CLG has, on 17 November 2014, issued a Consultation, for response by 19 December 2014, on proposed amendments to the Local Authorities (Capital Finance and Accounting) (England) Regulations 2003, as amended, in relation to the use of capital receipts arising from the disposal of council housing assets, to come into force on 1 April 2015. The purpose of the proposed amendments is stated to be to enable local housing authorities to calculate the “poolable” amount derived from the disposal of assets for the years 2015-2016 and 2016-2017. The proposed amendments deal directly only with the calculation of allowable debt, the local authority share and the Treasury share. It is proposed that this calculation will remain unchanged. It is also proposed that the calculation of the local authority share cap will remain unchanged; and that the calculation of share ratio will remain unchanged; save in the case of a small number of identified authorities which are in the process of transferring their stock.
Best Value Inspection
November 18th, 2014 by James Goudie KC in Best ValueAs is well known, Part 1 of the Local Government Act 1999 (“LGA 1999”) relates to “Best Value”. Section 3 imposes the general duty. Section 3(1) provides that a “best value authority” must make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness. As Underhill LJ observed in R (Nash) v Barnet LBC [2013] EWHC 1067 (Admin), [2013] LGR 515, at paragraph 69(1), the core subject matter of the substantive best value duty is “the way in which” the authority’s functions are exercised; and that is “very general language” which connotes high-level choices about how, as a matter of principle and approach, the authority goes about performing its functions.
Sections 10-15 inclusive of LGA 1999 relate to best value inspections. Section 10(1) authorises the Secretary of State (“the SoS”) to appoint a person to carry out an inspection of a specified best value authority’s “compliance” with the requirements of Part 1 of LGA 1999 in relation to specified functions. Section 11 sets out the Inspector’s powers and duties. Section 13 relates to Reports. Section 15 gives the SoS further powers.
Pursuant to Section 10, the SoS decided that best value inspection should be carried out in the case of Tower Hamlets LBC. On 14 November 2014 an attempt by the authority to bring a judicial review challenge against the SoS failed. Goss J ruled that detailed reasons were not required, especially in the context of confidential material that had been received and where the authority already knew what the issues were and could not credibly claim to be in the dark.
LEGITIMATE EXPECTATION
November 17th, 2014 by James Goudie KC in Decision making and ContractsIn Solar Century Holdings Ltd v Secretary of State for Energy and Climate Change [2014] EWHC 3677 (Admin) the submissions made for the Claimant included that (1) certain pre-legislative statements were admissible and in effect bound the Government, according to the principles laid down by Lord Steyn in R (Westminster City Council) v National Asylum Support Service [2002] UKHL 38 at paragraph 6, (2) certain statements made by the Government were “clear and unequivocal” representations which gave rise to a legitimate expectation, and (3) the expectation could not be trumped or thwarted by any of the policy considerations advanced by the Government. Green J rejected all these submissions. The case concerned renewable energy sources by way of large scale “solar farms”, governed by the Electricity Act 1989, as amended by the Energy Act 2013, and whether the Government was bound to maintain a particular scheme in place until 2017. Clear and repeated representations had been made to that effect, but they had always been qualified.
As to (1) above, Green J said, at paragraph 48: “If … the language of the enactment is clear and unequivocal and inconsistent with the pre-legislative material, then a court cannot assume that Parliament necessarily intended to translate into statutory form the will of the Executive”. At paragraph 52, Green J stated the principles as follows:-
“i) When construing an enactment, including the exercise of power under an enactment, it is relevant to identify the intention or purpose of the measure, i.e. the mischief to which it is directed.
ii) In all cases (save with regard to consolidating enactments) the purpose or mischief may be identified by the posing of questions … such as: If the legislation has changed, what has changed? If there is a problem which had to be resolved, what was the problem? If there was a blemish in the legislation, what was that blemish? If there was an improvement which was sought to be achieved, what was that improvement?
iii) To identify the purpose or mischief and to answer these questions it is permissible to examine Explanatory Notes, White and Green Papers, Ministerial statements … and Law Commission Reports, all of which may be admissible forms of evidence.
