PLC Public Sector reports:

Make sure that you have not missed a key development in your area of the law by reviewing our latest list of recommended actions.

Education and children’s services: education lawyers should note that the Department for Education has published a Governor’s Handbook.

Employment and pensions: employment lawyers should be aware of the following EAT judgments:

• An employee who was summarily dismissed on capability grounds, and then reinstated, was constructively dismissed as a result of the imposition of a mandatory retraining programme (Thomson v Barnet Primary Care Trust).
• The Acas Code of Practice applies to dismissals where disciplinary proceedings have been, or ought to have been, invoked (Lund v St Edmund’s School).
• An employee who had raised a grievance and submitted a tribunal claim about persistent racist comments, was not victimised when his employer required him to relocate to an alternative site (Micheldever Tyre Service Ltd v Burrell).
• Seven weeks’ pay was too high for a technical breach of TUPE consultation provisions (Shields Automotive Ltd v Langdon).

Environment: environmental lawyers should note that the:

• European Commission has published in the Official Journal its Recommendation on the use of common methods to measure and communicate the life cycle environmental performance of products and organisations.
• Government has announced that its one-stop shop for consents for nationally significant infrastructure projects (NSIPs) under the Planning Act 2008 is open for business.

Equality Act 2010: equality lawyers may be interested that the Scottish Government has published a report on integration of the public sector equality duty in Scotland.

FOI and data protection: information lawyers should be aware that the:

• Consultation on the Ministry of Justice’s proposal to extend the Information Commissioner’s powers to compulsorily assess NHS bodies‘ compliance with data protection legislation closes on 17 May 2013.
• Consultation on draft statutory guidance extending the period of retention for biometric data where necessary for the purposes of national security closes on 20 May 2013.
• Department for Business Innovation & Skills has published an independent report by Deloitte that assesses the market for public sector information across the UK.

Housing: housing officers should look at the Homes & Communities Agency’s consultation on protecting social housing assets.

Local government: local government lawyers should note that the:

• Supreme Court has clarified the scope of a local authority’s duty to provide accommodation to vulnerable adults under section 21(1)(a) of the National Assistance Act 1948 (SL v Westminster City Council).
• Local Audit and Accountability Bill has had its first reading.
• Department for Communities and Local Government has announced that town and parish councils will be able to submit “barrier busting” proposals to the government under the Sustainable Communities Act 2007.

Pensions: pension lawyers should be aware that the Department for Education is consulting on detailed proposals relating to the design of the reformed Teachers’ Pension Scheme.

Property and planning: property lawyers may be interested that:

• Permitted development rights have been extended for homeowners and businesses.
• The Growth and Infrastructure Act 2013 (Commencement No 1 and Transitional and Saving Provisions) Order 2013 has been made.
• The Court of Appeal has ruled that tenants’ unlawful flat conversion works did not render the building a house allowing them to acquire the freehold (Henley and another v Cohen).
• The Land Registry has revised Practice Guides 19 and 26.
• The Law Society has published updated conveyancing forms.
• The Royal Institution of Chartered Surveyors (RICS) has published a draft guidance note on capital allowances and land remediation relief on which it is currently consulting.

Regulation and enforcement: procurement officers should note that the draft Dangerous Dogs (Amendment) Bill, proposing that private property will be covered by the Dangerous Dogs Act 1991, has been introduced to Parliament.

PLC Public Sector reports:

On 29 January 2013, the Political and Constitutional Reform Committee published its report on the prospects for codifying the relationship between central and local government. The report proposed the introduction of a code that would give local government greater control over its own affairs and clarify which responsibilities should rest with central government and which with local government. For information on the report, see Legal update, Political and Constitutional Reform Committee publishes report on codifying relationship between local and central government.

Given the support in local government circles for a code governing the relationship between central and local government, the government’s response to the report’s recommendations for a new constitutional settlement for local authorities in England that might achieve greater autonomy for local government has been eagerly awaited. That government response has just been published (see Government Response to the House of Commons Political and Constitutional Reform Committee Report (May 2013)).

