In the UK and also globally, the spread of coronavirus is creating fundamental changes in our way of life – with individuals, businesses, organisations and also entire economies all facing an uncertain future.
It’s unknown how long the international emergency will last, what measures will be taken by governments to mitigate the crisis, and (when the pandemic is all over) whether countries will return to ‘normal’ – or a paradigm shift will occur.
For in-house lawyers, giving the correct advice depends on having up to date and detailed knowledge on rapid changes in government policy – certainly on a day-to-day basis, sometimes even hourly – and communicating that information quickly.
A crisis management plan is essential – and the ability to communicate that plan effectively, on a regular basis, to a wide range of stakeholders. Any information vacuum is unsettling, especially for employees – who want transparency and confidence that their concerns are being listened to.
Staff will be understandably concerned about maintaining their financial livelihood during any period of absence, whether on account of an instruction from their employer, in light of the relevant guidance to self- isolate for a period of time or as a result of caring for a dependent. Managing this situation will require a careful juggling of priorities and considerations, not least operational, financial, safety and business continuity.
Suppliers and customers need similar confidence about supply chains, warehousing and inventories. In essential services, regulators and other authorities will also need re-assurance. Those communications may also be market sensitive – at a time when UK and global financial markets have been in freefall.
Operational resilience is now being tested to the extreme. Businesses should therefore be vigilant, detailed and accurate in recording how they manage the crisis.
A review of contracts to check the extent to which contractual obligations can be met, by both the business and by any suppliers/ customers, is critical.
In some cases, it will be necessary to pause steps being taken which could potentially result in proceedings in due course. For example, switching to different suppliers, or using different products or raw materials due to shortages, may result in a claim for repudiatory breach if a breach by the original supplier has not been sufficiently established.
Other risks include:
- Potential health and safety investigations resulting from failure to adequately protect health and safety of employees and/ or failure to take reasonable steps to control spread of coronavirus at sites under the control of the employer;
- Employment claims resulting from reduced salaries, temporary layoffs or termination after an employee contracts coronavirus;
- Data protection claims resulting from disclosure of employees’ travel, health or personal information;
- Concealment of market or commercially sensitive information relevant to coronavirus.
COVID-19 could also create a number of claimed force majeure difficulties between businesses, where parties can potentially excuse or delay performance if the contract allows them to do so and if the pandemic has directly caused the failure to perform. In some cases, the contract may be frustrated. An organisation wishing to claim force majeure should act quickly to exercise its rights.
The financial stability of key suppliers and customers will also need to be assessed. Any requests for changes to payment terms, for example, should be explored and investigated. Contracts should be reviewed to consider rights to recover assets and/or ring fence goods. Actions taken outside of the agreed procedures could result in a claim for breach of contract.
The organisation’s insurance portfolio should be reviewed carefully to see whether any insurance cover is available to assist with financial difficulties or losses arising out of the coronavirus outbreak.
Most business interruption cover is only triggered when physical damage is caused to the insured’s premises or property. Even where the policy covers business interruption caused by disease, the standard wording is for the policy only to cover diseases named in the policy wording, which almost invariably will not include COVID-19. However there are some insurance policy extension wordings which might respond to coronavirus-related losses, so the scope of the organisation’s insurance cover should be reviewed.
To help you through the current emergency our COVID-19 Advisory Service is supporting organisations and businesses on a range of safety issues, managing operational workforce issues, contractual obligations and transactions, supply chain management, insurance exposure and relevant regulators.
We can also keep you up-to-date with the latest COVID-19 news and articles via our COVID-19 Insight Information Hub.
- Commercialisation (Chris Harper)
- Place & Growth (Rebecca Pendlebury)
- Governance & Reorganisation (Judith Barnes)
- Contract Management (Richard Lane)
- Disputes & Regulatory Support (Olivia Carter & Judith Hopper)
The impact of COVID-19 on the High Street
The Government recently implemented unprecedented measures to protect the public and the economy during the current pandemic. A moratorium has also been imposed by the Coronavirus Act 2020 to prevent most landlords of commercial premises from evicting tenants who have failed to pay a sum due under the lease.
