S 114 – (3) PWLB terms

November 26th, 2020 by Peter Oldham QC in Capital Finance and Companies, General, Judicial Control, Liability and Litigation, Local Authority Powers

Unlinked to any particular LA’s situation, the Government consulted earlier this year on revised Public Works Loan Board lending terms and guidance. The background was LAs’ involvement in the commercial property market as a means of increasing income, which had been the subject of much controversy over the years.  The extreme financial pressures now faced by LAs as a result of the pandemic brings this issue into particular focus. Yesterday (25th November 2020) the Treasury published its response to the consultation, and it can be found here.

As the consultation response explains:-

“In recent years a minority of local authorities have borrowed substantial sums from the PWLB to buy investment property with the primary aim of generating yield. The National Audit Office estimates that LAs bought £6.6bn of investment property between 2016-17 and 2018-19. The government is clear that this is not an appropriate use of PWLB loans.”

The response explains that from today, 26th November 2020, the PWLB (i.e. the Treasury) will apply a new approach to deciding whether to lend for a proposed project.  These include the following:-

“b) the PWLB will ask the finance director of the LA to confirm that there is no intention to buy investment assets primarily for yield at any point in the next three years. This assessment is based on the finance director’s professional interpretation of guidance issued alongside these lending terms.

c) It isn’t possible to reliably link particular loans to specific spending, so this restriction applies on a ‘whole plan’ basis – meaning that the PWLB will not lend to an LA that plans to buy investment assets primarily for yield anywhere in their capital plans, regardless of whether the transaction would notionally be financed from a source other than the PWLB.”

The response also announces that, now a workable system is in place to ensure that loans will “not be diverted into debt-for-yield activity”, PWLB lending rates from today for new Standard Rate and Certainty Rate loans will be reduced by 1%.

Peter Oldham QC


S 114 – (2) Croydon

November 26th, 2020 by Peter Oldham QC in Capital Finance and Companies, General, Judicial Control, Liability and Litigation, Local Authority Powers

On 11th November 2020, Croydon LBC’s s 151 officer wrote a report to the authority under s 114(3) of the LGFA 1988, which can be found here.  For the purposes of this series of posts, the interesting point is that the Council obtained clarification from CIPFA of the meaning of its guidance of June 2020, which I discussed in my earlier post today.

The s 151 officer’s report explains that in early September she issued a draft s 114 report to the Leader and others in the Council, and also sent it to the MHCLG, the LGA and the Council’s external auditors.  She explains that she did not issue a formal s 114 notice “as the conversations with MHCLG were ongoing”.  As we have seen, this was in accordance with the CIPFA guidance of June.

She reports that, on 6th November:-

“the Chief Executive of CIPFA clarified in a letter to Croydon Council that the modified guidance regarding the issue of S114 notices was as a direct result of costs incurred by the Covid19 pandemic. Croydon’s financial pressures are not all related to the pandemic.”

Stopping there, this clarifies the purpose of the CIPFA guidance of June 2020: that it was directed to pressures arising as a result of Covid. It was not meant to apply to situations where the financial crisis arose for other reasons, or other reasons as well.

The S 151 officer went on to explain that the financial pressures in Croydon also arose because of a misidentification of in-year savings as “new” savings; a greater risk of a group company, Brick by Brick, not making interest and dividend payments; a failure to identify medium term budget savings; and the continued incurring of non-essential costs. She also referred to the October report in the public interest under the Local Audit and Accountability Act 2014 from the Council’s auditors (s 24, Sched 7), which had detailed its deteriorating financial resilience.  She said:-

“I am not seeing the necessary level of pace, urgency or radical options to be presented to members to take decisions upon to give me confidence that the Council can make the level of savings required to deliver a balance budget in year, without external support in the form of a capitalisation direction.”

Peter Oldham QC


S 114 – (1) CIPFA’s approach

November 26th, 2020 by Peter Oldham QC in Capital Finance and Companies, General, Judicial Control, Liability and Litigation, Local Authority Powers

This is the first of a short series of posts about s 114 of the Local Government Finance Act 1988. They look at (1) CIPFA’s approach announced in June 2020, (2) the s 114 notice in Croydon and (3) yesterday’s Treasury response to consultation about PWLB lending terms.