Localism and decentralisation

In response to the Committee’s recognition of the commitment of all parties to the concept of localism and the government’s willingness to devolve powers from Whitehall to local government, the government:

• Welcomed the Committee’s recognition that progress on the concept of localism is being made.
• Confirmed its belief that power should belong at the lowest appropriate level and that there are benefits (such as stronger democracy, innovation and local growth) in moving power away from Westminster and Whitehall.
• Outlined the steps that it had already taken to free local government in England from the control of Whitehall, such as removing the regional tier of government (see Legal update, Government commits itself to abolishing Regional Strategies and returning decision-making powers to local councils) and passing power down via the Localism Act 2011 (LA 2011) with the general power of competence contained in section 1 of the LA 2011 reversing the position on local authority vires. For more information, see Practice note, Localism Act 2011.
• Confirmed that responsibility for commissioning public health services has been decentralised to local government in the new commissioning structure for health services contained in the Health and Social Care Act 2012. For more information, see Practice note, Health and Social Care Act 2012: commissioning structure.
• Cited City Deals, a series of tailored agreements under which certain powers (and funding) will be transferred from central government to the city, as an example of what it is willing to devolve to help deliver economic growth at a local level, see Legal update, New City Deals launched.
• Confirmed that it will be taking forward the majority of Lord Heseltine’s recommendations in his review on economic growth, see Legal update, Heseltine review on economic growth published.
• Considered that, taking all of the above issues into account, local authorities have unprecedented freedom and power to innovate and support their communities and there has been a shift in the balance of power with local communities in charge of their own affairs.

Therefore, although the government welcomed the Committee’s interest and ideas for further localism it considered that these should be seen in the context of the action that the government is already taking.

Codifying the relationship between central and local government

The Committee recognised that the draft code was not a finished product and that central and local government should engage to define the code further. In its response, the government:

• Referred to previous failures to codify the relationship, citing in particular the 2007 Central-Local Concordat. It believed however that these failures had occurred because such documents were about processes, rather than policy intended to improve outcomes.
• Was concerned that, instead of liberating local leaders, the codified relationship proposed might simply focus energy on theoretical debate rather than shared endeavour, problem-solving and action.
• Advocated an approach of introducing policies, linked to legislative changes where necessary. That approach avoids a “one-size-fits-all” approach and allows different responses to different challenges rather than seeking to establish a “rigid, constitutional blueprint” through a statutory code.

Financing greater local autonomy

In response to the report’s recommendation that local authorities should have unlimited ability to introduce their own taxation policies, subject to agreement from the local electorate, the government:

• Commented its belief that there is little public appetite for the introduction of additional local taxation and that it has no plans to do so.
• Confirmed its view of the merits for greater local control. For this reason, it had introduced new protections for council taxpayers through referendums and direct democracy.

A statutory code for relations between central and local government

In its response to the Committee’s recommendations that a statutory code setting out a stronger constitutional basis for local government could be beneficial to both tiers of government; and that it proposed turning the illustrative code into a draft Bill, the government:

• Expressed concern that any new statutory code could support an increasingly litigious culture, at a time when it is seeking to tackle red tape and safeguard judicial review as a critical check on the power of the state. For more information on the proposed changes to judicial review, see Legal update, Government announces outcome of consultation on judicial review.
• Indicated it would be interested in the substance of, and the reaction to, any draft Bill published by the Committee but that it did not believe that a case has been made for any amendment to the Parliament Acts 1911 and 1949 or for treating legislation affecting local government differently from other statute.

Next steps

In relation to the Committee’s proposals for continuing the dialogue, including hosting a conference to consider the next steps for the relationship between central and local government, the government welcomed the prospect of the conference and indicated that it was willing to participate in a debate about devolving responsibility and the options for practical reform.  We will be watching further developments with interest.

PLC Public Sector addresses the questions that schools may ask local authorities regarding day-to-day school management and sets out the legal issues to consider when responding:

In this edition, we consider what steps can be taken to deal with unwanted third parties accessing school land.  For details of all our school hotline queries, please see Practice note, Schools hotline FAQs. 

Q: At weekends local residents are frequently seen walking their dogs or playing football on the school field. What can the school do to prevent this?

A: The school premises are private property and unless these people are parents of pupils at your school and it is during school hours they have no permission to enter. If the trespassers are identifiable, the LA can write to them asking them to keep away from the school field. If the activity continues, the LA could consider bringing a civil action for trespass and ultimately the LA may take legal action under section 547 of the Education Act 1996.

In the meantime, the school should ensure that its premises are secure at the end of the school day and at weekends to prevent such trespass. Any steps it takes to secure its premises should comply with planning rules. The school should also ensure that it displays visible signs stating that the site is private property and that trespassers enter the site at their own risk.

PLC Public Sector reports:

Make sure that you have not missed a key development in your area of the law by reviewing our latest list of recommended actions.

Queen’s Speech: all public sector lawyers should note the provisions in the Queen’s Speech 2013, which include the introduction of a Local Audit and Accountability Bill.

Central government: those in central government may be interested in the:

• Government’s response to the BIS report on the operation of the Insolvency Service.
• Completion of the transition of government websites to the new single GOV.UK domain.