Most leases provide that where a tenant of commercial premises fails to pay rent, the landlord will be entitled to re-enter the property to evict the tenant and change the locks. This is a process which is known as forfeiture. It serves as a powerful incentive for tenants to pay because a business which has been evicted can seldom trade profitably without premises. However, now that landlords no longer have the power to end leases for non-payment before 30 June (though this period is subject to review and may be extended), a large number of commercial tenants have deliberately withheld their latest rent instalments in order to retain cash in the bank and help see their own businesses through the initial period of disruption.
It is important for owners and occupiers of commercial premises to be aware that:
- Not all tenants will be protected by the moratorium. Some occupiers, such as licensees of serviced office accommodation and short-term occupiers (who occupy under tenancies at will), are excluded. So too are agricultural tenants and tenants under less common leases in the mining and telecommunications industries.
- Where protection does exist, it extends to prevent eviction for non-payment of rent, service charge and insurance (where applicable).
- The moratorium does not operate as a ‘windfall’ or rent free period for tenants. Where sums have not been paid, tenants remain liable for them, interest will accrue and landlords still retain the ability to sue their tenant for the money or force the tenant company into insolvency (not that those courses of action will necessarily yield more prompt payment of the debt).
- Once the protection ends on 30 June, landlords will be able to commence forfeiture action in respect of the missed payments.
It is therefore crucial that tenants regard any protection under the Act as nothing more than a temporary reprieve. The consequence of deferring payments is likely to impact heavily on cash flow later in the year, and landlords who have had their own cash flow impacted can be expected to call in the debts quickly.
It isn’t all doom and gloom, though. We have been able to help owners and occupiers of commercial premises identify that it is possible to achieve a compromise which may substantially help each of them now and in the months to come. Landlords are keen to maintain their income but tenants don’t want to pay out large sums of rent every quarter. If a tenant is in a position to do so, it may be advantageous to seek to agree alternative payment terms – for instance, in return for continuing to pay rent through to 30 June (or beyond!), the landlord may wish to accept smaller but more frequent payments of rent until long after normal service has resumed so that both parties are in a better position to bounce back.
Are you using Procurement Cards?
The Cabinet Office has published Procurement Policy Note PPN 03/20 on Use of Procurement Cards - COVID-19. PPN 03/20 applies to all Central Government Departments, their Executive Agencies and Non Departmental Public Bodies (in scope organisations).
All in scope organisations are required to engage urgently with their procurement card provider to:
- Increase the single transaction limit for £20,000 for key card holders; and
- Raise the monthly limit on spending with procurement cards to £100,000 for key card holders. It also confirms that monthly spend on procurement cards in excess of £100,000 should be permissible to meet business need.
By 30 April 2020, in scope organisations should:
- Ensure that appropriate number of staff have the authority to use these cards
- Upon all relevant categories of spend to enable the cards to be used more widely.
The PPN also confirms that in scope organisations not currently using procurement cards, should immediately put in place arrangements using the relevant Crown Commercial Service agreement. The PPN includes information and advice on maintaining controls to minimise risk of inappropriate use of procurement cards and responses to seven FAQs which can be located here.
Reports and guidance
House of Commons Library | March 17, 2020
On 18 March 2020, there will be an opposition day debate on Local Government responsibilities for public services, including social care. This page primarily focuses on social care and recent guidance for local authorities on tackling coronavirus in social care settings.
House of Commons Library | March 5, 2020
Local authorities in England spent £91bn in 2018/19. This briefing looks at the funding that local authorities receive from central Government, and where and how they spend it.
PublicFinance | April 14, 2020
The framework governing capital investment by local authorities has been tested to breaking point by councils borrowing cheaply to invest in commercial property, according to a recent NAO report.
LGC | April 14, 2020 [subscription only]
Community Leisure UK, which represents 110 members that operate 3,700 facilities, has highlighted the financial crisis facing leisure trusts as coronavirus has closed sports centres across the country.
LGC | April 7, 2020 [subscription only]
Birmingham City Council leader Ian Ward has written to the chancellor asking for local authorities to be given short term loans to support cashflow through the coronavirus crisis. Birmingham received £38.7m from the £1.6bn grant allocated to councils to fund additional services required as a result of the crisis, but claims it has already spent that twice over.
LGC | April 1, 2020 [subscription only]
Barking & Dagenham LBC’s chief executive has raised concern about the impact of coronavirus on councils’ ability to raise revenue and to complete transformation plans within deadlines.