Under s 114(3) of the LGFA 1988:-

114(3)     The chief finance officer of a relevant authority shall make a report under this section if it appears to him that the expenditure of the authority incurred (including expenditure it proposes to incur) in a financial year is likely to exceed the resources (including sums borrowed) available to it to meet that expenditure.

In the light of the pandemic, and its impact on LAs’ finances, CIPFA put out this statement in June 2020 – and note the words “due to COVID-19” which I’ve put in bold, and whose significance I will pick up in my next post:-

“The role of S.114 in the current crisis has been the subject of understandable debate. This statement confirms that the statutory responsibilities of the CFO has not changed. However, CIPFA proposes that there should be a temporary modification to existing guidance in order to create an opportunity, within existing statutory limits, to enable an exploration of what further options and/or financial assistance may be available.

The proposed modifications are as follows:

  • At the earliest possible stage a CFO should make informal confidential contact with MHCLG to advise of financial concerns and a possible forthcoming S.114 requirement
  • The CFO should communicate the potential unbalanced budget position due to COVID-19 to MHCLG at the same time as providing a potential s 114 scenario report to the council executive (Cabinet) and the external auditor

In practice this means it should not normally be necessary for a s.114 report to be issued while discussions with the government that would address the issue are in progress.

It is important to note that this modification does not change the statutory responsibilities of S.151 officers.

Where there is any doubt the CFO should of course revert to the statutory requirements of S.114.”

Rob Whiteman, Chief Executive of CIPFA, was quoted on Room 151 as follows on 23rd June 2020:-

“These temporary changes are designed to facilitate dialogue between local and central government. Prior to these changes, difficult conversations remained both internal and informal, and councils were able to issue notices without involving central government beforehand. Due to current pressures, this can no longer be the case.

The additional breathing room created by these amendments should ensure that more finance directors are able to meet their statutory responsibilities, while avoiding a premature S.114 notice, and the resulting freeze on local spending that inevitably follows.

The modifications do not change the statutory duty of the Section 151 officer. Our hope is that they support local authorities to impress upon government both the urgency of the need for additional funding to deal with the current crisis, as well as the thorny issue of local government funding in its entirety.”

Private Eye ran the following story in early summer 2020:-

“According to a senior figure in local authority finances, the local government ministry feared that if one council issued a S114 notice, many others would swiftly follow. They said that Robert Jenrick’s Ministry of Housing, Communities and Local Government, “…could cope with one or two S114 notices, but they wouldn’t be able to deal with 20 or 30”.”

CIPFA’s guidance was aimed at putting a buffer between LAs and the need to issue a s 114 notice, by strongly encouraging LAs to talk to the MHCLG “at the earliest possible stage”, as those discussions might “address the issue”.  But it made clear that – as was of course the case – this approach did not, and could not, alter the s 151 officer’s duties under s 114.

Peter Oldham QC


COVID-19 – list of Govt publications by date order and useful websites

March 26th, 2020 by Peter Oldham QC in General

The virus has led to the Government producing a great deal of information and guidance, of varying degrees of formality.  It is not easy to keep track of it all.

The following is a list of some useful websites covering this (and related) material, and then a list of material by publication date, followed by a weblink.   Please note that the list by date order will not be complete.  I will try to update it regularly.  Other documents of particular relevance may be included in the list (e.g. the European Commission’s Temporary State Aid Framework of 19th March).  Proposals for inclusion are very welcome – please contact peter.oldham@11kbw.com. The earlier versions of documents amended after 25th March are not shown.


For guidance aimed at local government


For guidance for schools and educational settings


For procurement


For Department of Health and Social Care


For Public Health England

https://www.gov.uk/government/publications/covid-19-stay-at-home-guidance and


For information about Universal Credit


For more general documentation from the Government about the crisis


For Parliamentary material on the Coronavirus Act 2020


The Local Government Association has an extremely informative, broad and helpful collection of material at https://www.local.gov.uk/our-support/coronavirus-information-councils.  This includes a section at https://www.local.gov.uk/our-support/coronavirus-information-councils/covid-19-statutory-council-duties dealing with particular functions by alphabetical order.