Civil litigation: civil litigation lawyers may be interested that the:

• Court of Appeal has warned against unnecessarily long skeleton arguments (Standard Bank plc v Via Mat International Ltd and another).
• High Court has ruled that the purported acceptance at trial of a Part 36 offer was invalid (Sutton Jigsaw Transport Ltd v Croydon London Borough Council).
• High Court has struck out parts of a witness statement, including opinion evidence, as those parts were an abuse (JD Wetherspoon plc v Harris and others).
• Law Society has issued an update on civil justice reforms.
• Judiciary of England and Wales has published a guide to judicial conduct.

Education and social services: education lawyers and those working in the Court of Protection will be interested to note that:

• The DfE has updated its advice on standards for school premises.
• Thirty Nine Essex Street has published its Court of Protection newsletter for May 2013.

Employment: employment lawyers should be aware of the:

• Employment implications of the Crime and Courts Act 2013, which will merge county courts and allow some court proceedings to be filmed.
• Employment implications of the Justice and Security Act 2013, including the proposal to allow “intercept evidence”.
• Consultation published by DEFRA, on the proposed changes to the Gangmasters Licensing Authority.
• EAT rulings holding that:
  • post-employment victimisation is unlawful under the Equality Act 2010 (Onu v Akwiwu and another);
  • an employer did not breach its TUPE obligations by failing to inform and consult employees who worked in the part of its undertaking that did not transfer, as those employees were not “affected employees” (I Lab Facilities Ltd v Metcalfe and others); and
  • pension contributions are not “wages” in unlawful deductions claims (Somerset County Council v Chambers).

Environment: environmental lawyers should note the following judgments:

• The Supreme Court’s decision to refer ClientEarth’s judicial review challenge to the UK government’s failure to comply with nitrogen dioxide limits under the Air Quality Directive 2008 to the ECJ (R (ClientEarth) v Secretary of State for the Environment, Food and Rural Affairs).
• In the judicial review challenges to the government’s decision on the proposed High Speed Two rail network, the High Court dismissed the environmental grounds, but the challenge to the consultation on compensation for blight was successful (R (Buckinghamshire County Council and Others) v Secretary of State for Transport).

FOI and data protection: information lawyers should be aware that the:

• Council Presidency proposals for EU data protection reform were leaked and published on a civil liberties website.
• First-tier Tribunal (Information Rights) has ruled that the form of original documents can be disclosable “information”, which must not be withheld by providing the data in a different format (Independent Parliamentary Standards Authority v Information Commissioner and another).
• ICO has updated its definition documents for the publication schemes of principal local authorities, government departments and higher education institutions.

Housing: housing officers may wish to be aware that regulations covering the selling and gifting of mobile homes come into force on 26 May 2013.

Local government: local government lawyers should note that the:

• Public Audit Wales Bill (which reforms audit arrangements in Wales and provides for the Auditor General for Wales to audit local government bodies in Wales) has received Royal Assent.
• High Court has rejected a judicial review challenge to Barnet Council’s outsourcing decisions (Nash v Barnet London Borough Council).
• DCLG has published guidance for billing authorities on the council tax empty homes premium.
• DCMS and DCLG have issued a joint technical consultation on mobile connectivity in England.

Property and planning: property lawyers may be interested that the:

• Technology and Construction Court has held a property developer landlord liable for breach of sale agreements and repairing covenants (Hunt and others v Optima (Cambridge) Ltd and others).
• Welsh Government has published a consultation on amending the regulations governing approved building inspectors in Wales.
• Law Commission is encouraging developers to respond to its proposals on problems with rights to light.

Public procurement: procurement lawyers and officers should note that the General Court has dismissed an appeal by an unsuccessful tenderer against a decision of the European Commission.

The financial challenges facing the public sector are huge, but they are not straightforward. Not only is there pressure to reduce expenditure immediately, but the combination of demographics and the economic outlook means there is a need also to procure more longer term solutions, if the picture is not to get steadily worse.

This post looks at the role that commissioning for outcomes can play in meeting these challenges and how social impact bonds may be used to finance new approaches to the delivery of public services, without the public sector bearing the risk attached to such innovation.

Prevention better than cure: but difficult to commission

The argument that it would be more effective to procure preventative services, rather than paying the cost of dealing with social problems once they have arisen, has long had widespread theoretical acceptance. However, commissioning for outcomes can be challenging, not least because:

• It can be difficult to establish the outcomes with sufficient clarity so that success can be objectively measured, particularly for certain services with less obvious success factors, and especially over a short commissioning cycle.
• It demands a different approach to commissioning, more arm’s length than such bodies may be accustomed to, in which it is the provider, rather than the commissioner, who determines the model of service delivery that will deliver the outcomes.
• It may involve procuring a service that delivers benefits to other local public authorities and requires engagement with them to explore how that may be reflected, both financially and operationally.

