Magazine article Public Finance

LAA Law - the Story Continues

Magazine article Public Finance

LAA Law - the Story Continues

Article excerpt

In a recent Point of Law, we argued that Local Area Agreements needed a statutory base ('Where there's a will, there's a way', January 20-26). We cited Suffolk County Council, which had been advised by leading counsel that the proposed operation of its LAA contravened public law.

The difficulty in Suffolk arose from the way the LAA was intended to operate - namely that each of the local government and health parties would contribute their share of the resources and the regional Government Office would add the government's share. This would all be paid to Suffolk council, as the 'accountable body'.

However, it was proposed that the spending decisions would be taken by a small group, comprising the leaders of the eight local authorities and the chairs of the primary care trusts, police authority and so on.

In law, there are only a very small number of bodies to which a local authority can delegate its functions under the Local Government Acts 1972 and 2000. The Suffolk group would not be one of them.

This left two options. The group could be advisory only, with all decisions being referred back to the county council to be taken formally. Alternatively, some form of contractual arrangement could be entered into, whereby the county council could contract to spend the money in accordance with the edict of the group (without this in any way fettering the council's discretion on the matter). These solutions were created to accommodate this new policy into the existing legal rules.

In the previous article, we commented that although LAAs were being described as the 'new frontier' for local government and ministers were putting huge store on them, they have no more legal foundation than any other governmental policy initiative. This means they are subject to the current public law framework, which might not fully accommodate the aims of the initiative. While this is often the case, the point here is that LAAs are seen to be so important to the future of local government generally that this seems surprising. We predict other legal problems will arise. Are ministers going to allow this key policy to be blown off course by legal difficulties that could be solved by new legislation?

In response to our piece, Dick Sorabji of the New Local Government Network wrote a letter to Public Finance saying that the last thing LAAs need is more lawyers and regulation; trust is the key ingredient and high-trust partnerships do not depend on legal rules. …

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