9th March

News story – Taskforce to bolster local response to coronavirus


16th March

Press release – Robert Jenrick reaffirms support for councils in their coronavirus response


17th March

Press release – £3.2 million emergency support for rough sleepers during coronavirus outbreak


Press release – Government to grant permission for pubs and restaurants to operate as takeaways as part of coronavirus response


18th March

Press release – Complete ban on evictions and additional protection for renters


Procurement Policy Note 01/20: Responding to COVID-19


19th March

EU Commission Temporary State Aid Framework


Guidance – Responding to COVID-19: the ethical framework for adult social care


News story – £2.9 billion funding to strengthen care for the vulnerable


Guidance – COVID-19: guidance on residential care provision


Guidance – COVID-19: guidance for supported living provision


Guidance – COVID-19: guidance on home care provision


Guidance – Coronavirus (COVID-19): maintaining educational provision


Guidance – COVID-19: free school meals guidance


20th March

Business Rates Nursery Discount 2020/21: Coronavirus Response – Local Authority Guidance


Guidance – Closure of educational settings: information for parents and carers


Guidance – Coronavirus (COVID-19): cancellation of GCSEs, AS and A levels in 2020


Guidance – Procurement Policy Note 02/20: Supplier relief due to COVID-19


21st March

Press release – Major new measures to protect people at highest risk from coronavirus


Guidance – Coronavirus (COVID-19): guidance on isolation for residential educational settings


22nd March

Guidance – COVID-19: school closures

23rd March

COVID-19: guidance on isolation for domestic abuse safe-accommodation settings


Press release – Extra protection for businesses with ban on evictions for commercial tenants who miss rent payments


Guidance – Coronavirus (COVID-19): maintaining further education provision


Guidance – Coronavirus (COVID-19): apprenticeship programme response


Correspondence – Coronavirus (COVID-19): letter from the Minister of State for Care to recruitment agencies


24th March

COVID-19 outbreak – councillor guidance


Council Tax COVID-19 hardship fund 2020-21 – Local Authority Guidance


COVID-19 advice for accommodation providers


Guidance – Coronavirus (COVID-19): implementing social distancing in education and childcare settings



Guidance on shielding and protecting people defined on medical grounds as extremely vulnerable from COVID-19


Guidance – COVID-19: support for businesses


25th March

Grant Funding Schemes Small Business Grant Fund and Retail, Hospitality and Leisure Grant Fund Guidance Version 2 (new para 17)


Business Rates Expanded Retail Discount 2020/21: Coronavirus Response – Local Authority Guidance (updated to include formerly excluded, but forced to close)


COVID-19: guidance for hostel or day centre providers of services for people experiencing rough sleeping


Coronavirus (COVID-19) – Planning Inspectorate guidance – updated 25th March 2020 (cancellation of Planning Inspectorate’s site visits)


Note the helpful collection of planning material on the same page

Guidance – Further businesses and premises to close: guidance and designation letter under the Health Protection etc Regs 2020



Guidance – Coronavirus (COVID-19): early years and childcare closures


Guidance – COVID-19: guidance for educational settings


Guidance – Coronavirus (COVID-19): guidance on vulnerable children and young people


Guidance – Coronavirus (COVID-19): travel advice for educational settings


Peter Oldham QC



LAs as liquidity source for private enterprise – thoughts on PPN2, New Burdens &c

March 25th, 2020 by Peter Oldham QC in General

The Cabinet Office today published Procurement Policy Note 2, “Supplier relief due to COVID-19 Action Note”.

