Outsourcing services – the Barnet case

Readers may be aware of the recent High Court decision in R (Nash) v. Barnet LBC [2013] EWHC 1067 (Admin), in which a challenge to the outsourcing of various functions and services, including a number of the council’s regulatory functions (such as development management) was dismissed.

The claimant is a resident of the borough who depends on the social services provided by the council, and the case turned largely on the alleged inadequacy of the public consultation prior to the outsourcing decision being taken, the council’s duty to ensure equality in the provision of its services and an alleged breach of fiduciary duty.

Bearing in mind the area of operations with which the claimant was concerned, it is entirely understandable that these should have been the issues canvassed before the court. However, it seems to me that there are some serious issues relating to the outsourcing of the council’s regulatory functions, such as development management, that have not been addressed.

I have previously written on this subject in a post entitled “Privatising Development Control” on Thursday, 8 March 2012. My concern now, as then, is that a local authority has no right to delegate decision-making in relation to any of its regulatory functions to anyone outside the authority. It is the council that has the statutory duty to make the decision, and so an LPA must be very careful not to go too far in delegating planning casework to an outside contractor, lest they infringe the very well known rule - Delegatus non potest delegare.

I drew attention in that previous post to a successful High Court challenge in Dorset some years ago to the determination of a homelessness claim, where the council had farmed out the processing of homelessness casework to a housing association, reserving to themselves only the final decision as to whether the applicants were homeless within the statutory definition. The way in which the processing of the casework had been delegated meant that the officers of the housing association were responsible for all the relevant investigations and they then compiled a report which included a recommendation to the council as to whether the applicants should or should not be found to be unintentionally homeless, and therefore entitled to re-housing by the authority. The High Court quashed the determination in question on the basis that the Council had delegated so much of the process to the housing association as to be acting as no more than a rubber stamp for a decision which had already effectively been made by the officers of the housing association.

I do not know the details of the agreement Barnet LBC has reached with Crapita (as Private Eye always calls them), and it seems that the council successfully kept the agreement under wraps in the recent High Court proceedings on the grounds of commercial confidentiality, but the extent to which the development management process has been delegated to this contractor in Barnet may well come in for scrutiny, and if the extent of that delegation goes too far (as the homelessness investigations did in the Dorset case), we may yet see a successful legal challenge to Barnet’s outsourcing scheme.

© MARTIN H GOODALL