Local Authority round-up 06/12/19

Brexit

Can a trade deal be negotiated between the EU and the UK in time?

Under the Withdrawal Agreement Boris Johnson negotiated, the existing arrangements between the EU and UK would temporarily continue until 31 December 2020, with goods and services flowing freely across borders.  After that it is unclear what will happen should Brexit go ahead.  Boris Johnson has said that if he wins the election he would negotiate a free trade agreement with the EU which would be ready to go at the end of 2020.  It is unclear whether it would be possible to put such an agreement in place within that timescale, usually negotiations take several years.  The EU’s deal with Canada took more than 5 years to negotiate and a further 3 years before it came into force.  It is possible to extend the transition period by negotiating an extension of 1 or 2 years but that decision must be made by 1 July 2020 or the Withdrawal Agreement would need to be amended or a new one agreed to extend beyond that period, which it is argued may not be legally possible.  If no agreement is reached the UK would default to World Trade Organization terms meaning British exporters would have the same access to the EU as do other countries with no trade agreement.

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EU chief warns UK to keep closely aligned after Brexit

The European Union’s financial services boss Valdis Dombrovskis has said the European Commission would remain observant in ensuring that British rules comply with the EU’s own standards for protecting consumers and guaranteeing financial stability.  Once the UK leaves, the EU is willing to allow the UK to use an “equivalence” system after its proposals for the possibility of a permanent access deal for financial services were rejected as part of the Brexit negotiations.  He said that the UK would then need to stay aligned with the EU as if a country “is either diverging from EU legislation, or not following up EU legislation, in this case the equivalence determination can also be withdrawn.”

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Commercial

Glasgow City Council receives £195 million investment

Glasgow City Council have announced that Pension Insurance Corporation plc will be investing £195 million of debt finance in City Property Glasgow Ltd, a subsidiary of the Glasgow City Council Group. In January, Glasgow City Council agreed to pay out a reported £548 million after a long-running dispute over women paid historically less than men in jobs of the same grade and this money will be used to fund the council’s equal pay settlement with the debt being secured against five city properties including the Royal Concert Hall and the Riverside Museum. Pauline Barclay, Managing Director of City Property, said “We are pleased to have been able to complete this transaction with PIC, an increasingly important lender in the private debt space. The PIC team have been flexible and proactive in helping us achieve our aims.”

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Council plans to invest £340 million in property

South Cambridgeshire District Council has announced its plans to invest £340 million over the next five years in real estate in order to raise revenue to maintain and improve services. Leader of the council, Cllr Bridget Smith, said “The opportunity to do nothing as far as investments is long past. We all know of the challenges facing local government now thanks to the continued reduction in central government funding and the uncertainty of the future. So if we just want to keep on treading water we have to have revenue from investments. If we want to actually start delivering more, and delivering on our priorities, particularly in my mind those to do with decarbonising South Cambridgeshire, we have to generate more money to do it.”

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Regulatory

Council sues contractors over “multiple fire safety failings”

Following an evacuation of the Chalcots Estate two years ago, Camden Council is seeking £130 million costs from contractor Partners for Improvement in Camden, who were responsible for refurbishing and maintaining the estate, to cover the council’s costs of the evacuation and repairs needed to improve fire safety.  The council have already received £80 million from the Government in October 2018 to fund replacement cladding but the council said that this has only covered part of the costs it has incurred.  A council spokesman said “The costs of the supporting residents during the evacuation and level of work required at the Chalcots made a major impact on our reserves. Clearly, it would not be right for residents and, by extension, the public purse, to foot the bill for what has been a private contractor failure.”

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Councils and housing associations face multi-million pound refunds to tenants

The High Court has ruled in Royal Borough of Kingston-Upon-Thames v Moss that a council should have passed on to its tenants the group discounts negotiated with Thames Water Utilities where those houses and flats were not on water meters. The defendant, a secure weekly tenant of a flat where Kingston was his landlord, argued that the amount of “water charges” which he was liable to pay to Kingston was in accordance with Thames Water’s tariff for the water and sewerage services provided to his flat, less the voids allowance and less “the commission” referred to in a 2003 agreement between Thames Water and the council under which the council, and not the tenant, was billed for such charges.

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Planning and housing

Bolton Council to increase council tax on unoccupied properties

In an attempt to bring more properties into use, Bolton Council has launched a consultation to increase council tax on empty properties by up to three times.  Currently properties which have been unoccupied and substantially unfurnished for two years or more are subject to an additional 50% council tax premium but under the new proposals this could be doubled from 1 April 2020, properties empty for over 5 years could be hit with a 200% additional premium and those empty for 10 or more years could face a 300% premium.  Borough treasurer Sue Johnson said “This is not a way of bringing more money into the council. We are really doing this to bring properties into use.”

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Child homelessness is at its highest for 12 years

New research from homeless charity Shelter has revealed that the number of children who are homeless is at its highest in 12 years with 135,000 currently homeless or living in temporary accommodation and one child losing their home every eight minutes.  The charity argues that the homelessness crisis is the result of a ‘severe’ lack of social homes, expensive private rents and welfare cuts.  Polly Neate, chief executive of Shelter, said “The fact 183 children become homeless every day is a scandalous figure and sharp reminder that political promises about tackling homelessness must be turned into real action.”

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Council secures injunction for affordable housing sale

Shropshire Council has obtained an injunction to secure affordable housing provision on a housing development site after granting planning permission in August 2015 for a residential development for 36 houses, of which 5 were to be affordable houses secured under a section 106 agreement. The landowner then proceeded to market the houses for sale on the open market and not as affordable housing.  The council sought an injunction to prevent the final two properties on the site being sold.  The application was initially refused however the injunction application was amended to prevent both the occupation and/or sale of the two properties as anything other than affordable housing, and the order was sought against the landowners, marketing agent and in addition “persons unknown”, relying upon the powers available under both s.106(5) and s.187B of the 1990 Act.  The order was subsequently granted.

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