Social impact bonds: allocating the financial risk

Social Impact Bonds do not address the practical difficulties of commissioning for outcomes. However, they do create the opportunity for experienced service providers (often charities or social enterprises) to address intractable social issues through new models of service provision, without the public sector taking the risk on whether it will work. In this model, social investors pay the service provider in the short term and take the risk that, if the service provider successfully delivers the intended outcomes, the payments from the commissioner on delivery of the outcomes will provide them with a financial return on their investment. This is in addition to the satisfaction of seeing the public benefit delivered by the achievement of the outcomes. It has been implemented to date on projects dealing with reducing reoffending, homelessness and keeping children out of care and the government is, not surprisingly, keen to see its adoption on a much wider basis.

Other steps to encourage outcomes-focused commissioning

With the social impact bond addressing, to a large degree, the problem of financial risk, the government is taking others steps to make it easier for public authorities to embrace new commissioning models. A key feature of commissioning social outcomes is that if such projects are successful, the benefits are likely to be felt by a number of public agencies, rather than solely the one commissioning the outcomes. In recognition of this, the Cabinet Office has created the Social Outcomes Fund to offer financial incentives to public bodies who commission outcomes where a significant element of the social benefit may translate into savings for other agencies.

The Cabinet Office has also set up a Centre of Excellence to offer support to public authorities seeking to commission social outcomes. One product of this will be a template contract for use by such authorities. This is currently close to release following a consultation exercise with those organisations that have experience already of such agreements. Inevitably, this will require some adaptation to reflect the specifics of individual projects. However, it does mean that authorities should be able to focus on the critical (and difficult) elements - such as how to establish suitable metrics to measure success and how to allocate risk around payments - without having to draft and negotiate every contractual clause every time. A push for transparency and information sharing means a body of know how is emerging around these critical elements, whilst several organisations have sprung up offering measurement tools for social outcomes.

This drive to align commissioning across sectors is echoed in recent legislation, such as the Health and Social Care Act 2012, which introduced sweeping reforms to the NHS, including obligations for NHS and local authorities to work in an integrated way to meet patient and service user needs. Under the Public Services (Social Value) Act 2012 public authorities are also now required to consider how new contracts can improve the economic, social and environmental well-being of their relevant area as a whole. Commissioners must therefore think more widely about the potential benefits that may arise from what is to be commissioned and capture them right at the outset.

The Payment for Outcomes spectrum

Of course, such initiatives never happen in isolation. There is overlap between the idea behind these contracts - that the public authority identifies the outcome that it wishes to see delivered and commits to paying well for it if it is achieved (for example, the spread on the Peterborough social impact bond, a project aimed at reducing reoffending, goes from nothing if the contract fails to a capped maximum 13% return for investors) - and the more familiar payment by results models.

Payments for outcomes contracts can be regarded as sitting somewhere on a spectrum. This has social impact bonds and commissioning for outcomes at one end, where very innovative services are commissioned; all payments are dependent upon the outcomes achieved; and the service provision is funded in the first instance by third party investors seeking combined social and financial returns, and the more prescriptive payment by results models at the other.

Choosing the right approach and implementing it is a significant task and in particular demands serious engagement with relevant stakeholders before the procurement process has commenced. However, while the challenges around commissioning and contracting for outcomes may seem daunting, the prizes can be significant, with benefits that flow beyond the contract itself. For example, if the Peterborough scheme successfully reduces recidivism, there are not simply financial savings both for the Justice sector, but social benefits for the service users and the communities they live in. There is also a template that is proven and which may then be commissioned on a less speculative basis in future.

Coming soon

Over the coming weeks, we will look at some of these challenges in more detail with further posts on:

• Considerations around commissioning for outcomes.
• Contractual issues in payment for outcomes agreements.

These will be followed on 4 July, by an event run by BWB and Practical Law, which will combine an examination of specific legal issues with the experiences of some of the organisations that have delivered such contracts to date.

PLC Public Sector reports:

Make sure that you have not missed a key development in your area of the law by reviewing our latest list of recommended actions.

Central government: lawyers involved in challenges to central government policy should note that the High Court has rejected a judicial review challenge to the closure of the Independent Living Fund, on the basis that the government had properly carried out a consultation on the closure and had complied with its equality duties under the Equality Act 2010 (even though disabled people would be disproportionately affected by the decision) (R (Bracking and others) v Secretary of State for Work and Pensions).

Civil litigation: litigation lawyers may be interested that the:

• Crime and Courts Bill 2012-13 has received Royal Assent.
• Justice and Security Bill 2012-13 has received Royal Assent.
• High Court has ruled that a prospective defendant had standing to make submissions in an application to bring proceedings by a vexatious litigant (Ewing v London Borough of Camden).

