment works by 2030 in 'nutrient neutrality' areas.
Scrap industry calls for batteries recycling scheme to prevent fires
MRW | 22 July 2022
British Metals Recycling Association (BMRA) president Susie Burrage has called for a national scheme to recycle equipment containing lithium-ion batteries following an ‘epidemic’ of fires breaking out at HMRCs.
Environment Agency calls for prison sentences and much higher fines in water pollution cases
Local Government Lawyer | 21 July 2022
Prison sentences should be handed out to chief executives and board members of water and sewage companies, and much higher fines should be imposed, for serious and deliberate pollution incidents in response to declining standards, the Environment Agency has said.
Mobilising local net zero investments
UKRI | 21 July 2022
Local authorities have a critical role in delivering the UK’s transition to net-zero by 2050, but massive investment will be required. This will require large amounts of private capital to be mobilised alongside public finance. But what are the issues that will help or hinder the flow of investment needed? This report is the first phase of a joint project by Innovate UK and the Green Finance Institute. It is designed to help policymakers, local authorities and investors find some of the answers to unlocking the finance that will be needed on the local net zero journey.
Government approves Sizewell C nuclear plant
Local Gov | 21 July 2022
The Government has given the go-ahead for the Sizewell C nuclear power station in Suffolk.
Government sets out plan to reduce water pollution
Department for Environment, Food & Rural Affairs | 20 July 2022
New plans to help safeguard England’s precious protected sites by driving down nutrient pollution and allowing for the construction of sustainable new homes for families across the country were announced by the Government on the 20 July 2022.
Electric motorbikes race onto UK roads through transport decarbonisation measures
Department for Transport | 14 July 2022
Electric motorbikes and mopeds will soon become the norm on UK roads as the Government sets out a range of measures to mark a year of success since the Transport Decarbonisation Plan was introduced.
Energy Bill, Second Reading House of Lords, 19 July 2022
Local Government Association | 14 July 2022
The LGA support the Government’s ambition to protect consumers from unfair pricing by enabling an extension of the price cap beyond 2023.
Nearly half of local authorities yet to set a date for electrifying fleets
Local Gov | 14 July 2022
Almost half (46%) of local authorities in England have yet to set a date for when they expect their vehicles to be electric, new research has found. A freedom of information request by Geotab found a fifth of local authorities have yet to add a single EV to their fleet, with only four having fleets with over 20% EVs.
Implement ‘emergency’ home energy efficiency plan, energy professionals urge UK Government
edie | 13 July 2022
Energy professionals are calling on the UK Government to launch an “urgent and enduring” energy efficiency programme in the face of the price crisis, with 70% believing that energy efficiency policy has had no positive impact within the past 12 months.
'Ella's law' codifying human right to clean air has second reading in parliament
AirQualityNews | 8 July 2022
A new bill aiming to limit air pollution and enshrine the human right to clean air has had its second reading in the House of Lords. The legislation, brought in by Green party peer Baroness Jenny Jones, was voted top of the ballot for private member’s bills.
Delivering Value
Announcing our new Pension Points Publication
We are pleased to announce the first edition of Pensions Points, a quarterly guide to key pension issues.
In our first edition, we look at:
- Consolidation of the Regulators Codes of Practice into a single code.
- The impending arrival of pensions dashboards.
- ESG Investing and the need for due diligence.
- McCloud Are We Nearly There Yet?
- An Employment Tribunal case that threatens one of the key age discrimination exemptions for Pension schemes.
- An update on one of the Last quarters more interesting Pensions Ombudsman’s determinations.
If you would like any more information in relation to any of these issues or any other pensions related matter please contact Nigel Bolton, Philip Woolham or Lyndsay Mair.
Publications & Guidance
Flexible use of capital receipts for transformation projects: letter to council leaders
Department for Levelling Up, Housing and Communities | 2 August 2022
This letter sets out the updated direction and statutory guidance to extend the freedom for local authorities to use eligible capital receipts to fund the revenue costs of projects that deliver ongoing savings or improved efficiency.
System on a cliff edge: addressing challenges in social care capacity
NHS Confederation | 28 July 2022
Government urged to take action on the social care workforce crisis or risk putting the care and safety of patients in the NHS in jeopardy. Find LGA’s response here: LGA responds to NHS Confederation report on social care | Local Government Association
Reforming children’s homes: a policy plan of action
The Children's Commissioner's Office | 28 July 2022
Last year, nearly 6,000 young people in care responded to The Big Ask survey about their own experiences of the care system, apprehensions about and ambitions for the future, and outlook on life. In response to these findings, in January my office produced a report which laid out some of the fundamental reforms required across the whole care sector in order to deliver for children and young people.
Must Know: Children's services
Local Government Association | 27 July 2022
Is your council doing all it can to improve outcomes for children and young people? This document has been shaped by chief executives who are either former directors of children’s services or for other reasons have been closely associated with leading improvement journeys in council children’s services.
Ofsted: Concerns over damaging impact of staff shortages on children’s social
Ofsted | 27 July 2022
Ofsted has published a report on the ongoing impact of the Covid-19 pandemic on children’s social care, drawing on evidence from inspections, focus groups and interviews with inspectors. Read ‘Children’s social care 2022: recovering from the COVID-19 pandemic’.
Ombudsman annual review of complaints: the power to change
Local Government and Social Care Ombudsman | 27 July 2022
As it increasingly focuses on making wide-ranging recommendations to better council services, the Local Government and Social Care Ombudsman has directed more improvements to local councils in the past year than ever before. The Ombudsman’s annual review of complaints gives a concise overview of the state of local government complaints over the past year.
How council library services can support children and families in the earliest years
Local Government Association | 26 July 2022
In the spring of 2022, the Local Government Association commissioned consultant peers to review library services in eight councils, specifically with regard to how they worked to enhance the local early years offer and, in particular, support for speech, language and communication development.
Expert Panel’s report rates government overall progress ‘inadequate’ on key workforce commitments
UK Parliament | 25 July 2022
The evaluation by the panel of independent experts considered how the Government had progressed overall against seven commitments it has made in three policy areas across the NHS and social care: planning for the workforce; building a skilled workforce and wellbeing at work, including reducing high rates of bullying in the NHS. Read the report here: Expert Panel: evaluation of Government’s commitments in the area of the health and social care workforce in England
Care and support and homelessness: Top tips on the role of adult social care
Local Government Association | 20 July 2022
These top tips, developed as part of the LGA and ADASS’s work with the Shared Outcomes Fund, seeks to support directors of adult social services and their teams, focusing on the role of social care in supporting people experiencing and recovering from homelessness. It provides top tips under six themes which have been identified as enablers for achieving better outcomes for this cohort, and was co-produced with partner organisations listed in the appendix.
