Public Sector Update - December 2011Thursday 15th December 2011
Case Comment: Bibb v Bristol City Council  EWHC 3057 (Admin)
The High Court has recently found in favour of Bristol City Council in relation to planning permission it granted for a Tesco Express supermarket in the Stokes Croft area of Bristol. Permission had been granted for a change of use of the premises from a comedy club to A1 retail use in November 2009. In December 2010 the planning committee considered a further planning application for the installation of chiller and freezer units in the rear service yard.
It was argued that the installation of the chiller and freezer units amounted to a 10% extension of the shop floor space and the additional impact of the increase in floor space was a material consideration. Counsel argued that the incremental impact of servicing a shop with the extra floor space was a material consideration which was ignored.
During the Committee debate the legal adviser to the Council had said that "servicing can be a material consideration but it is for you, the committee, to determine if in this particular case you believe it to be a material consideration - that's the first thing. And the second thing that you have to consider is how much weight you are going to attach to that issue. That is a matter for you." Judge Ousely found that this advice was lawful, admitting, however, that "the legal adviser used an unhappy formulation". The legality of this advice exposes the differing approaches to materiality in two leading cases namely Tesco Stores Limited v SS for the Environment  1 WLR 759 and Bolton MBC v SS for the Environment  (61) P & CR 343.
In Tesco Hoffman LJ drew the sharp distinction between the question of law as to whether something is a material consideration and the question of the weight to be given to it. If Tesco were followed the incremental impact would be a material consideration and it was for the councillors to decide how much weight to afford it. Omitting servicing as a material consideration would be unlawful.
In Bolton Glidewell LJ permitted a category of lesser or insignificant considerations which it is not unlawful to take into account; the omission of which does not invalidate the decision. If Bolton were to be applied the omission of servicing would be unlawful, but not enough to quash the decision. Although the judge "was far from clear how consistent the decisions in Tesco and in Bolton are with each other", he found that the advice given was in keeping with the Bolton decision.
The judge went on to consider whether the incremental impact of servicing had been considered and found that it had. None of the reports had considered the issue, but it was concluded that the short discussion between Councillors and officers that took place at the meeting was sufficient to show that "they did treat incremental impact as relevant in the sense of being something worth considering." This was found to be the case despite advice given by the planning officer showing a "degree of confusion between materiality in law and materiality as having some significance in weight."
This decision demonstrates the low threshold for what can be considered a lawful decision in planning committees. It also shows the benefit of doubt afforded to Council's committees where ambiguous legal advice is provided to the decision makers.
A justified difference in pay under the Equal Pay Act 1970
Secretary of State for Justice v Bowling
The Claimant was a female employed at a Shared Service Centre operated by the Prison Service in Newport as a Service Desk User Support Team Customer Service Adviser. A month later a male colleague was employed in the same job role. The male colleague started on a higher salary than the Claimant.
The Claimant brought proceedings under the Equal Pay Act 1970 on the basis that she had the same job title as her male colleague and they had been doing the same work therefore she should have been paid the same wage as him. It was for the Secretary of State then to show that the defence under the Equal Pay Act applied, namely that the difference in pay is genuinely due to a material factor which is not the difference of sex.
The terms and conditions applicable to their job role involve a salary scale comprised of seven "spinal points" that employees may be expected to progress up on an annual basis, subject to satisfactory performance. The Secretary of State successfully argued that the male colleague started on a higher spinal point than the Claimant and therefore a higher wage due to his more extensive experience. They had therefore satisfied the Tribunal that the difference in sex was not the reason for the difference in pay when the Claimant and the male colleague were first employed.
However, in April 2009 both employees had annual pay reviews. The Claimant was now at a level where she was attending the same training courses as her male colleague and they both achieved the same appraisal rating. However the male colleague remained two points above the Claimant on the spinal scale. The Employment Tribunal held that the original justification for the difference in pay had at this time ceased to be a material factor and therefore the Claimant should be entitled to receive the same pay as her male colleague from this date.
The Employment Appeal Tribunal disagreed with this reasoning, allowed the appeal and dismissed the claim. They stated that by starting the male colleague two points above the Claimant on the spinal scale, a differential had been built in, subject to adequate performance. An employee's position on the spinal scale will impact his pay relative to a colleague lower down the spinal scale in each subsequent year until he reaches the top. At which point a colleague that started lower down the spinal scale can begin to "catch up".
