Gone are the days when local government lawyers, faced with swingeing budget cuts, could talk about nothing other than alternative business structures and shared service agreements. Now, you would be hard-pressed to find a council that is not part of a shared service agreement.
As for ABSs, when I attended the Lawyers in Local Government weekend school a couple of years ago, solicitors were keen to know more about local authority-led ABSs, such as north London’s HB Public Law.
Perhaps repeated warnings to think carefully about whether an ABS is the right vehicle to generate income struck a chord. At this year’s weekend school, held at the University of Warwick 10 days ago, there was little if any talk of the model.
The financial challenge, meanwhile, remains formidable. A £2.2bn funding gap is forecast in social care by 2020; and the Department for Communities and Local Government budget has been cut by 60% since 2011/12. By 2020 that budget will have been pared to just £3.3bn – an 88% decline in the space of a decade.
And then, of course, there is Brexit – what does this mean for councils? In the opening plenary session, Coventry City Council’s legal services manager Helen Lynch laid bare the scale of the challenge.
‘How are we going to deal with the lack of opportunities currently being provided by EU funding and grant funding arrangements, which so much of us have benefited from over the last few years?’ she asked. ‘How are we going to continue to support businesses in the way we have done through EU funding?’
The ‘cornerstone’ of Coventry’s own support for local small and medium-sized enterprises is the Europe-funded business support programme. Lynch said: ‘We need to think about what happens come December 2018, when the government guarantee for the EU to fund projects is expected to come to an end.’
Her own council is establishing the Coventry and Warwickshire Duplex Fund, managed by Coventry and Warwickshire Reinvestment Trust, a local ‘community bank’ which lends to businesses that struggle to raise finance from banks.
Coventry would contribute a loan of up to £2m towards the fund, which is supplemented by £5.4m in grant funding from central government. A cabinet report states that an important benefit of the proposal ‘is that grant funding which under normal circumstances would be used once, would instead form part of a 10-year programme of business support’.
Warwickshire County Council is considering joining the fund, which Lynch hopes will support hundreds of SMEs and create more than 1,000 jobs. Any investment carries risks, she acknowledged, but successful businesses increase business rate receipts.
Although the project is in its infancy, the fund highlights a move away from a traditional grant-funding model ‘to something that’s a little bit more innovative and longer-term’, Lynch said.
Notwithstanding Brexit, local authorities already have to prepare for the General Data Protection Regulation (GDPR), which comes into force in May 2018.
The regulation will replace all data protection legislation in EU member states, including the UK’s Data Protection Act, without the need for further national legislation.
After conducting an information governance survey of councils, the Information Commissioner’s Office concluded last month that ‘many have work to do’.
A quarter of councils do not have a data protection officer, which public authorities are obliged to appoint under the regulation. More than 15% do not run data protection training for employees who process personal data. And a third do not conduct privacy impact assessments, which will be a legal requirement under the GDPR in certain circumstances.
A quick straw poll at the weekend school’s data protection session showed that two-thirds of councils represented were actively planning for the GDPR. One in 10 was just starting to think about a plan.
Public law specialist Jackie Gray, a partner at national firm Bond Dickinson, believes the data protection officer role lies within the legal department – not IT.
‘Where DPOs have been in the IT team, they tend to look at compliance through the lens of IT. But it’s about everything – having contracts in place on data processors that meet all the conditions, where [the data is being processed], why, what’s our statutory function,’ Gray said.
‘The DPO needs to be someone who is either a lawyer or is well versed in information governance, but not someone who is necessarily in IT.’
Wakefield Council has nominated its DPO – the council’s city solicitor, who is also the local authority’s monitoring officer. Legal services manager Liz Ogden told the session that other efforts to be GDPR-ready in Wakefield include conducting an ICO ‘stock-take’, and appointing and training information asset-owners.
Areas where the council is doing well include communicating privacy information, Ogden said. Areas for improvement include individuals’ rights. ‘We have to look more closely at what the right to be forgotten really means,’ she said.
As the financial noose tightens, meanwhile, the need to improve efficiency remains a top priority for in-house legal teams.
Fiona Alderman, former chief legal officer at the London Borough of Brent, talked about achieving the right mix between in-house legal teams and external suppliers. Data from case management systems is crucial to see how much time is spent on various types of work; what the volumes of work are; and the duration of different processes.
Alderman, now head of legal and constitutional services at the London Borough of Redbridge, said a lot of work is done in ‘workstreams’, such as debt recovery. At Redbridge, this is currently outsourced to private practice. But it is one area where local authorities may want to grow a team and bring some work back in-house. If the team has a lawyer who does a lot of insolvency work, they could also do the work for other councils, thus generating an income stream.
Councils should also look at the Proceeds of Crime Act, including confiscation orders, which brought in £1.3m for Brent. Such orders were used, for instance, in planning enforcement – an ‘area of key political interest’.
‘POCA is really worth looking at because it more than covered the costs of what we had to pay out,’ she added. Brent also built up its debt recovery team, which recovered £6m over three years.
The message for council solicitors? Where there may be money to be found, go and find it.