That Was 2011 That Was

Long ago in 1962/63 (before most people reading this blog had even taken the brave decision to get themselves conceived) the BBC ran a late night satirical revue called That Was the Week That Was. This opened with an eponymous review of the week's events elegantly sung in jazz mode by Millicent Martin and punctuated by short inserted sketches. As 1962 breathed its last, her review looked back over the past twelve months in That was the year that was.

But if Millicent Martin were available to sing a headline review of local government law events over 2011, she would undoubtedly devote a few lines to the Localism Act:

"That was the year that was, it's over let it go,

Oh what a year that was, that was the year, that was!

The Localism Bill in parts was criticized as cracked,

But though it nearly took a year, it finally made it as an act;

And whilst prescribing member conduct could make some ministers explode

Thanks to ACSeS and the Lords at least we finished with a code,

But can independent members chairing standards committees

Be independent persons? There are no certainties. . ."

Cue sketch and roll...

For the Localism Bill, announced on 13 December 2010 by Communities Secretaries, Eric Pickles, as a "landmark bill that heralds a ground-breaking shift in power to councils and communities overturning decades of central government control" finally achieved legislative life as the ACSeS Conference opened on 15 November 2011. In the process it had grown from its pre-natal 207 clauses in 406 pages to a newborn 241 sections in 483 pages. And as the song above suggested, there were many twists and turns on the way, including a late stage concession by the Government to require authorities to adopt a code of conduct consistent with the core Nolan principles. But, as indicated in my blog of 8 December 2011, uncertainties remain as to whether a former independent standards committee member can become an independent person under the Localism Act (Chapter 7 of Part 1). Some highlights from the Bill's childhood, adolescence and young adulthood as it became an Act have been noted in my blog and article postings throughout the year. Amongst these were the controversial Mayoral Chief Executive proposals, subsequently abandoned.

But did anything else happen?

Whilst the Localism Bill was a perennial leitmotif throughout 2011 (sometimes - as with the competence power - upbeat, other times in a decidedly more minor key), there was nevertheless no shortage of other legal developments to discourage local government lawyers from surrendering to existential ennui. For if there is a drought of public finance, the river of law nevertheless continues to flow wide and deep. And as Local Government Minister, Bob Neill, told ACSeS delegates on 17 November 2011, the role of local authority lawyers looks set to be enhanced. For the Localism Act ". . .is going to require a much more 'can-do' attitude amongst both members and officers" and the "role of legal adviser is absolutely central to helping that cultural change embed itself".

So much varied legal scenery has flashed by on the express train through 2011 that every lawyer will inevitably have noticed something different. But here are a few things that caught my eye on the journey.

Supreme Court overturns Court of Appeal on LAML Procurement

On 9 February 2011 the Supreme Court in Brent London Borough Council and others v. Risk Management Partners Ltd [2011] UKSC 7 reversed the procurement decision of the Court of Appeal in LAML. It found, amongst other things, that individual control is not necessary to meet the relevant criterion in the Teckal case [1]. Teckal of course established (at paragraph 50) that the public procurement rules can be departed from only where: (1) the authority exercises over the person concerned a control which is similar to that which it exercises over its own departments (the control test) and (2) at the same time, that person carries out the essential part of its activities with the controlling local authority or authorities (the function test). As Lord Hope indicated, "no injury will be caused to the policy objective of the Directive if public authorities are allowed to participate in the collective procurement of goods and services so long as no private interests are involved and they are acting solely in the public interest in carrying out their public service tasks".

Housing Possession Proportionality

On 23 February 2011 the Supreme Court gave judgment in London Borough of Hounslow v. Powell [2011 UKSC 8. Lord Phillips indicated that proportionality safeguards are in fact incorporated into the statutory scheme. And Lord Hope pointed out that since local authorities manage their housing stock for the benefit of the whole community the decisions they make affect the interests of the community as a whole. The court is not equipped to make these decisions and in the majority of cases "the court can and should proceed on the basis that the landlord has sound management reasons for seeking a possession order".

The proportionality of making a possession order will be supported by the fact that doing so would: (a) vindicate the authority's ownership rights and (b) enable the authority to comply with its public duties regarding the allocation and management of its housing stock.

But if the court does entertain a seriously arguable proportionality issue raised by the occupier, it must then "give a reasoned decision as to whether or not a fair balance would be struck by making the order. . .sought by the local authority".  Therefore, it is "only if a defence has been put forward that is seriously arguable that it will be necessary for the judge to adjourn the case for further consideration of the issues of lawfulness or proportionality". And if "this test is not met, the order for possession should be granted".

House in Barn Unlawful

6 April 2011 was when Mr. Beesley (of 'house in a barn' fame) met his legal waterloo. For the Supreme Court then decided that positive and deliberately misleading false statements by an owner successfully preventing discovery are outside the four year planning enforcement time limit for change of use in section 171B(2) of the Town and Country Planning Act 1990 (see Secretary of State for Communities and Local Government and another v. Welwyn Hatfield Borough Council [2011] UKSC 15). The Council's successful case relied on the following two principles:

1. Law should serve the public interest is a basic principle of legal policy. The courts have consequently evolved the "in bonam partem" (in good faith) constructional technique. This holds that if a statutory benefit is conferred only if a specified condition is satisfied it is presumed that Parliament intended the benefit to operate only where the required act is performed lawfully.
2. In the absence of contrary intention, no-one should be allowed to profit from his own wrong (nullus commodum capere potest de injuria).

