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Recent court judgements have highlighted the lack of local powers councils wield despite whatever Whitehall wants says Mark Conrad. Labour local government ministers have been quick to tell us they have devolved significant autonomous powers to councils since 1997 – and even a casual glance at their record would confirm this. But two recent legal cases show that Whitehall's increasing desire for local public services autonomy is no guarantee councils won't be challenged when they flex their hard-earned policy muscle. Exactly how councils use and implement new powers is critical. Take the case of the recent LAML judgement. Former local government minister John Healey was particularly keen for councils to take advantage of underused ‘wellbeing' powers – introduced in 2000 – which allow local authorities' to act on behalf of their areas to improve social, economic and environmental wellbeing. Drawing on these powers, a group of London boroughs set up a mutual insurance firm – Local Authorities Mutual Limited (LAML) – to provide corporate property, terrorism and liability risk insurance at low cost. The estimated savings for councils ran into millions of pounds annually and, as a result, 10 local authorities signed up. However, the insurance industry reacted to this competition by taking legal action on the grounds that, by using LAML, councils had avoided the required tendering process for local government services. The fine print of the LAML court ruling has been explored in detail by The MJ in recent weeks, but suffice to say the Court of Appeal ruled LAML was effectively operating in breach of certain laws and the mutual will now stop operating. As legal firm Wragge and Co pointed out in its assessment of the LAML case, ironically the Court of Appeal's ruling has served to clarify other key aspects of European law pertaining to wellbeing powers and council shared services. But in simple terms the lesson of LAML is that just because Whitehall introduces a policy (or a set of powers) does not make it legal. Political will is one thing: but implementing that will correctly in the eyes of the courts is quite another. As if to confirm this premise, local government received a second legal blow this week (albeit one that made thousands of parents around the UK breathe a collective sigh of relief). Harrow LBC hoped to become the first local authority to prosecute a parent for lying on their child's school admission form. But the council has withdrawn its legal case amid uncertainty about the law under which the authority had pursued the mother, Mrinal Patel. Harrow had cited the Fraud Act 2006 to prosecute Ms Patel after she gave her mother's address when applying to a popular local school for her son, because her own address was outside the school's preferred catchment area. The council said Ms Patel's action did not provide a ‘level playing field' for local pupils who want to attend good schools. A senior source at Harrow said Ms Patel's actions also ‘distorted what local autonomy exists over schools admissions policies'. However as Harrow's legal bill soared town hall officials became concerned the Fraud Act 2006 may not apply to such cases and withdrew their challenge. David Ashton, Harrow's leader, said: ‘This seems to be a loophole, we can't in this particular instance and with this example use the Fraud Act 2006.' Mr Ashton said the council would now consider ‘other avenues' but added: ‘It would help if the government considered this position, because it is a nationwide problem.' Immediately, the Department for Children, Schools and Families said it would seek to clarify the issue. A spokesman for the department pointed out Harrow could have pursued Ms Patel under a simple breach of the national schools admissions code – which is enshrined in law. ‘The School Admissions Code sets out a clear and robust framework that schools and local authorities must follow to ensure that all school places are awarded fairly and openly,' he said. ‘The Code states "an offer of a place may be withdrawn if it is based on a fraudulent or intentionally misleading application from a parent - for example, a false claim to residence in a catchment area - which effectively denied a place to another" child.' Playing devil's advocate, where does this leave a-religious, or even protestant, parents who attended a few services with the local priest just to support little Tarquin's application to the excellent Catholic school down the road? But whatever the rights and wrongs of Ms Patel's case – she insists she lived at her mother's address for a short period and was honest with Harrow LBC when officials questioned her application - the case again highlights a problem with Westminster's devolution agenda. While Whitehall may wish to promote certain local authority actions when framing new legislation, it does not mean legal professionals will view the detail of new laws in the same way. The MJ's recent exposé of councils' use of pension fund money to boost spending on services raises similar issues. While the CLG insists regulations published in 1998 approve the use of pension fund money in this way, more recent European and UK laws have raised sufficient concern for Eland House to review the practice. It is this legal uncertainty linked to new policy that can stymie authorities when attempting to exert local autonomy. Ministers have indeed delivered on many promises to devolve powers to local government – but legal caution, as ever, is required when using these freedoms.

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WHITEHALL

Councils are court in the acts

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