iv) However, not all such admissible sources are of equal weight. Those sources (such as Explanatory Notes) whose “shape” was closely connected to the “shape of the proposed legislation” may be more informative as guides (Westminster City Council) than other sources which are more remote from the final language selected by Parliament.
v) In addition, a court may draw inferences from the statutory words actually used in the scheme of the legislation as a whole and from any case law on the underlying subject matter and a court might ask whether it may be inferred that Parliament intended to act consistently with the standard set out in case law … .
vi) Material that is admissible will reflect the views of their authors. And the views of authors, including the Government of the day, do not necessarily reflect the will of Parliament (Westminster City Council). If there is an inconsistency between the statutory language and the pre-legislative, admissible, material it cannot, without more, therefore be assumed that the statutory purpose must reflect the purpose set out in pre-existing admissible material.
vii) However, if there is a collision between a literal interpretation of an enactment and the contextual material with the consequence that the literal interpretation “is manifestly contrary to the intention which one may readily impute to Parliament, when having regard to the historical context and the mischief…“, then the enactment should be construed in the light of the purpose as evident from the historical context and mischief…”.
As to (2) above, Green J said, at paragraph 72-76:-
“72. When what is objected to is the abrogation of a policy or a change of policy the starting point is that once a policy is promulgated and said to be settled there needs to be a rational ground for terminating it … But there is no presumption that policy cannot change; on the contrary it plainly can do so and frequently does. So the issue become whether there can be identified a representation of sufficient certitude that the policy will not be changed regardless of surrounding circumstances. As to this a representation that a policy will continue until a specified date is not the same as a promise that it will never be changed even if circumstances change. If it were otherwise then an intention to pursue a policy for a fixed period would become set in stone and permanently unyielding to changes in relevant circumstances however compelling they might be.
73. And even if a sufficiently certain promise or representation has been made that a policy will continue in force and not be changed until a fixed date there is always a balance still to be struck between the retention of that policy and the strength of the (ex hypothesi) rational grounds which have arisen and which now are said by the Government to necessitate a frustration of that prior representation or promise. The test laid down by the Courts is whether the change of policy and the concomitant thwarting of the prior expectation amount to an abuse of power….”
“76. …recognising that policy can change there is still a duty on the decision maker to weigh up the competing interests. There is no unfettered right to change policy (even for good reason) without putting those good reasons into the melting pot with the other countervailing reasons favouring retention of the policy and forming a rounded assessment of where the balance lies: …”
As to (3) above, Green J said, at paragraph 90:-
“… I consider that even if there were a legitimate expectation which arose it was amply offset by the powerful public interest considerations on the other side of the equation and the frustration of that expectation is not, nor comes close to being, an abuse of power.”
Commons Registration
November 17th, 2014 by James Goudie KC in Environment, Highways and Leisure
County Councils in England, District Councils in England for an area without a County Council, London Borough Councils and County or County Borough Councils in Wales are “commons registration authorities”. The commons registration authority in relation to any land is the authority in whose area the land is situated. Where any land falls within the area of two or more commons registration authorities, the authorities may by agreement provide for one of them to be the commons registration authority in relation to the whole of the land.
The Commons Registration Act 1965 (“the 1965 Act”) created a legal record of common land, town and village greens and rights over the land by requiring that all were registered by a cut-off point, failing which they lost that status. The compilation of the original registers resulted in many mistakes and anomalies, eg land was recorded as common land despite having never been part of the common. Many of these mistakes were not noticed until after the registers became conclusive on 31 July 1970 but there were insufficient powers to correct them. The 1965 Act also failed to require that registers be kept updated when events took place that affected the information in the registers. Consequently the registers currently maintained under the 1965 Act are not an accurate record of common land, town or village greens or the rights over them.
Part 1 of the Commons Act 2006 (“the 2006 Act”) 2006 Act provided for applications to amend the information in the registers to reflect contemporary events, anomalies and mistakes, and unregistered events. It also provided that changes to the information in the registers are only considered lawful when recorded in the register.