It says:-

All contracting authorities should: ● Urgently review their contract portfolio and inform suppliers who they believe are at risk that they will continue to be paid as normal (even if service delivery is disrupted or temporarily suspended) until at least the end of June. ● Put in place the most appropriate payment measures to support supplier cash flow; this might include a range of approaches such as forward ordering, payment in advance/prepayment, interim payments and payment on order (not receipt). ● If the contract involves payment by results then payment should be on the basis of previous invoices, for example the average monthly payment over the previous three months. ● To qualify, suppliers should agree to act on an open book basis and make cost data available to the contracting authority during this period. They should continue to pay employees and flow down funding to their subcontractors. ● Ensure invoices submitted by suppliers are paid immediately on receipt (reconciliation can take place in slower time) in order to maintain cash flow in the supply chain and protect jobs.

The policy is that LAs should provide liquidity to private enterprise, including payments in advance of contractual obligation.  This is made clearer still as the Note continues:-

“6. The current outbreak of COVID-19 is unprecedented and will have a significant impact on businesses of all sizes. Many suppliers to public bodies will struggle to meet their contractual obligations and this will put their financial viability, ability to retain staff and their supply chains at risk. Contracting authorities should act now to support suppliers at risk so they are better able to cope with the current crises and to resume normal service delivery and fulfil their contractual obligations when the outbreak is over.

7. It is vital that contracting authorities pay all suppliers as quickly as possible to maintain cash flow and protect jobs. Contracting authorities should also take action to continue to pay suppliers at risk due to COVID-19 on a continuity and retention basis. Contracting authorities can consider making advance payments to suppliers if necessary.”

Would such payments, in ordinary circumstances, be compliant with the quasi fiduciary obligation in Roberts v Hopwood?     The Government is saying this is not the time to be contractually squeamish: needs must.

A similar line of thinking about LAs as providers of liquidity to business is visible in two other initiatives of the Government, the Small Business Grant Fund and the Retail, Hospitality and Leisure Grant Fund, both to be channelled through LAs. The Government has said that it will reimburse LAs for these grants, and will also reimburse LAs’ grant administration costs pursuant to the New Burdens doctrine.   Meanwhile LAs will be out of pocket, as I understand it.

It will be interesting to see if further Government policies  in this crisis treat LAs as a means of effecting economic stabilisation – and longer term, whether this will kick-start LAs’ role as key players in the local economy.

Peter Oldham QC


Herding cats

March 25th, 2020 by Peter Oldham QC in General

One of the difficulties faced by LAs in dealing with Government Covid guidance is keeping track of it as it continues (unsurprisingly) to pour forth.  The following is a good starting point: https://www.gov.uk/guidance/coronavirus-covid-19-guidance-for-local-government.

However, it’s not intended to be a comprehensive set of guidance: for instance it does not deal with education. There is a collection of education guidance here:- https://www.gov.uk/government/collections/coronavirus-covid-19-guidance-for-schools-and-other-educational-settings.

A more general Covid collection of Government guidance is at https://www.gov.uk/government/latest?topical_events%5B%5D=coronavirus-covid-19-uk-government-response.

And of course sometimes Government guidance does not capture relevant material from other sources, for instance the European Commission’s Temporary Framework on State Aid, which you can find at https://eur-lex.europa.eu/legal-content/EN/TXT/uri=OJ%3AJOC_2020_091_I_0001.

The LGA has an extremely helpful collection of material at https://www.local.gov.uk/our-support/coronavirus-information-councils.

Parliamentary material on the Bill – and there is a great deal of it – is at https://services.parliament.uk/Bills/2019-21/coronavirus/documents.html.

While that includes some impact material, the Government’s overall Summary of Impacts document on the Bill is not on there, and that can be found at https://www.gov.uk/government/publications/coronavirus-bill-summary-of-impacts/coronavirus-bill-summary-of-impacts.  It is on a page headed Department of Health and Social Care, though it deals with provisions of the Bill generally and not just in relation to health and social care. It includes some important material.

Peter Oldham QC


Virtual LA meetings

March 24th, 2020 by Peter Oldham QC in General

The Coronavirus Bill, introduced into the House of Lords today, now has a cl 78 allowing the Secretary of State in England and Ministers in Wales to make regulations for LA meetings prior to 7th May 2021, including regulations for virtual attendance.

