Localism Act 2011: General Power of Competence

Alastair Lewis, Partner & Parliamentary Agent, Sharpe Pritchard

Suggested summary

• “A power to do anything, so long as it’s not illegal”

• Not quite so simple as that

The Basics

• Creatures of statute can only do what they are empowered by statute to do

• Pre-1972 Act: common law doctrine of incidental powers

S. 111 Local Government Act 1972 (extract)

• …a local authority shall have power to do any thing … which is calculated to facilitate, or is conducive or incidental to, the discharge of any of their functions…

• Not prayers at council meetings

Section 2 Local Government Act 2000

• Power to do anything … likely to achieve the promotion or improvement of the economic social or environmental well-being of the area

LAML

• The case• The remedy• The Conservative proposals: Control Shift• The LGA’s Bill

Section 1(1) to (3)Local authority’s general power of competence(1) A local authority has power to do anything that individuals generally may do.(2) Subsection (1) applies to things that an individual may do even though they are in nature, extent or otherwise—

(a) unlike anything the authority may do apart from subsection (1), or(b) unlike anything that other public bodies may do.

(3) In this section “individual” means an individual with full capacity.

Section 1(4): wide ranging power(4) Where subsection (1) confers power on the authority to do something, it confers power (subject to sections 2 to 4) to do it in any way whatever, including—

(a) power to do it anywhere in the United Kingdom or elsewhere,(b) power to do it for a commercial purpose or otherwise for a charge, or without charge, and(c) power to do it for, or otherwise than for, the benefit of the authority, its area or persons resident or present in its area.

Section 2(1): Pre-commencement Restrictions

If exercise of a pre-commencement power of a local authority is subject to restrictions, those restrictions apply also to exercise of the general power so far as it is overlapped by the pre-commencement power.

Section 2(2)(a): Pre-commencement limitations

The general power does not enable a local authority to do anything which the authority is unable to do by virtue of a pre-commencement limitation.

Section 2(2)(b): Post-commencement limitations

The general power does not enable a local authority to do anything which the authority is unable to do by virtue of certain post-commencement limitations

Section 2(3): Democratic arrangements & contracting out

The general power does not confer power to make or alter democratic arrangements (ie type of political structure) or make or alter any contracting-out arrangements, or other arrangements that authorise a person to exercise a function of a local authority.

Section 3 (extract): Charging(1) Subsection (2) applies where—

(a) a local authority provides a service to a person otherwise than for a commercial purpose, and(b) its providing the service to the person is done, or could be done, in exercise of the general power.

(2) The general power confers power to charge the person for providing the service to the person only if—

(a) the service is not one that a statutory provision requires the authority to provide to the person,(b) the person has agreed to its being provided, and(c) ignoring this section and section 93 of the Local Government Act 2003, the authority does not have power to charge for providing the service.

(3) The general power is subject to a duty to secure that, taking one financial year with another, the income from charges allowed by subsection (2) does not exceed the costs of provision.

Section 4: Commercial Purposes(1) The general power confers power on a local authority to do things for a commercial purpose only if they are things which the authority may, in exercise of the general power, do otherwise than for a commercial purpose.(2) Where, in exercise of the general power, a local authority does things for a commercial purpose, the authority must do them through a company.(3) A local authority may not, in exercise of the general power, do things for a commercial purpose in relation to a person if a statutory provision requires the authority to do those things in relation to the person.

Section 5: Orders

Power to repeal or amend statutory restrictions on the general power and powers that overlap the general power

Power to make orders to prevent authorities exercising power in specified ways and to impose conditions on its exercise

Common law and other general restrictions

• Wednesbury unreasonableness• Padfield – proper purposes• Human Rights Act• Equalities Acts

Question 1

• Has the Secretary of State made an order saying that the general power can’t be used to do what the council wants?

Question 2

• Is this something that an ordinary individual could do?

Question 3

• Was there, before the end of the Parliamentary session in which the Localism Act was passed (ie May 2012) an existing provision contained in an Act which is still in force now and says that the council can do what it wants to do? Or was there such a provision in a statutory instrument that was in force before the end of that session? If yes to either, is there any restriction on that power?

Question 4

• Has any statutory provision been passed since the end of the session in which the Localism Act was passed which expressly imposes a prohibition, restriction or other limitation on the general power and which is relevant to what the council wants to do?

Question 5

• Does what the council wants to do alter its democratic arrangements or contracting out or other arrangements that authorise another person to exercise its functions?

Question 6

• If the council wants to charge for a service, is the service in the nature of a duty?

• If not will the charge only be made if a person agrees to pay it, and will the council make sure that it only charges enough to recover its costs?

Question 7

• Is what the council proposing to do for a commercial purpose?

• If so is it something the council could do otherwise than for a commercial purpose?

• And is it something that the council has a duty to do?

Question 8

• Are there any public law restraints on what the council wants to do: is it reasonable (Wednesbury) is it for proper purposes (Padfield) is it ECHR and discrimination law compliant?

Old Cases: Would the decision be different?

• AG v Manchester Corporation [1906] • McCarthy & Stone (Developments) Ltd v

Richmond upon Thames London Borough Council [1991]

• Morgan Grenfell & Co v Sutton London BC [1996]

Old Cases: Would the decision be different?

• Credit Suisse v Allerdale BC [1997]• Hazell v Hammersmith and Fulham London

Borough Council [1992]• Credit Suisse v Waltham Forest London

Borough Council [1997] • LAML