Localism and regionalism

Problem scenario

Parliament enacts the Local Housing Act 2028. This gives effect to key parts of the government’s plans for solving a housing shortage by requiring local councils to subsidize private tenancies, thereby making it more affordable for poorer families and individuals to rent somewhere to live. Central government awards grants to councils, as it sees fit, for the specific purpose of subsidizing the tenancies. In the (fictional) town of Strochester, however, the council has recently been newly elected and one of the main parts of the winning party’s manifesto was a pledge to ensure the building of 500 new homes in the town. Strochester Borough Council, in view of its election promises, decides to use the money granted by central government to embark on a five-year programme of home-building. The Secretary of State, learning of Strochester’s refusal to use the money for the specific purpose for which it was intended, decides to cancel their grant with immediate effect.

Analysing the scenario

Imagine that you have been presented with this scenario and asked to discuss the local governmental issues arising. The first thing to consider in this scenario is the actions of the council using the money from central government to fund the building of new homes, rather than the subsidisation of private tenancies, as stipulated in the 2020 Act. This is ultra vires. This scenario is reminiscent of the case, Attorney-General v Fulham Corporation.¹ It is recalled that, here, the local council used a power intended for the establishment of wash-houses, to create a laundrette wherein council employees would wash customers’ clothes. The court found that this was ultra vires the statutory power. Similarly, therefore, since Strochester council are seeking to use a grant of money, intended for the subsidisation of private tenancies, to build new homes they can similarly be deemed to be acting ultra vires.

The second aspect of the problem scenario for discussion is the fact that Strochester council was elected on the basis of a promise to build 500 new homes. As the decision in Bromley makes clear, though, local councils are not legally bound by promises made in an election manifesto. Indeed, it would arguably be unreasonable to impose such expectations. What is more, section 9.5.2 has already made clear that councils can only do – and must only do – that which central government, and Parliament, instructs. Strochester council, therefore, is not required to honour its election pledge to build 500 homes and, indeed, in light of the discussion already had about the actions of the council being potentially ultra vires, their legal responsibilities under the 2020 Act must take priority over their political promises. This might, of course, have political ramifications, such as a petition or a different result in a subsequent election, however, election promises do not affect the legal responsibilities of councils.

Finally, the Secretary of State is arguably justified in cancelling the grant. As the problem scenario makes clear, central government awards grants to councils ‘as it sees fit’. It is, therefore, entirely within the discretion of the Secretary of State to decide whether or not to make such an award. In light of Strochester council’s misuse of the funds, it could be argued that the Secretary of State is more than justified in cancelling the money.

1 [1921] 1 Ch 440. Also see fuller discussion of this case at section 11.2.