The Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014, SI 2014/165, made by the Secretary of State pursuant to Sections 8 and 20 of the Local Government and Housing Act 1989, and amending the Local Authorities (Standing Orders) (England) Regulations 2001, SI 2001/3384, were laid before Parliament on 31 January 2014 and will come into force on 25 February 2014.  The Amendment Regulations are “localism” in reverse, imposing “best practice”.  They require that the votes at key budget decision meetings by local authorities are recorded, something of course which it is already open to local authorities to do.  There is a diktat that in the Minutes of such meetings there must be a record of how each member present voted on the budget ie voted on the council tax or the issuing of the precept in the case of precepting authorities.  Moreover, the Explanatory Notes state (para 8.3) that CLG’s “expectation” is “that all councils will follow this practice at their budget meetings even where these are held in advance of the practice becoming mandatory”.

The Non-Domestic Rating (Designated Areas) Regulations 2014, SI 2014/98 form part of the scheme for local retention of non-domestic rates.  The purpose of the Regulations is to designate areas in relation to which a proportion of the non-domestic rating income (as calculated in accordance with the Regulations) is to be retained by the local authority all or part of whose area falls within the designated area.

The Non-Domestic Rating (Small Business Rate Relief) (England) (Amendment) Order 2014, SI 2014/43 (“the 2014 Order”), amends the Non-Domestic Rating (Small Business Rate Relief) (England) Order 2012 (“the 2012 Order”) to provide for a temporary extension to the increase in small business rates relief in England until 31 March 2015 and to extend the scope of the relief where small businesses expand.

The 2012 Order prescribes the conditions for eligibility for small business rate relief and the rates of relief in relation to eligible hereditaments.  A hereditament is only eligible where it is the sole hereditament occupied by the ratepayer, but additional hereditaments are disregarded where their rateable value is not more than £2,599 and the aggregate rateable value of all hereditaments occupied by the ratepayer does not exceed £25,499 if situated in Greater London or £17,999 if situated outside Greater London.  The 2014 Order substitutes new provisions for Articles 3(6) and 4(7) of the 2012 Order so that where a ratepayer starts to occupy an additional hereditament, the ratepayer does not lose the benefit of the relief for the first 12 months of occupation.

Where the eligibility criteria are satisfied a ratepayer’s daily liability for non-domestic rates in respect of that hereditament is determined under Section 43(4A) of the Local Government Finance Act 1988.  Section 43(4A) provides for the calculation in accordance with the formula (A x D) divided by (C x E) where: A is the rateable value of the hereditament; D is the small business non-domestic rating multiplier for the financial year; C is the number of days in the financial year; and E is such amount as is prescribed in relation to the hereditament by the Secretary of State by Order. Article 4 of the 2012 Order prescribes the amount of E for the financial years beginning on 1 April 2012 and 2013 and Article 3 of the 2012 Order prescribes the amount of E for subsequent financial years.

The 2014 Order amends the 2012 Order to apply Article 4 of the 2012 Order to the financial year beginning on 1 April 2014.  The effect of this amendment is to extend the temporary doubling of the level of small business rate relief for a further year.  Article 4 will also continue to apply in respect of days falling within the financial years which started on 1 April 2012 and 1 April 2013.