Commercial: commercial lawyers should note that:

• BIS has amended the start date for statutory interest on late payment of commercial debts in the Late Payment of Commercial Debts Regulations 2013 (SI 2013/395).
• The European Commission has proposed a Regulation on promoting the free movement of citizens and businesses, by simplifying the acceptance of certain public documents in the EU.

Employment and pensions: employment lawyers should be aware of the following developments:

• The Enterprise and Regulatory Reform Bill 2013 has received Royal Assent.
• BIS has announced that the commencement date for employment provisions in the Enterprise and Regulatory Reform Act 2013 will be 25 June 2013.
• A draft statutory instrument to introduce fees in employment tribunals and the EAT has been laid before Parliament.
• The Public Service Pensions Bill 2013 has received Royal Assent.

Environment: environmental lawyers should note the:

• Environmental implications of the Crime and Courts Bill 2012-13, which has received Royal Assent.
• ECJ has clarified the meaning of adverse effect on the integrity of a site under the Habitats Directive (Ireland v An Bord Pleanala).

FOI and data protection: information lawyers should be aware of the Information Tribunal’s rulings that the following should be disclosed:

• The exact salary of a public servant (Dicker v Information Commissioner).
• A list of the names and addresses of dog breeders licensed by a county council (White v Information Commissioner).

Health: health officials may wish to read the following publications from the Department of Health:

• Guidance for local authorities on changes to secondary legislation arising from the Health and Social Care Act 2012.
• The independent report by Dame Fiona Caldicott on how information about patients is shared between public sector healthcare bodies.

Housing: housing lawyers should look at the Court of Appeal case on when a payment is considered advanced rent rather than a rent deposit (Johnson and others v Old).

Local government: local government lawyers should note the government’s response to the report of the pre-legislative scrutiny committee on the Draft Local Audit Bill.

Property and planning: property lawyers may be interested in:

• The property implications of the Enterprise and Regulatory Reform Act 2013.
• The Growth and Infrastructure Bill 2013, which has just received Royal Assent.
• DCLG guidance published under the Planning Act 2008, relating to applications under the nationally significant infrastructure projects planning regime.
• DCLG guidance published under the Growth and Infrastructure Act 2013, on the review and appeal of section 106 affordable housing requirements, in order to make developments economically viable.

Public procurement: procurement officers should note the Public Accounts Committee’s criticism of the government’s National Infrastructure Plan.

Regulation and enforcement: officers involved in licensing enforcement may wish to read the draft regulations published by the government, which are intended to exempt certain types of entertainment from the requirements of the Licensing Act 2003.

PLC Public Sector reports:

Our April 2013 case digest includes cases on the structure of evaluation processes, disclosure in procurement disputes and the application of the procurement regime to development agreements.

Please feel free to submit a comment below or contact us at: feedback@practicallaw.com if you have any views on the cases covered or think that we have missed a case that should be brought to the attention of public procurement practitioners.

Two stage evaluation procedure approved (for utilities) (Irish Waste Services Ltd v Northern Ireland Water Ltd & Ors [2013] NIQB 41)

The High Court of Justice in Northern Ireland dismissed an appeal by Irish Waste Services Limited against a procurement procedure conducted by Northern Ireland Water Limited. The court concluded that the award criteria and their respective weightings were adequately set out in the tender documents. It also concluded that there was no blurring between the selection and award criteria, noting that the main EU case law on this issue was not applicable to the utilities procurement regime. Arguably of most interest, was the court’s finding that Northern Ireland Water had been entitled to conduct a two stage award evaluation procedure whereby bidders had to meet a minimum quality threshold before undergoing a price evaluation. It should not be forgotten that this a procurement covered by the utilities procurement regime. However, many contracting authorities set hurdles against certain criteria which must be met for a bid to be considered compliant. The process adopted by Northern Ireland Water is comparable, the difference being a formal two stage evaluation process so that if the hurdle was not met, no further evaluation was undertaken. The extent to which this approach can be carried over to a procurement regulated by the Public Contracts Regulations 2006 is an issue that will be of interest to many.

High Court orders evaluation documents to be disclosed (Roche Diagnostics Ltd v The Mid Yorkshire Hospitals NHS Trust [2013] EWHC 933 (TCC))

Cases shedding light on the mechanics of how a procurement dispute will play out in the courts are always of interest.  In this case, the High Court handed down a ruling on an application by the claimant for specific disclosure and pre-action disclosure. The court concluded that the claimant was entitled to various documents relating to the procurement evaluation process, including instructions to the evaluation team, contemporaneous records of the evaluation process and any independent audit of the evaluation. Such documents were necessary to allow the claimant to take a considered and informed view of the legality and fairness of the evaluation process.

