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In the beginning…

Rob Hann, local government lawyer and author, finds time during the Covid 19 lockdown to share some of his early experiences as a trainee lawyer at Sheffield City Council at a time of major conflict between central/local government.

Here I am like many others, banged up at home, trying to avoid the dreaded COVID-19. Doing my bit for Queen, Country and the NHS and spending more time in the garden than I ever thought possible, digging for victory!

I have a cuppa tea, pick up The Times and as I flick idly through the newspaper, I come across the obituary of Ted Knight, ex-Labour Leader of Lambeth Council in the 1980’s, passed away at the age of 86.

Now I never met ‘Red Ted’ and haven’t  worked for Lambeth Council but nonetheless, Ted Knight’s passing triggered memories of my dim and distant days as a trainee lawyer (or articled clerk as we were rather quaintly known back then) for Sheffield City Council in the mid-1980’s.

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In 1984, fresh from passing my solicitor’s finals, I found myself in Sheffield, taking up my first job in local government beginning a career that now (incredible as it seems to me) spans 35 years. 1984 was not perhaps the best time to move to Sheffield given what was happening. Apart from anything else, the miners' strike was in full flow. Generally, it was a time of enormous change and conflict between some councils of a very left-wing radical persuasion and the equally radical Conservative Government led by Mrs Thatcher. The Labour Leader of Sheffield City Council at that time was one, Mr David Blunkett.

Sheffield, Lambeth, Liverpool (under its then radical deputy Leader Derek Hatton) and several other councils of a similar political hue had joined forces to find ways to challenge central government on what they saw as unfair policies impacting on the funding of local government.

I didn’t know it then but as it turned out, I found myself, just three months into my local government career, with a ringside seat at one of the biggest political and legal bust-ups of the era.

The Deputy Head of Legal at Sheffield Council was Martin Knox who was also in charge of my training and development. I was fortunate to have Martin as my principal and mentor. Many colleagues of a certain age will remember Martin, a hugely talented lawyer always brimming with enthusiasm, who had reached a high position in the legal department at Sheffield at an incredibly young age (under 30).

First and foremost, Martin instilled in me the importance of thoroughly researching the cornerstone of local government – its legal powers (or vires) to find ways to get things done and to make sure whatever policies our council wanted to follow, there was always a sound, lawful basis for those actions.To this day I have always been interested in the wide and varied archive of statutory powers which together dictate what councils can or can’t do and the ‘grey’ bits in between. These ‘grey bits’ or discretionary areas where legislation wasn’t always clear or was not couched in absolute terms, were the areas my then employing council took a keen interest in.

To me, this was an exciting challenge in the context of those turbulent times.

As regards the political theatre that was being played out, whilst I was never party to the detail, it went something like this:

Mrs Thatcher’s Conservative government, elected in 1979, was determined to rein in public spending, and in the early 1980s, it began a process of cutting the grants given to local government. Some more radical local authorities responded by hiking the rates which in turn prompted the threat of rate capping by central government. The 1984 Rates Act followed giving Whitehall powers to prescribe spending limits for individual authorities, along with broad discretionary powers over LA financial decisions, culminating in rate-capping. Controls on capital were also introduced to curtail council funded spending.

Whatever the rights and wrongs of these policies, the overall effect impacted significantly on central/local government relationships which became generally more antagonistic and legalistic. In response to grant penalties some local authorities increased the rates to maintain spending. Some used creative accounting techniques to avoid spending controls -- such as deferred purchase, sale and leaseback, the setting up of companies to avoid controls over local authority caps on spending, interest swaps, debt rescheduling and fund switching. The penalty system was hugely complex and operated through a byzantine maze of regulations which required further legislation in successive years to close ‘loopholes’ (those ‘grey areas!’) and to respond to legal challenges posed by councils. More and more frequently both central and local government resorted to the Courts to resolve disputes, usually through judicial review, but sometimes via appeals against action taken by third parties such as the local government watchdog, the Audit Commission.

