Consultation on General Power of Competence: A Response

The Scottish Government has recently published a consultation on whether local authorities should have a general power of competence, as in England. Here's my response.

Response to Consultation Paper on General Power of Competence

Introductory

1.    I am Andrew C. Ferguson. I am a former solicitor, having ceased membership of the Law Society of Scotland in October 2020 as I no longer intend to practise as such. I now run a local government consultancy and have a number of public sector clients.

2.    Prior to that date I had gained some 33 years’ experience as a solicitor, 31 of them with Fife Council, its predecessor Kirkcaldy District Council and other public sector affiliates (Forth Estuary Transport Authority, SEStran, etc.)

3.    Latterly I specialised in governance matters, working in Fife’s Committee Services as a manager for the last 18 years of my time there. I say this simply to explain why I had direct, hands-on knowledge of working with the current power to advance well-being.

4.    I continue to take an interest in governance matters as a consultant, and I am motivated to respond to this consultation paper because, in my view, it represents an opportunity for the Scottish Government to address some of the endemic problems facing councils if it is prepared to take a bold, cross-cutting approach to the reforms needed.

Consultation paper

5.    The Consultation Paper in general gives a good general overview of the existing law. However, there is an error in it at ‘Existing Statutory Framework’ where it says, in relation to s.20 of the Local Government in Scotland Act 2003, that ‘The general power for a local authority to ‘do anything to advance well-being’ is restricted to its local area and/or persons living within that area.’ Section 20(4) specifically says:

‘(4) The power under subsection (1) above includes power to do anything—

(a)  in relation to, or for the benefit of, any persons or place outwith the area of the local authority; or

(b)  in any such place,

if the authority considers that doing so is likely to achieve the purpose set out in that subsection.’

6.    Another point I think worth noting is in relation to the dicta in the case of Portobello Park Action Group Association v The City of Edinburgh Council [1] referred to in the Consultation Paper. In her judgement on behalf of the Inner House, Lady Paton said:

‘For one thing, the reference to ‘anything’ in section 20(1) cannot in our view possibly be thought to mean what it appears to say. It cannot, for example, be understood as conferring on a local authority the right to act in breach of contractual or trust or title obligations, or to the detriment of third party rights [my emphasis].’

7.    I will argue in this response that the latter part of this statement by a senior Scottish judge actually encapsulates the lack of power that local authorities encounter – or at least say they encounter – every day, and is the main mischief that any change in the law needs to address.

8.    However, I will also argue that addressing it by introducing a general power of competence is looking at the issue from the wrong direction, and one that is doomed to failure when challenged in court. The right direction, in my view, is to look at common areas where local authorities find it difficult to achieve things, and examine why.

Financial considerations

9.    Much of the Consultation Paper concerns itself with existing powers for raising/borrowing finance, trading commercially, and charging for services. It rightly points to the existing Scottish legislation in this area, starting with the Local Authorities (Goods and Services) Act 1970, proceeding through s.83 of the Local Government (Scotland) Act 1973, and on to the various sets of regulations, codes of practice and guidance notes that regulate such matters.

10. It also points to the provisions of both the current Scottish power to advance well-being and the English general power of competence that hedge, very carefully, local authorities’ ability to use these powers to raise finance by means of additional taxes, charges, borrowings or trading.

11. My comment on this aspect of any proposed general power is that it would take a very bold council lawyer indeed to advise that their local authority should think outside the box on such matters rather than sticking very rigidly to what the existing legislation says they can do. One does not have to go back very far to see examples, such as in the Western Isles, where attempts to be bold in matters of finance became unstuck.

12. The Brent LBC case referred to in the consultation paper[2] was another example of judicial restriction of any supposed ‘loosening up’ of finance powers. The proposal that eventually came to be struck down was an innovative approach by various London burgh councils to save money on their insurance by setting up their own insurance company. The s.2 power became irrelevant to the case ultimately but there were useful dicta to the effect that, when using such a power, a deliberate intent to use it and identify the well-being it would bring was necessary.

13. I am not sufficiently cognisant of current uses of the general power of competence in England to be able to comment on it, but would suggest that it would be helpful when consulting on a Scottish version to confirm whether, in fact, the English power is routinely used or not. If not, then again it would be useful to know that and to know the reasons why.

14. Be that as it may, as with other areas I will discuss below, my own view is that if there is a perceived lack of flexibility in councils adopting innovation in finance matters, then the solution would not be to introduce a general power of competence but to look again at existing powers and see whether they need adjustment.