The 2006 Act received Royal Assent on 19 July 2006. Part 1 of the Act provides for the maintenance of, and amendment of the information in, the registers of common land and of town and village greens which were established under the 1965 Act. Section 1 provides that commons registration authorities shall continue to keep registers of common land and of town and village greens (ie those originally prepared under the 1965 Act). Sections 2 to 5 provide for the purpose of the registers, the definition of commons registration authorities and the land to which Part 1 applies, which is most of England and Wales. Sections 6 to 17 specify the types of applications to amend the registers to reflect contemporary events which affect the information contained in the registers. Section 18 provides for the conclusiveness of the registers, eg land (i.e. common land) is deemed to be subject to rights of common upon the registration of the right. Section 19 allows for the correction of the registers in prescribed circumstances, eg where the commons registration authority made a mistake when it made an entry in the register. Section 20 requires that the registers must be made available for inspection by any person. Section 21 provides for official copies of the registers. Section 22 gives effect to Schedule 2. This allows for the registration of common land and town and village greens that were not registered, and for the removal of land that was wrongly registered as common land or town or village green, under the 1965 Act. Section 23 gives effect to Schedule 3. This provides for a transitional period during which historic events which were not recorded in the registers can now be recorded.
Section 24(1) of the 2006 Act provides the Secretary of State (“the SoS”) with powers to make Regulations that provide for the making and determination of applications to amend the registers under Part 1. Subsection (2) lists the matters that the Regulations may in particular provide for, which includes: the form of an application, the information to be supplied with one, notice requirements, the making of objections and the persons who must be consulted, the holding of inquiries, the evidence to be taken into account. Subsection (2A) provides the SoS with powers to make Regulations for the fees payable for applications, including where the person who determines the application is different from the person to whom it was made. Subsection (3) provides that the Regulations can specify the persons entitled to make certain types of application. Subsection (6) provides the SoS with powers to make Regulations concerning the making and determination of proposals made by commons registration authorities (ie applications the authority makes to itself), and subsection (7) lists the matters that such Regulations may in particular include. Subsection (8) provides that the appropriate national authority (in England, the SoS) may make regulations to appoint persons to discharge functions of a commons registration authority in relation to applications or proposals.
The Commons Registration (England) Regulations 2008 (“the 2008 Regulations”) implemented Part 1 in the seven “pioneer” local authority areas in October 2008. Those authorities comprise: Blackburn with Darwen Borough Council, Cornwall Council, Devon County Council, County of Herefordshire District Council, Hertfordshire County Council, Kent County Council and Lancashire County Council.
The Commons Registration (England) Regulations 2014, SI 2014/3038 (“the 2014 Regulations”) provide for the maintenance of the registers of common land and town and village greens, including the procedure for applications to amend them under Part 1 of the 2006 Act. The registers can be amended to add new information or amend or remove existing information. Amendments can be made to reflect contemporary changes (Sections 6 to 15 of the 2006 Act), mistakes and anomalies (Section 19 and Schedule 2 to the 2006 Act) and historic unregistered events (Schedule 3 to the 2006 Act).
The 2014 Regulations apply in full to the areas of Cumbria and North Yorkshire (“the 2014 registration authorities”) and the pioneer areas (“the original registration authorities”, which were previously subject to the Commons Registration (England) Regulations 2008, which the 2014 Regulations now replace). Cumbria and North Yorkshire are required to review their registers to identify anomalies and to process fifteen types of applications. The 2014 Regulations partially apply elsewhere in England to allow five types of applications to correct mistakes in the registers. The five types of applications are those under: Section 19(2)(a) (correction of mistakes made by an authority when it made an entry in the register), and paragraphs 6, 7, 8 and 9 of Schedule 2, which allow for the removal of certain types of land that were wrongly registered as common land or town or village green.
The 2014 Regulations require applications to be submitted to commons registration authorities. They have the power to charge fees, set by themselves in relation to most types of applications (certain types are specified as liable to no fee, due to a public interest). Applications must be referred to the Planning Inspectorate for determination where the authority has an interest in the outcome of an application. Applications to correct a mistake, or add land to, or remove land from, the registers must also be referred provided objections have been received from persons with a legal interest in the land.