An incremental scale against which pay is assessed is common in public sector work, and this principle will therefore have a wide application.
How Local Authorities can benefit from the new "Green Deal"
The Energy Act 2011 came into effect on 18 October 2011 and set into motion (among other things) the government's plans for implementing the Green Deal. This initiative was developed by the coalition to enable householders and businesses to spread up-front costs of energy efficiency improvements to buildings by attaching repayments to energy bills. The scheme will be delivered through new finance frameworks provided by commercial companies, social enterprises and local authorities.
The next 12 months will involve finalisation and implementation of secondary government legislation to provide clearer delivery frameworks for providers and commercial partners, and the Department of Energy and Climate Change ("DECC") has indicated that the first Green Deals should be available in Autumn 2012. Stakeholder guides, draft regulations and industry codes and regulations are available on their website (www.decc.gov.uk).
How will the Green Deal affect the public sector?
Local authorities are in a strong position to deliver efficient Green Deal schemes for a number of reasons, eg:
- The strategy may correlate with existing policies (e.g. creation of employment/training opportunities, improvement of housing stock, promotion of better health outcomes and reduction of fuel poverty);
- Authorities can adapt existing energy programmes (e.g. under the Community Energy Saving Programmes ("CESP") or Carbon Emissions Reduction Target ("CERT") initiatives) and offer these to commercial partners as "ready-to-go" projects; and
- Authorities will have superior awareness of issues affecting their locality.
The DECC recently issued an Information Note outlining ways that local authorities can maximise investment in the scheme, support local communities and drive economic growth. The legislation allows local authorities to choose how extensive their involvement will be. The following are mentioned specifically:
- Provision - Raising and providing finance, either individually or through consortia, will allow an authority to retain extensive control over schemes in their local community. Local authorities may already have strategies in place for the delivery of existing policies and may be able to adapt these to fit the new model with little disruption.
- Partnership - Working alongside commercial partners may draw in alternative sources of finance and enable implementation through a more specialist skilled supply chain. The degree of authority control can ensure that key local policies are achieved. Authorities may wish to adapt existing CERT or CESP schemes.
- Promotion - Authorities can act as advocates of local schemes, which may allow them to retain awareness of local strategies and earn commission on referrals. However, specific influence over schemes and their effects in the local area will clearly be more limited.
The Information Note raises considerations and preliminary steps for local authorities interested in the scheme. Interested parties should also keep abreast of the following developments:
- The DECC consultation on the proposed secondary legislation, which closes on 18 January 2011;
- The new Nottingham Declaration, which will set out a number of proposed energy targets and indicators that councils can opt into;
- DECC and Department for Communities and Local Government guidance on local carbon reduction and the Green Deal (scheduled to be issued in Spring 2012);
- CERT and CESP schemes - these are available until December 2012, and so councils should consider adapting these to satisfy the new scheme.
Compulsory data protection audits in local government and healthcare sector
The Information Commissioner, Christopher Graham, has called for the power to conduct compulsory data protection audits in local government, the health service and the private sector. The call for wider compulsory audit powers comes as a result of the Information Commissioner's Office (the "ICO") being blocked from auditing the organisations that are causing the most concern over their handling of personal information.
The ICO has agreed 47 undertakings with organisations that have breached the Data Protection Act 1998 (the "DPA") since April. Over 40% of these were in the healthcare sector, with the most serious personal data breaches having occurred in local government organisations, including local authorities.
Although the DPA provides the ICO with the power to conduct compulsory data protection audits, this only applies to central government departments. The DPA identifies audit as a central tool for assisting and ensuring organisations meet their data protection obligations, and consequentially the ICO undertakes consensual audits with the aim of providing practical advice and recommendations. However, the ICO has seen a general reluctance to undergo a consensual audit.
At the 10th annual data protection compliance conference, Christopher Graham said, "Something is clearly wrong when the regulator has to ask permission from the organisations causing us concern before we can audit their data protection practices."
The overall number of new data protection complaints is up by 2% compared to the same period last year, and Christopher Graham has highlighted that "With more data being collected about all of us than ever before, greater audit powers are urgently needed to ensure that the people handling our data are doing a proper job".
There are many benefits to undertaking a consensual ICO audit. The process will take approximately one month and the focus is very much on assisting the organisation in mitigating the risks of non compliance. The organisation will benefit from the ICO's resources at no expense and achieve independent assurance of data protection policies and practices.
