Insight Local Government Lawyer Insight December 2018 33 Property development is a major challenge for local authorities. Not only do they have to cope with a changing legal landscape but also the vagaries of the commercial climate. EU procurement When is a development agreement likely to constitute a works contract for the purposes of the EU procurement rules? This question has been rumbling on since the ECJ’s decision in Auroux¹, which widened the scope for development agreements to be caught by the Public Contracts Regulations 2015. This case was followed by Helmut Müller² which held that: (a) exercising regulatory planning functions did not qualify as procurement; and (b) for a public works contract to exist an essential element is that the contractor must assume a legally enforceable obligation to carry out the works. In respect of (b) a creative approach had been adopted whereby development obligations would only be triggered in the event options were exercised, that is, some time after the contract had been entered into. In this way, at the moment the contract was entered into, there were no binding development obligations. The Court of Appeal in Faraday³ has held that such arrangements do not comply with the Public Contracts Regulations because they involve a contracting authority agreeing to act unlawfully in the future, that is, by effectively agreeing to contract for works in the future. A second feature of the judgment is that it is the first time that a contracting authority has had a finding of ineffectiveness made against it in the English Courts. A fine of £1 was imposed, although had the circumstances been different then it is likely to have been a lot higher. Finally the Court had some interesting observations about the adequacy of the drafting of voluntary transparency notices. Disposing of open space land Local authorities have very broad powers to dispose of land under section 123 Local Government Act (LGA) 1972. However, where ‘open space’ is involved there is a further obligation to advertise the proposed disposal and consider any objections received. The conventional wisdom has been that by following this process it is possible to defeat the open space status of the land. However, the recent decision in Wandsworth⁴ is a reminder that this will not always be the case. The Court held that the disposal of land by way of a lease to a private nursery would be contrary to a statutory trust arising under section 10, Open Spaces Act 1906, because no public access to the land would, thereafter, be permitted. In order to avoid a similar situation arising in future a simple solution is to appropriate the land from its open space use to planning purposes in reliance on section 241 Town and Country Planning Act 1990. Appropriation is the process by which local authorities transfer how they hold land from one statutory function to another. Section 122 LGA 1972 governs the process. This requires that the local authority resolves that the land is no longer needed for the purpose for which it is currently used and the new function, or use, to which it is to be put is one for which they could have acquired the land. As with section 123 LGA 1972 there is an obligation to advertise where ‘open space’ is involved. Town and Village Greens (TVG) The registration of land as a TVG strikes a fatal blow to any hopes for its development. This can be as much of a problem for the public sector as it is for the private sector. In addition to proving that the land has been used for recreational purposes for a continuous ¹ Case C-220/05 - Jean Auroux and Others v Commune de Roanne ² Case-451/08 - Helmut Müller GmbH v Bundesanstalt für Immobilienaufgaben ³ Faraday Development Ltd v West Berkshire Council and another [2018] EWCA 2532 (Civ) (14 November 2018) ⁴ R (Alexander Keay Muir) v Wandsworth BC [2018] EWCA Civ 1035 Nathan Holden and Clive Pearce look at the lessons to be learned from recent topical legal cases and other changes in the real estate market of relevance to local authorities. A market snapshot