PublicFinance | March 11, 2020
The government has announced plans to cut the Public Works Loan Board interest rate - but only after it has introduced measures to ban councils borrowing to invest in commercial property.
LGC | March 11, 2020 [subscription only]
As announced in the Budget, councils will only be able to borrow once a year from the Public Loans Board to invest in commercial property for rental income, under government proposals for a new "lending framework".
PublicFinance | March 9, 2020
The “high quality” of the local government sector made the Municipal Bonds Agency’s first bond issuance possible despite turbulent financial markets, says the agency’s Chair.
PublicFinance | March 5, 2020
25 contracts are currently in the process of being brought back under the authority’s direct control, in a bid to reverse the “historic mistake” of outsourcing.
Grant Thornton UK LLP | March 4, 2020
Expenditure on both adult and children’s social care continues to rise at an alarming rate. In 2018/19, 47% of councils overspent on their adult social care budget, a 7% increase compared to 2017/18. Children’s social care saw 82% of councils overspend against their budget in 2018/19. This number has risen almost consistently since 2014/15 (68% overspent).
Keeping construction sites operational
The COVID-19 crisis has meant that all sectors of the economy have had to rapidly adapt to evolving guidance. This is especially the case for the construction industry which, unlike the leisure sector, still has the option to leave sites open. Contractors therefore face the challenge of balancing their contractual requirements to deliver services whilst following guidance.
How rapidly the picture is evolving is demonstrated by the fact that the government publication: Guidance on Remediation and Covid-19: Building Safety Update (the “Guidance”), originally published on 27 March 2020, was updated just 4 days later. The original version of the Guidance was stated to be “for those with an interest in building safety” and refers to “making buildings safe including the remediation of high-rise buildings with unsafe cladding. In parallel to the Guidance the Secretary of State for Business, Energy & Industrial Strategy Alok Sharma MP published a letter to those working in the construction industry, which confirmed that construction needed to stay open beyond fire remediation.
As the government clarifies in the guidance, construction sites have not been asked to close, so work can continue if it is done safely. However, whilst construction sites can remain open, the Guidance was updated on 31 March 2020 to warn contractors that sites which cannot demonstrate that they are consistently implementing the measures set out in the CLC guidance face the risk of being shut down.
The CLC guidance includes the following:
- criteria for workers who should be asked to self-isolate
- procedures to follow if a worker falls ill on site
- recommendations that, where possible, workers should travel alone and using their own transport, and matters that sites should consider such as providing cleaning facilities at entrances and exits
- what should be put in place regarding site access
- guidance for communal areas such as canteens and cleaning facilities. These include introducing staggered start and finish times, and increasing areas where possible to allow for two meters distancing
- principles for where workers cannot distance themselves by two meters, either because it is not possible, or safe for workers, such as stopping non-essential physical work which requires close contact
- cleaning requirements on site.
For many contractors, there will be a difficult balance in meeting these demands. Without a formal declaration by the government that sites must close, construction companies who wish to close sites have to instead carefully scrutinise the contractual provisions to see whether they are entitled to relief, or face delays and potential liquidated damages.
Many large house builders such as Persimmon and Barratt have put a pause on works, no doubt aware that buyers will not be able to complete due to restrictions on movement. For those who are working on infrastructure, making dwelling safe and supporting the NHS in fighting the pandemic, then it is clear the government considers those works to be essential. For the rest of the industry, the position is considerably murkier.
Guidance and publications
House of Commons Library | March 11, 2020
This note provides an overview of City Deals, with details on the 31 that have been successfully negotiated since July 2012.
House of Commons Library | March 11, 2020
This note looks at the creation of the Single Local Growth Fund and the process of allocating Growth Deal funding to Local Enterprise Partnerships.
House of Commons Library | March 3, 2020
Active travel means making journeys by physically active means, like walking or cycling. Given active travel is a devolved policy area, this briefing relates primarily to active travel policies in England.
HM Treasury, BEIS | April 1, 2020
Today high streets begin to receive £22bn coronavirus boost, with grants of up to £25,000 already being paid into bank accounts of high street businesses.
The MJ | March 27, 2020 [subscription only]
“Once the public health crisis has ended policymakers will need to develop a new long-term response which recognises that the economic damage done by coronavirus will be felt differently across the country.”
