November 12th, 2018 by James Goudie QC in Local Authority Powers

The Local Government (Miscellaneous Amendments) (EU Exit) Regulations 2018 amend four statutory instruments in the field of local government finance legislation in consequence of the UK’s exit from the European Union. They amend the definition of a “prescribed educational establishment” in the Council Tax (Discount Disregards) Order 1992 (S.I. 1992/548) so that those institutions in the UK continue to be included in this definition after the UK leaves the EU; remove the definition of “prescribed investment” from the Local Authorities (Funds) (England) Regulations 1992 (S.I. 1992/2428), amend the Local Authorities (Contracting Out of Investment Functions) Order 1996 (S.I. 1996/1883) to remove references to qualifications from other member states and amend the definition of “money market fund” in the Local Authorities (Capital Finance and Accounting) (England) Regulations 2003 (S.I. 2003/3146).


Local Government Reorganisation

August 14th, 2018 by James Goudie QC in Local Authority Powers

R ( Christchurch BC ) v SOS for HCLG ( 2018 ) EWHC 2126 ( Admin ) concerned a challenge by the Council to the decision of the SOS to use his power in section 15 of the Cities and Local Government Devolution Act 2016 to lay Regulations before Parliament to amend the Local Government and Public Involvement in Health Act 2007 to enable a proposal to reorganise local Government in Dorset which would abolish all the existing Dorset authorities. The challenge failed. The Council argued that the Regulations were ultra vires and unlawful because they were retrospective. The proposal was in existence before the Regulations came into effect. Sir Ross Cranston rejected this argument. He held that there was no vice of retrospectively and no unfairness and that in any event the Regulations are procedural in character and any presumption against retrospectively does not apply. He also found that the claim had not been brought promptly and that there was no justification for an extension of time.



June 7th, 2018 by James Goudie QC in Local Authority Powers

In R (Palestine Solidarity Campaign Ltd) v SoS for CLG (2018) EWCA Civ 1284 the Court of Appeal allowed the SoS’s appeal against a declaration at (2017) EWHC 1502 (Admin) that part of his statutory Guidance relating to the Investment Strategy of local authorities administering local government pension schemes was unlawful.  The Court of Appeal ruled that the SoS was within the broad discretion afforded to him by the Public Service Pensions Act 2013 in issuing Guidance on non-financial considerations, including those of wider public interest, such as foreign and defence policy.  Nor was the relevant passage in the Guidance contrary to Article 18 of Directive 2003/41/EC on the activities and supervision of institutions for occupational retirement provision (“the IORP Directive”), which it was common ground applies in relation to the LGPS.  The Guidance included a summary requirement that administering authorities “should not pursue policies that are contrary to UK foreign policy or UK defence policy”, with a fuller statement in the accompanying text that “using pension policies to pursue boycotts, divestment and sanctions against foreign nations and UK defence industries are [sic] inappropriate, other than where formal legal sanctions, embargoes and restrictions have been put in place by the Government”. Read more »


Public Health

November 11th, 2016 by James Goudie QC in Local Authority Powers

The appeal has been dismissed in National Aids Trust v NHS Commissioning Board and the Local Government Association [2016] EWCA Civ 1100.  NHS England does have the power to commission an anti-retroviral drug for use on a preventative basis for those at high risk of contracting HIV.  The question at the root of the appeal was out of whose budget the cost of medication is to be paid: the budget of NHS England; or that of local authorities.  The answer is NHS England.  This is because it is not a public health function for the purposes of the Health and Social Care Act 2012.  However, it is not possible to draw the dividing line between public health and non-public functions neatly along the lines between the prevention of ill-health and its treatment. There is no simple criterion for defining the boundaries of public health functions in a borderline case.  However, in circumstances where public health functions are not defined and the boundary line between local authority public health functions and NHS non-public-health functions is not clearly drawn in the primary legislation, it is legitimate to refer to where it is drawn in the related secondary legislation.


Public health functions

August 2nd, 2016 by James Goudie QC in Local Authority Powers

National AIDS Trust v NHS England (2016) EWHC 2005 (Admin) is a challenge to a decision of NHS England to refuse to consider in its commissioning process an anti-retroviral drug to be used on a preventative basis for those at high risk of contracting AIDS. NHS England argued that it had no power to do so under the governing legislation, the National Health Service Act 2006.

It argued that it did not have power to perform “public health functions” that are carried out by local authorities or the SOS pursuant to their respective statutory powers and duties. NHS England further argued that, pursuant to 2013 Regulations promulgated by the SOS there is now a division of labour between NHS England and local authorities, with the latter assuming responsibility for preventative medicine in relation to sexually transmitted diseases.

The local authorities disagreed. They were represented in the litigation by the LG A. At its core the judicial review was about the allocation of budgetary responsibility in the health field.