Performance management guide for councillors
Local Government Association | 19 July 2022
This guide contains ideas, tools and approaches to help councillors manage performance effectively, in collaboration with local authority officers. The guidance is suitable for councillors in any role and provides an overview of performance management and councillors' role in it.
News
Adult social care charging reform: distribution of funding 2023 to 2024
Department of Health and Social Care | 8 August 2022
The Government is introducing a new adult social care charging framework from October 2023. This consultation seeks views on proposals for distributing funding to support the first year of delivery of adult social care charging reform in 2023 to 2024.
Local Government Association | 6 August 2022
Over 4,500 primary school classes worth of homeless children are spending the summer holidays in temporary accommodation amid a national shortage of affordable housing, the Local Government Association warns.
Evidence of immediate pressures to social care growing
Local Government Association | 5 August 2022
Councils are extremely concerned about the current pressures facing social care and the capacity and financial resources required to deliver the Government’s reform agenda.
Capital borrowing falls by a fifth in two years, data reveals
Local Gov | 2 August 2022
Councils’ prudential borrowing for capital expenditure has fallen 22% in two years, official data confirmed. The latest local government finance statistical release from the Department for Levelling Up, Housing & Communities (DLUHC) revealed local authorities borrowed £9.3bn last year to fund capital projects – compared with £10.5bn the previous year and a record £12bn in 2019/20.
Districts to lobby over inflation pressures
The MJ | 2 August 2022
District councils are gathering evidence on the impact of inflation to aid their lobbying efforts, The MJ understands. A survey has been carried out by the District Councils’ Network (DCN) on inflationary pressures to prepare for the next finance settlement or any potential budget from the incoming Prime Minister.
£368m fund to improve youth services in underserved areas opens for bids
Department for Digital, Culture, Media & Sport | 1 August 2022
The Youth Investment Fund, designed to create, improve and expand local youth facilities and services, has opened for bids from 45 local authorities and more than 600 district wards in some of the most deprived areas in England. It will provide funding to build or refurbish up to 300 youth facilities over the next 3 years, providing safe spaces in which young people can socialise and participate in a wide range of activities, including those designed to help support them into employment.
Unison legal challenge over use of agency staff
The MJ | 1 August 2022
New regulations allowing town halls to use agency staff to cover strikes are based on an old consultation ditched as ‘not fit for purpose’ by an official watchdog, Unison has warned.
County Councils Network | 29 July 2022
Councils in England have seen their deficits in special educational needs (SEN) top a record £2.4bn this year, as local authority leaders warn the Government’s proposed reforms will not address this substantive funding black hole.
15 million households have received £150 cost of living council tax rebate
Department for Levelling Up, Housing and Communities | 28 July 2022
Nearly 80% of eligible households received the Government’s £150 council tax rebate in the first 3 months to help with the cost of living, published figures show.
Reserves drop by £8bn as councils brace for service cuts
Local Government Chronicle | 26 July 2022
The levels of reserves held by councils dropped by £8bn in the last financial year, with councils now planning budgetary cuts to some services to shore up their positions.
‘Jobs and services will be at risk’ to balance budgets after pay increases
Local Government Chronicle | 26 July 2022
Pay increases will put “jobs and services will be at risk” as councils try to balance budgets, the National Employers for Local Government Services has warned the Government.
Council employees’ pay offer announced
Local Government Association | 25 July 2022
“Council employees have been offered a pay increase of £1,925 from 1 April 2022. For the lowest paid (currently earning £18,333 per annum), the offer equates to an increase of 10.5 per cent."
Number of nurses in adult social care drops by further 4.5%
Local Government Chronicle | 25 July 2022
The number of nurses working in the adult social care sector in England fell by 4.5% in the last year, annual figures published by Skills for Care have shown.
Truss and Sunak promise councillors more funding for adult social care
Local Government Chronicle | 22 July 2022
Conservative party leadership hopefuls Liz Truss and Rishi Sunak have pledged to make more funding available for adult social care if they become the next prime minister during a hustings with councillors yesterday. Sources present at the event have told LGC Ms Truss made the pledge despite also promising to scrap the recently introduced national insurance rise designed to raise £12bn a year for health and social care over the next three years.
Number of children waiting for secure children’s home place doubles in a year
Local Government Association | 22 July 2022
The number of children in England waiting for a place in a secure children’s home (SCH) has doubled in a year, new figures show, underlining the urgent need for the Government to tackle the severe lack of provision that supports some of the most vulnerable young people in the country.
Health security agency may probe council COVID spending
The MJ | 20 July 2022
More than 200 councils have been scolded for failing to account for their spending of Government funding given to help them deal with COVID outbreaks.
Early intervention cuts trigger crisis interventions
The MJ | 19 July 2022
Councils, young people and families are trapped in a ‘vicious cycle’ due to the halving of investment in early intervention over the last decade, the largest children’s charities have warned.
Rise in care providers leaving market heightens fears for winter
Local Government Chronicle | 19 July 2022
Workforce pressures and increases in demand that have not been matched with enough funding mean social care directors have “never been more concerned” about the winter ahead, their representative body has warned.
Social care faces 'most challenging year'
The MJ | 19 July 2022
Social care is anticipating the most challenging year the sector has ever faced, according to a new survey. The Association of Directors of Adult Social Services’ (ADASS) spring survey found inflation and a labour market crisis were expected to add to long-term pressures caused by austerity and the COVID-19 pandemic.
Adult social care charging reform: care account functionality technical specification
Department of Health and Social Care | 13 July 2022
Technical specification and associated documents for individual care accounts, allowing local authorities to monitor a person's progress towards the lifetime cap on care costs.
Operational guidance to implement a lifetime cap on care costs
Department of Health and Social Care | 7 July 2022
From 4 March to 1 April 2022, the Government carried out a public consultation seeking views on draft statutory guidance setting out how a cap on care costs would operate in practice. The responses to the consultation have helped to refine the guidance. They will also help the Government understand how it can support local authorities as they prepare to implement the charging reforms from October 2023.
