Local government quarterly digest (February 2013 – April 2013)

This is the second in our series of quarterly local government update blogs which will enable readers to catch up on the most important cases, issues or developments in local government since February 2013.

Please feel free to submit a comment below or contact us at feedback@practicallaw.com if you have any views on the cases, issues, or legal development that is covered or if you think we have missed something that should be brought to the attention of local government practitioners.In this post we look at:

  • Standards of conduct for members.
  • The issues to consider when setting care home rates.
  • Free school transport and whether a local authority can designate a pick-up point other than the pupil’s home.
  • Why it was unlawful for a local authority to pay a lower foster care allowance to a family foster carer.

Standards of conduct for members

No dispensation necessary for council tax

The Localism Act 2011 (LA 2011) introduced key changes to the regulation of standards of conduct for elected and co-opted members. In particular, section 33 of the LA 2011 made significant changes to the provisions on dispensation and empowers a relevant authority, upon written request, to grant dispensations for up to four years for a member to be able to participate in or vote at meetings where they have a disclosable pecuniary interest. An authority should only grant a dispensation if a prescribed condition is met such as it considers that not granting the dispensation is likely to impede the particular business transaction or, without the dispensation, the representation of different political groups would be so upset as to alter the outcome of the vote.

Following these changes, it appears it was the practice of some monitoring officers to inform their members that being a council tax payer was a disclosable pecuniary interest in any Budget debate and that speaking or voting on that debate would be a criminal offence unless they obtained a formal dispensation. Therefore, on 5 February 2013 the Department for Communities and Local Government (DCLG) wrote to all local authority leaders clarifying that it considered such dispensations to be unnecessary since council tax liability applies to the population. The letter confirmed that although being a council taxpayer or being eligible for a discount under the new local arrangements for council tax support are pecuniary interests, they are not disclosable pecuniary interests as specified in the Relevant Authorities (Disclosable Pecuniary Interests) Regulations 2012 (SI 2012/1464). Therefore, a member does not need to seek a dispensation in order to participate in discussions or vote on decisions in the council tax setting process or on local arrangements for council tax support.

Receiving payment for lobbying

On 12 March 2013, following reports published in the Daily Telegraph on planning and councillors’ interests, the Secretary of State for Communities and Local Government wrote to Hilary Benn MP setting out the position on councillors and lobbying.  Although he did not consider that such lobbying was widespread, and that any practice was likely to pre-date the new standards regime in the LA 2011, his letter confirmed that it was unacceptable for councillors to receive any form of payment to lobby their own council. Such behaviour, which breached the seven Nolan principles set out in section 28(1) of the LA 2011, was a conflict of interest that would be prohibited by local authorities’ own local codes of conduct (and the DCLG’s illustrative text for local code of conduct) and the receipt of such payments could constitute a criminal offence under the Bribery Act 2010. However, the letter acknowledged that instances of local government corruption are rare and that in order to allow councillors to champion their local residents it was important to protect their right of freedom of speech.

Issues to consider when setting care home rates

Benchmarking alone is not enough (R (Redcar and Cleveland Independent Providers Association and others) v Redcar and Cleveland Borough Council [2013] EWHC 4 (Admin))

Following a successful challenge by the claimants that the council had failed to have due regard to the actual cost of providing the care services when setting the rates, the High Court ordered Redcar and Cleveland Borough Council to make a new decision setting its care home rate for 2012/13. Redcar, when setting its rates, had almost exclusively relied on a benchmarking exercise on the costs that other authorities were paying.  Although the High Court accepted that such an exercise may be useful and that there was no single defined method for calculating the actual costs of care, it held that whatever method was used must take account of actual costs and “local factors”. By solely relying on the benchmarking exercise, Redcar had failed to do so.