Now of course concealed breaches of planning control are dealt with by new provisions inserted into the Town and Country Planning Act 1990 by section 124 of the Localism Act.

Legitimate Expectation

Public authorities are required to act fairly and this can encompass a suite of behaviours including ensuring that any consultations are properly conducted and not abusing power by breaking promises (legitimate expectation). The unsuccessful attempt on 26 July 2011 by Cheshire authorities to challenge the government for anticipated PFI credits not forthcoming after the comprehensive spending review following the May 2010 change of government gave a reminder of some core elements of the principle of legitimate expectation (R (Cheshire East Borough Council and another) v. Secretary of State for Environment, Food and Rural Affairs [2011] EWHC 1975). For substantive legitimate expectation occurs only in exceptional circumstances and its procedural cousin arises where a public authority has given an unequivocal assurance of consultation before any change of an existing substantive policy.

Proper consultation

If an authority is going to consult it must do so properly and fairly in line with the principles in R v Brent LBC ex p Gunning (1985) 84 LGR 168, namely:

1. consultation must be at a time when proposals are still at a formative stage;
2. the proposer must give sufficient reasons for any proposal to permit of intelligent consideration and response;
3. adequate time must be given for consideration and response;
4. the product of consultation must be conscientiously taken into account in finalising any proposals.

Hyndburn Council unfortunately failed in introducing a selective licensing scheme under Part 3 of the Housing Act 2004. It was found not only to have failed in its statutory duty but the Court also found it "regrettable that the council was so economical in the accuracy of its reports to the secretary of state" (see (Peat and others) v. Hyndburn Borough Council [2011] EWHC 1739 ñ 25 May 2011).

Public Sector Equality Duty

This, in section 149 of the Equality Act 2010, came into force on 5 April 2011. Together with its legislative predecessors, this has been doing a roaring trade on behalf of claimants seeking to challenge local authority budget cuts. The extensive and pervasive nature of the duty can be illustrated by reading any of the judgments in this area over the past few months.

One, however, where the Council succeeded was the decision of Kenneth Parker J on 2 September 2011 in JG and MB v. Lancashire County Council [2011] EWHC 2295. On the particular facts and circumstances the judge found that it was sensible and lawful for the Council firstly to formulate its budget proposals and then, at the time of developing the policies in question, to consider the specific impact of proposed policies that might be implemented within the budgetary framework.

Whilst this area is a maze on a minefield, two key principles emerge. Firstly, the duty is to have "due regard" to the need to achieve the goals in question and not to achieve a particular substantive result. Secondly, "due regard" means specific regard throughout the decision process by way of conscious approach to the specified needs in question. Content yourself with merely ticking boxes and the fundaments of your case are likely to be carried out of court in those same boxes. Also worth checking out is the Government Equalities Office Quick Start Guide (last updated 30 June 2011).

It wasn't me, 'cos it was me, Guv!

Authorities escaping from their liabilities by pleading their own unlawfulness, whilst not necessarily regarded warmly by the courts, can occasionally succeed. On recent example of (albeit qualified) success in this area was the decision of Cranston J on 7 October 2011 in finding that the predecessor authorities to Cornwall Council had failed to have regard to their fiduciary duty in entering leasehold arrangements with the Claimant, Charles Terence Estates (Charles Terence Estates Ltd. v. Cornwall Council and another [2011] EWHC 2542).

Cranston J remarked that, given its access to legal and financial advice, "....it is unattractive, to say the least, that a public body should raise its own unlawful actions to defend a claim made against it under an agreement it has entered." But whilst Cornwall did succeed on this point (having failed on various other public law pleas of its own alleged, imputed legal shortcomings) the Claimant was nevertheless found to benefit from the "change of position" defence. This is a principle of justice designed to protect a party from a restitutionary claim where it would be inequitable to pursue all or part of the claim. Consequently, the Claimant was entitled to the leasehold rent agreed.

Sir Humphrey blocks Community Budgeting

Finally, Professor Tony Travers (Director of LSE London), writing in an MJ/CBI supplement on community budgeting, identified a key problem: "The government's community budgets policy is opposed by the government".

For whilst "DCLG ministers, the Treasury and local authorities appear onside for a radical move towards area-wide budgeting and service-delivery, other parts of the public sector are oppositional and resistant to reform". Other than the DWP, Professor Travers mentioned the Home Office, Education and Health as being "unwilling to pool resources in the interests of more rational and productive management of resources". The underlying problem, said Travers, is that if community budgets were widely implemented "they would radically undermine the power of central government departments". Time then to send in the Pickles.

Charge your batteries

2012 is set to be another busy year, not least with implementing the vast Localism Act. So do have a good break over Christmas if you can. Those batteries will need to be well-charged for another long and testing journey.

All good wishes for Christmas and 2012.

Dr. Nicholas Dobson is a Senior Consultant with Pannone LLP specialising in local and public law is also Communications Officer for ACSeS. He can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it.; Twitter: @nicholasdobson.

© Nicholas Dobson

[1] Teckal SrL v Commune di Viano & Azienda Gas ñ Acqua Consorziale (AGAC) di Reggio Emilia [1999] ECR I-8121.