UK Parliament | 7 July 2022
System-wide failings are resulting in looked-after children receiving inadequate and 'unacceptable' education. Just 7.2% of looked-after children achieved the grade 5 ‘good pass’ threshold in English and mathematics GCSEs, compared to 40.1% of non-looked-after children; across the board, children in residential care at age 16 scored over six grades less at GCSE than those in kinship or foster care. Read the full report here: Educational poverty: how children in residential care have been let down and what to do about it.
Place & Growth
Economic Crime (Transparency and Enforcement) Act 2022 – what you need to know
On 1 August 2022 the register for overseas entities (ROE) created under the Economic Crime (Transparency and Enforcement) Act 2022 (ECTEA 2022) came into force. The ROE is held by Companies House and requires overseas entities that own land or property in the UK to declare their beneficial owners and/or managing officers. The aim of the ROE is to create more transparency around the beneficial ownership of UK Property. On successful registration in the ROE, Companies House allocates a unique overseas entity ID (Entity ID) for each overseas entity.
In addition to the creation of the ROE, on 5 September 2022, the ECTEA 2022 will also amend the Land Registration Act 2002 which will prevent HM Land Registry (HMLR) from registering an overseas entity as a proprietor of a Qualifying Estate (meaning a freehold estate in land, or a leasehold estate granted for a term of more than seven years from the date of grant) unless the overseas entity has first obtained an Entity ID. The amendments will also include changes to some of the HMLR’s application forms, transfers and prescribed clauses for leases (although it will be possible to use the existing HMLR forms for 15 months). Further guidance from HMLR can be found in Practice Guide 78: overseas entities. The amendments will also affect property currently owned by overseas entries if registered pursuant to an application made after 1 January 1999.
The ECTEA 2022 provides a transitional period beginning on 1 August 2022 and ending on 31 January 2023 during which overseas entities can dispose of their property without having a valid Entity ID, although section 42 of the ECTEA 2022 provides for details of the disposition and beneficial ownership of the overseas entity to be given to Companies House.
When registering a relevant transaction (after the transitional period) an Entity ID must be provided in the application to register the transaction at HMLR. For disposals by an overseas entity the Entity ID must be valid at the time of the disposition. If a valid Entity ID is not produced on registration (or the overseas entity cannot rely on a permitted exception) the application will be rejected and the purchaser will not be able to register their legal interest in the property.
The Law Society have provided an Interim Note covering the ROE and they have identified a number of potential issues for those conducting property transactions with an overseas entity including:
- the overseas entity not being able to obtain the Entity ID from the ROE, which means they won’t be able to register their interest at HM Land Registry so the seller remains the legal owner;
- a restriction may appear on the title register after exchange, if the completion date falls after the transitional period ends in January 2023, registration of the transaction will not be possible without compliance with the restriction;
- if the seller transfers the property to the buyer in breach of the ECTEA 2022 (where the seller is an overseas entity not registered in the ROE) then this is a criminal offence by the seller and the completion monies may be the proceeds of crime.
Going forward we expect to see increasing use of express provisions in contracts where one party is an overseas entity, requiring the party who is an overseas entity to comply with their registration and ongoing filing obligations, and a requirement that the overseas entity provides the other party with their Entity ID by a certain number of working days before contractual completion. This will provide a level of protection to the party who is not an overseas entity as they can treat this obligation as a pre-condition for completion.
For further help or advice on this area, please contact Rebecca Pendlebury.
Publications & Guidance
Rent setting: social housing (England)
House of Commons Library | 9 August 2022
This paper explains policy developments in relation to setting social housing rent levels in England since 2002. For five years from April 2020 rent increases are based on the Consumer Price Index +1%.
Operating principles for night shelters
Department for Levelling Up, Housing and Communities | 2 August 2022
Operating principles for commissioners and providers of night shelters for people experiencing rough sleeping.
Levelling Up Parks Fund: Prospectus
Department for Levelling Up, Housing and Communities | 1 August 2022
The £9m Levelling Up Parks Fund will improve access to quality green space in over 100 neighbourhoods across the UK.
Independent Reviewer’s report published
Housing Ombudsman | 29 July 2022
The latest report of the Ombudsman’s Independent Reviewer of Service Complaints has been published. It is part of our commitment to learning from complaints about our service and to continually improve our performance.
Making a house a home: Why policy must focus on the ownership and distribution of housing
Joseph Rowntree Foundation | 27 July 2022
This briefing sets out the argument underpinning a new area of work at JRF, around ownership and distribution of homes in the English housing market. It suggests proposals for reform, and highlights areas we want to explore.
Infrastructure and Projects Authority annual report 2022
Infrastructure and Projects Authority | 20 July 2022
The IPA annual report 2021 to 2022 supports the government’s commitment to transparency, improving the delivery of infrastructure and major projects and delivering public services effectively and efficiently. It shows the progress made on those projects included in the Government Major Project Portfolio (GMPP).
Social housing tenants’ complaints of ‘uninhabitable homes’ must be addressed
UK Parliament | 20 July 2022
The condition of some social housing in England has deteriorated so badly as to be unfit for human habitation, and social housing providers must significantly improve their complaint handling process, says the cross-party Levelling Up, Housing and Communities Committee in a report published on 22 July. Read the full report here: The Regulation of Social Housing
UK Parliament | 20 July 2022
Clive Betts, Chair of the Levelling Up, Housing and Communities (LUHC) Committee has written to Lord Harrington, Minister for Refugees, regarding the Government’s support for Ukrainian refugees and asking for an update on the Government’s progress in enabling people to switch from the family scheme to the Homes for Ukraine scheme.
Anti-social behaviour principles
Home Office | 20 July 2022
The Anti-social Behaviour Strategic Board has developed a set of principles which seek to describe a consistent approach to understanding and addressing anti-social behaviour in local communities.
UK Shared Prosperity Fund: additional information
Department for Levelling Up, Housing and Communities | 19 July 2022
It provides additional information for partners on specific areas of the Fund. This complements the information already shared through the Prospectus. This guidance should be used by lead local authorities in England, Scotland and Wales preparing an investment plan for submission to the Department for Levelling Up, Housing & Communities (DLUHC) in order to access their allocation of the UK Shared Prosperity Fund (UKSPF). This follows publication of the prospectus for the Fund on 13 April 2022.
Homes England | 15 July 2022
This guide is a technical companion to ‘Building for a Healthy Life’, which is a design assessment tool and guide for new and growing neighbourhoods. ‘Streets for a Healthy Life’ provides examples of UK streets that meet the requirements for ‘healthy streets’ set out in ‘Building for a Healthy Life’.