The ICO has the power to issue fines of up to £500,000 for data protection breaches. Recently the ICO has fined Worcestershire County Council £80,000, North Somerset Council £60,000 and Powys County Council £130,000 after staff at the authorities sent highly sensitive personal information to the wrong recipients.
The current call from the ICO for wider audit powers coupled with the ICO's power to issue fines highlights the importance for organisations, especially those within the local government and health service sectors, to ensure that they have proficient and well established data protection policies and practices.
In Essex County Council v Williams  EWCA Civ1315 the Court of Appeal held that a person who reaches the age of 19 is no longer a "child" for the purposes of the Education Act 1996, and therefore Statements of Special Educational Needs lapse automatically upon attainment of that age. This case related to the obligation on the local authority to continue to maintain a Statement of a girl with Down's syndrome. The First Tier Tribunal had previously found that it lacked jurisdiction to hear an appeal by the girl's father as she was 19, and therefore no longer a child for the purposes of the Act. The Upper Tribunal reversed that decision, finding that the girl was still a child. It was argued that provided the statement was issued before a child is 19 then it should be maintained to the end of the course.
The definition of a child under s.312 of the Education Act includes any person who has not attained the age of 19 and is a registered pupil at a school. The Court of Appeal held that the meaning of the wording was clear and should be followed: namely that to be a child for these purposes, you must not have attained the age of 19. It followed that the local authority ceased to be responsible when a child reached 19, and was no longer bound to maintain a Statement after this age. Further, the local authority was not required to make a formal, appealable, decision. It will be interesting to see whether this is reconsidered in due course in light of the proposals in the SEN Green Paper, which proposes to introduce a single plan running to age 25 covering education, health and social care.
In relation to admissions, in November 2011 revised draft Admissions and Admissions Appeals Codes were published. The Admissions Code will apply to admissions in September 2013, with the existing code applying for the academic year 2012/2013. These codes remain in draft form but it is anticipated that they will be implemented as currently drafted in February 2012. Also relating to admissions, the Local Government Ombudsmen has warned school admission authorities that they face criticism when faults by school admissions appeal panels resulted in an unfair hearing. The report highlighted common problem areas including failures in communicating with parents, a lack of impartiality by the panel, procedural errors, failures in accurately recording hearings, and a lack of clarity in the communication of decisions.
In R (on the application of St. John's School Northwood) the Hillingdon LBC, a school applied for judicial review of an enforcement notice issued by the defendant local planning authority, where the school was in breach of a planning permission condition limiting its total number of staff and pupils. The school raised a number of strong arguments, including that the local authority had not properly considered the detrimental impact to the school in reducing pupil and staff numbers. It was found that the planning committee had complied with the law and had a careful balance to strike between considering the impact on the school and the public interest, which it had properly drawn in this case.
Hufton v Somerset County Council  EWCA Civ 789
The claimant was a pupil at a school run by the defendant local authority. The claimant slipped on a small pool of water on the wooden floor of the assembly hall as she entered the building during morning break. It had started to rain a few minutes into the morning break and some water had been brought inside. The claimant suffered injury to her knee and brought a claim in negligence for permitting its pupils to walk directly into the assembly hall when the floor was wet and hazardous.
The school confirmed that on wet days pupils were not permitted to enter the school hall and that a warning sign was put up. Prefects were positioned by the fire exit doors to prevent entry. Unfortunately, on the day of the accident the claimant managed to enter the building before these steps were taken. The Defendant could show that they had a risk assessment, although it was prepared some six years before the accident. The claim failed in the first instance. The Court of Appeal found in favour of the local authority and confirmed that there is no absolute duty on the part of an occupier to prevent any accident from ever occurring on their premises. In this instance the court found that a reasonable system was in place to prevent access to the hall floor in wet weather.
Furthermore, the court rejected that the defendants had been negligent in failing to clear up the wet floor before the claimant stepped on it.
Comment: This decision emphasises the requirement of an occupier to take reasonable care. In this case it would have been entirely unreasonable to suggest that the rainwater should have been instantaneously cleaned up as there was a short period of time between commencement of the morning break and it beginning to rain. The defendants could establish they have a reasonable system in place to prevent accidents in wet weather. Also the risk assessment, although dated, was unchallenged as there had been a significant period without incident. It is not sufficient to suggest that a rare occasion of system failing should give rise to liability.
