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A High Court battle, prompted by the actions of a private insurance company, could have major ramifications for local government. Risk Management Partners raised concerns over London Authorities Mutual Limited, a not-for-profit company set up to pool insurance risk for fire, damage and general loss on claims of more than £1m. The company is backed by 10 London boroughs, with more set to join. RMP's claim was for breach of statutory duty, in particular, breach of the public contracts regulation 2006, and a judicial review of the decision by Brent LBC to enter into an arrangement with LAML for the provision of insurance services. If RMP were to win, the impact on local government would be overwhelming, and could affect shared services and joint working across the board. Taxpayers would be hit hard, as councils currently make millions of pounds in savings through joint working. Kaz Janowicz, managing director of Risk Management Partners told The MJ the issues were over whether local authorities had got the power to set up this company (ultra vires) and if they have got the powers, did Brent LBC procure its contract properly. ‘The reason for bringing the case to court is to ensure we have an open, transparent playing field, in terms of procurement,' he said. ‘We need to find out whether local authorities can rely on teckal exemption or whether there needs to be a more open tendering process. This point needs clarification.' But LAML chairman, Nathan Elvery, said the company had demonstrated ‘a much-admired model for the whole shared services agenda in the public sector.' He revealed that he had written to local government minister, John Healey, saying: ‘The case, if it succeeds, strikes at the heart of the government's shared-service agenda'.

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WHITEHALL

Court battle threat to shared services

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