RSH publishes review of its 2022 social housing consumer regulation
Regulator of Social Housing | 14 July 2022
The report sets out the Regulator of Social Housing's approach to consumer regulation and includes case studies and lessons learned.
Developing workforce skills for a strong economy
National Audit Office | 13 July 2022
Government has had an enduring role in supporting workforce skills development, understanding that the market does not supply all the skills the country needs to provide goods and services and enhance productivity and competitive advantage. The funding and attention government gives to this area is continuing to grow. We examined whether government has an effective approach to enhancing workforce skills. Given its responsibilities for leading government’s approach to skills, much of our examination focused on DfE’s activities, but our work also took us into other departments which play a role in supporting skills development.
This report covers:
- the workforce skills system (Part One);
- the scale of the skills challenge that government faces (Part Two);
- government’s understanding of workforce skills needs (Part Three); and
- how well government is supporting the development of workforce skills (Part Four).
Flaws in the licensing system remain unresolved, says new Lords report
UK Parliament | 11 July 2022
This report examines the progress made by the Government in the implementation of the recommendations made by the Select Committee on the Licensing Act 2003 in its 2017 report, The Licensing Act 2003: post-legislative scrutiny.
In the Liaison Committee’s report, Review of House of Lords Investigative and Scrutiny Committees: towards a new thematic committee structure, published in July 2019, the Committee recommended that the Liaison Committee (on a case by case basis) could hold follow-up evidence sessions on a former special inquiry committee’s recommendations, followed by the publication of a report. This is the sixth occasion on which this new procedure has been utilised.
News
Call for new PM to boost role of LEPs
The MJ | 8 August 2022
The incoming Conservative Prime Minister must better support small businesses through Local Enterprise Partnerships (LEPs) if the UK is to ride the forthcoming recession, leadership candidates Liz Truss and Rishi Sunak have been warned.
One Public Estate: Brownfield Land Release Fund (BLRF2) July 2022
Local Government Association | 4 August 2022
At the Spending Review 2021, the Chancellor announced a £1.8bn package of investment to regenerate communities and level-up the country, unlocking new homes on derelict and underused brownfield land. Up to £180m Brownfield Land Release Fund (BLRF2) capital grant funding is available to all constituent English councils over a three-year period to support the release of council-owned brownfield land for housing. There will be at least 3 assessment points where applications for requests for BLRF2 funding will be open between 2022 – 2025. The first assessment point is now open for applications for funding with up to £40m available.
£6m funding to improve housing and support for vulnerable tenants
Department for Levelling Up, Housing and Communities | 3 August 2022
Vulnerable tenants living in supported housing with little support will see significant improvements as councils are given funding to drive up standards.
£6bn in Right to Buy discounts threaten future of scheme
Local Government Association | 1 August 2022
Almost £6b has been given out in discounts through the Right to Buy (RTB) scheme since the size of the discount was increased in 2012, new analysis by the Local Government Association reveals.
Over 100 new and revamped parks to level up towns and cities across the UK
Department for Levelling Up, Housing and Communities | 1 August 2022
The Levelling Up Parks Fund will create new and improved parks in urban areas, helping communities to come together and enjoy the outdoors.
16 faith groups to share £1.3m ‘New Deal’ fund to help support communities
Department for Levelling Up, Housing and Communities | 29 July 2022
Sixteen faith-based groups working with the most vulnerable people in local communities will receive a boost to support their work through the government’s £1.3m Faith New Deal pilot scheme. The groups, which include Christian, Jewish and interfaith organisations, will work in partnership with councils, schools, police, health providers and voluntary groups to develop innovative interventions to tackle social issues affecting those in most need of support.
Supply of accessible homes to receive vital boost
Department for Levelling Up, Housing and Communities | 29 July 2022
New homes will be more accessible for older and disabled people as the Government confirms plans to raise the accessibility standard following full consultation of proposals. The raising accessibility standards for new homes consultation proposed staying with the existing framework for accessible housing, reconsidering the way existing standards are used or raising the minimum standard. We are now committing to raising the minimum standard, giving people the dignity and security they deserve in their homes.
Community Renewal Fund recipients get extra time after delays
Local Government Chronicle | 29 July 2022
The deadline for councils to spend funding received under the Community Renewal Fund has been extended by six months, the Department for Levelling Up, Housing & Communities has confirmed.
Record high rents and bills ‘tipping thousands’ into homelessness
Local Gov | 28 July 2022
Homelessness in England increased by 11% over the first three months of 2022 due to a combination of high private rents and rocketing household bills, homelessness charity warns.
Leaseholders protected from unfair bills to make homes safe
Department for Levelling Up, Housing and Communities | 28 July 2022
More leaseholders in high-rise homes will be spared unfair bills for building safety costs as the government’s £4.5bn Building Safety Fund reopens for new applications on 28 July, the Department for Levelling Up, Housing and Communities has announced.
100,000 Ukrainians welcomed to safety in the UK
Department for Levelling Up, Housing and Communities | 28 July 2022
The Government has thanked the British public for their generosity and goodwill after more than 100,000 people from Ukraine have now been welcomed into homes across the UK after arriving through the two Ukraine visa schemes.
Record number of local authorities have Build-to-Rent in housing pipelines
British Property Federation | 27 July 2022
Analysis published by the British Property Federation (BPF) shows the Build-to-Rent (BTR) sector continues to grow at pace, with the total number of homes completed, under construction or in planning up 13% year-on-year to 237,000 and a record number of local authorities having BTR in their housing pipeline.
Think tank calls for beefed up levelling up
Local Gov | 26 July 2022
A think tank has demanded the next government reverse council funding cuts and beef up the levelling up Bill after new figures revealed public spending continues to leave the North behind. The IPPR North research shows that despite nearly three years of the Government’s levelling up agenda public spending in the north of England has remained lower - and grown less - than in other parts of the country.
Safer Streets Fund continues to make streets safer
Home Office | 25 July 2022
£50m of new funding will be given to communities across England and Wales to make the streets safer for all, the Home Secretary announced on Monday 25 July. The money will go to police forces, local authorities, British Transport Police and eligible community groups across England and Wales to prevent violence against women and girls in public, neighbourhood crime and anti-social behaviour.
Al fresco dining boost for businesses
Department for Levelling Up, Housing and Communities | 22 July 2022
Temporary changes, brought in to help pubs, cafes and restaurants take advantage of the warm weather and operate outside, are extended and will be made permanent next year.
