Public Sector Update - June 2010

Planning

Coalition Government: Radical shake up of Planning policy

The new Government has released details of its plans for radical planning reform in its document "The Coalition: Our Programme for Government".

Some of the key proposal are listed below:

• Rapidly abolish Regional Spatial Strategies and return decision making powers on housing and planning to local councils, including giving councils new powers to stop 'garden grabbing';
• Radically reform the planning system to give neighbourhoods far more ability to determine the shape of the places in which their inhabitants live, based on the principles set out in the Conservative Party publication Open Source Planning (Policy Green Paper No 14);
• Abolish and replace the Infrastructure Planning Commission with an efficient and democratically accountable system that provides a fast track process for major infrastructure projects;
• Create a new designation similar to SSSIs to protect green areas of particular importance to local communities;
• Promote 'Home on the Farm' schemes that encourage Farmers to convert existing buildings into affordable housing;
• Create incentives for local authorities to deliver sustainable development, including for new homes and businesses;
• Review the governance arrangements of National Parks in order to increase local accountability;
• Take forward the findings of the Pitt Review to improve flood defences and prevent unnecessary building in areas of high flood risk;
• Create a presumption in favour of sustainable development in the planning system; and
• Present to Parliament  a consolidated national planning framework covering all forms of development and setting out national economic, environmental and social priorities.

If the policies above are implemented there will be a seismic change in planning policy. Practitioners should start preparing now.
For further information, please do not hesitate to contact our Planning Team.

Employment

Disability discrimination duty to make reasonable adjustments: Chief Constable of South Yorkshire Police v Jelic UKEAT/0491/09/CEA

An Employment Appeal Tribunal ("EAT") has upheld an employment tribunal's judgment that swapping the job roles of a disabled employee with that of a non-disabled employee would be a reasonable adjustment under the Disability Discrimination Act 1995 ("DDA").

PC Jelic was diagnosed with chronic anxiety syndrome and assessed to be unfit for front-line duties; as such, he was moved to a role that involved no face-to-face contact with members of the public.  In this new role PC Jelic performed to a high standard without lengthy sickness absence for several years.  However, over time PC Jelic's new role increasingly included contact with the public. Following an Occupational Health assessment PC Jelic was found to be unable to perform his full duties and was retired with an ill health pension.   

PC Jelic successfully brought a claim for disability discrimination by reason of a failure to make reasonable adjustments.  The employment tribunal held that swapping PC Jelic's role with that of a non-disabled police officer's would have been a reasonable adjustment for the purposes of the DDA.  The Chief Constable appealed.

The EAT upheld the tribunal's finding.  

On the face of it this judgment seems to extend an employer's duty to make reasonable adjustments. However, there is no doubt here that the nature of the police force had an impact on the decision, particularly as the EAT acknowledged that what constituted a reasonable adjustment would depend on the facts of the particular situation and that a job-swap would not be reasonable in all cases.  Additionally, in many cases it may be that the relevant consideration of "effect on the workforce" outweighs the advantage to the individual disabled employee of moving them into an existing role of a non-disabled employee.  

However, following this case, all employers would be wise to consider whether a  "job-swap" between disabled and non-disabled employees is a viable option when considering reasonable adjustments, particularly in the public sector, given the broad range of roles available within many organisations.

Projects

Commission closes infringement proceedings against UK over development agreement

The Commission has closed its proceedings against the UK over the direct award of a land development contract by the City of York Council. This is despite the Commission finding that the initial contract award did not comply with the EU public procurement rules.

In 2002, the City of York Council awarded a public works concession contract for the land directly to the Joseph Rowntree Housing Trust, without following an EU wide tender process.

In June 2009, the Commission sent the UK a reasoned opinion under EU infringement procedures which formally requested the UK to change the procedures followed.
The Commission's decision to close the infringement proceedings against the UK was taken because the UK had accepted that the EU public procurement rules apply to this type of development agreement and had since taken appropriate measures to reopen the contract to competition. The project will not be undertaken on the basis of the original concession contract but will instead be realised in four distinct phases, with each phase being awarded following a separate, open and transparent tendering process.

The Commission also stated that it decided not to refer the case to the European Court of Justice because the UK had put in place clear guidance for contracting authorities on the application of the Public Contracts Regulations 2006 (as amended) to development agreements aimed at ensuring that these types of issues will not arise again in the future.  