Green J concluded that NHS England had erred in law in deciding that it had no power or duty to commission the preventative drugs in issue. It has a broad preventative role and commensurate powers and duties. In any event preventative treatments facilitate and/or are conducive and/or are incidental to the discharge of its broader statutory functions. 


Charges for water and sewage services

March 8th, 2016 by James Goudie QC in Local Authority Powers

Newey J described the point in Jones v Southwark LBC [2016] EWHC 457 (Ch) as being one of “considerable importance”.  This was both because Southwark itself had numerous tenants who could be affected, and because it could have implications for other landlords.

The point arose in this way. For decades, Southwark had collected from many of its tenants, including the claimant, charges for water and sewerage services.  These services were supplied to the properties by Thames Water.

The questions raised by the case were, first, whether the Water Resale Order 2006 (“the 2006 Order”) applied to these arrangements, and, second, if it did, whether Southwark had charged its tenants more than was permissible under the 2006 Order. The answers turned, in part, on whether Southwark had been acting as an agent or had been buying and re-selling the services.

The Judge concluded that the relationship between Thames Water and Southwark was not one of principal and agent, but involved Southwark buying water and sewerage services from Thames Water and re-selling them to its tenants; as a result ,the 2006 Order did apply and served to limit what tenants could be charged; and the amounts that Southwark charged Miss Jones exceeded the “maximum charge” allowed under the 2006 Order.


Benefit fraud

February 19th, 2016 by James Goudie QC in Local Authority Powers

A DWP Consultation, for response by 31 March 2016, seeks views on a revised “Social Security Fraud Act 2001 Code of Practice on Obtaining Information”. The current Code is from 2002.  The Welfare Reform Act 2007 (Sections 46 to 48) extended local authority investigation powers to enable local authorities to investigate and prosecute fraud against certain DWP benefits alongside offences committed against Housing and Council Tax Benefit. These sections commenced in April 2008 and empower local authorities to investigate and prosecute certain DWP benefits providing there is a linked Housing/Council Tax Benefit claim. The required changes have been incorporated into Appendix 3 of the Code.

The Welfare Reform Act 2012 (Sections 122 and 123) extended the definition of social security benefits to include tax credits and child tax credits, for the purposes of Sections 109A (Authorisations for investigators) and Section 109B (Power to require information) of the Administration Act, when investigating benefit offences. These Sections commenced in April 2013, therefore tax credits and child tax credits are treated as social security benefits and are subject to those provisions and the revised Code.

Other amendments due to operational changes in the DWP have been incorporated into the Code, mainly the creation of DWP’s Fraud and Error Service, which will enable a single fraud investigation to be undertaken to investigate all social security benefits, including those currently administered by local authorities and HMRC. The reference to local authority powers in the Code is relevant whilst individual local authorities still have Authorised Officers or investigation staff undertaking social security benefit fraud investigations. Once a local authority benefit investigation team transfers into DWP that local authority will no longer be bound by the Code.

There are changes to the layout of the Code, with the aim of making it clearer and simpler to use. This includes the introduction of five new appendices providing the more detailed information on who can be required to provide information, examples of the type of information that may be requested, when and about whom may Authorised Officers require information, details to be included in requests for information, and contact details

The Code outlines the important safeguards that exist and penalties against misuse of the powers, including confidentiality, security and data retention arrangements, and legal professional privilege.


Consequences of Ultra Vires

October 6th, 2015 by James Goudie QC in Local Authority Powers

In Central Tenders Board v White [2015] UKPC 39 the Privy Council said (at paragraph 26):-

“Ultra vires is not, of course, the only ground on which a court may quash an administrative decision, but it would be wrong for a court to do so in such a way as to nullify a contract made between a public body pursuant to a legal power and a person acting in good faith, except possibly on terms which adequately protect that person’s interest.”


Local Authority Powers

September 18th, 2015 by James Goudie QC in Local Authority Powers

Part 8 (Clause 26 and Schedule 4) of the Enterprise Bill, introduced in the House of Lords on 17 September 2015, contains elaborate provisions giving the Treasury power to impose restrictions on public sector exit payments, as broadly defined. They will be capped.


Fees for Licence

April 29th, 2015 by James Goudie QC in Local Authority Powers

The Supreme Court, in R (Hemming) v Westminster City Council [2015] UKSC 25, has allowed in part an appeal by Westminster City Council (“Westminster”) from [2013] EWCA Civ 591, but on a critical question has made a reference to the CJEU.