LocalGov | March 25, 2020
Birmingham City Council has written to the Government requesting postponement to the launch of its Clean Air Zone (CAZ) to help protect the economy during the coronavirus pandemic.
PublicFinance | March 19, 2020
No self-respecting minister in the Boris Johnson’s new administration would dare deliver a speech without referring to ‘levelling-up’. But what does the buzz-phrase actually mean and what financial choices does it imply for policymakers?
PublicFinance | March 17, 2020
The government has promised to ‘level up’ disparities in income growth across the UK, but is regeneration the right way forward?
PublicFinance | March 6, 2020
The chair of the National Infrastructure Commission has voiced his disappointment over a delay to the publication of the government's £100bn National Infrastructure Strategy, which is set to outline capital spending of £100bn over the next five years and covers transport, local growth and digital infrastructure.
A new virtual way of working
At times such as the present significant pressure inevitably comes to bear upon the local government machine. The speed at which the sector has had to adapt and embrace new challenges across multiple fronts, whilst ensuring that the wheels go on turning, has been unprecedented. It is not of course the first time that local government has had to deal with significant challenge – the last decade of deep cuts to Council budgets and increasing demand upon services being testament to this. Both then and now, good governance is an essential part of the jigsaw in order to ensure lawful operations and to mitigate against risk.
The Coronavirus Meetings Regulations are a welcome piece of legislation that should help Councils continue to make decisions through committees and full Council. However the practical task of facilitating remote meetings is far from being straight forward, with early pioneers experiencing various difficulties such as the unfortunate interruption of South Somerset Council’s planning meeting.
We have been advising Councils on various issues arising in consequence of the current pandemic to enable continuity in service delivery and functions. This has included advice around the new remote meetings provisions, electronic signatures and seals, powers of attorney, schemes of delegation and emergency decision making. Across the firm we are also advising on ensuring the continuing provision of social care and education, the distribution of grant funding, procurement issues, the coronavirus job retention scheme and furloughing, and housing resources to name but a few areas impacted by the pandemic.
Readers may be interested in the various Covid-19 related insight articles we have written and published covering key issues of importance to clients, and which can be accessed at from our Insights hub. This includes the recent articles on remote meetings as well as our article on the execution of documents.
We are also providing support to Councils whose Monitoring Officer and appointed Deputies are unable to act due to illness, which includes the appointment of some of our specialist governance lawyers as Deputy Monitoring Officers.
Guidance, reports and inquiries
House of Commons Library | April 14, 2020
An introduction to the devolution settlements in Scotland, Wales, Northern Ireland, London and parts of England.
LLG & ADSO | April 7, 2020
An explanatory note including highlights of issues to consider on The Local Authorities and Police and Crime Panels (Coronavirus) (Flexibility of Local Authority Police and Crime Panel Meetings) (England and Wales) Regulations 2020. Revised on 7th April to expand on regulations 7-12 in reference to the GLA and amends reference to the 1960 Act.
MHCLG | April 6, 2020
Letter from MHCLG to local authority chief executives on emergency legislation to support local authorities.
MHCLG | April 3, 2020
Local authorities in England handed new powers to hold public meetings virtually by using video or telephone conferencing technology.
House of Commons Library | March 26, 2020
This Commons Library briefing paper summarises the main developments regarding the process of devolution of powers to local government within England since 2014.
House of Commons Library | March 25, 2020
A briefing on the provisions in the Coronavirus Bill 2019-21 concerning powers to waive legal requirements around local authority meetings.
MHCLG | March 13, 2020
This document sets out the terms of a proposed agreement for a devolution deal between the government and the local authorities of West Yorkshire, comprising Bradford, Calderdale, Kirklees, Leeds, and Wakefield Councils, and the West Yorkshire Combined Authority.
Housing, Communities and Local Government Committee | March 9, 2020
The Housing, Communities and Local Government Committee has relaunched its inquiry into progress on devolution in England. The inquiry will scrutinise the impact of recently agreed devolution agreements and ask if the transfer of further powers to England’s regions can boost local economies and provision of public services.
LGC | April 7, 2020 [subscription only]
Plans to relax reporting requirements on councils' 2019-20 accounts have been roundly rejected, with auditors, regulators and the Treasury raising concerns about the plans.