Councils could get landfill tax relief for redevelopment
MRW | 21 July 2022
Councils could get Government help with landfill tax where this is a barrier to redeveloping brownfield and contaminated land. Under plans being consulted on by ministers, grants would refund the tax, currently £98.60 per tonne, reduced to £3.15 for the least polluting material.
Mayor doubles council housebuilding target to 20,000 new homes
London City Hall | 20 July 2022
The Mayor of London, Sadiq Khan, has doubled his stretching council housebuilding target, supporting councils to start work on 20,000 new council homes by 2024. It marks a dramatic acceleration in action and ambition, after the Mayor smashed the previous target to start 10,000 new City Hall-funded council homes by the end of 2021/22 earlier this year. Sadiq now aims to start a further 10,000 homes in a significantly shorter time - a total of 20,000 new City Hall-backed council homes by 2024.
Inflation threatens levelling up schemes, Tory council leader warns DLUHC
Local Government Chronicle | 20 July 2022
A prominent Conservative council leader has called on the government to provide a one-off grant to offset the impact of inflation, which she warns is threatening the viability of levelling up projects. Stoke-on-Trent City Council leader Abi Brown (Con) has written to levelling up secretary Greg Clark outlining nearly £10m in extra budgetary pressures facing the city.
Councils 'don't have skills' to make levelling up bill work
Local Government Chronicle | 20 July 2022
A "20-year decline" in the skills of council planning staff means they will not be able to fully implement aspects of the Levelling Up and Regeneration Bill, a committee of MPs has heard.
New expert panel launched to help social housing landlords tackle anti-social behaviour
Department for Levelling Up, Housing and Communities | 19 July 2022
Eddie Hughes announces new panel of experts to advise on the best approach for dealing with anti-social behaviour from tenants who suffer from mental health issues, or drug and alcohol dependency.
Department for Digital, Culture, Media & Sport | 16 July 2022
The Government has launched a public consultation on what social and environmental causes should benefit from more than £700m of dormant assets funding in England. The consultation will close on 9 October 2022.
Governance & Reorganisation
Government launches consultation on changes to local authority finance and accounting regulations
Councils must comply with the CIPFA Code of Practice on Local Authority Accounting (the Code), which since 2010 has been based on International Financial Reporting Standards (IFRS), suitably adapted for local government. As new standards are introduced they are adopted into the Code.
In 2018 IFRS 9 was introduced, which included a number of changes to existing practices regarding the accounting treatment of financial instruments, with the aim of increasing reporting on and the transparency of risks associated with them. Particular concerns were raised by the local government sector in relation to investments in pooled investment funds, which were widely used as part of treasury management in the local government sector. Specifically, local authorities would be required to account for any movements in the market value of pooled investment funds through their revenue accounts. In consequence any movements in value would affect budget setting and the determination of council tax, and due to the volatility of movements could negatively impact service delivery, as losses would count as expenditure reducing available resources, while unrealised gains could not be spent as they would need to be set aside to manage future volatility.
After an initial Consultation in 2018, the Government implemented a five-year override mandating councils to remove changes in pooled investment funds from their budgets and record them in an unusable reserve. This meant that the pooled investment values were not included in revenue accounts, although Councils were required to disclose the amounts as a separate line item in their accounts.
This override ends in April 2023, and the Government has launched a Consultation on whether to permanently keep the statutory amendment, temporarily extend it, or remove it altogether.
The Government has said that it agrees with the aims of IFRS 9 to ensure that authorities recognise the risks of their borrowing and investment activities and that there is an argument that following the five-year intervention, no authority should be holding investments it cannot manage the risk of in its revenue account.
Richard Lloyd-Bithell, senior consultant at CIPFA, said: “Councils should use this opportunity to take stock of their investment risk management frameworks to prepare for a ‘post-override’ world, and also their functions capacity under MiFID II regulations.”
However, in the 2018 Consultation 90% of respondents (primarily Councils) said that they thought the statutory override period should not be time limited and concerns were raised that the change “could result in potential burdens on the council tax payer or it could have impacts on service provision”.
With the impact of Covid-19 and cost of living crisis presenting challenges for Council budgets, we anticipate that Councils will be seeking an extension of the override. However, Government statements supporting the aim of IFRS 9 may be an indication that changes lie ahead.
Publications & Guidance
Councillor workbook: Finance for non-finance portfolio holders / cabinet members
Local Government Association | 8 August 2022
This workbook has been designed to enable councillors holding a non-finance portfolio to better understand their roles and responsibilities in relation to the financial aspects of their role.
The Local Government (Disqualifcation) Act 2022 | Local Government Association
Local Government Association | 4 August 2022
Background and implications for councils and councillors.
Correspondence between Lord Evans and Camden Council's Standards Committee
Committee on Standards in Public Life | 22 July 2022
Councillor Richard Cotton, Chair of Camden Council’s Standards Committee, wrote to Lord Evans expressing disappointment that the Government had not implemented recommendations from CSPL‘s 2019 report on local government. Lord Evans replied expressing frustration at the Government’s response to that report. Lord Evans stated the Committee’s intention to write to the Secretary of State once the new Prime Minister has been appointed.
Information Commissioner’s Office | 11 July 2022
The Information Commissioner’s Office (ICO) has called for a government review into the systemic risks and areas for improvement around the use of private correspondence channels – including private email, WhatsApp and other similar messaging apps. The ICO report – Behind the screens - maintaining government transparency and data security in the age of messaging apps – details a yearlong investigation, launched in 2021 by Commissioner Elizabeth Denham, into the use of these channels by Ministers and officials at the Department of Health and Social Care (DHSC) during the pandemic.
News
MPs call for return of hybrid council meetings
The MJ | 10 August 2022
A cross-party coalition of MPs has called for the power for local authorities to hold hybrid council meetings to be restored.
Government launches fraud squad
Cabinet Office | 3 August 2022
A new team at the heart of government has been told to hunt down fraud committed against the public purse, with a £180m target set for the first 12 months.
Historic devolution deal to be signed with York and North Yorkshire
Department for Levelling Up, Housing and Communities | 1 August 2022
A historic devolution deal putting greater power into the hands of local communities in Yorkshire will be signed on 1 August 2022 by the Levelling Up Secretary Greg Clark. This historic moment comes as the county celebrates Yorkshire Day. DLUHC is delivering this significant deal which will create a new combined authority across the region with a directly elected mayor enabling local leaders to better address specific needs within the region.
