So, what is the “general power of competence” that, at the sweep of a minister’s pen, can banish the courts from interfering with local authority affairs and bring religious harmony to our land? UK Communities Secretary Eric Pickles brandished his pen to sign into law ahead of schedule provisions of the Localism Act 2011 to deal with the Bideford Town Council prayers row. They give councils in England “general powers of competence”, powers that allow them “the same power to act that an individual generally has”. The idea is to free them to offer services in innovative ways. But Pickles has a wider agenda: to keep “unaccountable judges” out of politics.
Hitherto local authority powers have been constrained by Acts of Parliament – they could do what was laid out in those Acts (particularly the Local Government Act 1972) and no more.
As a result, according to a Communities Department introduction to the new Act: “Sometimes councils are wary of doing something new – even if they think it might be a good idea – because they are not sure whether they are allowed to in law, and are concerned about the possibility of being challenged in the courts.The Government has turned this assumption upside down. Instead of being able to act only where the law says they can, local authorities will be freed to do anything – provided they do not break other laws.”
In the past if councils went beyond their powers they faced judicial review on the basis of illegality – that their actions, in old legal parlance, were ultra vires. This was the case in the Bideford prayers affair.
Mr Justice Ouseley found that councils had no powers to hold prayer meetings as part of their business. Pickles hopes that rushing through the Localism Act provisions will knock that on the head: local authorities will be able to do anything they want as long as it isn’t unlawful.
Pickles has said that he has taken this approach rather than changes that would abolish the ultra vires principle. He said in written evidence: “Activities that individuals can undertake will no longer be able to be found to be ultra vires because they are not expressly provided for in legislation, or are of a type that are not normally associated with a local authority, or other public body.”
The intention is clear: to put local authority powers beyond judicial review, to keep the courts out of democratic decision-making. It is a power the government would also very much like for itself, as David Cameron indicated when the courts intervened in the Sharon Shoesmith affair – the argument being that if the Government has a democratic mandate, courts should not interfere in its decisions.
For students of public law it will mean some rewriting of the text books. Take the classic case of the wash houses and the laundry service, Attorney General v Fulham Corporation (1921) – used to illustrate the concept of illegality (ultra vires). The council was empowered to set up wash houses for residents to do their laundry. It decided to also run a paid-for laundry service. This was deemed beyond its powers. Now it would be welcomed – particularly if a bit of profit could be made. One of the things an individual (as a “legal person”) can do is set up companies, and this is what is intended for local authorities.
Section 4(2) of the Localism Act says: “Where, in exercise of the general power, a local authority does things for a commercial purpose, the authority must do them through a company.” The ideal would be a series of semi-independent private companies offering services associated with local authority provision – or even services that have never been within councils’ purview – if you or I could do it, so can a local authority.
For example Essex County Council has used so-called well-being powers (a more restricted general competence introduce by Labour in the Local Government Act 2000) to set up a bank to lend to small businesses on the basis of local authority assets (it has since been wound up). It also created Essex Cares, wholly owned by the council, to provide social care. It transferred its 850 social care employees into the company – and also transferred legal liability. Several homes, run as separate subsidiaries, found themselves “unprofitable” and staff contracts were renegotiated – something that would have been difficult to do while the homes were absorbed within the council. This and the fact that there is nothing to stop local authorities selling off any of their businesses raises suspicion among trades unions that such local authority trading companies are simply a softening up stage towards privatisation.
If the Secretary of State thinks that a statutory provision (whenever passed or made) prevents or restricts local authorities from exercising the general power, the Secretary of State may by order amend, repeal, revoke or disapply that provision – S. 5 (1) Localism Act
The new law does not bar judicial review altogether since there are likely to be other cases for example based on procedural impropriety – failure to follow procedural rules. It is also a moot point whether Pickles’s action actually will allow councils to hold prayers, that is, to modify their procedures and undertake actions on what amounts to ideological grounds. In particular small Parish and Town Councils such as Bideford have to seek the general power of competence and may not want it or qualify for it (if more than a third of members are co-optees).