In Liverpool, where the city’s economy had grown increasingly reliant on public funding due to decline in the local economy, problems were particularly acute. To add to this potent mix, the Militant Tendency, a faction of the Revolutionary Socialist League, had taken control of the local Labour party and succeeded in getting increasing number of councillors elected. Most famous of whom was Derek Hatton, who became deputy leader of Liverpool City Council.

In 1984, Liverpool secured some extra funds in a compromise with the then environment secretary Patrick Jenkin MP, who oversaw the financial and regulatory system impacting on local government. Liverpool, Lambeth, Sheffield, the GLC and several other similarly minded authorities saw an opportunity to take a stance against rate capping by deciding to delay the process of setting a rate for their respective councils. The lack of legal clarity (another ‘grey area’) around local authority budget setting and the absence of a specific time within which a rate had to be declared and set was the focus of these particular challenges to the Government and its imposition of capping and spending controls.

However, the failure to set a rate within a reasonable time put local government auditors in a difficult position. Councillors, in fact, bore huge personal risk as they were joint and severally liable for any losses accruing to the authority due to failure to set a rate although this had to be proven to be through ‘wilful misconduct’.

To cut a long and complex story short, two councils in particular, Derek Hatton’s Liverpool and Ted Knight’s Lambeth, held out for longer than most other council in not setting the rate and were then subjected to an extraordinary audit which resulted in councillors being required to repay the amount the council lost in interest, and also being disqualified from office. These were significant sums for individuals to find. 49 councillors from Liverpool, 32 from Lambeth were required to repay the costs as a surcharge: £106,103 in Liverpool, £126,947 in Lambeth. In both cases the amount per councillor was over £2,000. That meant they were also subject to disqualification from public office. The surcharged councillors appealed through the courts against the audit penalties imposed; Sheffield and our Leader (Mr Blunkett) were concerned about the outcome of this appeal, fearing that the Audit Commission might also seek to take similar action against Sheffield.

The scene was set for ‘Yours Truly’ to enter the fray. Martin sent me on a ‘mission’ to the Royal Courts of Justice to ‘sit in and observe’ the outcome of the appeal against the surcharge and disqualification orders brought by Ted Knight, Derek Hatton and other councillors at Camden and Liverpool.

Unfortunately, no-one had anticipated the huge press and media interest that had been generated over these political battles. When I got to the Royal Courts building, the press pack and TV camera crews were queuing along the Strand to get into the Court to witness the spectacle of some of the most radical local government Leaders of the left bumping up against the combined might of the state and judiciary. I queued up along with my new pals from the press and tried to sneak in. But just as I thought I had evaded security; a giant hand gripped my shoulder.

“Hey you, sonny,” came the gruff voice. “Where do you think you are going?”

 “I’m with the press,” I squeaked.

“Ok, so where’s your press pass then?”

And that was it – dumped out on my backside.

What was an articled clerk to do in such circumstances? Phone home and tell the Leader I couldn’t get past security?

Out of the corner of my eye I spied a gaggle of bewigged and gowned counsel followed by a parade of suited and booted lawyers (all of whom had ‘Visitor’ passes dangling around their necks). I recognised Head of Law at Lambeth who had been on TV. I joined this queue, entering by a different door and, like an Emperor Penguin in a snowstorm, snuck my way into the centre of the pack.

But once again, just as I was about to enter the sanctuary of number 1 court a voice called out “OI you! Curly top! Where d’ya fink you’re going?”

“Err, I’m with the Council” I shouted back, (sort of truthfully).

Luckily for me, the security guard became momentarily distracted by another potential interloper and he lost sight of me and I took the opportunity to smuggle myself as near to the front of the court as I could.

When I furtively popped up and looked around towards the Bench, I found I was in the third row from the front, behind all the juniors who were busily conferring with their Leader QC colleagues and smack bang between the teams of instructing lawyers from Liverpool and Lambeth. Had I gone just one more row, I would have been in with the advocates!