Dalton v Nottinghamshire County Council  EWCA Civ 776
The claimant tripped over a loose and wobbling paving block that caused her to overbalance and fall, sustaining injuries. The accident took place in a pedestrianised area in Beeston town centre. The court at first instance found the defendant local authority negligent in carrying out their duty under section 41 Highways Act 1980 to maintain the highway. The defendant appealed.
It is possible to defend a s41 claim under section 58 Highways Act 1980 where the local authority has inspected the area in question on a regular basis and it has not noted any dangerous defects and as such the defect must have arisen since the last inspection period.
However, in this case the defendants had inspected the defect and graded it as a category Type 1 repair, and this was used as evidence that they believed it was dangerous themselves. With the defect being in the main square in the centre of the town with a high level of pedestrian use it was obvious that it was a danger and that it was foreseeable that it would cause an injury if somebody tripped over the loose paving.
In this case the claimant was successful due to the fact that the defect was proved to be dangerous both by the fact that the claimant fell over the loose paving and also by the fact that the local authority had deemed the defect as dangerous also.
Comment: The courts have previously made it clear that local authorities do not have to provide a perfectly flat smooth surface and that there are bound to be some bumps and ledges.
However, the Court of Appeal here found that "one does not expect the structure under foot to be shifting in nature." This case highlights the duty on local authorities to take swift action where they recognise a dangerous defect exists; this hazard went beyond merely a tripping hazard. The loose block could move quite freely and therefore the risk to a pedestrian was far greater. The defendant's assessment of the defect simply underlined the need for fast action.
Löfstedt report - reducing health and safety regulations
In March 2011, Professor Ragnar E. Löfstedt was asked by the Department for Work and Pensions to look into the scope for reducing the burden of health and safety regulation on business, whilst maintaining the progress that has been made in health and safety outcomes. His final report was published on 28 November 2011.
Prof. Löfstedt's report makes several recommendations. A key recommendation is to provide exemption from health and safety law to self-employed people whose work activities pose no potential risk of harm to others. This would extend to accountants, solicitors and other office-based professionals. Employment minister Chris Grayling estimates that a million self-employed people will be moved out of health and safety regulation altogether.
Another key recommendation is for the Health and Safety Executive ("HSE") to be given authority to direct all local authority health and safety inspection and enforcement activity. Currently, the HSE takes responsibility for regulating high-risk workplaces such as factories and mines, and local authorities monitor lower-risk environments such as shops and hotels. Transferring the inspection role to the HSE will ensure that enforcement is consistent and targeted towards the most risky workplaces.
Importantly, Prof. Löfstedt recommends that strict liability (where a company can have no legal defence for failing to comply with certain health and safety regulations) should be reviewed and either qualified with "reasonably practicable" where strict liability is not absolutely necessary, or amended to prevent civil liability from attaching to a breach of those provisions. Prof. Löfstedt's report stresses that employers should not be held responsible for damages when they have done all they can to manage risks. Such rules should be reviewed and curtailed to give employers more protection from legal claims.
Health and safety regulations will be cut by half over the next three years. Employment minister Chris Grayling is expected to start implementing the recommendations within weeks and start abolishing a substantial number of health and safety regulations.
Rules to be amended include:
- Health and Safety (First Aid) Regulations 1981 - remove the need for first aiders' training to be approved by the HSE. Prof. Löfstedt's report suggests that this requirement seems to have little justification provided the training meets a certain standard;
- Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995 - Prof. Löfstedt recommends simplifying the rules surrounding the reporting workplace accidents;
- Electricity at Work Regulations 1989 - ending over-compliance. At present, businesses are unnecessarily having appliances like microwaves and kettles testing carried out annually; and
- Work at Height Regulations 2005 - remove confusion over what constitutes "height" to prevent the law being used to prohibit activities like standing on a low stools so that people do not go beyond what is either proportionate or what the legislation was originally intended to cover.
The full text of the report is available online. Click here
Ashfords' Personal Injury Team has extensive experience in all areas of personal injury claims, ranging from accidents on public property or at work to road traffic accidents and clinical negligence. If you have had a claim made against you and would like to discuss your options, please contact Flora Wood, Partner, on 01392 334020.
The Localism Act 2011 and the General Power of Competence
The Localism Bill was granted Royal Assent on 15 November 2011. The Localism Act 2011 (the "Act"), introduces fundamental reforms in many aspects of local government. It is expected that most of the Act's provisions will come into force in April 2012.
