20 December 2002
Torbay council, which was ranked 'poor' in the tables published on December 12, said it had instructed legal firm Eversheds to begin the process of seeking a judicial review of the result. The firm confirmed that it was acting on behalf of a second authority, but declined to name it.
Salford council, which says it was demoted from 'fair' to 'weak' just hours before the results were published, has also instructed its in-house solicitors to mount a legal challenge to the result.
Other councils, including Bury, are believed to be considering whether to join the Eversheds action.
The Audit Commission remained tight-lipped about the legal action. It issued a statement that said: 'We are a little disappointed that at the last minute a couple of authorities commenced legal challenges to our actions. We will be seeking to resolve these challenges through discussions over the next few days but are entirely certain of the legal basis of our work.'
The three councils have submitted 'letters before claim' to the commission, asking it to set out its legal grounds for the CPA. So far there has been no response. As Public Finance went to press, Eversheds was due to submit evidence and witness statements on behalf of its clients to the High Court on December 20.
If the commission has still not responded satisfactorily by mid-January, there will be a court hearing where the councils will seek a judicial review. If permission is granted, the review hearing is likely to happen in February.
Stephen Cirell, head of Eversheds' local government group, argued that the Audit Commission had no legal right to conduct CPAs.
He said the inspections were not authorised, either by the Audit Commission Act 1998 or by the Best Value legislation contained in the Local Government Act 1999, because CPAs are 'blanket' inspections and these Acts only allow individual inspections.
Cirell told Public Finance that the conviction was spreading that the CPA was illegal. 'We are acting for two authorities and a number of others are considering joining the action. The action is gaining momentum. We remain confident that the commission did not have the powers to conduct the CPA and look forward to the proceedings confirming this.'
Salford's chief executive, John Willis, told PF that his authority had been downgraded 'with hours to go and no chance of an appeal'. He said a poor mark on housing had led to the council's demotion. 'The housing score was completely at odds with everything that had happened with our housing strategy and we have not had the opportunity to appeal against it.'
Willis met commission controller Sir Andrew Foster and chair James Strachan on December 17, but he would say only that the meeting was 'interesting'.
However, he confirmed that Salford would continue with legal action if the situation could not be resolved with talks.
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