Please read on for the NALC legal update from their legal team:
We have received a few requests from councils concerned that the income they receive from leasing land or selling land amounts to making a profit and the council engaging in trading activities. Paying rent is one of the components of a lease, and receiving rental income as a landlord does not amount to trading. The same goes for money received by a council vendor of land. Section 127 of the Local Government Act 1972 also requires councils to dispose of land (including by way of leasing or selling it) at market value, subject to the conditions in the General Disposal Consent. Our advice note on the disposal and appropriation of land by local councils contains guidance on the disposal of land.
We considered an unusual request where a council employee had invoiced their council after making an authorised office purchase using their own personal card and they had also used their store loyalty card during the purchase. The benefit to the employee consisted of a few pences, but a councillor questioned their conduct in making a financial gain from the transaction. In our view, the legal concept of de minimis was applied in the case as any breach was minor. The issue really highlighted the importance of having clear policies in place, and the council decided to implement corporate cards for staff use. A separate point was that an employee loyalty card purchase could benefit the employer with loyalty savings. However, having clear council policies on staff card use would avoid such issues arising.
We have been asked whether councillors resigning from committees are required to do so in writing. Section 84 (1) (c) and (d) of the Local Government Act 1972 provides the procedure for councillors and council chairs wishing to resign from their councils. The statutory requirements do not apply to councillors resigning from committees. We suggest that a committee’s terms of reference detail the process for resigning from those committees. Generally, it is desirable to put things in writing for clarity and certainty.
We are asked every year there is an election to provide dates for annual council meetings. The principle for our calculation remains the same every year. It is the dates that vary. The 2025 local election date is 1 May, and councillors would ordinarily take office on 5 May. As that day is a bank holiday, our view is that councillors will now take office on 6 May, making the relevant 14-day meeting period for the purposes of paragraph 7 (2) of Schedule 12 to the Local Government Act 1972. 7 May to 22 May inclusive. This an area where we are aware there have been different interpretations of the computation of days, and we have not counted Sundays in our 14-day calculation. We are also asked about the earliest date a council annual meeting can be held where there is no contested election. Our view is that where there is no contested election, so it is known whom to summons, the summons can be served with the requisite three clear days’ notice, which could be the day councillors take office. Councils have to know who they need to summons so notice cannot be given before results are known where there are contested elections. We will update our guidance in the event there are any election date changes.
If you have any queries relating to the legal update, please do reach out to us.