Local Authority round-up – 01/12/23

Regulatory

High Court issues new ruling relating to the Public Contract Regulations 2015

The High Court has held, in Brookhouse Group Ltd v Lancashire County Council [2023] EWHC 2921 (TCC), that the 30-day limitation period under regulation 93 of the Public Contract Regulations 2015 (PCR) does not apply where a public works contract was entered into without a preceding competitive tender process.

Facts

The defendant local authority (LCC) awarded a contract to a developer (MGD) in July 2022. The contract was a public works contract relating to land redevelopment. The Claimant had, in 2019, unsuccessfully attempted to contract with LCC for the development of the same site.

LCC argued that MGD and LCC were under a Strategic Partnership Agreement (SPA) constituting a “framework contract”. LCC considered that this allowed specific development agreements to be made with MGD without further competitive tendering.

LCC informed the Claimant about the MGD contract in August 2022.  The Claimant sent a letter before claim on 8^th September 2022. LCC’s reply, on 22^nd September 2022, explained why it could enter the MGD contract under the SPA, without undertaking a competitive tendering process.

The Claimant issued proceedings in January 2023 for a declaration of ineffectiveness under regulation 98(2) of the PCR 2015. LCC raised a limitation defence on the basis that, as the Claimant received a summary of the relevant reasons by 22^nd September, under regulation 93(5) the limitation period for a declaration of ineffectiveness is shortened to 30 days from the “standard” 6 month period. Therefore, the 30-day time limit for starting proceedings under regulation 93(2) expired on 24 October 2022.

Judgement

The High Court rejected LCC’s limitation defence. It held that:

• Regulation 93(5) can only apply where a competition has been carried out so that there are tenderers to whom a summary of relevant reasons can be provided pursuant to Reg 55(2).
• Where no competition had been carried out, there is only one route to shorten the limitation period, namely via a contract award notice which could include a justification as to why the contract was awarded. Therefore, as challengers were not put on notice by LCC, the 30-day time limit did not apply.
• Even if the shorter time-period had applied, LCC’s reply to the Claimant’s letter before claim was not a summary of relevant reasons as it did not contain the information specified in regulation 55(2).

Key takeaway

The case provides an important clarification regarding the limitation periods which apply to claims seeking a declaration of ineffectiveness against public contracts. Local authorities seeking to procure a public works contract, without holding a competition, should note the importance of issuing a contract notice to reduce the limitation period.

For more information please click here.

Planning and Housing

£150 million investment to create 1,200 new homes

It has recently been announced that 46 local authorities will receive funding to build or buy 1,230 homes for the most vulnerable as part of the Government’s Single Homelessness Accommodation Programme.

It is hoped that those at risk of homelessness will be helped into stable, long-term accommodation.

This investment will also fund new 24/7 support services for the most vulnerable, with access to specialist teams who can address substance misuse, domestic violence and mental health issues.

For more information please click here.

If you have any questions about the issues raised in this update, please do not hesitate to get in touch.