We are all aware of the unfolding situation in Ukraine following the invasion of Russian forces, and the support afforded to Russia by Belarus. The UK Government has, in response to the conflict, issued sanctions on companies and individuals.
We are all aware of the unfolding situation in Ukraine following the invasion of Russian forces, and the support afforded to Russia by Belarus. The UK Government has, in response to the conflict, issued sanctions on companies and individuals. Standing in solidarity with Ukraine, many public bodies outside of Central Government wish to follow suit. In a Public Procurement context, many contracting authorities (Authorities) have questioned their ability to terminate existing contracts and exclude from consideration, in future contracts, Russian and Belarusian suppliers (Suppliers).
UK law, in its current state, prohibits Authorities from taking into consideration non-commercial factors or acting in a way so as to not promote equal treatment and non-discrimination (see the s17 Local Government Act 1989 and the Public Procurement Regulations 2015). Equally, the World Trade Organisation, of which the UK is a member, and both the Russian Federation and Belarus enjoy rights as an observer, also prohibits discriminatory decisions based on a supplier’s nationality.
Following calls for intervention, on 28 March 2022, the UK Government released a Procurement Policy Note 01/22: contracts with suppliers from Russia and Belarus. This Procurement Policy Note (PPN) applies to Central Government Departments, their Executive Agencies and Non-Departmental Public Bodies. Whilst the PPN does not directly apply to Local Authorities, it states that “other public sector contracting authorities should consider applying the approach set out in this PPN”.
The PPN addresses the two main procurement concerns: how can existing contracts with Suppliers be terminated and how can Suppliers be excluded from tendering for new contracts?
The PPN is clear that existing contracts with Suppliers must be assessed on a case by case basis, and may only be terminated within the remits of existing UK law and the terms of the contract in question. Costs associated with termination (such as an early termination fee) must be accounted for out of existing budgets. Authorities may look only to the termination provisions within the contract — neither the PNN nor its accompanying FAQs indicate that Force Majeure or Frustration might apply as a result of the war.
The FAQs advise contracting authorities to be mindful of circumstances where termination may benefit a Supplier and, therefore, seeking to terminate would fail to meet the ultimate aim. The example given is that of a fixed-term energy contract with a fee lower than market value, and terminating the contract may enable them to secure a higher rate with another, willing, customer.
An Authority may decline to consider bids from Suppliers who are organised under the law of Russia or Belarus, or whose ‘Persons of Significant Control’ information states either country as their place of residency, the PPN advises. Whilst this guidance will, no doubt, be welcomed by Authorities, it is qualified with the exception of a Supplier registered or having significant business operations in the UK, or a country with a relevant agreement and access to public procurement. Where these exceptions apply, the non-discrimination, equal treatment and remedy provisions outlined in the Public Procurement Regulations would be applicable, and disqualification on grounds of nationality would be unlawful.
As the law remains unchanged, and terminating or excluding Supplier contracts could give rise to serious breach of UK law, the PPN sets out considerations Authorities should have when assessing risks involved. These include:
In summary, although the PPN sets out helpful guidance, it does not provide the public sector with a change in law or a route to sever ties with Suppliers. Calls for the Government to legislate with haste to amend or repeal domestic law remain; however, the PPN should enable the public sector to assess existing and future contracts with clarity, following the risk-based approach set out within the note.
Law firm Browne Jacobson has collaborated with Wiltshire Council and Christ Church Business School on the launch event of The Council Company Best Practice and Innovation Network, a platform which brings together academic experts and senior local authority leaders, allowing them to share best practice in relation to council companies.
In the Autumn Statement delivered on 17 November, rises to the National Living Wage and National Minimum Wage rates were announced, to take effect from 1 April 2023.
Announced in September but scrapped on 17 November the investment zone proposals were very short lived. The proposal has now morphed into the proposal for a smaller number of clustered zones earmarked for investment.
Settlement agreements are commonplace in an employment context and are ordinarily used to provide the parties to the agreement with certainty following the conclusion of an employment relationship.
On 2 November 2022, the Supreme Court handed down its judgment in the much awaiting case of Hillside Parks Ltd v Snowdonia National Park Authority [2022] UKSC 30. The Court’s judgment suggests that the long established practice of using drop-in applications is in fact much more restricted than previously thought. This judgment therefore has significant implications for both the developers and local planning authorities.
Across the UK, homelessness is an urgent crisis, and one that is set to grow amid the rising cost of living. Local authorities are at the forefront of responding to this crisis, but with a lack of properties that are suitable for social housing across the UK, vulnerable individuals and families are often housed in temporary accommodation.
Updates include UK Shared Prosperity Fund, contracts, Subsidy Control Bill, data controller liability, Government Covid-19 procurement and Highway Code revisions.
The complex and rather nebulous transitional subsidy control regime set out in the UK-EU Trade and Co-operation Agreement and the UK’s wider international commitments has made it difficult for public authorities and those working with them to proceed with certainty where subsidies are involved.
Investment zones have been introduced by the Conservative party to get the United Kingdom (UK) ‘working, building and growing’. They are to be designated sites which provide time-limited tax incentives, streamlined planning rules and wider support for local growth to encourage investment and accelerate the development of housing and infrastructure that the UK needs to drive economic growth. Processes and requirements that slow down development will be stripped back with the intention of attracting new investment.
Created at the end of the Brexit transition period, Retained EU Law is a category of domestic law that consists of EU-derived legislation retained in our domestic legal framework by the European Union (Withdrawal) Act 2018. This was never intended to be a permanent arrangement as parliament promised to deal with retained EU law through the Retained EU Law (Revocation and Reform) Bill (the “Bill”).
It is clear that the digital landscape, often termed cyberspace, is a man-made environment, in which human behaviour dominates and where technology both influences and aids our role in it — through the internet, telecoms and networked computer systems, which are often interdependent. The extent to which any organisation is potentially vulnerable to cyber-attack depends on how well these elements are aligned.
Three months on from the commencement of the new statutory Integrated Care Systems (ICS) Anja Beriro and Gerrard Hanratty reflect on the main themes and issues that have come from the new relationship between local government and health.
The Procurement Bill (the Bill) has now been with us for about four months, during which time there have been a huge number of amendments proposed in the House of Lords (circa 320). Lately, there has been less mention of it — unsurprising, really, given everything else going on in politics recently — but here’s a summary of some of the key issues and themes so far.
Browne Jacobson has been named as a supplier on Crown Commercial Service’s (CCS) Public Sector Legal Services Framework on Lot 1a – full-service provision (England and Wales) and Lot 2a – general service provision (England and Wales).
Welcome to our September edition of Public Matters, our monthly round-up of legal updates, news and insights for the public sector.
Since the UK left the EU and are now able to move away from the EU data protection regime, the UK government have implemented a national data strategy with the aim of reducing the burden on organisations but maintaining a high data protection standard.
The Chancellor’s recent mini-budget provided a significant announcement for business as it was confirmed that the off-payroll working rules (known as “IR35”) put in place for public and private sector businesses from 2017 and 2021 will be scrapped from April 2023.
Devolution is the transfer of powers in areas like transport, housing and skills in England and since the Cities and Local Government Devolution Act 2016 has been a much-discussed topic.