The court also granted a request by the claimant for pre-action disclosure of certain documents in the context of potential proceedings to challenge the grant of an interim contract to the successful bidder in the main procurement exercise. Such disclosure would enable the real issues to be identified and, possibly, resolved. The claimant was not however entirely successful and the court refused to order the disclosure of certain documents including some relating to the Trust’s relationship with another supplier. 

Contracting authorities need to be aware that if the worst does happen and a dispute does come to court, the details of their interaction with their evaluation team are likely to be open to disclosure. Therefore the processes put in place to manage an evaluation should be put together with this in mind.

Anyone considering going to a court in respect of a public procurement dispute will also be interested in the press reports that Leeds City Council has been awarded a £2 million interim costs order against Montpellier Estates following a high profile dispute about the construction of an arena.  It is claiming more than £4 million costs, but Montpellier has vowed to appeal the substantive decision to the Court of Appeal.

Müller haunts the Commission again (European Commission v Netherlands, (Case-576/10) (Advocate General’s opinion))

Advocate General Melchior Wathelet (AG) has handed down an opinion on an appeal from the European Commission regarding the application of EU procurement law to land development agreements. The AG stated that the Commission’s case should be rejected as it had based its case on Directive 2004/18 rather than its predecessor, Directive 93/37, which the AG considered was the applicable legislation.  Of greater concern to the Commission may be that the AG also considered the substance of the Commission’s appeal and recommended that, in the light of the ECJ’s conclusions in the Helmut Müller case, the ECJ should dismiss the appeal as unfounded because the developer obtained its right of exploitation as a result of its purchase of the land and not as a result of the co-operation agreement with the municipality. Therefore the EU procurement rules were not applicable because the co-operation agreement was not a public works concession within the meaning of Directive 2004/18. The high point of the procurement regime’s impact on development agreements, the ECJ decision in Roanne, feels like it was longer and longer ago.

Structural funds and the procurement regime (France v Commission (Case C-115/12 P) (Advocate General’s opinion))

In a case with a more tropical outlook than the average procurement dispute, Advocate General Juliane Kokott (AG) has handed down her opinion in an appeal by France against a General Court ruling upholding a European Commission decision cancelling part of the contribution of the European Regional Development Fund (ERDF) for EU structural assistance in Martinique.

The case concerns the circumstances in which private construction projects that are in a large part subsidised or financed by public funds, in this case the renovation and extension of a holiday village, should be subjected to a tender procedure under EU public procurement rules. The AG considered that the General Court committed an error of law when it included simple tax credits within the scope of Article 2 of Directive 93/37 concerning the co-ordination of procedures for the award of public works contracts. It had also erred in its appreciation of the concept of facilities intended for sports, recreation and leisure within paragraph 2 of Article 2 of Directive 93/37. The AG recommended that the ECJ annul both the General Court’s judgment and the Commission’s decision.

Another case where the reach of the procurement regime may not be as great as previously held.

General Court: website procurement did not confuse selection and award criteria (European Dynamics v European Commission (Case T-32/08))

On 24 April 2013, the General Court dismissed an appeal by the Greek company European Dynamics against a European Commission procurement process relating to the provision of services for a market study in view of developing a new approach for the “Environment for Young Europeans” website.

The General Court rejected the appeal in its entirety, finding that the Commission had not committed any manifest errors of assessment, nor had it mixed up the selection and award criteria in relation to its evaluation of the European Dynamic’s tender and that the statement of reasons was adequate.

PLC Public Sector addresses the questions that schools may ask local authorities regarding day-to-day school management and sets out the legal issues to consider when responding:

In this edition, we consider the issues to consider when dealing with abusive vistors to a school.  For details of all our school hotline queries, please see Practice note, Schools hotline FAQs. 

Q: Two of our parents have had a falling out and are often seen arguing in the playground when they collect their children. Yesterday they got into a fight and when our deputy headteacher tried to stop them they threatened him. We don’t want them on the school premises any more. What can we do? 

A: School premises are private property but parents of children at your school have an implied licence to enter onto them during school hours and for purposes connected with the education of their children. However, that licence can be withdrawn by the local education authority (LA) or the school’s governing body if necessary, by writing to the parents and asking them not to attend the school. They should give the parents an opportunity to respond before making a final decision (Wandsworth Borough Council v Parent A [2000] 1 WLR 1246 (CA)). The school’s decision to revoke an implied licence can only be challenged through judicial review (for example, on the grounds of Wednesbury unreasonableness). If banned parents subsequently enter the school site then they are trespassing, which is a civil matter that the school can pursue through the courts.

If parents cause a nuisance or a disturbance they are committing a criminal offence and the LA may prosecute them under section 547 of the Education Act 1996 (EA 1996).

It is advisable for every school to have a clear, written policy on how it will deal with unacceptable behaviour by parents and visitors on the school premises.

