NLGN urges Denham to legislate and overturn Appeal Court ruling constraining councils

June 9, 2009


Commenting in response to the Court of Appeal judgement in the LAML mutual insurance case handed down this morning (Tuesday 9 June 2009), New Local Government Network Director Chris Leslie said:

“This judgement is a body blow for innovative local authorities seeking to save money for the taxpayer, signalling that creative efforts by councils to pool efforts and share services mutually may no longer be allowed. At a time when councils should be encouraged to join forces and bulk purchase goods and services, this judgement may scare off council solicitors from going near mutual initiatives, effectively placing the narrowest interpretation on what was supposed to be a general ‘power of wellbeing”.

“The courts are interpreting section 2 of the 2000 Local Government Act in a way which harks back to the days of ‘ultra vires’, when councils needed permission from above before they could act. Unless Ministers act immediately and amend the current Local Democracy Economic Development & Construction Bill to clarify that councils do in fact have the power to join forces and save money, then we will suffer inefficiencies and lack of ambition for years to come”.

“Urgent steps are needed by the new Secretary of State to prevent the good work of several council mutual initiatives being scrapped and wasted. There is an apparent consensus in Parliament across all parties in favour of a “power of general competence” for local authorities; the opportunity should be taken to counteract the Appeal Court ruling as soon as possible. It would be a crying shame if the great advances of partnership working and efficiency were held back for years to come because of a technical interpretation of the law.”


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