Existing powers: their uses or lack of them

15. As regards existing Scottish powers, the Consultation Paper mentions s.69 of the Local Government (Scotland) Act 1973. This power, which allows councils “to do anything (whether or not involving the expenditure, borrowing or lending of money or the acquisition or disposal of any property or rights) which is calculated to facilitate, or is conducive or incidental to, the discharge of any of their functions,” is in my experience seldom invoked these days. There is a string of case law which again puts strict limits on what is considered ‘conducive or incidental.’ The main usage is in relation to grants of planning permission, where so-called ‘s.69 agreements’ are occasionally helpful in securing short term obligations on the part of developers which cannot be secured otherwise in terms of planning legislation.

16. That aside, the main ‘general’ power is now described in ss.20 – 22 of the Local Government in Scotland Act 2003, as referred to above. My own involvement in this began soon after the Act’s implementation, and it is fair to say that Fife Council was one of the principal exponents of its use in the early days. This is because Douglas Sinclair, then Chief Executive at Fife, had been heavily involved in the development of what became ss. 20 – 22 through his role in the Society of Chief Executives (SOLACE).

17. Mr Sinclair and his fellow chief executives saw the new power as a way of driving innovative change. Fife at that time was divided into three Areas, with each of them managed corporately by Area Managers (the exact title changed over the years) who were answerable directly to the Chief Executive and tasked with delivering services locally. At some point in the mid-2000s the Council area was divided into 7, rather than 3, Areas, but with a similar management structure.

18. Mr Sinclair was keen to see the power help resolve localised issues that had become intractable. Examples might include fly tipping, derelict pieces of land or untidy gardens, or even houses that had to all intents and purposes been abandoned. As we will see from a much more recent ‘live’ example, Council services that had some powers to resolve these issues were often reluctant to act. This might have been because their powers did not exactly fit the set of circumstances before the Council, or, more commonly, it was because the services involved did not want to expend their limited resources on what might end up to be an expensive and recurring problem.

19. For a limited period, the Area Managers were given a ‘power of well being’ budget to help kick start solutions to such problems. As long as that budget existed – and as long as lawyers like myself were prepared to take a broad view of what s.20 enabled councils to do, taking a risk based approach – some local issues were resolved with it – at least temporarily. However, once that budget was (inevitably) cut, Council services fell back on their ‘own’ legislation (environmental health, building standards, housing, etc) and refused to act.

20. What effectively killed off use of the power for issues such as these was the case law north and south of the Border referred to previously. Faced with dicta such as those quoted above from Portobello Park, it was no longer realistic for me or my legal colleagues to recommend use of s.20 to address issues that involved going onto privately owned ground, even when the purpose of doing so was to improve the look of it.

21. That is not to say that the powers in s.20 were never used. It remains the source power, for example, in commercial situations where councils participate in limited companies. Internal guidance and a register of uses was introduced in Fife, working with the Chief Executive’s team. However, actual recording of uses of the power waned. It is no doubt used on occasion. However, it is very rare for it to be knowingly, positively used with a cogent examination of what well-being it is advancing having taken place – as the Brent case enjoined councils to do.

A problem-solving approach or pass the parcel?

22. As with the discussion of finance issues, above, my view based on these experiences is that the way forward is not to introduce a general power of competence, but to strengthen and clarify existing statutory provisions, backed by specific financial inducements to councils to use them. I have recently been involved in a case that exemplifies much of what I have said so far.

23. As part of my consultancy work I am acting (pro bono) on behalf of a friend whose son lives in a small town in central Scotland (not Fife). His son owns a flat which is part of a traditional ‘four in a block’ arrangement. In 2020, the upper flat which is not immediately above him went on fire, a fire which unfortunately proved fatal for the owner. The police and fire services attended. However, due to the owner’s heirs being unwilling or unable to take action, the flat has sat for nearly 5 years now in an insecure, fire-damaged state.

24. My first involvement with the case was in spring 2023, by which time the flat had been in that state for 3 years already. I wrote to a contact at the relevant council, asking what the Council could do. His response was one that I could have scripted myself, and indeed very possibly did back in Fife days. Police, Fire, the Safer Neighbourhood Team, and Building Standards had all been involved but their involvement had not prevented the flat becoming and remaining insecure. Building Standards opined that ‘they have no legislative input to insecure premises unless they are dangerous, and the fact that premises are insecure does not make them dangerous.’ Planning Enforcement and Environmental Health did not feel they had any locus.

25. Subsequent to that, an Empty Homes Officer was appointed by the Council – this, I believe, following specific funds being directed at local authorities by the Scottish Government to allow them to do so. Despite this, and despite a recent site meeting being arranged by the Chief Executive’s Service, there is little promise of any immediate relief. Until recently the Council claimed not to know who the owner was. Again, it was only recently that it became clear that none of the services involved so far had actually thought to cap off a live gas supply.