The Supreme Court had the benefit of interventions by HM Treasury and a considerable number of regulatory or professional bodies, concerned about their ability to recover fees for enforcing other regulatory schemes, which might be regarded as similar to that presently under consideration

In order to trade, sex shops in Westminster’s area need a licence from Westminster under Schedule 3 to the Local Government (Miscellaneous Provisions) Act 1982, paragraph 19 of which provides that an applicant for the “grant, renewal or transfer of a licence … shall pay a reasonable fee determined by the appropriate authority”.
EU law has placed limits upon the licence fees which can be charged.  Article 13(2) of Directive 2006/123/EC,  given domestic effect by Regulation 18(4) of the Provision of Services Regulation 2009 SI No 2999, provides that the “authorisation procedures and formalities” for applicants “shall not be dissuasive … and any charges which the applicants may incur from their application shall be reasonable and proportionate to the cost of the authorisation procedures in question and shall not exceed the cost of the procedures”.

Mr Hemming runs sex shops in the Westminster area under the name Simply Pleasure Ltd. Westminster has over past years required applicants for sex shop licences to pay with their applications a substantial sum (£29,435 in 2011/12), broken down into a smaller amount (£2,667 in 2011/12) relating to the processing of the application and a larger amount (£26,435 in 2011/2012) relating to the cost of administering and enforcing the licensing regime as a whole. The larger amount was refundable whenever an application failed.

Mr Hemming claims that this system is illegitimate under both domestic and EU law. His primary case is that there is no basis for requiring successful or unsuccessful applicants to meet the costs of administering and enforcing the regime. He has also developed a secondary case, that there is no basis for requiring such costs to be paid with the applications, even on a refundable basis. The Courts below agreed with Mr Hemming’s primary case, holding that such costs had to be funded by an authority such as Westminster out of its general funds.

The Supreme Court has now concluded that:-

(1) Paragraph 19 of schedule 3 to the 1982 Act enables a licencing authority to impose on an applicant a fee for the grant or renewal of a licence which covers the running and enforcement costs of the licensing scheme, to be payable either (a) at the time when the licence is granting; or (b) on a refundable basis, at the time when the application is lodged;

(2) Article 13(2) of the Directive deals only with authorisation procedures and fees relating to applications for permission to access or exercise a service activity, such as operating a sex shop:  it does not prevent the imposition on those who receive licences of proportionate charges to fund the cost of administering and enforcing the licensing regime;

(3) As to the legitimacy of Westminster’s system, it is helpful to distinguish between two types of scheme: under Type A, applications for licences are made on terms that the applicant must, upon their application being granted, pay a fee to cover the cost of administering and enforcing the licensing regime; under Type B, which represents the scheme actually adopted by Westminster, applications for licences are made on terms that the applicant must, at the time of making the application, pay a fee, refundable in the event that the application fails, to cover the cost of administering and enforcing the licensing regime;
(4) Type A schemes are permissible under Regulation 18(4) of the Regulations and  Article 13(2) of the Directive, because they permit a licensing authority to charge a successful applicant with a proportionate part of the cost of administering and enforcing the licensing regime as a whole;

(5) Whether Article 13(2) also permits Type B schemes is more problematic, because payment is required to be made by every applicant, albeit on a potentially refundable basis, at the time when the application is made: there was no evidence that a Type B scheme could or would have a potentially dissuasive effect upon applicants, but it remains unclear whether it involves in law a “charge” incurred from the application, contrary to Article 13(2);  and

(6) A reference to the OJEU is therefore required on whether and when a Type B scheme is consistent with Article 13(2).

As the Supreme Court observed, at paragraph 20:-

“Under a scheme of Type B, every applicant is required to pay up front – even though on a refundable basis – a sum which is referable not to the costs of handling the application, but to costs which will be incurred for the benefit only of successful applicants. This is a requirement which attaches to the application, not to its success. The question is whether it infringes Article 13(2).”

The Supreme Court further observed, at paragraph 23:-

“The question is … whether the requirement to make a payment refundable on failure of an application is a “charge”. When the application succeeds, the payment becomes due unconditionally. When the application fails, the payment is refundable and refunded. But is it a charge to have to advance the payment, in order to await one or other of these occurrences?”

The questions arising were whether:-

(1)  The requirement to pay a fee including the second refundable part means, as a matter of law and without more, that the Respondents incurred a charge from their applications which was contrary to Article 13(2) in so far as it exceeded any cost to Westminster of processing the application; or

(2)  A conclusion that such a requirement should be regarded as involving a charge – or, if it is so to be regarded, a charge exceeding the cost to Westminster of processing the application – depends on the effect of further (and if so what) circumstances, for example: (a) any evidence establishing that the payment of the second refundable part involved or would be likely to involve an applicant in some cost or loss, (b) any saving in the costs to Westminster of processing applications (and so in their non-refundable cost) that would result from requiring an up-front fee consisting of both parts to be paid by all applicants.

No authority addressing these questions was cited to the Supreme Court.  The answers to them are unclear. Accordingly, it was necessary for the Supreme Court to make a reference to the CJEU.