The Department for Education (DfE) has provided guidance for schools on barring parents from schools (see Advice on school security: Access to, and barring of individuals from, school premises (December 2012)).

PLC Public Sector reports:

Make sure that you have not missed a key development in your area of the law by reviewing our latest list of recommended actions.

Central government: those interested in legislation drafting should note that the Office of the Parliamentary Council has launched the Good Law initiative aimed at making legislation simpler and more accessible.

Charities: charities lawyers should be aware that the High Court has granted an appeal by a charity against an order to pay business rates in relation to its use of warehouse premises (Kenya Aid Programme v Sheffield City Council).

Civil litigation: litigation lawyers should be aware of the following recent developments:

• The government has announced the outcome of its consultation on judicial review focusing on speeding up the court system by reducing the time spent on meritless claims.
• The government has published a consultation on fee remissions for courts and tribunals.
• The ECJ has announced that it has launched its own Twitter feed and also a mobile app for press releases.
• The Interim Applications Court of the Queens Bench Division has published a revised guide for litigants in person.

Commercial: commercial lawyers should note that the government will be revising the Late Payment of Commercial Debts Regulations 2013, after an anomaly was identified.

Education and children’s services: lawyers working in the fields of education and children’s services are likely to be interested that the:

• High Court has required Lancashire County Council to pay £210,734 costs after it committed a number of human rights breaches in relation to two children who were in its care after they had been freed for adoption (A and S (Children) v Lancashire County Council).
• Department for Education has published:
  • information to help schools and Academies secure a review of their governance arrangements; and
  • advice on driving school minibuses.

Employment and pensions: employment and pensions lawyers should note that the:

• ECJ has clarified the scope of “disability” and “reasonable adjustment” by reference to the UN Convention (HK Danmark, acting on behalf of Ring v Dansk Almennyttigt Boligselskab and another case).
• Court of Appeal has held that a provision in a collective agreement did not entitle an employer to choose between the lower of two possible pay rates (Anderson and others v London Fire & Emergency Planning Authority).
• House of Commons is currently considering the amendments to the Enterprise and Regulatory Reform Bill made by the House of Lords.
• European Commission has announced that it will be adopting a proposal for a Directive facilitating the exercise of workers’ rights.
• Pensions Ombudsman has upheld a complaint by a member of the Railways Pension Scheme who was refused an incapacity pension on the grounds that the trustee thought he was able to perform “other duties”.

Environment: environmental lawyers are likely to be interested in the government consultation on the UK implementation of the recast WEEE (waste electrical and electronic equipment) Directive 2012.

Health: healthcare lawyers involved with reforms under the Health and Social Care Act 2012 should be aware that the Arrangements to be made by Relevant Bodies in respect of Local Healthwatch Organisations Directions 2013 have been made and came into force on 1 April 2013.

Housing: housing practitioners should note the recent High Court decision in which it held that powers under an estate management scheme had been properly exercised with statutory authority (Shebelle Enterprises Ltd v The Hampstead Garden Suburb Trust Ltd).

Human rights: human rights lawyers should be aware that the European Court of Human Rights has held that a ban on broadcast political advertising was compatible with the European Convention on Human Rights (Animal Defenders International v United Kingdom).

Local government: local government lawyers may be interested in the Committee on Standards in Public Life annual plan for 2013-14.

Property and planning: property and planning lawyers should be aware of two recent rulings:

• The High Court has held that a council was liable to pay compensation under section 106 of the Building Act 1984 in relation to its restriction of access to a pier because of public safety concerns (Manolete Partners plc v Hastings Borough Council).
• The Court of Appeal has held that non-contiguous floors occupied in the same building by the same business can be treated as a single hereditament for non-domestic rating purposes (Woolway (Valuation Officer) v Mazars LLP).

Public procurement: procurement lawyers and officers should note the following procurement-related developments:

• The High Court has ruled on what principles it will consider when deciding on applications for early specific disclosure in procurement cases (Roche Diagnostics Ltd v The Mid Yorkshire Hospitals NHS Trust).
• The General Court has dismissed an appeal against a Commission tender relating to the “Environment for Young Europeans” website (Evropaïki Dynamiki v European Commission).
• The Advocate General has recommended that a General Court decision be set aside relating to when private construction projects which have been substantially subsidised by public funds will fall under EU public procurement rules.

Regulation and enforcement: enforcement lawyers should be aware that the government plans to legislate to extend the Primary Authority scheme to other sectors.

Katherine Calder, Senior Associate, Berwin Leighton Paisner LLP:

In the 2012 Autumn Statement, the Chancellor of the Exchequer confirmed plans (first announced in September 2012) to use of the public procurement process to deter tax avoidance and evasion. A discussion document and draft guidance for consultation followed in February 2013 and on 20 March 2013, in the 2013 Budget report, the government confirmed that the new policy would be introduced from 1 April 2013.