Cl 78 provides as follows – see cl 78(2) for regulations about virtual attendance:-

78 Local authority meetings

(1) The relevant national authority may by regulations make provision relating to—

(a) requirements to hold local authority meetings;

(b) the times at or by which, periods within which, or frequency with which, local authority meetings are to be held;

(c) the places at which local authority meetings are to be held;

(d) the manner in which persons may attend, speak at, vote in, or otherwise participate in, local authority meetings;

(e) public admission and access to local authority meetings;

(f) the places at which, and manner in which, documents relating to local authority meetings are to be open to inspection by, or otherwise available to, members of the public.

(2) The provision which may be made by virtue of subsection (1)(d) includes in particular provision for persons to attend, speak at, vote in, or otherwise participate in, local authority meetings without all of the persons, or without any of the persons, being together in the same place.

(3) The regulations may make provision only in relation to local authority meetings required to be held, or held, before 7 May 2021.

Peter Oldham QC


Guidance on coronavirus

March 22nd, 2020 by Peter Oldham QC in General

There is now a great deal of Government guidance, much of it informal as yet but clearly intended to be followed, and other Government material related to the Coronavirus Bill.  It is growing by the hour.   Here’s a collection of material that I’ve come across, under different headings: general, social care, housing and day centres, education, business rates and procurement.

The MHCLG twitter account is a useful source of information  – https://twitter.com/mhclg.


Statement of support from the Minister https://www.gov.uk/government/news/robert-jenrick-reaffirms-support-for-councils-in-their-coronavirus-response

“Coronavirus Bill – Summary of Impacts” https://www.gov.uk/government/publications/coronavirus-bill-summary-of-impacts

“Guidance: what the Coronavirus Bill will do” https://www.gov.uk/government/publications/coronavirus-bill-what-it-will-do/what-the-coronavirus-bill-will-do

Explanatory notes to the Bill https://publications.parliament.uk/pa/bills/cbill/58-01/0122/en/20122en.pdf

Social care

Responding to COVID-19: the ethical framework for adult social care  https://www.gov.uk/government/publications/covid-19-ethical-framework-for-adult-social-care/responding-to-covid-19-the-ethical-framework-for-adult-social-care

COVID-19: guidance on residential care provision https://www.gov.uk/government/publications/covid-19-residential-care-supported-living-and-home-care-guidance/covid-19-guidance-on-residential-care-provision

COVID-19: guidance for supported living provision https://www.gov.uk/government/publications/covid-19-residential-care-supported-living-and-home-care-guidance/covid-19-guidance-for-supported-living-provision

COVID-19: guidance on home care provision https://www.gov.uk/government/publications/covid-19-residential-care-supported-living-and-home-care-guidance/covid-19-guidance-on-home-care-provision

Guidance on shielding and protecting people defined on medical grounds as extremely vulnerable from COVID-19 https://www.gov.uk/government/publications/guidance-on-shielding-and-protecting-extremely-vulnerable-persons-from-covid-19/guidance-on-shielding-and-protecting-extremely-vulnerable-persons-from-covid-19

Housing and day centres

COVID-19: guidance for hostel or day centre providers of services for people experiencing rough sleeping https://www.gov.uk/government/publications/covid-19-guidance-on-services-for-people-experiencing-rough-sleeping/covid-19-guidance-for-hostel-or-day-centre-providers-of-services-for-people-experiencing-rough-sleeping

Press release – Complete ban on evictions and additional protection for renters https://www.gov.uk/government/news/complete-ban-on-evictions-and-additional-protection-for-renters


Guidance for schools, childcare providers, colleges and local authorities in England on maintaining educational provision https://www.gov.uk/government/publications/coronavirus-covid-19-maintaining-educational-provision/guidance-for-schools-colleges-and-local-authorities-on-maintaining-educational-provision

COVID-19: guidance for education settings https://www.gov.uk/government/publications/guidance-to-educational-settings-about-covid-19/guidance-to-educational-settings-about-covid-19

COVID-19: free school meals guidance for schoolshttps://www.gov.uk/government/publications/covid-19-free-school-meals-guidance/covid-19-free-school-meals-guidance-for-schools

Business rates

Business Rates Expanded Retail Discount 2020/21: Coronavirus Response – Local Authority Guidance https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/873622/Expanded_Retail_Discount_Guidance.pdf


Procurement Policy Note – Responding to COVID-19


Peter Oldham QC


Coronavirus and public attendance at LA meetings

March 22nd, 2020 by Peter Oldham QC in General

The right of attendance LA meetings in s 100A of the LGA 1972 is (subsection (8)) “without prejudice to any power of exclusion to suppress or prevent disorderly conduct or other misbehaviour at a meeting.”

