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A zero sum game?

The number of SEND tribunal cases is rising and the proportion of appeals ‘lost’ by local authorities is at a record high. Lottie Winson talks to education lawyers to understand the reasons why, and sets out the results of Local Government Lawyer’s exclusive survey.

Local Authority Insight Series: Local Authority Companies – How to Make Them Work

In this webinar, three highly experienced public commercial lawyers explore the background and future of local authority-owned companies, examining the pressures and complications they face, the factors behind their creation and look at how councils can best manage their external companies to avoid the pitfalls that have led some to fail.

There are estimated to be several hundred local authority-owned companies performing a wide range of functions and their numbers continue to increase. Many have been long standing successes - but some have not, failing in very public ways.

In this webinar, three highly experienced public commercial lawyers explore the background and future of local authority-owned companies. They examine the pressures and complications they face, the factors behind their creation and look at how councils can best manage their external companies to avoid the pitfalls that have led some to fail.

It will examine:

  • When you need to establish a company including when might it be useful or desirable to set up a separate entity?
  • What corporate forms can LA authorities take?
  • What additional pressures are LA companies under compared those in private ownership and how can these be addressed?
  • How should the performance of LA-owned companies be evaluated?
  • What factors often cause LA companies to fail?
  • How should the relationship with the Council be managed and what Governance issues commonly need to be addressed?
  • What effect might the Procurement Bill have on existing and proposed LA-owned companies?

+ - Resources (click to open/close) Click to collapse

Local Partnerships Guide to Local Authority Company Review: https://localpartnerships.org.uk/news/launch-of-local-authority-company-review-guidance/

Wiltshire Council governance review of Stone Circle (agenda item no. 65): https://cms.wiltshire.gov.uk/ieListDocuments.aspx?CId=141&MId=14128

Q&A

  1. How do Municipal Bus Companies fit in - arm's length?  Municipal Bus companies are a bit of a hangover from the past (Transport Act 1985). Most have been sold off but some remain as ‘arms-length’ managed companies.
  2. What are your views on strategic directors being on the board.  EG should your S151 officer steer clear of being a board member to avoid conflict  We covered this in the session – Our collective view was ‘yes’ - avoid if possible due to potential conflict with statutory duties, although we have come across examples where those occupying statutory officer posts have occupied directorship roles due to business criticality of the venture, pragmatism, individual experience or lack of other options, It is not ideal!
  3. Is a cause of failure sometimes caused by Local Authorities involving themselves in businesses that they had no place involving themselves in the first place?  One example I would suggest being Robin Hood Energy? The various public interest reports into high profile LA company failures are well worth reading, if only to highlight what potential dangers lie in wait in highly regulated markets and where good governance arrangements are not in place.
  4. What about MO as Co Sec? – We would be less concerned than acting as a director but  there could be concerns/conflicts around ‘shadow director’ and what knowledge they may have attending board meetings. The preference would still however, be that you would not have statutory officers on the board if at all possible.
  5. Any examples of bringing a service back 'in-house' to a newly formed Teckal rather than LA? This is becoming more common in recent years and is a very good potential use of LA companies as it gives opportunities to share services, trade in particular areas and capture risks amongst other things.  Such a quasi “insourcing” requires as much planning as the original outsourcing of a service and it is important to ensure that the those leading the service have the training and skills necessary to run a company, at the same time as delivering a service to the council(s).
  6. What's the latest in the Procurement Bill re shared Teckals please? As you will be aware the Procurement bill has been subject to significant amendment during the Lords committee stages but it has now entered the commons committee stage. As of yet we don’t know what amendments will stand and what additional amendments will be made. As it stands, a number of necessary amendments have been made to the bill to facilitate jointly owned vehicles being within the ambit of what is the existing regulation 12 exemption. However, at the moment this is qualified in Schedule 2 paragraph 2 (a) which provides that a contract will not be exempted (ie will need to be procured) if the contract ‘could reasonably be supplied under a separate contract’. This is a new and significant hurdle for joint working and the LGA are lobbying for this to be removed.

About the speakers

Perry Holmes

Perry is Director of Legal & Governance (Monitoring Officer) at Wiltshire Council. He has substantial experience as a senior leader in the local authority sector for over 15 years. He has worked at County, District and Unitary councils. He leads a varied set of teams at Wiltshire Council including Communications, Executive Office, Customer Services, Registration, the Coronial Service, the Lord Lieutenancy, as well as Legal and Democratic Services. He is part of the Corporate Leadership Team reporting to the Chief Executive and is the Council’s Solicitor and Monitoring Officer. He has significant expertise in local authority governance.

He recently completed an MBA with distinction and focussed his research project on the governance of council companies. He conducted a governance review of Wiltshire’s Stone Circle companies which has been shared as an exemplar by the Chartered Institute of Public Finance and Accountancy to other Councils. He has modernised and improved the approach to elections at Wiltshire and built succession planning and resilience into his teams. He has introduced a new performance management process and led a nationally unique campaign for positive conduct and democracy which was supported by conduct icon Jackie Weaver.

Peter Ware

Recognised by Chambers and Partners and Legal 500 as a leading expert in public law and procurement, Peter is the head of Browne Jacobson’s Government practice. Specialising in contentious and non-contentious procurement matters, Peter supports public and private sector clients to get the very best out of their regulated procurement activity.

Prior to joining Browne Jacobson, Peter was a special projects adviser for Nottinghamshire County Council – meaning he really understands the pressures faced by in-house counsel when leading major projects.

Rob Hann

Rob is a legal director and Head of Local Government at Sharpe Pritchard. He has worked for several local authorities and was head of legal at 4ps/Local Partnerships for nearly 20 years, leading the development and roll-out of the local government PFI programme for local government across England and Wales. Rob is also the author of several major law books on local authority charging, trading, companies and partnerships.

Rob is known for his extensive knowledge of public law, procurement, vires and the laws relating to large-scale and high-value PFI and PPP projects. Having worked for many years at the centre of local government policy development and programmes, identifying and removing obstacles to major projects, Rob can use this experience to benefit clients and to pursue new initiatives efficiently and effectively.

For further information on the Local Authority Companies Network, please contact Peter Ware at This email address is being protected from spambots. You need JavaScript enabled to view it.