Off Street Parking
November 12th, 2014 by James Goudie KC in Environment, Highways and LeisureIn Isle of Wight Council and Others v HMRC [2014] UKUT 446 (TCC) the Upper Tribunal held that the First-tier Tribunal had been entitled to find that local authorities were not entitled to recover VAT included in supplies of off-street carparking pursuant to the Road Traffic Regulation Act 1984, Sections 32, 35 and 122. Non- taxation would lead to the risk of significant distortions of competition in the off-street car parking market and the provision of outsourcing. Local authorities were not entitled to be treated as a non-taxable person.
Proudman J accepted (para 54) that “the RTRA as a whole is not a revenue-raising measure”; that, although the cases of Cran, Djanogly and Attfield relate to on-street parking, they were applicable in that respect to off-street parking; that it is legitimate for a local authority to structure its car parking prices so as to discourage parking in some places and encourage it in others; that it is likewise legitimate to use surplus revenue generated from some car parks to make up a shortfall in revenue from car parks which, whether for policy reasons or otherwise, are run at a loss, or where parking is free of charge; and that there is no requirement that income and expenditure be balanced on a car park by car park basis.
Proudman J said that it must follow, if the RTRA is not a fiscal measure, that “overall, and perhaps taking one year with another”, the cost to the local authority of meeting its statutory obligation of providing sufficient off-street parking and the revenue generated from the activity must be “broadly equal”. The “deliberate making” of a profit would take the activity into the realm of “trading”.
Highways
November 4th, 2014 by James Goudie KC in Environment, Highways and LeisureThe normal course with highway developments is that estate roads when constructed become public highways maintainable at the public expense. This result is usually achieved by the mechanism of an agreement made between the developer and the local highway authority under s38 Highways Act 1980. Such an agreement has two aspects: first, the roads are dedicated and adopted as public highways; and, second, they become highways maintainable at the public expense.
In R (Redrow Homes Ltd) v Knowsley Metropolitan Borough Council [2014] EWCA Civ 1433 both Redrow and the Council as the highway authority wished in principle that this should occur. A part of the roads will be street lighting. The Council said that it would not enter into an agreement under s38 unless it contained a provision that Redrow pays at the date of the agreement £39,000, which is a commuted sum representing the estimated capital sum to cover the cost of future maintenance of the street lights. The Council said that such a provision in a s38 agreement is lawful by reason of the word “maintenance” in s38(6) and that maintenance refers to and includes future maintenance of the road following its adoption. Redrow said that no such provision may lawfully be included in a s38 agreement.
The case related only to street lighting and a relatively small sum. However, the issue of statutory interpretation is of wide importance.
The Court of Appeal found in favour of the Council. Lord Dyson MR, with whom Gloster and King LJJ agreed, said:-
“ … The starting point is that s38(6) is expressed in wide and unqualified terms. On its face, it permits an agreement between a developer and a highway authority containing “such provisions as to the dedication as a highway of any road or way…, the bearing of the expenses of the construction, maintenance or improvement of any highway, road…to which the agreement relates and other relevant matters as the authority making the agreement think fit”. It could hardly be wider in its scope. In particular, there is nothing in the language of the subsection which draws a distinction between what is permitted in respect of the period before and what is permitted in respect of the period after the road or way becomes a highway maintainable at the public expense….”
“19. … First, as a matter of ordinary language the phrase “maintainable at the public expense” connotes that the highway authority will be liable as a matter of public law to maintain the highway. But it does not indicate how the authority is required to discharge that liability. The authority may carry out the maintenance itself or make an agreement for a developer to carry out the work. It may choose to pay for the maintenance of the highway out of public funds or obtain funds for doing so from the developer or a combination of the two. Whichever course is adopted, the highway authority remains liable and the highway continues to be maintainable at the public expense. Thus, for example, if a developer agrees to maintain a dedicated highway and defaults on his obligation, the highway authority remains liable. That is because the highway is maintainable at the public expense. …
20. Secondly, quite apart from the natural meaning of s38(6), … it is clear from other provisions of the 1980 Act that Parliament did not intend by the use of the phrase “maintainable at the public expense” in the subsection to exclude the possibility of an act of privately maintaining or of privately contributing to the cost of maintaining a highway maintainable at the public expense. It can be seen from provisions such as ss 44 and 278 that an act of private maintenance or an act of the provision of expenses is not inconsistent with the concept of a highway being maintainable at the public expense.
