Insight Local Government Lawyer Insight December 2018 37 creating housing companies as part of a wider solution to address market need (whether affordable or market rented or for sale) or with a joint venture partner whether through One Public Estate or public/private JVs; • Custodian of public realm and public interests including the skills agenda and inclusive and connected communities. New ways of working Local authorities have been exploring ways of operating more efficiently and effectively over many years. This has included consideration of a wide range of models of operation, not just for improved service delivery, but to generate revenue and capital from major projects. These new ways of working often include: • Ceasing to provide services that are loss making or may be provided elsewhere more cost effectively; • Using charging policies strategically to influence demand for services; • Greater income generation including from the use of existing assets; • Transformation through the use of ICT and digitising services so that there can be far more self-service and reduced cost through Smart-phone technology; • Delivering functions through alternative service delivery vehicles, including: − Housing delivery vehicles; − Asset vehicles; − Shared services partnerships/vehicles; − Teckal or trading companies or charities e.g. for leisure, libraries and culture; − Social enterprises and mutuals; • Delivery of renewables and sale of electricity through energy service companies etc; • Social investment bonds, investment vehicles/partnerships; • Supporting business growth and productivity through economic social and environmental regeneration. One area where local authorities may have opportunities to shape their Place and deliver growth as well as improved financial returns is through the better use of assets particularly land and property – as well as using their powers to acquire manage and dispose of land. Development of land and assets Local authorities have wide-ranging powers to buy, sell and develop land. Their powers are set out in various statutes including: • Local Government Act 1972; • Housing Act 1985; • Town and Country Planning Act 1990; • Local Authorities (Land) Act 1963. Local authorities also have explicit powers that allow them to provide financial assistance and subscribe for shares in companies to provide privately let housing under ss 24-26 Local Government Act 1988. Local Authorities also have powers that enable them to appropriate land, in particular for planning purposes, or to acquire land for planning purposes to secure the proper planning of the area. When land is acquired or appropriated for planning purposes then an authority may dispose of that land under section 203 Housing and Planning Act 2016 in a way that converts any easements, covenants or other significant encumbrances into monetary consideration - thereby enabling and facilitating development. In exercising their powers local authorities may take a long-term view and may acquire land under s120 Local Government Act 1972 even where land is not immediately required for the purposes for which it is acquired. It is therefore open to local authorities to promote regeneration by acquiring land (either by agreement or compulsorily) to facilitate land assembly and strategic long term development that will support capital appreciation and growth, as well as potentially through development of revenue streams from those developments. Land acquisition and development generally needs to be for the benefit or improvement of the area, but does not necessarily have to be within the authority's area. Incidental powers are usually sufficient to rely upon to form a company or other corporate vehicle, if required, depending on the purposes for which the corporate vehicle is being formed, for example, regeneration purposes or to improve the area, or to generate cash through a trading company. Additionally or in the alternative reliance could be placed upon the general power of competence in s1 Localism Act 2011 that enables local authorities to do anything that an individual can do, so long as that it is not constrained by other legislation. In setting up any corporate vehicle there will be many legal issues and requirements to cover including: • The form of vehicle (contractual), corporate or joint venture; • The constitution; • Governance and accountability arrangements including who appoints whom to the board; • Procurement; • State aid; • The need to obtain best consideration; Roles of the Council Example Documentation Owner of the company and its business Articles of Association or Partnership Constitution for the company/LLP Shareholders’/Members'/Partnership Agreement (including "Reserved Matters" requiring council approval) Guarantor/funder of the company's business "Parent company" guarantee Loan or revolving credit agreement Security documents/debenture Client/customer of the business Strategic delivery contract Service contracts Client management arrangements Provider of services to the business Service level agreements e.g. ICT, HR, legal, payroll Provider of premises and assets to the business Lease or licence of premises Licence of ICT