One of the Liverpool lawyers nudged me. “Hi, I’m James” he said, “This is exciting – are you with Lambeth?”

“Just taking some notes” I whispered whilst nodding a greeting to the Lambeth lawyers on my right.

And that is how, an articled clerk from Sheffield City Council managed to sit betwixt the massed ranks of lawyers from Liverpool and Lambeth while the Court of Appeal judges filed in to give Red Ted, Degsey and their colleagues the bad news that the court was upholding the auditors decisions to surcharge and disqualify them from office for wilful misconduct for not setting a rate. As soon as the leading judge had finished delivering the coup-de-grace, there was a moment of silence as everyone took in what was said.

The drama, the atmosphere, the reaction of the large group of councillors gathered at the back of the Court is hard to convey at this distance, but it certainly had a lasting impact on me. In short:

Pandemonium!

Derek Hatton, Ted Knight and some of their more radical colleagues were shouting, shaking their fists at the judges. This was followed by a chorus of the Labour anthem “Keep the Red Flag Flying” and the Liverpool favourite “You’ll Never Walk Alone”.

But also, in that moment, I noticed some councillors slumped in their seats, heads in hands realising, perhaps for the first time, the enormity of what had just happened to them as individuals.

My mission, however, was not over. I had to get out of court as quickly as possible, find a public telephone that was in working order (no email, internet or mobile phones then, remember), pray I had enough coins to make a call and then summarise as carefully as I could everything I had heard in court to my boss (Martin Knox) as he sat with the Council Leader (David Blunkett) hunched over the ‘octopus’ (the new-fangled conference call machine). Every phone box in the Strand was occupied by the press pack and I had to get a tube to Baker Street to find a free phone box.

I made my call; I spoke to the Leader in person for the first (and as it turned out the last) time passing on the bad news about the councillors in Lambeth and Liverpool. In the event, and for reasons I never fully understood, the auditors never did take similar action against Sheffield or indeed any other council. Perhaps ‘the powers that be’ felt there was little to be gained by a further demonstration of the might of the central machine?

That whole experience helped make up my mind that local government offered an incredibly varied and interesting career, a decision I can now say, some 35 years down the line that I have never regretted.

To any new lawyers coming fresh to local government I would simply pass on those words instilled in me by Martin Knox all those years ago:

“Focus on the law. Research the powers and legislation that underpin the sector and make sure whatever policies the council wants to follow, there is a sound, lawful basis for those actions.”

And now, time to get back to the garden……

Dramatis Personae:

Ted Knight – Left wing radical Labour Leader of Lambeth LBC in the mid-1980’s – expelled from Labour and banned from public office following these events. Passed away 30th March 2020 - Obituary The Times April 7th 2020;

Derek Hatton –Left wing radical Labour deputy Leader of Liverpool City Council in the mid-1980’s until banned from office and expelled from Labour and has pursued careers in property development, broadcasting and public speaking since leaving the political stage.

David Blunkett – (Now Lord Blunkett) - Leader Sheffield City Council between 1980-1987. Became an MP and rose to high Ministerial Office serving in several cabinet roles including Home Secretary under Tony Blair’s premiership.

Martin Knox -  After becoming one of the youngest deputy chief legal officers at Sheffield, Martin eventually became head of public law at law firm Anthony Collins, solicitors in Birmingham but died suddenly in 2004 aged 48, sorely missed by all who knew him.

Rob Hann –Following my training at Sheffield, I worked for five other local authorities before joining 4ps/local partnerships where I became head of legal. I now work as a freelance local government lawyer and am author of a number of books including A Guide to Local authority charging and trading powers 2020 and A Guide to Local Authority Companies and Partnerships (LACAP) about to be published for the first time in hardback format.

To order advance copies please contact Rob: This email address is being protected from spambots. You need JavaScript enabled to view it.. www.hannbooks.com

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