Local Government Review – September 2013
Print newsletter11/09/2013

Charging for services – the Barnet parking permit case
A recent case is a salutary reminder of when and how much a local authority […]
A recent case is a salutary reminder of when and how much a local authority can charge for providing services.
The case of R (Attfield) v The London Borough of Barnet [1] was a judicial review of Barnet’s decision to increase the annual charge for a resident’s parking permit from £40 to £100, and the charge for a visitor’s permit from £1 to £4 each. Mr Attfield claimed that the increase was unlawful as its purpose was to generate a surplus, beyond the cost of operating the parking scheme. The council argued that it was entitled to generate a surplus, as long as it used that surplus to fund other highways measures.
The judge ruled in favour of the claimant. Although Barnet was entitled to charge for parking under the Road Traffic Regulation Act 1984, previous cases had shown that the 1984 Act is: “not a fiscal measure and does not authorise the authority to use its powers to charge local residents for parking in order to raise surplus revenue for other transport purposes”. Barnet could only use the revenue raised to fund the cost of operating the parking scheme itself. In reality, this means it will have to reduce its parking permit charges and will therefore have reduced funds for other highways measures.
It is a timely reminder that a council’s powers to make charges need to be carefully considered and, where there are restrictions or conditions attached, they need to be complied with. The case also underlines that when authorities are looking at ways to maximise income, charges set can be challenged in the courts, who may not be sympathetic to the council’s need to raise income.
[1] R (Attfield) v The London Borough of Barnet [2013] EWHC 2089 (Admin), 22 July 2013

Freedom of Information Act and Environmental Information Regulations Guidance Update
A brief summary of the new guidance on the Freedom of Information Act (FOIA) and […]
A brief summary of the new guidance on the Freedom of Information Act (FOIA) and the Environmental Information Regulations (EIR) since our last Local Government Newsletter.
Since our last Local Government Newsletter the Information Commissioner’s Office (ICO) has reviewed and updated its guidance on several key FOIA and EIR issues. In particular, it has:
- updated its guidance on vexatious, manifestly unreasonable and repeat requests under FOIA and the EIR, following recent Upper Tribunal rulings which had criticised the existing guidance. Instead of characterising vexatiousness using five characteristics, the revised guidance sets out 13 indicators of vexatiousness, which are explicitly not meant to be conclusive. It also emphasises that public bodies may refuse requests as manifestly unreasonable or vexatious wherever they believe the request to be disproportionate or unjustified, rather than as a last resort
- expanded its guidance on the personal information exemption in section 40 of FOIA and the exception in regulation 13 EIR
- updated its guidance on the information reasonably accessible by other means exemption under section 21 of FOIA, including examples of circumstances where information can be considered to be reasonably accessible by another route
updated its guidance on the section 30 exemption (investigations and proceedings) and the section 31 exemption (law enforcement), in particular how they interact and how section 30 protects criminal investigations and proceedings conducted by public authorities - provided clarification on what constitutes a ‘reasonable amount’ under the charging regime found in regulation 8 EIR. It has also generally updated its guidance on how to comply with the charging regime and how to comply with information on emissions under regulation 12(9) EIR
- updated its guidance on the retention and destruction of information requested under FOIA and EIR, in particular emphasising the importance of disposal schedules
updated its guidance on responding to requests under FOIA so that public authorities avoid inadvertently disclosing personal data hidden in datasets, in particular the use of pivot tables for any disclosures or data sharing involving personal data.
From 1 September new obligations on public authorities in relation to publishing datasets come into force. The Protection of Freedoms Act 2012 requires public authorities to publish datasets as part of their publication schemes. The ICO has updated its guidance on publication schemes and its model publication scheme, plus sector-specific definition documents, including for local authorities and schools.
You need to make sure that the new text regarding datasets in the model scheme and definition documents is inserted into your own publication schemes and guides to information.
The ICO Guidance can be found here.

