Agenda Item No. 9
The Vale of Glamorgan Council
Shared Regulatory Services Joint Committee: 3rd November 2015
Report of the Head of Shared Regulatory Services
Purpose of the Report
- To advise the Joint Committee of the Primary Authority principle and its benefits.
- The Joint Committee notes the content of this report and the operating model for generating additional income within the SRS. .
Reason for the Recommendation
- The Primary Authority principle enables local authorities to provide assured advice to business on the basis of full cost recovery. The scheme therefore supports economic development and the growth of local businesses; while at the same time enabling the authority to recover its costs. As such, building a portfolio of Primary Authority relationships is central to the approved business model of the Shared Regulatory Service in terms of its cost recovery and income generation capacity.
1. Consumer protection legislation applies to businesses operating throughout the UK and is enforced by local authority trading standards and environmental health services.
- The Home Authority principle was developed to provide business with a single point of local government regulatory contact. Under that scheme, a business operating across different areas of the UK, such as high street retailers, can nominate the local authority in which its head office is located as its 'Home Authority'. This is a discretionary function, but the benefit to business is that it saves duplication of resources allowing queries to be managed through the Home Authority rather than the business having to answer queries on the same issue raised by multiple local authorities.
- This concept was extended following the creation of the Better Regulation Delivery Office (BRDO) which is part of the Department for Business, Innovation and Skills (BIS). The overall aim of BRDO is to secure the effective performance of local authority regulatory services in accordance with the principles of better regulation, ensuring that inspection and enforcement are based on an assessment of risk so that businesses are supported and regulatory resources are focused on those areas that require most attention.
- Building upon the Home Authority principle, the concept of Primary Authority was launched as a result of the Regulatory Enforcement and Sanctions Act 2008. Businesses, particularly those that operate across local authority boundaries, can enter into a statutory partnership with a Primary Authority of their choice and receive consistency in advice, support and inspection from local authorities. Primary Authority comes with certain statutory powers allowing BRDO to direct local authorities in their dealings with companies.
- When a Primary Authority partnership is formed, the Authority is charged with providing robust and reliable advice on legal compliance. Other councils must take this assured advice into account when carrying out inspections at business premises or dealing with any issues of non-compliance. This formal relationship requires there to be a contractual arrangement in place between the Authority and the business it enters into partnership with.
- In 2013, the scope of the Primary Authority principle was extended by the Enterprise and Regulatory Reform Act, and now businesses having a shared approach to compliance (commonly through a body such as a trade association) are able to enter into what is known as a co-ordinated partnership with a Primary Authority. The added value of a co-ordinated partnership is that it allows many businesses who may not be eligible for a direct partnership (particularly small businesses) to join together to benefit from Primary Authority.
- An authority may charge partner businesses for some or all the services supplied through Primary Authority partnerships, however it can only recover the costs reasonably incurred.
Relevant Issues and Options
- An important element of the business model for the Shared Regulatory Service approved by the three Councils is the building of a portfolio of Primary Authority relationships. In addition to satisfying the participant councils' shared goals of economic development and supporting reputable business, increasing the reach of our Primary Authority work is central to the Service's cost recovery and income generation capacity as envisaged in the approved Business Plan for 2015/18.
- The Shared Regulatory Service currently maintains two Primary Authority arrangements, one a direct partnership and the other a co-ordinated partnership. The direct partnership is with a catering company for Trading Standards and Environmental Health matters, while the co-ordinated partnership is with the Association of Convenience Stores for devolved, Wales only law. Both of these partnerships were set up by Bridgend County Borough Council. Since the inception of the Shared Service, two more Primary Authority partnerships are contemplated and should be formed in October 2015.
- Moving forward, all Primary Authority contracts will be between the relevant business entity and the Vale of Glamorgan Council as the host Authority for the Service. The Vale of Glamorgan's Legal Services Department has been briefed and is fully supportive of this arrangement. In line with this, the two existing Primary Authority contracts will be migrated from Bridgend County Borough Council to the Vale of Glamorgan Council as soon as practicable.
- In addition to the provision of assured advice, other services can be delivered to Primary Authority businesses, for example bespoke training packages on a range of regulatory topics, tailored to the needs of the business. All such services can be charged at a rate to enable full cost recovery, and work carried out to determine the appropriate rate for the existing partnerships has arrived at a charge of £50 per hour of officer time.
Resource Implications (Financial and Employment)
- As outlined above, all Primary Authority work will be charged to the recipient businesses at a rate of £50 per hour enabling full cost recovery. This rate will be reviewed annually.
- There are no additional resource implications associated with this report at this time
Sustainability and Climate Change Implications
Legal Implications (to Include Human Rights Implications)
- The Primary Authority principle has been shown to work well since its inception in 2008, and a number of safeguards and protections are in place. Since that time there has only been one challenge to the advice given by a Primary Authority that has resulted in a determination being given by BRDO. That determination was in favour of the Primary Authority.
- Under the standard terms and conditions of Primary Authority arrangements, the Authority's liability to the business (whether in contract, tort, negligence or otherwise) is limited in any year to the amount paid in that year for the services provided.
- Likewise, the local authority is not liable to any unforeseeable loss which arises as a consequence of its involvement in the partnership.
- The Head of Shared Regulatory Services has delegated authority to enter into these agreements under the terms of the Joint Working Agreement.
Crime and Disorder Implications
Equal Opportunities Implications (to include Welsh Language issues)
- Continuation of arrangements allowing additional partnerships to be entered into will ensure the promotion of legitimate businesses.
- Adverse impact of the arrangement on equality is very unlikely. Moreover, the legislation and policy has been developed to mitigate the risks and consequences of any adverse impacts, should they occur. Positive impact in relation to equalities, beyond the protection if an individual's human rights is also unlikely.
- On the basis of the above, it is not considered that a detailed Equality Impact Assessment is required.
- Promoting the Primary Authority principle is an important step in supporting legitimate businesses across the Bridgend, Cardiff and the Vale of Glamorgan region, as it enables business to grow with confidence. This area of work links strongly with the participant authorities' stated objectives around economic growth which are reflected in the Shared Regulatory Service themes of 'Promoting economic development' and 'Supporting reputable businesses to thrive'.
Policy Framework and Budget
Consultation (including Ward Member Consultation)
Relevant Scrutiny Committee
Helen Picton, Operational Manager for Enterprise and Specialist Services
Head of Service, Bridgend County Borough Council
Assistant Director, City of Cardiff Council
Director of Environment and Housing Services
Legal Services, Vale of Glamorgan Council
Accountant, Vale of Glamorgan Council
Dave Holland, Head of Shared Regulatory Services