The purpose of the Billing Authorities (Anticipation of Precepts) (Amendment) (England) Regulations 2014, SI 2014/35, is to enable billing authorities in England making council tax calculations in accordance with Section 31A of the Local Government Finance Act 1992 (“the 1992 Act”) to anticipate a precept from a local precepting authority.  The legislative context is that Sections 73 to 79 of the Localism Act 2011 (“the 2011 Act”) made amendments to the calculations which billing authorities, major precepting authorities, and local precepting authorities in England must make to determine their basic amounts of council tax for a financial year. The obligation to calculate a budget requirement for a year was replaced with an obligation to calculate a council tax requirement. Under the new provisions an authority’s council tax requirement for a financial year is the amount the authority requires from council tax alone in order to finance its budget for the year and this amount is used to calculate the authority’s basic amount of council tax. Section 74 of the 2011 Act inserted a new Section 31A into the 1992 Act requiring a billing authority to calculate its council tax requirement each financial year, and Section 32 of the 1992 Act was modified to apply to Wales only rather than to England and Wales. The Regulations make a minor amendment consequential on the changes made by the 2011 Act to update the definition of “calculations” in the Billing Authorities (Anticipation of Precepts) Regulations 1992 in relation to England to refer to the new Section 31A inserted by the 2011 Act.. This will enable billing authorities in England making their calculations in accordance with Section 31A of the 1992 Act to anticipate a precept from a local precepting authority under Section 41 of the 1992 Act if that precept has not been issued in time for their calculations.

The Local Government Finance Act 1988 (Non-Domestic Rating Multipliers) (England) Order 2014, SI 2014/2, has been made in exercise of the powers conferred by paragraph 5(3) of Schedule 7 to the Local Government Finance Act 1988 (“the 1988 Act”). In relation to England and for the financial year beginning on 1st April 2014 (“2014-15”) the Order specifies an amount which is to be used in the calculation of the non-domestic rating and the small business non-domestic rating multipliers for that year.

Schedule 7 to the 1988 Act establishes a procedure by which the non-domestic rating and the small business non-domestic rating multipliers are calculated for a chargeable financial year. In relation to England and a year at the beginning of which new rating lists are not compiled, the small business non-domestic rating multiplier is calculated in accordance with paragraph 3 of Schedule 7 to the 1988 Act. The non-domestic rating multiplier for the year is then calculated in accordance with paragraph 3A of Schedule 7 to the 1988 Act by reference to that multiplier.

The calculation in paragraph 3 of Schedule 7 to the 1988 Act includes a variable referred to as “B”. Unless an order made by the Treasury provides otherwise, B is the retail prices index for September of the financial year proceeding the year concerned, which in relation to 2014-15 was 251.9.  Paragraph 5(3) of Schedule 7 to the Local Government Finance Act 1988 enables the Treasury by order to specify a different amount for B. Where the Treasury exercises this power the amount specified must be less the retail prices index for September of the financial year proceeding the year concerned.

For 2014-15 the Order specifies B as 249 for the purposes of paragraph 3 of Schedule 7 to the 1988 Act. This represents a 2% cap.  Otherwise the figure would have been 3.2%.

Premises will be “wholly or mainly used for charitable purposes”, for the purposes of assessing whether a registered  charity is entitled under Section 43(6)(a) of the Local Government Finance Act 1988 to mandatory charitable relief from non-domestic rates only if the charity makes extensive use of the premises for charitable purposes.  In Public Safety Charitable Trust v Milton Keynes Council [2013] EWHC 1237 (Admin) Sales J held that merely some charitable use of the premises was not enough, following Kenya Aid Programme v Sheffield City Council [2013] EWHC 54 (Admin).

Does the fact that no more than a minute fraction of the area encompassed within premises is used (by the presence of blue-tooth apparatus) prevent occupation being rateable occupation?  No, holds Wilkie J in Sunderland City Council v Stirling Investment Properties Ltd [2013] EWHC 1413 (Admin).  Wilkie J further holds, applying Arbuckle Smith v Greenock Corporation [1960] AC 813, that it is not relevant, for the purpose of rateable occupation, that the nature of the use to which the hereditament is put is different than that which was described in the rating list. There is nothing in the legislation which limits the ability of a local authority to levy rates to occupation for a purpose which is identical to the description of the hereditament in the rating list. The issue of any apparent disconnect between the nature of the occupation of an hereditament and its description in the rating list is a matter for the valuation officer to address if he thinks that a new, or additional, hereditament may have been brought into existence.