If you don’t hold it, don’t disclose it
The Freedom of Information Act 2000 (the Act) remains a cornerstone in the drive to […]
The Freedom of Information Act 2000 (the Act) remains a cornerstone in the drive to provide greater transparency and accountability over use of the public purse.
The First-Tier Tribunal (Information Rights) (the Tribunal) recently delivered a reminder to public authorities of the scope of the Act. On appeal in the case of Hackett v Information Commissioner and another (EA/2012/0265) the Tribunal upheld the Information Commissioner’s decision that a request under the Act for employment information from a public charity should not be complied with, since the information was not held by the public charity or another public body.
The United Learning Trust (ULT) is an education charity with 21 Academy schools. ULT were approached by the appellant to provide a range of information that included details of senior ULT staff members’ pay, pension contributions, other remuneration and expenses. The appellant’s request was refused on the basis that the employment information demanded was not held by ULT, but by the United Church School Trust (UCST) who, as a non publicly-funded charity, is not subject to the Act.
The Information Commissioner
ULT produced a copy of a senior member of staff’s employment contract to the Information Commissioner. The contract illustrated that the employee was legally employed directly by UCST and, therefore, the responsibilities for payment and pension contributions belonged to UCST, not ULT. The Information Commissioner held that the application be dismissed, because the information requested was held by UCST who, as a non publicly-funded charity, were not subject to the Act.
On appeal to the Tribunal
The appellant put forward the view that the corporate structure of ULT and UCST was an accounting process “in order not to have to publish the details of the public money that was paid to ULT’s chief executive and ULT’s senior managers”. In addition the appellant submitted that:
- both ULT and UCST were subsidiaries of the United Church Schools Company and as such were, “in effect, both part of one company”;
- the sole source of funds for the ULT Academies was derived from Government and, as such those funds should be accounted for publicly even if partially “distributed” through UCST
- the information requested was “held by the company of which ULT was a part” and it was important to release the information to ensure that public spending was “open and transparent”.
The Tribunal acknowledged that the key question to answer was whether the information requested was held by ULT or UCST. In assessing the question the Tribunal appeared reluctant to look at whether the UCST, as a separate private entity, should be the employer to senior members of ULT’s staff. The Tribunal, however, did acknowledge that:
- the corporate structure had been “urged on ULT” by the Department for Education
- the two charities had maintained a “complete corporate separation”
- the service agreement between ULT and UCST expressly referred to the senior staff being employed by UCST.
On the basis of the points outlined above the Tribunal unanimously upheld the decision of the Information Commissioner.
Further Information
Full details of the Tribunal’s decision can be found here.

Public sector investment in PF2 projects
In December 2012, as part of the Chancellor’s Autumn Statement, the Government published its long-awaited […]
In December 2012, as part of the Chancellor’s Autumn Statement, the Government published its long-awaited policy statement on the future of the Private Finance Initiative (PFI), A new approach to public private partnerships (PF2 Policy). The first PF2 projects are the privately financed element of the Priority Schools Building Programme, covering 46 schools in five batches, the first of which was released in June 2013.
As part of its reforms to PFI, the Government announced it would act as a minority investor in future PF2 projects. HM Treasury recently issued a consultation along with a draft Shareholders Agreement, Articles of Association and Loan Note Instrument, detailing how it sees that minority investment working. There is nothing to stop local authorities using a similar investment model for their own PPP projects and so the draft documents are worth a look.
It works like this. The Government, through a separate unit within the Treasury (the Treasury PF2 Equity Unit) will invest a minority share, alongside the private sector, into a joint venture company. The investment will be on the same terms as those agreed by the private sector and will be done through a company wholly owned by the Treasury (HMTCo). The minimum HMTCo investment is expected to be 15 per cent. Since the draft Shareholders Agreement proposes that each shareholder with a 15 per cent. shareholding can nominate a director for each 15 per cent, it means HMTCo will have at least one director on the company’s board. In addition, HMTCo can nominate an observer to the board, which could be the authority or other local representative as appropriate, such as a school.
Having a minority shareholding and board membership should mean that the public sector has a seat at the table giving more visibility of project information and more involvement in strategic decision making. The objective is to secure greater transparency, better partnership working and improved value for money as the public sector shares in investment returns.
The final versions of the Shareholders Agreement and Articles of Association of the joint venture company, plus the Loan Stock Instrument (since equity is frequently invested by way of share capital and loan stock) will form the Standard PF2 Equity Documents.
Although the consultation has now closed, it and the draft Standard PF2 Equity Documents are still available online here.