The High Court also held that Redcar was not allowed to maintain a closed list of care homes in which it would place residents on the basis that these homes had agreed in advance to accept the council’s rates. Although it was open to a council to refuse to place a resident in a home if that home refused to accept a council’s (lawfully set) rates, it must not exclude a care home from any list of homes that it is willing to contract with.

How to use a benchmarking exercise successfully (R (Care North East Northumberland) v Northumberland County Council [2013] EWHC 234 (Admin))

Following the decision in Redcar, the High Court rejected a challenge to Northumberland County Council’s decision to fix care home rates in the Northumberland area for a three-year period from 1 April 2012. The claimant’s ground of challenge was also on the basis that, in setting its rates, Northumberland had failed to pay due regard to the actual cost of care provision. Although Northumberland had in part based its conclusion on the appropriate level for care homes on the fact that some neighbouring authorities were paying lower rates than it currently paid, unlike Redcar and Cleveland Borough Council, it had also had due regard to the actual costs of providing the care in that:

  • The officer tasked with making decisions was experienced in running care home services in the area and understood the costs involved.
  • Northumberland had carried out a review of the profitability of various providers based on the current rates that it was paying.
  • Northumberland had expressly discussed with those providers that had accepted the proposed new rates whether the proposed rates would meet the actual costs and the fact that 70% of existing providers had accepted the new rates suggested they were sufficient.

Therefore, the High Court rejected the claim.

School transport

Home does not necessarily always mean home (R (M and another) v London Borough of Hounslow [2013] EWHC 579 (Admin))

The High Court considered the extent of a local authority’s obligations to provide travel assistance to two children with special needs between home and school. The London Borough of Hounslow asserted that it had the power under section 508B of the Education Act 1996 (EA 1996) to arrange transport for an eligible child  from a pick-up point a reasonable distance from the child’s home, even if the parents did not consent to the arrangement. Section 508B(3) of the EA 1996, which defines home to school travel arrangements as relating to travel in both directions between a child’s home and school, does not state that these have to cover the whole journey from home to school.

The High Court agreed and dismissed the claim on the basis that the phrase “home to school travel arrangements” in section 508B does not require the provision of transport between the child’s home and school in every case and permits a local authority, in an appropriate case, to impose on the parents of a child a designated pick-up point other than the child’s home.

Foster carers pay

Unlawful to pay family foster carers a lower rate than unrelated foster carers (R (X) v London Borough of Tower Hamlets [2013] EWHC 480 (Admin))

The High Court held that the London Borough of Tower Hamlets’ fostering policies were unlawful because they provided that, unless there were exceptional circumstances, a lower foster caring rate was paid to family foster carers than to foster carers who were unrelated to the child.  The setting of foster care rates by local authorities is governed by the statutory guidance issued under section 7 of the Local Authority Social Services Act 1970 which states that local authorities shall, in the exercise of their social services functions act under the general guidance of the Secretary of State, but a local authority is free to depart from the guidance provided there is a cogent reason for doing so.

The High Court accepted the London Borough of Tower Hamlets’ submissions that the statutory scheme leaves it to local authorities to determine the terms (including payment terms) on which they provide fostering services to looked after children and the statutory guidance permits local authorities to pay different rates to different types of foster carers. However, it considered that the freedom of local authorities to determine their own policies was restricted since the legislation showed that Parliament had intended that children who were unable to continue living with their parents should be placed, if possible, with family members in preference to unrelated carers. It followed from this that a local authority policy that frustrated this intention was likely to be unlawful.

The High Court concluded that the London Borough of Tower Hamlets’ policies on fees did not accord with the statutory guidance, since they provided for a difference in treatment between family foster and unrelated foster carers. Given that the local authority was unable to demonstrate that there were sufficiently cogent reasons for departing from the principle of equal treatment as required by the statutory guidance, the High Court held that the local authority’s policies of paying a lower rate to family foster carers were unlawful, as they discriminated on the grounds of pre-existing relationship with the children between family and unrelated foster carers in the payment of the fostering fee.

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