Further (Mc)Clouds on the horizon in public sector pensions
Local Government Lawyer | 28 July 2022
Doug Mullen considers the likely impact of a pensions legal challenge being brought by the Fire Brigades Union (FBU) and the British Medical Association (BMA).
Bills could force council's staff back to office
The MJ | 28 July 2022
A council senior officer has said staff may head back to the office this winter in a bid to keep their energy bills down. Director of resources at Leeds City Council Neil Evans told a scrutiny committee meeting that while many staff at the council have been based at home because of financial pressures, they could decide by September that it was cheaper to be office-based.
Government rules out wide-scale Ombudsman reform in response to select committee report
Local Government Lawyer | 28 July 2022
A parliamentary committee's proposal to create a 'People's Ombudsman' by uniting the Local Government and Social Care Ombudsman with the Parliamentary and Health Service Ombudsman has been rebuffed once more by the Government. The call for fundamental Ombudsman reform was first made in 2014 by the Public Administration Select Committee (PASC).
Pay offer treats chiefs as 'less valuable' than other senior parts of public sector
Local Government Chronicle | 27 July 2022
The pay offer for council chief executives treats them as "less valuable" than other parts of the public sector, the Association of Local Authority Chief Executives and Senior Managers has warned.
Local government accounts for one in 10 data breaches
The MJ | 26 July 2022
The local government sector accounts for one in 10 rule breaches reported to the UK’s data protection watchdog, according to the latest figures.
MJ | 21 July 2022
Council staff exit payments have plummeted since 2014-15 when they hit more than half a billion pounds
The latest figures released by the Department for Levelling Up, Housing and Communities (DLUHC) show the total value of exit packages for 2021-22 was £214,161,226, down from a high of £517,103,453 in 2014-15.But when it comes to senior staff exit payments, councils paid out £21,572,159 in 2021-22 compared with £20,934,952 in 2014-15.
EXCLUSIVE: Employers warn against local pay deals
The MJ | 20 July 2022
Councils have been warned against undermining the ‘fundamental integrity’ of national talks by agreeing local deals as pressure grows on pay.
Warning about financial reporting ‘crisis in timeliness’
Local Government Chronicle | 18 July 2022
Ongoing delays to get councils’ financial accounts signed off by auditors are placing extra burdens on stretched teams, the Chartered Institute of Public Finance & Accountancy has warned. Some delegates at the organisation's conference suggested more should be done to hold auditors to account for their part by introducing a statutory deadline for the audit to be completed.
Electoral system not ready for voter ID: electoral administrators
Local Government Lawyer | 14 July 2022
Election officers have warned the Government that the planned timetable to introduce voter identification cannot be met. Voters are due under the Elections Act 2022 to have to produce approved photo identification at polling stations from May 2023 for all elections and referendums in England, and police and crime commissioner elections in Wales.
Contract Management
A Short Guide to Smart Contracts
What are smart contracts?
A smart contract is essentially a computer programme that is able to manage performance of a legally binding contract. The contractual obligations are defined in and/or performed automatically by computer code. As they are drafted in code, they follow logic and work with specific inputs and outputs, such as “if X occurs, then execute step Y”. A smart contract works by having an external source of information that can automatically feed in to determine whether or not a contract obligation has been triggered or breached. A smart contract may be used, for example, in the monitoring of service level agreements – where a contract has an agreed set of performance levels and a defined service credit mechanism, a smart contract can collect data and, where a performance level has been breached, automatically assign a service credit to the customer, all without human intervention.
What are the benefits?
Smart contracts can bring efficiency and certainty to contract management. Given the automation, smart contracts should be able to reduce human error, reduce the amount of time required to manage a contract and, importantly, to increase the speed and accuracy of contract performance. Additionally, the use of smart contracts should theoretically reduce the need for, and the cost of, enforcement and remedial actions. If a smart contract is properly coded it is simply unable to refuse to act or fail to perform as long as the pre-programmed contractual conditions for the action or performance are met.
What are the issues?
Not logical?– perhaps the biggest pitfall from our present viewpoint is an issue of logic. Smart contracts are wonderful when there is a simple “if X happens, do Y”, but where obligations are not based on conditional logic they are difficult (maybe impossible) to translate into code. Consider where a contractual obligation requires the exercise of reasonableness or discretion of one of the contract parties – how can this be automated?
- Code breaking– the next biggest issue is around confidence in the code used to “draft” smart contracts. What if the code fails? According to experts, the same computer code does not always produce identical results. Whilst not common, computer code can run in a different way, producing different results, when run on a different computer, or indeed on the same computer but at a different time. As such, inaccuracy and uncertainty remains possible.
- The data input– how do you ensure the data being input is accurate and up to date? What if it isn’t – whose responsibility is that?
- Lost in translation– what is the translation process from natural language to code and when in the negotiations it is done? Which ultimately takes precedence? Who checks it – third party code verifier/auditor?
- Precedence concerns– if some contract terms are in natural language and some in code, what is the precedence in the event of a dispute? Will that depend on the type of clause being disputed?
- In writing?– there are questions around whether computer code would satisfy the definition of “in writing” as set out in the Interpretation Act 1978 which defines it as including “typing, printing, lithography, photography and other modes of representing or reproducing words in a visible form”. There is certainly room for argument here.
- The issue of interpretation– is computer code subject to the usual rules around interpretation of clauses? Who is qualified to interpret it? Is there room for the concept of a “reasonable computer programmer”? Are there differences between a human interpretation (understanding the nuances of a situation) and a computer interpretation (a very literal interpretation)? Is there room in the future for a new breed of coding lawyers? If not, there is certainly going to be a need for close collaboration between coders and lawyers.
Are smart contracts the future?
At present smart contracts are largely being used in contract management, rather than as a standalone binding legal contract. Perhaps the biggest hurdle is that many contracts (consider a typical 200-300 page outsourcing contract sprinkled with “reasonable endeavours”) will be too complex, or contain too much subtlety, to be helpfully translated into code. That said, the march towards automation will undoubtedly continue at pace, with and increasing use of smart contracts in future.
A Law Commission report concluded firmly that our current legal framework is able to flex with the proliferation of smart contracts and, as such, it has discouraged the creation of a new legal and regulatory regime. Instead, it preferred the use of the current common law system to develop the law in this area as and when needed.
For specific advice on smart contracts, please contact our specialist ICT team.