State Aid Update
With the European Commission’s recent updates to its state aid modernisation project there has been […]
With the European Commission’s recent updates to its state aid modernisation project there has been plenty to talk about since our last Local Government Newsletter. We summarise recent articles that were published on Reach and on our website. To be alerted to these articles as soon as they are published, make sure you are signed up to Reach. For more details click here.
Most recently, as of 20 August 2013, the Commission’s amendments to the state aid Enabling Regulation (Council Regulation 994/98) and the state aid Procedural Regulation (Council Regulation 659/99) are now in force. The Enabling Regulation has been extended and will now cover, amongst others, aid in favour of:
transport for residents of remote regions
broadband infrastructure
innovation
multifunctional infrastructure.
The Procedural Regulation has been updated, with:
complaints now subject to the ‘interested party rule’ and requiring key information before being lodged
market information tools will now allow the Commission to request targeted information once a formal state aid investigation has opened
the Commission has also been granted the power to undertake sector inquiries where information available provides suspicion that state aid measures may have distorted the market
and finally the co-operation between the Commission and national judges in state aid cases has been formalised.
For more details see our article Major Move Forward for the State Aid Regime.
On top of this, the Commission has also issued a revised second draft of the state aid de minimis regulation, which is again subject to consultation. The revised draft still maintains the current ceiling of €200 000 over three years but amends the definition of ‘single undertaking’ so as to include an exhaustive list of examples. As with the first draft, this version also contains a proposal to introduce a mandatory de minimis register, but now it expands on the detail to be included in the central register, such as an enterprise’s size and the economic sector in which it operates. The proposals in the first draft for a safe-harbour provision remain untouched, although the second draft does clarify that aid comprised in loans shall also be considered transparent de minimis aid if secured by collateral covering at least 50 per cent of the loan (providing the loan does not exceed €500,000 and has a duration of ten years). See our article Revised state aid de minimis regulation published for more detail.

The Local Audit and Accountability Bill 2013-2014
The Audit Commission (the Commission) has been a key component in the administration of local […]
The Audit Commission (the Commission) has been a key component in the administration of local authorities, the police, fire and NHS bodies since its commencement in April 1983. However, the Local Audit and Accountability Bill (the Bill) enacts the Government’s policy to retire the Commission within the next few years.
What’s new?
The Bill, currently making its way through Parliament, aims to provide greater decentralisation and transparency in the auditing of local authorities, with the intention of providing higher auditing standards and increased competition, seeking to deliver lower fees.
The key changes outlined in the Bill include:
- the Commission will be closed
- a local regime for local authorities to appoint auditors will be established
- the Secretary of State will be given the power to direct local authorities to comply with the local authority publicity “Code of Recommended Practice”
- a new system will be established for referendums in respect of increases in council tax.
Progress of the Bill
The Bill was published on 9 May 2013 and introduced to the House of Lords the following day. Debates in the Lords have focused on the impact of a number of the Bill’s provisions including:
- Clause 38 – noting that the Secretary of State now has the power to “direct local authorities to comply with the Code (of Recommended Practice) even if there was no evidence that they had broken it” – see our previous article on this
- a discussion on the realism of the Bill’s intention to create independent auditor panels suggesting as a solution that local authorities are required to establish local audit committees.
Among the amendments proposed during the Bill’s passage through Parliament is a desire to create a framework for central procurement. The Local Government Association provides support for the central procurement proposal stating that “National procurement has been estimated to save between £205 million and £250 million over a five-year period compared to local appointment”.
The Bill has passed through the House of Lords and had its first reading in the House of Commons on 24 July 2013.
Key dates
A timetable of key milestones was also published with the Bill:
- 2010/2011: the abolition of the Commission was announced
- 2012/2013: the Commission’s staff are transferred to the private sector and auditing contracts are outsourced
- 2014/2015: the Audit Commission is scheduled to close prior to April 2015
- 2015/2016: the new regulatory regime will take effect
- 2017/2018: local authorities may appoint auditors at the beginning of the financial year.
Further Information
Full details of the Bill’s progress through Parliament, including a copy of the latest version as it left the House of Lords, can be found here.
If you are interested in the Bill and want advice on the legal implications, please contact Richard Auton in our Public Sector and Projects Team.