21. S44 provides that a person who is liable “under a special enactment or by reason of tenure, enclosure or prescription to maintain a highway” may enter into an agreement with the highway authority “for the maintenance by him of any highway maintainable at the public expense by the highway authority”. Such a person may also enter into a s38(1) agreement. Parliament clearly envisaged in such circumstances that the highway remains maintainable at the public expense notwithstanding continuing maintenance obligations on the part of the counterparty to the agreement. S278 provides that a highway authority may enter into an agreement with any person for the execution by the authority of any works which the authority is or may be authorised to execute on terms that that person pays for the whole or part of the cost of the works. S278(3) provides that the agreement may also “provide for the making to the highway authority of payments in respect of the maintenance of the works to which the agreement relates”. There can be no doubt that an agreement made pursuant to s278 can provide for a payment in respect of maintenance of a highway, including a highway maintainable at the public expense.
22. Thirdly, … s38(1) when read together with s53 shows that Parliament cannot have intended to preclude the possibility of an agreement for maintenance by a developer after the dedication of a highway. …”
Consultation
October 30th, 2014 by James Goudie KC in Decision making and ContractsThe Supreme Court has on 29 October 2014 decided R (Moseley, in substitution of Stirling deceased) v Haringey LBC [2014] UKSC 56 on appeal from [2013] EWCA Civ 116. The subject matter is the authority’s Council Tax Reduction Scheme (“CTRS”) and the Consultation Document (“the CD”) in relation to the draft CTRS. The CD explained the reduction in Central Government funding and stated that this means that the introduction of a local CTRS in Haringey will “directly affect the assistance provided” to everyone below pensionable age who had been receiving Council Tax Benefit. The CD also contained a Questionnaire asking how the reduction in relief should be distributed among claimants. Following the consultation exercise the authority decided to adopt a CTRS under which the level of council tax relief was reduced for 2013-2014 by 19.8% from 2012-2013 level for all claimants other than pensioners and the disabled.
The Supreme Court unanimously allowed the claimant’s appeal. They declared that the consultation exercise was unlawful. However, they declined to order the authority to undertake a fresh consultation exercise. This would have been disproportionate in the circumstances.
The Supreme Court (paragraphs 25, 35 and 44) gave its endorsement to the four Gunning/Coughlan criteria of a fair consultation.
At paragraph 26 Lord Wilson added that two further general points emerge from the authorities: (1) the degree of specificity with which, in fairness, the public authority should conduct its consultation exercise may be influenced by the identity of those whom it is consulting; and (2) the demands of fairness are likely to be somewhat higher when an authority contemplates depriving someone of an existing benefit or advantage than when the claimant is a bare applicant for a future benefit.
The critical passages are at paragraphs 27/28 and 39-41:-
“27. Sometimes, particularly when statute does not limit the subject of the requisite consultation to the preferred option, fairness will require that interested persons be consulted not only upon the preferred option but also upon arguable yet discarded alternative options. …
28. But, even when the subject of the requisite consultation is limited to the preferred option, fairness may nevertheless require passing reference to be made to arguable yet discarded alternative options. …”
“39. … Meaningful public participation in this particular decision-making process, in a context with which the general public cannot be expected to be familiar, requires that the consultees should be provided not only with information about the draft scheme, but also with an outline of the realistic alternatives, and an indication of the main reasons for the authority’s adoption of the draft scheme. …
40. That is not to say that a duty to consult invariably requires the provision of information about options which have been rejected. The matter may be made clear, one way or the other, by the terms of the relevant statutory provisions, … To the extent that the issue is left open by the relevant statutory provisions, the question will generally be whether, in the particular context, the provision of such information is necessary in order for the consultees to express meaningful views on the proposal. …
41. Nor does a requirement to provide information about other options mean that there must be a detailed discussion of the alternatives or of the reasons for their rejection. The consultation required in the present context is in respect of the draft scheme, not the rejected alternatives; and it is important, not least in the context of a public consultation exercise, that the consultation documents should be clear and understandable, and therefore should not be unduly complex or lengthy. Never-theless, enough must be said about realistic alternatives, and the reasons for the local authority’s preferred choice, to enable the consultees to make an intelligent response in respect of the scheme on which their views are sought.”