Local Government Lawyer | April 2, 2020
The Government has issued the regulations that will give local authorities greater flexibility in the conduct of meetings, including allowing members to attend remotely, and for public and press access to those meetings.
LocalGov | April 2, 2020
Waltham Forest LBC’s planning committee used video conferencing software to help decide key planning applications in what is believed to be the first meeting of its kind in the country.
Local Government Lawyer | March 27, 2020
Two barristers from Essex Chambers consider the signing and sealing of formal documents during the coronavirus outbreak, with particular regard for the issues faced by local authorities.
LGC | March 26, 2020 [subscription only]
Councils have been given assurances by the Information Commissioner they will not be prosecuted for using or sharing data to deliver care and support during the coronavirus crisis.
LGC | March 25, 2020 [subscription only]
Bradford City MBC’s executive and Kirklees Metropolitan Council’s cabinet have both overcome social isolation restrictions to signal the go ahead for the West Yorkshire devolution deal to move forward to its next stage.
The MJ | March 17, 2020 [subscription only]
Academics giving evidence to the Housing, Communities and Local Government committee yesterday agreed that the UK should follow other countries’ example and decentralise the majority of councils’ income.
Bristol Civic Leadership Project | March 16, 2020
In a referendum held in May 2012 the citizens of Bristol voted in favour of introducing a Directly Elected Mayor model of governance for the city. This third Policy Report from the Bristol Civic Leadership Project will provide an independent assessment of the strengths and weaknesses of the model of mayoral governance as implemented in Bristol over the last eight years.
LocalGov | March 2, 2020
District and borough councils in Leicestershire have announced they will be taking forward discussions about creating an East Midlands Combined Authority after the Government welcomed the idea.
Using electronic signatures
We have received a number of questions about the use of electronic signatures and the execution of deeds. Local authorities will have their own specific rules that they have included in their constitution that will:
- explain who can authorise the execution of any deed or document and
- who can sign and seal those documents.
More flexible arrangements may need to be included in the Constitution whilst staff are working from home and minimising attendance at the office. It is unlikely that officers will have the flexibility to change the contract standing orders, financial procedure rules and articles that relate to signing and sealing documents and it may therefore be necessary to authorise changes to the Constitution at a meeting of the authority (which can now be held virtually – see our article on remote meetings).
Publications and guidance
Cabinet Office | April 7, 2020
This Procurement Policy Note (PPN) sets out information and guidance for public bodies on payment of their suppliers to ensure service continuity during and after the current coronavirus, COVID-19, outbreak.
Cabinet Office | April 6, 2020
This Procurement Policy Note sets out guidance on the use of procurement cards to support cash flow for suppliers.
Cabinet Office | March 18, 2020
This Procurement Policy Note gives information and guidance on public procurement regulations and responding to the coronavirus, COVID-19, outbreak.
Local Government Lawyer | March 25, 2020
Two barristers from 36 Essex Chambers set out what local authorities need to consider in relation to state aid if they are looking to provide support during the COVID-19 outbreak.
PublicFinance | March 24, 2020
The Cabinet Office has decided to waive the rules on payment in advance, in a bid to help local authority suppliers stay afloat during the coronavirus pandemic.
LocalGov | March 20, 2020
Waste operators have asked to be excused from performance penalties from the councils they have contracts with as part of the effort to keep services running during the pandemic.
LocalGov | March 4, 2020
Eleven councils have pledged to move away from big outsourcing contracts and keep local services in the hands of local community organisations by signing up to Locality’s Keep it Local Network.
Institute for Government | March 3, 2020
The government has yet to address the problems that led to the collapse of Carillion two years ago – this report warns that the Johnson government risks ‘another Carillion’ if it doesn’t get behind the reforms put forward after the firm’s liquidation.
Ensuring access to education
A key issue facing local authorities at the present time is the requirement to ensure that all children can access teaching, including those children who normally attend an academy or free school, in circumstances where schools are closed for all pupils other than vulnerable children and the children of key workers. The current lockdown has resulted in schools seeking to teach remotely and online, but it is estimated that as many as one million children are at risk of being excluded because they have insufficient access to laptops and/or the internet.
It follows that a large portion of those struggling to access education online are likely to be disadvantaged pupils and the lockdown is at risk, therefore, of compounding educational inequalities between wealthy and poor pupils.