Can LAs exclude the public because of the threat of passing on the coronavirus?  The right of attendance is an important part of local democracy, but I think the answer is probably yes.

The caselaw largely involves scuffles, protests (actual or threatened), and overcrowding.  But note the following in Lucas v Mason (1875) LR 10 Ex 251 (obiter, emphasis added):-

“It is no doubt the duty of the chairman of a meeting, where a large body of people are gathered together, to do his best to preserve order, and it is equally the duty of those who are acting as stewards or managers to assist him in so doing, but the nature and extent of this duty on both sides cannot be very closely defined a priori, and must necessarily arise out of, and in character and extent depend upon, the events and emergencies which may from time to time arise.”

In Doyle v Falconer (1866) LR 1 PC 328, the Privy Council referred obiter to the “right to remove for self-security”.

These are old cases but they have been referred to in modern authority:  R v Brent HA, ex parte Francis [1985] QB 869 and Laporte v Metropolitan Commissioner [2014] EWHC 3574 (QB).

My own view is that, given the Government’s policy of suppression of the disease through self-isolation and social distancing, a Court would probably decide that, as things stand, the threat of passing on the disease by attendance fell within the scope of s 100A(8), at least if the LA had made it clear that attendance was not allowed because of the pandemic.

That said, it would be good to get some guidance from MHCLG.  There is a deluge of guidance from the Government on COVID-19, growing by the hour, but I don’t think there is any guidance on this issue yet.

LAs excluding on this basis should ideally show that they have taken countervailing factors (e.g. Art 10) into account, and put in place measures to allow publicity through other means.

Peter Oldham QC


Coronavirus Bill, LAs and the right to emergency volunteering leave

March 21st, 2020 by Peter Oldham QC in General, Local Authority Powers

Cl 7 of the Coronavirus Bill gives effect to Schedule 6 –  provisions about a new right to emergency volunteering leave (“EVL”).

Under Schedule 6, a worker is entitled to be absent from work for the period specified in an emergency volunteering certificate (“EVC”) if, no later than 3 days before the first day of the period specified in the EVC, the worker gives notice to their employer of their intention to be absent for the period stated in the EVC.   The EVC may specify two, three or four consecutive weeks within a single volunteering period.  A volunteering period is the period of 16 weeks after the right under the Bill comes into force and each period of 16 weeks thereafter, unless shortened by the Secretary of State in regulations.  A worker may take EVL only once in the same volunteering period.  If a worker takes EVL, they have the right to return to their job, and not to suffer detriment as a result.  Dismissal by reason of EVL is automatically unfair.  Under cl 8 SoS must establish a scheme to compensate volunteers for lost income and expenses incurred.

LAs are given an important role.  The EVC is a document issued by “an appropriate authority”, a category which includes the Secretary of State, the NHS Commissioning Board, and local authorities – county councils, district councils where there is no county council, London boroughs and the City.

The EVC certifies that the worker has been approved by the appropriate authority as an emergency volunteer in health or social care.

The Government’s document “Coronavirus Bill – Summary of Impacts” tells us what the Government’s expectation of LAs is likely to be. It says:-

“Impact on Local Authorities – the policy requires LAs across the UK to identify volunteer social care opportunities and to match these opportunities to volunteers coming forward. This may add additional burdens to the work that LAs are doing in response to the outbreak. HM Government will provide detailed guidance for LAs to follow and will design a simple system in collaboration with them that is easy to administer. Additional funding may also be required.”

Peter Oldham QC