Beyond establishing any new authority, the LGR process will demand a substantial investment of time and resources to ensure the smooth transfer of day-to-day operations and minimise any impact on service delivery.

In this blog series, LGR Practicalities, we break down the practical realities of LGR and how to approach dealing with it. In this blog, we focus on the law applicable to transferring property, rights and liabilities. In future blogs, we will expand on this to look specifically at contracts, procurements, companies, property and ongoing litigation.

With the transfer of functions, it is essential to plan for what that means in terms of the property, rights and liabilities of the authorities that will no longer exist post vesting day. How the functions will be delivered post vesting day is a critical factor in this. 

The Local Government and Public Involvement in Health Act 2007 (2007 Act) is the primary legislation. There are several sets of regulations made under the 2007 Act, but the key one on this issue is the Local Government (Structural Changes) (Transfer of Functions, Property Rights and Liabilities) Regulations 2008/2176 (Transfer Regulations).

Vesting

The Transfer Regulations provide for the transfer of functions to the new authority and the vesting and transfer of all property, rights and liabilities to the new authority.

Section 16 Agreements

Section 16 of the 2007 Act allows the public bodies (including parish councils) affected by an SCO to enter into agreements with respect to:

• Any property, income, rights, liabilities and expenses (so far as affected by the SCO) of the parties to the agreement – this can include specifying alternative vesting and joint use of property.
• Any financial relations between the parties to the agreement, including payments from one public body to another.

A section 16 agreement can be used to formalise and underpin the statutory vesting. It could also be used to ensure that property, rights or liabilities do not transfer – this will most likely be the case if they are to transfer to a parish council for example or where hosting arrangements have been agreed, where property, rights and or liabilities may not be readily capable of splitting for vesting or the vesting may not reflect the reality of, for example, how assets are used. Agreements are essential where there might be multiple successor authorities.

The transfer of functions is effected by statutory transfer but as this LGR Practicalities blog series demonstrates, there is a lot of due diligence and thought needed about how services will be delivered post vesting day to be able to implement LGR successfully. 

It can be a daunting task and one that has to take place in a short time period to ensure effective transfer. Our team at Anthony Collins is well-versed in the issues arising from LGR and can assist authorities (whether predecessor, continuing or new) with the process, including due diligence and implementation.