Applying the law to the facts, the Supreme Court held that fairness demanded that the Consultation Document should briefly refer to alternative methods of absorbing the shortfall in government funding and to the reasons why the authority had concluded that they were unacceptable. The consultation was premised on the assumption that the shortfall would be met by a reduction in council tax relief. No other option was presented. Neither was it reasonably obvious to those consulted what other options there may have been and the reasons why such options had been discarded. Indeed, only an infinitesimal number of responses to the consultation alluded to other ways of meeting the shortfall. Therefore, the consultation exercise was unfair and unlawful. (However, it was not unlawful that the authority had failed to consult on the possible adoption of a Transitional Grant Scheme announced by Central Government only 5 weeks before the completion of the Consultation.
The purpose of this particular statutory duty was to ensure public participation in the local authority’s decision-making process. Meaningful participation in these circumstances required that those consulted be provided with an outline of the realistic alternatives. In the absence of specific statutory provision, reference to alternative options will be required where this is necessary in order for the consultees to express meaningful views on the proposals.
In summary, the Consultation Document presented the proposed reduction in council tax support as if it were the inevitable consequence of the Government’s funding cuts, and thereby disguised the choice made by the authority itself. It misleadingly implied that there were no possible alternatives to that choice. In reality, therefore, there was no consultation on the fundamental basis of the CTRS.
Council Tax Reduction Scheme
August 5th, 2014 by James Goudie KC in Council Tax and RatesPursuant to the Local Government Finance Act 2012 Sandwell Council adopted a Council Tax Reduction Scheme. For working age council taxpayers this was restricted to those who have lived in the Council’s area for over 2 years: the residence requirement. In R (Winder) v Sandwell MBC (2014) EWHC 2617 (Admin) Hickinbottom J upheld a judicial review challenge to the residence requirement. The principal ground on which he did so was that it was unlawful as being ultra vires. The Judge ruled that the residence requirement went beyond the criteria, referenced on financial need, by which, pursuant to the legislation, classes for council tax reduction can be defined. He said, at para 53, that the class must be defined by reference to financial need, albeit by reference to criteria which the authority considers identify those who are, in general, in financial need. There is considerable discretion in the authority as to the criteria adopted to identify financial need, but, said the Judge, criteria which do not identify those who are at least more likely to be in financial need fall outside the powers granted to an authority by Parliament.
Alternatively, para 58, the residence requirement was, the Judge held, the use of the statutory power, to relieve those in financial need from the full burden of council tax, for an unauthorized purpose, which the Judge found to be, to discourage people from areas of higher housing cost from moving to Sandwell.
Appropriation of Land
August 5th, 2014 by James Goudie KC in Land, Goods and ServicesR (Maries) v Merton LBC (2014) EWHC 2689 (Admin) concerned the exercise by the Council of its powers of appropriation of land under s122(a) of the Local Government Act 1972 and whether land is no longer held for the purposes for which it is currently held. The land in question is a recreation ground acquired pursuant to s164 of the Public Health Act 1875 on trust for the enjoyment of the public. The Council proposed to expand an adjacent primary school onto part of the recreation ground. The Court, para 59, distilled 3 material principles: (1) whether land is still or is no longer required for a particular purpose, meaning no longer needed in the public interest of the locality for that purpose, is a question for the local authority, subject only to Wednesbury; (2) the legislative provision is concerned with relative needs or uses for which public land has or may be put, and does not require it to fall into disuse before the authority may appropriate it for some other purpose; and (3) the authority is entitled when exercising its appropriation power to seek to strike a balance between comparative local needs and to take a broad view of local needs.
Applying those principles, the Court rejected the judicial review challenge to the appropriation of part of the recreation ground. The correct statutory question had been addressed; the approach to considering the competing needs and to the question whether the land was no longer required for the purpose for which it was held had not been flawed; and the decision was not irrational. In any event, paras 88-91, the Judge would have denied relief.