In R (Stirling) v Haringey LBC (2013) EWCA Civ 116 the Court of Appeal were concerned with a claim for Judicial Review of the Council’s Council Tax Reduction Scheme pursuant to Section 10 of the Local Government Finance Act 2012 and Regulations thereunder, replacing Council Tax Benefit.  The Council were required to, and did, publish a draft Scheme and consult upon it, against the background of a 10% reduction in the funding given by Central Government to local authorities for council tax support.  The challenge was as to the consultation process.

There were three grounds: (1) that consultees were not provided with sufficient information to enable them to appreciate that there were alternatives to the draft scheme;  (2) that the information provided in the Consultation Document, as to the shortfall that would have to be met by the Council, was not accurately and fairly presented; and (3) that the Council should have told consultees about the Transitional Grant Scheme (“TSG”), and asked them if they wished to make any, or any further, responses in the light of the availability of that Scheme.  The second ground was not pursued in the Court of Appeal.

Dismissing the first ground, Sullivan LJ said, at paragraph 15:

“It is one thing to say that when options for change are presented in a consultation paper … they must be fairly presented, it is quite another to submit … that in order to be fair a consultation paper must present information about other options that have been rejected. What fairness requires depends on the circumstances of the particular case. In some statutory contexts a decision maker may be required, or may choose to consult as to which of a number of options should be adopted.”

However, Sullivan LJ continued, in paragraph 16, alternatives to a preferred scheme do not in all cases have to be mentioned as having been rejected.  At paragraph 18, Sullivan LJ stated that, in the particular statutory context, fairness did not require the Council, in the consultation process, to mention other options which it had decided not to incorporate into its published draft Scheme.  Much less did fairness require that the Consultation Document contain an explanation as to why these options were not incorporated in the draft Scheme.  At paragraph 19, Sullivan LJ went on to say that, evenif the statutory scheme had been less prescriptive and more open-textured as to the subject matter of the consultation process, he would not have concluded that the Consultation Document’s failure to mention the other possible ways of meeting the shortfall in Central Government funding rendered the consultation process unfair. The existence of the three options relied upon by the Appellant – raising Council Tax, reducing other Council services or utilising some of the Council’s reserves – were all reasonably obvious ways of meeting a shortfall in Central Government funding, and the form of the Consultation Document did not prevent consultees from suggesting them as possibilities. This was not a case in which the failure to mention the three options in the Consultation Document might have had the consequence that the decision-maker would have failed to appreciate their existence. The full Council would have been well aware of these three ways of meeting a shortfall in Central Government funding.  

Dismissing the third ground, the Court of Appeal held that the change of circumstance constituted, in the public domain, by the TSG, though plainly relevant, was not a change of such significance that the Council was bound to draw attention to it, or to commence the consultation process afresh.

Two new Statutory Instruments, the Council Tax Reduction Schemes (Prescribed Requirements) (England) Regulations 2012, SI 2012/2885, and the Council Tax Reduction Schemes (Default Scheme) (England) Regulations 2012, SI 2012/2886, make provision for the new, localised, council tax support schemes in England, which come into effect on 1 April 2013.  They replace council tax benefit.  All billing authorities in England are required to have their own scheme.  The Default Scheme Regulations make provision for a default scheme that will apply to those billing authorities that have not made their own scheme by 31 January 2013.  Otherwise all schemes made by authorities, approved by Full Council, must include those matters that are prescribed in the Prescribed Requirements Regulations, as well as those matters which are required to be included in local schemes by paragraph 2 of Schedule 1A to the Local Government Finance Act 1992, as inserted by the Local Government Finance Act 2012, section 10 and Schedule 4.

R (Dudley MBC) v SoS for CLG [2012] EWHC 1729 (Admin) concerned a decision by the SoS to change the way in which he would make payments pursuant to s88B of LGFA 1988/s31 of LGA 2003 under a PFI scheme.  There were five grounds of challenge. The first, procedural fairness, relating to consultation, succeeded.  The other four failed. They were breach of a substantive legitimate expectation; application of a rigid and inflexible policy; failure to take relevant facts into account/error of fact; and breach of the PSED under s149 Eq A 2010.