This post outlines the scope of the new policy ultimately implemented by the government, looks at the issues that remain with it and considers what services providers need to be doing.

The policy

Potential service providers or contractors wishing to tender to any central government department, executive agency or non-departmental public body for a contract advertised after 1 April 2013 and over £5 million in value will have to self-certify their tax compliance post 1 April 2013 at PQQ selection stage.
Where there has been an “occasion of non-compliance”, as defined by this new policy, the provider may be excluded from tendering on the basis of Regulation 23(4)(g) of the Public Contracts Regulations 2006 (PCRs), which provides for discretionary exclusion on the grounds that the economic operator has “not fulfilled obligations relating to the payment of taxes…”. However, in some cases the issue may be addressed (or waived) by assurances for future “good behaviour”. 

There will be an “occasion of non-compliance” if any of the following apply:

• A tax return is found incorrect or amended as a result of successful HMRC action under the new general anti-abuse rule (GAAR) or (in VAT cases) the “Halifax principle”.
• The supplier has been involved in a failed scheme requiring notification under the Disclosure of Tax Avoidance Scheme (DOTAS) rules.
• The supplier has been convicted of a tax-related offence or suffered a penalty for civil fraud or evasion.

The provisions will apply to providers based in foreign jurisdictions by reference to corresponding rules in their own country.

The government propose that disclosure should apply to all occasions of non-compliance in the preceding six years (but no further back than 1 April 2013).

Tenderers will be asked to self-certify whether an occasion of non-compliance has occurred and, if it has occurred, what steps the organisation has put in place to ensure it will not occur in future.  This statement of assurances will be assessed by the contracting authority when deciding whether to exclude the economic operator or not from the competition.

In addition, government contracts above the £5m threshold are to include standard terms to allow for termination of the contract in the event of “occasions of non-compliance” by the contractor/supplier or its subcontractors in the future.  No draft standard terms have yet been published for consultation.

The issues

The government’s initial consultation document setting out a first draft of this policy was particularly draconian and received a large number of responses pointing out both inconsistencies with EU procurement law and general impracticality. 

Thankfully, the final policy has been significantly tempered but it still poses interesting issues for any contracting authority seeking to implement, namely:

• How will it be able to judge what is unacceptable tax avoidance and what is not?
• Will HMRC be able to support every affected procurement?
• Will the contracting authority or HMRC have the appropriate expertise to review notified “occasions of non-compliance” in other tax jurisdictions?
• How can statements of assurances and mitigating factors from tenderers from different tax jurisdictions, with very different tax laws, be evaluated equally?

Litigation on this seems inevitable, as the potential for claims based on unequal treatment of tenderers seems obvious.

Given the UK’s new anti-abuse tax law, UK tenderers are more likely to be adversely impacted by the changes as the reality is that many other jurisdictions do not have this type of tax avoidance (as opposed to illegal tax evasion) legislation.  Is the potentially greater domestic impact an “own goal” in terms of promoting UK business?

Moreover, the policy appears inconsistent with the European Commission’s approach: that Member States should not exclude any tenderer on this ground where the tenderer can show that they have since paid the taxes due or have come to a settlement with the relevant tax authority.  This UK policy, however, will enable UK contracting authorities to nevertheless exclude such organisations, even where no liability has been admitted and/or settlement has been agreed and sums paid.

From the perspective of tenderers for high value works, services or supply contracts, this will undoubtedly change behaviours. Whether this is in the manner contemplated by government remains to be seen.  Only the economic operator tendering for the contract will be assessed, not its whole group, so it may be that large multinational or non-UK organisations will simply separate their UK public sector business entities from the rest of operations to ensure no “contamination” as a result of tax planning for the organisation as a whole.

The real impact upon the market will only be seen once the contractual drafting is published.  It will be interesting to see how this will be approached and how contractors will be expected to police the tax planning of their supply chain.  Moreover, for large capital projects, senior lenders are also likely to take issue with provisions which could invalidate their investment for behaviours outside their control.

What service providers need to do

Providers of works, supply or services to government under contracts above the £5m threshold should consider their organisation’s current tax position, consult with tax advisers and identify a strategy for completion of PQQs after 1 April 2013. If there are likely to be “occasions of non-compliance”, mitigating factors will need careful preparation, and the supplier is likely to have to show that it has, or will introduce, acceptable tax compliance policies.  Providers based in other jurisdictions will need to identify equivalent provisions to GAAR, DOTAS and the Halifax Principle in those jurisdictions and formulate a similar strategy of response accordingly.