There are other areas likely to prove controversial. For example, will the companies councils set up be covered by human rights law? Local authority entities, as emanations of the state pursuing state aims, generally are so covered – but what about the new profit-making trading companies that do not even have to be providing traditional state services such as care or welfare?
In the case of YL v Birmingham Council (2007) judges decided that residents of a private home were not covered by the Human Rights Act even though they were placed and paid for by the council. The law had to be changed by the Labour Government to bring private homes within the ambit of human rights. The mood is very different now and the Government is most unlikely to extend human rights where it does not have to.
In fact it is more likely to cut down on legal requirements that might stand in the way of the operation of general competence – including perhaps those in the 2010 Equality Act. And Mr Pickles has given himself remarkable powers to remove such burdens. S.5(1) of the Localism Act gives the Secretary of State “Henry VIII” powers (explained here) to repeal any part of another Parliamentary Act – whether past or future – that the Secretary of State thinks stands in the way of a local authority doing what it wants – or more correctly perhaps, what the Secretary of State wants. There is mention of consultation but basically Acts passed by the democratically elected Parliament can be amended or repealed by a single person. These are not the powers “any individual” normally has – they are super-powers. They cannot be challenged by judges and his decisions will have only the most cursory scrutiny by Parliament.
They are akin, to use another historical regal analogy, to James II’s “dispensing” power. It will be remembered that the 17th century king got into some trouble by “dispensing with”, that is, disapplying, Parliamentary Acts he disapproved of – sometimes barely before the ink of his own signature on those acts was dry.
Pickles has given himself just such draconian powers whenever he “thinks” a Parliamentary Act stops councils doing things that he wants to see them do. In Pickles’s case, however, he doesn’t have the excuse of being a pre-democratic autocratic monarch with absolutist tendencies.
Note: Rutland County Council lawyers are apparently telling the council it (as a body, not individuals) can now sue for libel (contrary to Derbyshire County Council v Times Newspapers) thanks to the general power in the Localism Act. David Allen Green disputes that contention here.
Alrich’s view of the Bideford affair is here
There is a discussion of the general powers issue on Lawthink here
And here Andrew Le Sueur gives his view
This is a Communities Department guide to the Act
Localism Act 2011
Section 1: Local authority’s general power of competence
(1) A local authority has power to do anything that individuals generally may do.
(2) Subsection (1) applies to things that an individual may do even though they are in nature, extent or otherwise –
(a) unlike anything the authority may do apart from subsection (1), or
(b) unlike anything that other public bodies may do.
(3) In this section “individual” means an individual with full capacity.
(4) Where subsection (1) confers power on the authority to do something, it confers power (subject to sections 2 to 4) to do it in any way whatever, including –
(a) power to do it anywhere in the United Kingdom or elsewhere,
(b) power to do it for a commercial purpose or otherwise for a charge, or without charge, and
(c) power to do it for, or otherwise than for, the benefit of the authority, its area or persons resident or present in its area.
(1) If the Secretary of State thinks that a statutory provision (whenever passed or made) prevents or restricts local authorities from exercising the general power, the Secretary of State may by order amend, repeal, revoke or disapply that provision.
10) Section 1 provides a general power of competence for local authorities in England. It gives these authorities the same power to act that an individual generally has and provides that the power may be used in innovative ways, that is, in doing things that are unlike anything that a local authority – or any other public body – has done before, or may currently do … the power does not need to be exercised for the benefit of any particular place or group, and can be exercised anywhere and in any way … The amendments to the Local Government Act 2000 mean that the well-being power provided in section 2 of that Act will no longer apply to English local authorities.
Note: The 2000 Local Government Act that created the “well-being power” imposed restrictions on it including this in S.3(1): “The power … does not enable a local authority to do anything which they are unable to do by virtue of any prohibition, restriction or limitation on their powers which is contained in any enactment (whenever passed or made).” This ultra vires provision is in effect revoked by the new law.