In view of the above, the Good Law Project is threatening to sue local authorities for failing to ensure access to education. At the same time, they are putting pressure on Central Government to provide funding and providing guidance to local authorities to assist them in meeting their legal obligations to provide education to children who cannot attend school.
To avoid litigation, local authorities, Central Government and schools need to consider what steps can be taken to ensure that the requisite technology is provided to those pupils who need it to access education. This is likely to involve schools having to make difficult decisions about which children need assistance. Consideration will also need to be given to developing a system for giving pupils internet access, which could work in a similar way to the free school meals voucher system (albeit it is important to learn from and avoid the recent difficulties with this scheme).
If the issues raised above are of concern to your authority, we would be happy to discuss with you in more detail ways of ensuring that the legal duty to allow access to education can be satisfied in these difficult times.
Guidance and publications
Courts and Tribunals Judiciary | maintained
This section contains the latest advice and guidance from the judiciary in relation to the coronavirus pandemic and is updated when there are significant developments.
HM Courts & Tribunals Service | April 8, 2020
This page provides a daily summary of the HM Courts and Tribunals Service operational position during the coronavirus pandemic, and is updated by 9am daily.
MHCLG | March 26, 2020
Measures to protect renters affected by coronavirus (COVID-19).
The MJ | April 8, 2020 [subscription only]
Councils are facing pressure from the National Joint Council (NJC) to ensure that staff are safe when collecting refuse and delivering other services where social distancing may be an issue.
Local Government Lawyer | April 3, 2020
The High Court has ruled that councils cannot treat disabled facilities grant (DFG) applications from council tenants differently to those from others. In McKeown, R (On the Application Of) v London Borough of Islington  EWHC 779, Judge Mercer rejected Islington’s case that it had to consider whether the flat was suitable for a disabled person.
Local Government Lawyer | March 31, 2020
Medway Council has lodged an appeal against a High Court decision that found that a joint committee of clinical commissioning groups had acted lawfully when dealing with health inequalities when they decided the locations of three hyper acute stroke units (HASUs) in Kent.
Local Government Lawyer | March 27, 2020
Manchester housing association Mosscare St Vincent’s has been granted an injunction under The Antisocial Behaviour, Crime and Policing Act 2014, against a partying tenant who continued to ignore government guidelines on social distancing.
Local Government Lawyer | March 26, 2020
In LB v London Borough of Tower Hamlets  EWCA Civ 439, the Court of Appeal has dismissed an appeal over whether it was not reasonable for the appellant to stay in a property from which she was evicted for rent arrears given that there was evidence she had been subjected to domestic violence.
The MJ | March 24, 2020 [subscription only]
Trade union Unite has said its dispute with Veolia over holiday pay for refuse staff working at Tower Hamlets LBC has been resolved as a ‘priority’ in light of the coronavirus crisis.
A local authority had not breached its duty under the Children Act 1989 s.21(2)(b) by entering into centralised arrangements with other local authorities for the provision of secure accommodation for children at risk of being detained in police custody.
Bevan Brittan articles
An Act to make provision in connection with coronavirus; and for connected purposes.
Selected secondary legislation
These Regulations postpone the days on which certain by-elections and local referendums are to be held during the period from 16th March 2020 to 5th May 2021 (“the relevant period”).
These Regulations make provision for the conduct of local authority meetings held before 7th May 2021, and for public and press access to these meetings.
These Regulations bring section 15 of, and Part 1 of Schedule 12 to the Coronavirus Act 2020 (“the Act”) into force.
Bringing into operation ss.18, 19, 21 and Sch.13 of the 2020 Act on 26 March 2020.
Ministry of Housing, Communities & Local Government | maintained
A collection of all guidance for local councils during the coronavirus (COVID-19) outbreak.
Local Government Association | maintained
Useful information for councils on novel coronavirus (COVID-19).
Local Government Association | maintained
Information and guidance related to data protection, elections, meetings, parking, procurement and more.
NALC | maintained
This page has been created to provide local (parish and town) councils with information related to the coronavirus.
Centre for Cities | updated daily
Nowhere is feeling the economic and social impact of Covid-19 more than UK’s cities and largest towns. They account for around 60% of the country’s economic output and more than half of the population.
County Councils Network | maintained
Links providing an overview of the latest government guidance for councils, alongside the latest from the County Councils Network and what county authorities are doing to assist the national effort.