This decision adds further weight to the principles first introduced in the Auroux case and contracting authorities undertaking land development projects are advised to refer to the OGC guidance on development agreements at http://www.ogc.gov.uk/documents/PPN_11_09_Development_Agreements.pdf

Crime

Prosecuting offenders could reap rewards for Local Authorities
With the new coalition Government still finding its feet, there is a degree of uncertainty as to what areas of Local Government will be left unscathed from Government cutbacks.  It is now time for local authorities to reflect on ways in which they can be seen to be proactive in reducing waste and dealing with injustice.

Regulatory crime is one area. For example, people illegally using the disabled persons blue badge scheme may fall foul of a number of potential offences, from the common law offence of conspiracy through Fraud Act 2006 offences, offences under the Forgery & Counterfeiting Act 1981 to the Road Traffic Regulations Act 1984.  Prosecutions have a high success rate as many offences are strict liability, therefore easily proved. Sentences range from fines to custodial sentences.  Community penalties are often imposed, particularly for the more serious dishonesty offences.   

It is also worth targeting offenders who could fall foul of the Proceeds of Crime Act 2002.  The potential benefits here are that the Court has significant powers to levy unlimited confiscation orders requiring defendants to pay significant sums to the Treasury, the Court having determined that assets in the possession of offenders were the proceeds of offending.  This law applies to any offence where the offender has derived a "benefit" from offending.  Benefit here relates to the "use of" an asset and valuations can therefore be many times in excess of the actual street value of the assets seized.

There are therefore potential advantages for local authorities in being seen to be tough on offenders.  If you would like to discuss your options then please contact Ashfords' Jeremy Asher on 01884 203081 for further information.

Construction

Tolent Clauses: Who pays the adjudicator's costs?

Yuanda (UK) Co Limited v W W Gear Construction Limited.  

The case concerned an adjudication clause in a construction contract, which stated that the entity referring a dispute to adjudication had to bear their own and the other side's legal and experts costs in relation to the adjudication. The Court held that the clause was unenforceable, whereas in earlier cases the Courts have held that such a clause is enforceable against the referring party.

In this case the clause in the contract was drafted in such a way that if the contractor referred the matter to adjudication he had to bear the employer's legal costs of the adjudication, whereas if the roles were reversed and the employer referred a dispute to adjudication each party would bear their own costs.

The Court held that the clause in this case was not compliant with the Housing Grants Construction and Regeneration Act 1996, on the basis that a clause which states that the referring party must pay the financial costs of the adjudication is a very real fetter on the referring party's ability to refer a dispute to adjudication pursuant to the Housing Grants Construction and Regeneration Act 1996.  This is because the practical effect is that the contractor bringing the adjudication will be deprived of his remedy up to the amount of the employer's costs, so that if the employer's costs exceeded the amount of the adjudicator's decision in favour of the contractor, the contractor would not receive any money.

As such the Court held that the offending clause was not compliant with the Construction Act and should be struck out and not enforced.

The result is that the entirety of the provisions in the contract regarding adjudication were unenforceable and instead the adjudication provisions in the Scheme for Construction Contracts (England and Wales) Regulations 1998 applied to the contract.
This decision could be used by Judges in future cases to find that such a clause is unenforceable and must be struck out. 

Such clauses are in any event likely to be banned by the new Construction Act, but as yet it is not known when or whether this will come into force.

If you have any queries or need further information, then please do not hesitate to contact Ashfords' Stephen Homer at s.homer@ashfords.co.uk.

Housing

All Change with ASTs

One of the last acts of the previous Government was to introduce changes to the assured shorthold tenancy ('AST') regime.
The assured shorthold tenancy is the most common type of tenancy in the private rental sector. It provides the tenant with statutory rights of occupation which do not apply to high rent tenancies.

At present, in order to be an 'AST' the annual rent payable must not exceed £25,000.00 per year.

However, from 1 October 2010 this threshold is increasing to £100,000.00 per year, so from this date any tenancies that would (apart from the high rent) otherwise have been AST's will now also fall with the AST regime. Crucially, it appears at present that these changes will be retrospective, so many existing tenancies will suddenly overnight become AST's.

Why is this significant? It will mean that thousands of tenancies will suddenly find themselves being regulated by the Housing Acts.

This will have a significant impact in several areas including, perhaps most importantly, in relation to the rights of termination. In addition, this will mean that all landlords who have taken a deposit will be subject to the tenancy deposit legislation contained in the Housing Act 2004. If deposits are not protected, landlords could face damages claims and also face difficulties in attempting to obtain possession from their tenants.

Some commentators are hopeful that the changes will not be retrospective, but all signs at present are that the change in legislation will be.

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