It is a fundamental principle of local government law that functions conferred by Parliament cannot be given to other entities unless the statute itself allows that, or some other statute confers a general power to contract for the services with some other body. Therefore the answer to the above question depends on each case which service one is considering, and under what statute that particular function was given to local authorities to perform. The partnership flexibilities in the Health Act make it much easier to achieve joint working but there are still legal pitfalls for the unwary.
A. We look at each of the 5 main service provision functions relating to social services, and also to the one contracting power of the NHS, below, and then explain why the question might matter a great deal for the legal position of the providers and the commissioning body.
Statute provides, and case law has confirmed, that all residential and nursing home provision under s21 NAA 1948 can be performed by local authorities by way of contract with the private sector (see Wandsworth ex p Beckwith no. 1 and Beckwith no. 2). It had been argued that authorities had to retain at least some direct provision capacity themselves, by owning or managing Part III NAA homes. But the litigation involving Wandsworth established that this was not so; in passing s26 of the NAA (which specifically envisages arrangements being made with the independent sector, so long as the homes providing both board and personal care for the clients, together with the accommodation, are registered) Parliament had intended, so the judges decided, that local authorities could contract out the whole of their provision, and not even keep one home.
Later case law has established that when a home enters into a s26 arrangement with an authority, it is acting as an independent contractor, and not as an agent of the local authority for the discharge of a public law duty of its own actually to provide the accommodation (see Servite Houses and Leonard Cheshire cases).
Likewise, s45(3) HSPHA specifically provides that an authority may employ as its agent for the purposes of that section any voluntary organisation or any person carrying on, professionally or by way of trade or business, activities which consist of or include the provision of services for ‘old’ people.
Given that the wording of the original s45 function itself is to ‘make arrangements’ and s45(3) authorises appointing an agent for the purposes of that function, it might mean that the authority can engage eg Age Concern or Mencap as its agent not just for providing the services, but for making arrangements itself, with yet further others. Even if it goes that far, it is unlikely that it would be lawful to contract out the decision making with regard to who should get the services in the first place, because s47 NHSCCA is now the ‘umbrella’ assessment section, and there is no scope for making arrangements for that function to be done other than by the authority.
We think that the s117 Mental Health Act aftercare provision probably implicitly authorises contracts with contractors which the courts would see as independent contractors, and not as agents.
(1) The Secretary of State may, where he considers it appropriate, arrange with any person or body (including a voluntary organisation) for that person or body to provide, or assist in providing, any service under this Act.
3) The powers conferred by this section may be exercised on such terms as may be agreed, including terms as to the making of payments by or to the Secretary of State, and any goods or materials may be made available either temporarily or permanently.
B. The difference between contracting as an agent and contracting as an independent contractor matters for a number of reasons:
Authorities are not necessarily liable in negligence for the actions of independent contractors. We think that there is more likely to be liability for such negligence if the basis for the arrangement is that the contractor is merely the means used by the authority for the discharge of its own provision functions, under s111 LGA. But traditionally, independent contractors bear the primary liability for their own wrongs, and the purchaser need only worry about choosing a ‘proper’ contractor, ie be sensible about tendering and check-ups before going ahead. In contrast, purchasers are liable for the negligence of agents in contractual settings, and also in the law of tort (negligent personal injury, for these purposes).
Secondly, independent contractors are not public authorities for the purposes of the Human Rights Act. So if a contractor acts incompatibly with human rights, the contractor will not be able to be sued, which makes it more likely that the authority will be sued for failure to protect against inadequate respect for a person’s private life, or against inhuman or degrading treatment, etc.
Specifically Related questions:
>Can local authorities make lawful arrangements for
a) two local authorities to provide for the joint discharge of each of their respective functions?
b) one local authority to discharge its functions by another local authority or officer employed by that authority?
>What are the legal possibilities for using other local authorities’ staff for the discharge of one local authority’s functions?
>If no approved partnership flexibilities have been obtained, is there any other lawful way for a local authority to discharge functions common to both it and the health authority or PCT, such as in the aids and equipment field, (or vice versa)?