Publications & Guidance
Public Procurement Review Service
Crown Commercial Service | 28 July 2022
These updates show the issues raised and resolution of cases investigated under the Public Procurement Review Service, previously known as the Mystery Shopper Service.
“Impossible to have confidence” that Randox contracts were awarded properly
UK Parliament | 27 July 2022
In a highly critical report by the Commons’ Public Accounts Committee, it says that “woefully inadequate record-keeping”, failing to meet even basic requirements to publicly report ministers’ meetings with external parties or deal with potential conflicts of interest, “despite clear concerns about Randox’s political connections” means it is “impossible to have confidence” that the £777m of contracts – many without competition – “were awarded properly”. Find the full report here: Government’s contracts with Randox Laboratories Ltd.
Procurement statistics: a short guide
House of Commons Library | 26 July 2022
One of the ways in which the Government achieves its goals is to buy goods and services. This is called procurement, and covers a wide range of things, from the purchase of printer paper to commissioning social care. This is a short guide to the main sources of procurement statistics for the UK, with headline figures.
Government failures to control PPE contracts could cost taxpayers £2.7bn
UK Parliament | 20 July 2022
The Department of Health and Social Care remains in dispute with many suppliers it entered into contract with over the quality of the PPE provided and accepts that some surplus stock will end up being incinerated.
In their report, MPs say there is little sign of the Government taking action against potentially fraudulent suppliers despite DHSC’s estimate that as much as 5% of PPE expenditure may have involved fraud.
The Committee concludes that suppliers and intermediaries are likely to have made excessive profits while providing substandard PPE. Insufficient due diligence checks prior to contract agreement have left the Department paralysed from acting in some cases. Disputes with suppliers on 176 PPE contracts worth up to £2.7bn are still to be settled.
Find the full report here: Management of PPE | Twelfth Report of Session 2022-23 | Committee of Public Accounts
News
Council eyes “significant savings” after terminating PFI contract for three buildings early
Local Government Lawyer | 8 August 2022
Redcar & Cleveland Borough Council has agreed to service notice on a Private Finance Initiative (PFI) contract for three buildings, with a view to generating significant savings at a time when the council is facing severe financial pressures.
TfL urged to have procurement bids independently reviewed
Public Finance | 27 July 2022
Independent analysis of procurement bids received by Transport for London would help ensure projects provide value for money, a scrutiny body has said, adding that it could help the Greater London Authority avoid costly legal action.
Local Government Lawyer | 26 July 2022
The incumbent operator of the National Lottery, Camelot, and IGT, another bidder, have been given permission to appeal the High Court’s decision last month to lift the automatic suspension that prevented the Gambling Commission from formally awarding the fourth National Lottery licence to Allwyn Entertainment UK (Allwyn). In an update on its website the Gambling Commission confirmed that the Court of Appeal’s decision meant that the automatic suspension remains in place, pending the outcome of the appeal proceedings. The appeal hearing is likely to take place in the week of 12 September.
Councils spending £9bn a year more on local suppliers, research finds
Local Gov | 22 July 2022
Councils are spending 46% of their procurement budgets with local suppliers, new research has revealed. The research, conducted by Tussell, shows councils are spending £9bn a year more on local suppliers than they were in 2016. This is up from £16bn in 2016, to £25bn in 2021.
Discovering procurement’s untapped gold mine
The MJ | 13 July 2022
With UK councils spending around £80bn annually with third parties – on average, 30-40% of individual authorities’ total budget – procurement plays an important role in local government. A recent major research project, Optimising Outcomes from Procurement and Partnering during COVID-19 and Beyond: lessons from the crisis, looked at how greater value could be created and retained from this huge expenditure, where even 1-2% extra value could be highly significant.
Disputes & Regulatory Support
Defective Cladding Claim: Martlet Homes Ltd v Mulalley & Co Limited
In the recent case of Martlet Homes Ltd v Mulalley & Co Limited, the Court awarded a housing association substantial damages in a claim relating to defective and combustible cladding.
The case gives a key insight into the approach the Court is likely to take in such disputes, following the Grenfell Tower tragedy in 2017 as well as helpful guidance for local authorities.
Background
The dispute relates to five concrete tower blocks which were built in the 1960s in Hampshire to provide social housing. In the mid-2000s, the owner of the towers appointed the Defendant to undertake a refurbishment of the towers. This included the installation of external wall insulation rendered cladding.
Following the Grenfell Tower tragedy, the Claimant undertook investigations and decided to remove the entire cladding system that had been installed by the Defendant and replace it with a new non-combustible cladding system.
The Claimant’s primary case was based on installation breaches on the basis that the horizontal fire barriers at each floor level had not been properly fixed and the insulation boards were not adequately fixed to the wall behind. In the alternative, the Claimant argued that the Defendant had breached the contractual specification in its use of EWI for the external wall system.
The total costs claimed were £8m and included the provision of a waking watch as a safety precaution.
The Decision
The Court found that the installation of the cladding by the Defendant was defective as it was in breach of the Building Regulations and the guidance in place at the time.
The full costs sought were awarded to the Claimant.
Practical points for local authorities
As well as the case providing helpful guidance for how the Court will approach such claims, the following helpful practical points were given:
- The Court will be slow to criticise a claimant who has undertaken remedial works due to the fact that another party is in breach;
- A claimant’s decision to undertake remedial work must be reasonable, although this does not mean ‘cheapest’;
- Whilst a party should consider remedial proposals put forward by the defendant, it is not bound to accept them, particularly if they do not fully address all defects; and
- A claimant should keep a paper trail of its decision-making processes, particularly in relation to remedial solutions which will help to evidence the ‘reasonableness’ of the decision making.
This is a significant case relevant to combustible cladding claims. It is notable that the Court has demonstrated that it is willing to take a strict view on compliance with the Building Regulations in force at the time of construction. For a more detailed analysis of this decision, please read our full review.
If you wish to discuss a similar matter, please contact Judith Hopper or Will Cursham.
Publications & Guidance
"The Judge Over Your Shoulder"
Government Legal Department | 28 July 2022
The sixth edition of “the Judge Over Your Shoulder”, or JOYS for short, has been released. Since first publication in 1987 it is still a pivotal piece of guidance for civil servants on what to expect when working with government lawyers, allowing for effective collaboration and lowering the risk of legal challenge.
