‘An invaluable, comprehensive toolkit for lawyers, law firms and others advising on or participating in Local Authority Companies and Partnerships’ - Local Authority Chief Executive
Changes since the publication of the 2020 Guides to Local Authority Charging and Trading (‘LACAT’) and LA Companies and Partnerships (‘LACAP’).
A Note from the Author and Head of Local Government at Sharpe Pritchard, Rob Hann:
Both my Guides LACAT and LACAP were written and published in 2020, i.e. prior to the huge changes which have now happened post 2021, namely the UK’s departure from the European Union, otherwise known as Brexit. These changes will impact on the content of both books going forward but for now, and until such time as new legislation is enacted and which departs from the processes described for EU procurement and state aid, much of the existing content will remain valid and relevant to practitioners. Now that the content of the 2020 Guides are published on-line via Sharpe Edge, there is also the opportunity to flag these changes as they happen. To that end the following significant changes should be noted:
Changes to Procurement
Since 1st January 2021 (the end of the ‘implementation period’ or Brexit transition period), the Public Contracts Regulations 2015 (SI 2015/102) (the “PCR”) have been amended by the Public Procurement (Amendment etc.) (EU Exit) Regulations 2020 (SI 2020/1319) (“the Exit Regulations”). The amendments introduced by the Exit Regulations do not change the analysis of the PCR in this publication, but for completeness it should be noted that amendments have been made to PCR Regulation 12 (discussed in section 5.11) to reflect the fact that the European Union (Withdrawal) Act 2018 has ‘retained’ EU law in force prior to 2021 into UK law.
For more information about the impact of the Exit Regulations and of Brexit generally on the public procurement regime, please visit www.sharpepritchard.co.uk/brexit-hub. Also, while the changes made by the 2020 Regulations to the public procurement regime are relatively restrictive, in December 2020 the UK Government published a Green Paper on the transformation of procurement, and commenced public consultations, with a view to making substantive changes to the rules, including the PCR. Developments in this regard are also closely monitored and discussed on the SP website.
Changes to State Aid
From 1 January 2021, the EU State aid rules no longer apply to funding and other forms of support measures granted to business by UK public authorities. In place of the EU State aid rules, new provisions are set out in Chapter 3 of Title XI of the new Trade and Cooperation Agreement (the ‘TCA’).
While the TCA adopts a familiar set of principles to previous EU State aid regulations, the terminology and structure of the rules the UK must adhere is very different.
The concept of ‘subsidy’ replaces ‘State aid’; a recognition that the UK is no longer in the EU Single Market. ‘Subsidy’ is defined in terms very similar to the concept of ‘aid’, meaning that what would have been considered ‘aid’ before 31 December 2020 is largely likely to be captured under the Subsidy Control regime from 1 January 2021.
For more information on how the new Uk subsidy regime operates see www.sharpepritchard.co.uk/brexit-hub/
Author: Rob Hann
About ‘A Guide to LACAP’
Written by experienced local government lawyer and consultant Rob Hann with the co-operation and involvement of several leading practitioners in the field, the updated 2020 new edition of this unique book charts how partnerships, (whether in the form of limited companies or various other sorts of collaborations), involving local authorities, the private sector and/or the voluntary sector, can be established within the current legal and accounting framework.This new, single volume, limited edition now replaces the subscription based version of LACAP which Rob maintained for 25 years.
The new Guide to LACAP provides an essential toolkit for anyone (lawyers, chief officers, service leads and others) who may be tasked with setting up, managing, or advising local authorities and/or the many diverse corporate vehicles councils create. The book provides a ‘road map’ - to follow in the footsteps of the many successful companies and partnerships which have already been established in local government. The increasing use of alternative delivery vehicles means that many councils are still coming to terms with the legal, financial and governance issues related to these entities and their relationship to that parent body.
This book can help untangle and explain many of those complexities.
The legislative landscape for trading remains a difficult one to navigate, despite laws which have been introduced specifically to facilitate income generation through charging and trading. There are now many examples of successful local authority trading enterprises which are active in the market and provide role models for others to follow (some of which are featured on the cover of LACAP).
This book covers not just partnerships forged through traditional companies limited by shares but explores the full range of corporate vehicles used by local government in the modern age. It can, at times, be an unforgiving environment, as demonstrated by the myriad of court cases contained and featured in this work.
Those who advise local authorities, or who are invited onto a local authority company board, will find it hugely advantageous to have a copy of a Guide to LACAP handy, to study its content and to take proper heed of the lessons of the past.
Coherent delivery strategies are essential in both the set up and the management of such projects, the regulation of which can be volatile and unclear, and this book uses flowcharts and diagrams to simplify the message. Local authority powers and the powers of general competence contained in the Localism Act 2011 are comprehensively covered.
Local authority corporate structures which have become so familiar in the UK, such as so-called Teckal trading companies, are likely to remain an important part of the local authority landscape for some time to come. With the help of leading law firm Browne Jacobson LLP, the complexities of the State aid system are also covered. The procurement sections of this book and the State aid chapter will help with these difficult topics in the context of local authority companies and partnerships.
About the author
Rob Hann is an experienced solicitor, specialising in local government law. He has worked for many years in the public sector on major infrastructure projects, the PFI and helping local authorities to commercialise services through trading companies and other vehicles. He has also helped several authorities to bid for devolution and setting up combined authorities.
He is a regular author of articles and publications as well as two major local government textbooks and a ‘sister’ publication to LACAT – A guide to local authority charging and trading powers 2020.
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