As to the first ground, Singh J considered both whether there was a duty of consultation, and, on the basis that there was, the requirements of a lawful consultation.  As to the former, there were two bases on which the Council argued that it was entitled to be consulted before the decision was taken to withdraw the PFI grant on a declining balance basis and to replace it with the annuity basis. The first was that it had a legitimate expectation that there would be consultation based on the defendant’s past practice. The second was that, quite apart from such a procedural expectation, the claimant had an expectation that its grant would continue to be paid on the declining balance basis and that fairness required that, before it was withdrawn, it would be consulted on this issue. Singh J observed that it was important to note that, in making the second of those arguments, the Council for this purpose relied on its expectation not to argue that the SoS was not entitled to reach the decision he did at all (that was the subject of a separate ground, based on the doctrine of substantive legitimate expectation), but that, before he did so, he had to follow a fair procedure. In other words, for this purpose, the Council submitted that its expectation gave rise to procedural rights, not substantive rights.

So far as the Council’s first argument was concerned, Singh J observed that in principle a legitimate expectation of consultation (i.e. a procedural expectation) can arise either from a promise that there will be consultation or from a past practice of such consultation. In the present case, the Council did not suggest that there was any promise of consultation. However, it did contend that there had been a past practice of consultation. Singh J, however, was not persuaded by that argument. All that the Council was able to rely on was the fact that in 2004 the SoS did consult when consideration was given to introducing the annuity basis as an alternative to the declining balance basis. In Singh J’s judgment, one incident of consultation of that type could not amount to a practice of consultation such as to give rise to a legitimate expectation of such consultation in the future.

However, the Council’s second argument did not depend on either a promise or a past practice of consultation. The starting-point is that, if a decision-maker intends to take a decision which affects a person’s rights, the duty to act fairly (in earlier parlance “natural justice”) will usually be required by public law, which will imply such a duty into a statutory scheme even when none is expressly laid down.

Singh J considered a number of previous authorities, concluded that the SoS’s decision “fundamentally altered the nature of the commitment” which had previously been made by the SoS to fund capital projects, that the impact on the Council was “pressing and focussed”, that there was a small and limited class of local authorities that were affected by the SoS’s decision, and that (para 69): “To make the decision abruptly without consultation would, in the circumstances of the present case, be so unfair as to amount to an abuse of power”.

Singh J went on to consider whether the requirements of a lawful consultation had been met.  He concluded that they had not.  Consultation had not been at a formative stage of the decision-making process.  The decision letter invited representations only as to how the impact of the decision might be mitigated in the Council’s case, but not about the principle of the decision itself.

As regards the PSED, Singh J said:

“93.      I accept the defendant’s submissions in relation to this ground of challenge. As the authorities have frequently stressed, what is “due regard” is such regard as is appropriate in all the circumstances. In my judgement, the defendant was not required to have regard to the matters set out in section 149 of the Equality Act for two main reasons.

94.       First, the suggested impact is a contingent and indirect one. The defendant’s decision was a financial one. It will frequently be the case that the central government makes financial decisions of a general kind which leave up to individual local authorities the manner of their implementation. The relevant authorities may have a choice about whether they cut or reduce a particular service or how they find alternative funding for it if they feel that service should continue. The local authority concerned may well have to perform the Public Sector Equality Duty itself before it decides which of various courses it should take in order to implement the financial decision of the central government.

95.          Secondly, and in any event, the defendant was entitled to take the view that he did, that the detrimental consequences which the claimant suggests would flow from the decision under challenge are not only contingent but lie some years ahead in the future, given the funding that the defendant has made available to the claimant until 2015. The defendant’s simple submission was that, in those circumstances, the duty may arise in 2015 but cannot be said to have arisen now. There are too many vicissitudes in life for a court to be able to say that the defendant has breached the Public Sector Equality Duty as things stand at present. I accept that submission by the defendant.”