The Legal Education Foundation | 20 July 2022
Making information from court records available to commercial organisations is not supported by the public and risks further undermining confidence in the justice system, according to ground-breaking research undertaken by Ipsos Mori for The Legal Education Foundation. The research, contained in a report called “Justice data matters – building a public mandate for court data use”, shows that a large percentage of people are uncomfortable about tech companies, credit rating agencies and insurance firms getting unrestricted access to court data and that an overwhelming majority support the need for robust, independent and transparent controls to ensure that use of court data delivers public benefit.
News
High Court judge issues ruling on fairness of age assessment procedure
Local Government Lawyer | 4 August 2022
The High Court has found against the London Borough of Brent in a case concerning the age of an asylum seeker even though Mr Justice Swift said the council’s conduct was “not an error of the most serious nature”. In HAM, R (On the Application Of) v London Borough of Brent [2022] EWHC 1924 (Admin) the judge said the Upper Tribunal should now resolve the dispute and Brent need not devote any more scarce social services resources to it.
Attorney General tells government lawyers to adopt “private-sector approach” to client service
Local Government Lawyer | 2 August 2022
The Attorney General, Suella Braverman, has introduced guidance calling on government lawyers to adopt a “private-sector approach” to client service and use “innovative legal thinking".
Council wins High Court case to protect ‘green spaces’
Local Gov | 2 August 2022
Worthing Borough Council has welcomed a decision by the High Court to rule against plans to build 475 homes, which the local authority argues would spoil its ‘green spaces’.
Further investment in digital transformation of UK’s legal sector
Ministry of Justice | 1 August 2022
The digital transformation of the UK’s legal sector is to be backed by a significant uplift in government funding - keeping it at the global forefront of innovation.
Local Government Lawyer | 1 August 2022
The Court of Appeal has rejected an appeal over a High Court judge’s dismissal of a judicial review challenge to the Government’s decision to end the ‘Everyone In’ initiative that was launched to get rough sleepers off the streets during the pandemic. The claimant in ZLL, R (On the Application Of) v Secretary of State for Housing, Communities and Local Government [2022] EWHC 85 came to the UK in 2002 and his visa expired in 2004. His immigration status put him in the category NRPF (no recourse to public funds) and he had spent many years rough sleeping.
Local Government Lawyer | 28 July 2022
A local authority has a power, as a matter of law, to provide financial support for recreational activities and holidays under section 18 of the Care Act 2014, the Court of Appeal has ruled. The case of BG & Anor, R (On the Application Of) v Suffolk County Council [2022] EWCA Civ 1047 (Lady Justice Nicola Davies, Lord Justice Baker and Lord Justice Phillips) concerned two brothers BG and KG aged in their forties, who both have autism, learning disabilities and other serious medical conditions.
Local Government Lawyer | 28 July 2022
Lawyers at Hambleton District Council are assessing the Home Office's response to the local authority's pre-action protocol letter threatening potential legal action over plans for an asylum seekers centre in Linton-on-Ouse.
Council halts direct care payments policy pending review after judicial review threat
Local Government Lawyer | 28 July 2022
Stockport Metropolitan Borough Council has paused its direct payments policy and is reviewing its approach after facing potential legal action over its stance that the funds should not be spent on fuel.
Local Government Lawyer | 28 July 2022
The Court of Appeal has considered the extent to which judges are required to respond to requests for clarifications in judgments. This arose in a case concerning the alleged sexual abuse of two children.
Crown Court sentencing remarks to be broadcast for first time
Ministry of Justice | 27 July 2022
It will allow the public to see and hear judges explain the reasoning behind their sentences, giving a better understanding of how these decisions are reached. The move will open up some of the most high-profile courts across the country, including the Central Criminal Court, which is more commonly known as the Old Bailey.
Government reveals plans to divert thousands of civil legal disputes away from court
Ministry of Justice | 26 July 2022
Ministers have published a blueprint for major reforms to the civil justice system which seeks to save people the cost, time and stress of lengthy courtroom battles. It will see mediation made compulsory for small claims of up to £10,000, such as disputes over goods and services. People would be referred automatically to a free hour-long telephone session with a professional mediator provided by HM Courts and Tribunals Service (HMCTS) before their case can be progressed to a hearing.
Local Government Lawyer | 21 July 2022
The Court of Appeal has “reluctantly” allowed an argument that the London Borough of Ealing should have done more to find accommodation for a homeless applicant. In Abdikadir v London Borough of Ealing [2022] EWCA Civ 979 Lord Justice Lewison, who sat with Lady Justice King and Lady Justice Asplin, said he was aware of the need not to unnecessarily burden financially pressed councils but Ealing had acted unlawfully.
High Court finds council failed to carry out lawful housing needs assessment for asylum seeker
Local Government Lawyer | 21 July 2022
The London Borough of Havering acted unlawfully in providing an inadequate housing needs assessment and failing to prepare and keep under review a personalised housing plan (PHP) for an asylum seeker, ZK, the High Court has found. In ZK, R (On the Application Of) v London Borough of Havering [2022] EWHC 1854 (Admin) Susie Alegre, sitting as a deputy High Court judge, said the council failed to carry out its duties under section 189A of the Housing Act 1996.
Local Government Lawyer | 21 July 2022
Trail riders have lost a High Court action over the extinguishment of the right of mechanical vehicles to use a road in Cornwall. The case of Trail Riders Fellowship & Green Lane Association Ltd & Anor v The Secretary Of State for the Environment Food and Rural Affairs & Anor [2022] EWHC 1804 (Admin) was brought by the Trail Riders Fellowship and the Green Lane Association, the latter a body that promotes the use of unsurfaced roads by all means of transport.
Crackdown on corrupt elites abusing UK legal system to silence critics
Ministry of Justice | 20 July 2022
Courts will be able to dismiss lawsuits seeking to stifle free speech earlier under government reforms to protect the UK legal system from abuse.
High Court finds that Ombudsman did not give enough reasons for refusal to investigate complaint
Local Government Lawyer | 19 July 2022
A Local Government and Social Care Ombudsman's (LGSCO) position that it could not investigate an autistic man's complaint that Oldham Council had made numerous claims it sought his views, when in fact it had not, was wrong, the High Court has ruled. In the Administrative Court, within the Queen's Bench Division, HHJ Sephton QC also held that the Ombudsman did have jurisdiction to consider the complaint and had not given adequate reasons for refusing to do so.
Adequate alternative remedies in judicial review
Local Government Lawyer | 14 July 2022
Jonathan Auburn QC and Mark Thornton consider recent developments in the case law on adequate alternative remedies in judicial review claims.
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