One of the major measures in the Act is the general power of competence of local authorities and certain other public bodies (the "General Power of Competence"). The General Power of Competence is designed to give local authorities the power and freedom to do anything that an individual can do, so long as it is not specifically prohibited elsewhere. Local authorities will be able to exercise their discretion and utilise their own expertise to produce effective outcomes in response to local issues. It is hoped this will enable local authorities to work with others to deliver innovative solutions that will provide better value for money and drive down costs.
Historically, local authorities have only been allowed to act under specific statutory powers. Consequently, local authorities have been wary of innovative solutions, even where they believe a solution is a good idea, due to concerns about acting outside of their powers. By introducing the General Power of Competence, the Act is seeking to address this issue by granting local authorities the "power to do anything that individuals generally may do" (section 1(1) of the Act). The Secretary of State also has the power to remove unnecessary restrictions and limitations where there is a good case to do so.
While the intention behind the Act is to enable local authorities to adapt to circumstances and adopt new ways of working, the Act also seeks to protect public services. It specifically provides that the General Power of Competence does not relieve local authorities from providing existing statutory obligations, thereby safeguarding vital public services.
The Act introduces a number of other key measures which we will be addressing in future updates, together with details of any government guidance relating to the Act and its implementation that is released over the coming months.
Definition of Public Service Contract - ECJ Preliminary Ruling
The European Court of Justice ("ECJ") has handed down its preliminary ruling in the case of SIA Norma-A, SIA Dekom v Ludzas novada dome . The ruling, delivered on 10 November 2011 in response to a preliminary reference from the Latvian Supreme Court, has clarified the position on the classification and definition of public services contracts for the purposes of the public procurement rules.
One of the questions referred to the ECJ concerned the definition of a public services contract as opposed to a public service concession under Directive 2004/17 (the "Utilities Directive"). In particular, whether it is appropriate to treat a contract as a public service concession where the consideration in the contract is the right to exploit the service and/or compensation for losses from the contracting authority, and the risk of operating the service (in this case a public bus service) is limited by law and the contract itself.
The ECJ stated that a public service concession is ostensibly the same type of contract as a public service contract. This is because they are both contracts for pecuniary interest, made in writing between a service provider and one or more contracting authority, and with the object of providing a service. However, the difference between them lies in the nature of the consideration for providing the service. The ECJ made the following distinction:
- In a public service contract, consideration is paid directly by the contracting authority to the service provider;
- In a public service concession, the consideration will be a right to exploit the service, with or without an additional payment from the contracting authority to the service provider.
The ECJ therefore held these distinctions concern the assumption of risk. In particular, a public service concession is a contract where the service provider assumes the risk of operating the service. However, if the risk of operating the service is not transferred to the service provider, the contract will be a public service contract.
While this assumption of risk can be very limited to begin with, the ECJ clarified that the contracting authority must ultimately transfer all, or at least a significant share, of the risk of providing the public service if the contract is to be a public service concession.
As a general principle, the ECJ concluded that the question of classifying the type of contract is up to the national court to assess, based on whether a significant share of the risk has been passed from the contracting authority to the service provider.
However, by way of guidance the ECJ expressed the view that the relevant risk must be one of exposure to market forces rather than any other identifiable risk. The ECJ referred the case back to the Latvian Supreme Court to determine the classification of the contract.
Although the ECJ's ruling relates to the interpretation of the Utilities Directive, in our view it is likely this guidance would be applied equally by the national courts to the Public Sector Directive (Directive 2004/18). Therefore, the clarification and guidance provided by the ECJ on the distinction between a public service contract and a public service concession will be particularly useful for contracting authorities when classifying contracts and determining whether or not a contract is subject to the Public Contracts Regulations 2006 (as amended).
New Public Procurement Thresholds from January 2012
Every two years the financial thresholds for the application of the EU public procurement directives are adjusted.
From 1 January 2012 the thresholds for the award of public supply, public service and public works contracts (under Directive 2004/18 (the "Public Sector Directive")) will be revised upwards as follows:
- Supply and services contracts and design contests (awarded by central government authorities listed in Annex IV of the Public Sector Directive and covered by the WTO Government Procurement Agreement): from €125,000 to €130,000;
- Supply and services contracts and design contests (awarded by other contracting authorities) and subsidised services contracts: from €193,000 to €200,000; and
- Works contracts, subsidised works contracts and works concession contracts: from €4,845,000 to €5,000,000.
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