b'EU Procurement issues for shared services initiatives 5.11 The EU procurement regime is discussed in more detail in the sister publication to this2020 Guide, Local Authority Companies and Partnerships at Chapters 15 to 17. However, in brief, the EU procurement rules, (implemented in the UK by the Public Contracts Regulations 2015 (SI 2015/102)) require a procurement process to be followed for the award of certain public works, supplies and services contracts. There is no exception from the rules simply because public bodies wish to supply services to one another other. Regulation 12 of the Public Contracts Regulations 2015 codifies two major strands of EU case law relating to charging and trading. One is the EU case of Teckal (C-107/98) which provides an exemption from the application of the procurement rules where: the contracting authority exercises a control over the goods, services or works provider which is similar to that which it exercises over its own departments (the control test);at the same time, the provider carries out 80% of its activities with the controlling contracting authority or authorities (the function test); and there is no controlling direct private capital participation in the provider. In Brent London Borough Council v Risk Management Partners Limited [2011] UKSC 7, the Supreme Court held (overturning the Court of Appeal Judgment on this issue) that insurance contracts could be placed with a shared services company jointly owned and controlled by a group of local authorities and that, following the Teckal case, those contracts did not need to be tendered via OJEU. Lord Rodgers, in one of two leading judgments of the Supreme Court (the other being Lord Hope) outlined what many local authorities were seeking to do when they sought to develop shared service arrangements: In practice, a local authority which can afford, say, to run its own architects department is unlikely to see any real advantage in simply establishing that department as a separate entity with which it can then enter into contracts to meet its requirements for architectural services. Such an arrangement would probably not, for example, save costs. But local authorities and other public bodies may well be able to make considerable savings by co-operating to obtain the services and products which they require. For instance, a single local authority might not have enough work to make it economically worthwhile to have its own architects department; but between them, two authorities might well have enough work to make such a department viable. The possibility of local authorities co-operating in the provision of services has long been recognised; section 101(5) of the Local Government Act 1972 makes provision for two or more local authorities to discharge any of their functions jointly. So, for example, two 64'