26. I will not further extend my response by rehearsing ad longam the powers that are available to councils to deal with such situations. They range across many statutes and different disciplinary areas of local authority law. Instead, I will concentrate on two areas: Building Standards and compulsory purchase.

27. So far as Building Standards is concerned, it is baffling to my friend, his son and other neighbours how the Council can pronounce as safe a semi-derelict flat which is insecure, until recently had a live gas supply, and with a cast iron drainpipe hanging off it by a single thread. I can, as a former council lawyer, explain to them how the s.29 of the Building (Scotland) Act 2003 could be interpreted cautiously enough to justify the Building Standards team sitting on their hands, no matter how wrong-headed that may seem.

28. However, the clue to why they refuse to act lies not in what is in the 2003 Act, but what isn’t. When the 2003 Act was at its Bill stage, I worked with one of the Area Building Control Managers on a Fife Council response that advocated for retaining councils’ ability to put a Charging Order over buildings they took action on – effectively securing, on the land, a debt recoverable from the owner or their successor for any works carried out on the property under the Act. Despite our response the power to impose a Charging Order, as in the 1959 Act, was not replicated in the 2003 Act.

29. Ever since that time, Building Standards officers have been under pressure from their superiors to take the cautious approach this Council has taken with my friend’s son’s case. Carrying large outgoings on a shrinking Building Standards budget has not been seen as an option. Accordingly, unless a building is imminently due to collapse, nothing will be done, either under s.29 or s.28 (defective building notices).[3]

30. So far as compulsory purchase is concerned, the Society of Local Authority Lawyers and Administrators in Scotland (SOLAR) advocated, as far back as the mid-2000s, for reform of legislation that is patchwork, unwieldy, and in some cases so antiquated it was designed for building railways in the 19th century. It can take years for a CPO to grind its way through the system. Apart from a little tinkering nothing has been done; and since 2018 talk of compulsory sale orders, and revision of CPO legislation, has been just that – talk[4].

Powers ‘to the detriment of third party rights’

31. In the discussion above, I have outlined, firstly, the limits of existing general powers, judicial resistance to a liberal interpretation of them, and a reluctance to use even existing powers – general or specific – in any way that is seen as being ‘to the detriment of third party rights,’ to use Lady Paton’s phrase.

32. And yet powers which can be used to the detriment of third party rights are exactly what are required. Clearly such powers would need to be tested against ECHR obligations. More than that, they would need a bold policy approach that recognises there should be limits to the old maxim that an Englishman’s (or indeed Scottish person’s) home is their castle. However, in the midst of the worst housing crisis for decades, dereliction, decay, and misuse of empty properties should no longer be an option for owners.

33. What is needed, therefore, is a root and branch reform of existing powers available to local authorities, rather than the introduction of some unfocused general one. The power to advance well-being can be used intelligently to fill in gaps – company and partnership formation being one such example. But both in areas of finance and tackling derelict and dangerous properties, well worded and robust legislation is long overdue.

34. Coupled to that however is a need to incentivise councils financially to take action where such powers exist. Having worked for Scotland’s third biggest local authority for decades, I am by no means unsympathetic to the daily challenges officers face in trying to meet public demands for action. However, the Chief Executive’s latest response to my friend and his son inspire no confidence whatsoever. This states that Building Standards cannot act (not true) and that, if after an unspecified period discussions with the owner no further progress is made, the Council will consider compulsory purchase (something they could have done years ago) or compulsory sales orders (which don’t exist yet).

35. Incidentally, despite my criticisms of the existing power to advance well-being, I do think it can still serve a useful purpose, in areas such as company formation, in filling gaps in the existing legislation. Perhaps a refresh with Government Guidance taking account of existing case law, and providing best practice examples, would be helpful.

Edinburgh, 21st March 2025

[1] [2012] CSIH 69

[2] Incidentally there are two references in the discussion of the case which refer to ‘section 20’ when it should be section 2 of the (English) Local Government Act 2000.

[3] I intend, incidentally, to FOI all 32 councils to establish what uses have been made of ss.28 and 29 in the past year, as well as other useful powers such as those under Chapter 5 of the Housing (Scotland) Act 2006, and indeed s.87 of the Civic Government (Scotland) Act 1982, which everyone seems to have forgotten about.

[4] See, for example, letter from the Housing Minister to Convener Local Government, Housing and Planning Committee: https://www.parliament.scot/-/media/files/committees/local-gov/correspondence/2024/compulsorysalesorders.pdf It is also noted that a consultation on reform of CPOs is anticipated this year: see discussion of progress so far in (2025) 227 SPEL 7.