An imposing environment: Public Finance

Posted on June 15, 2008 · Posted in Public Finance

 

An imposing environment

 

Local authorities are operating in a legal environment that is imposing more responsibilities and demands on them. Councils must pay special attention to the Corporate Manslaughter Act and the Civil Contingencies Act.

 

Corporate Manslaughter Act

 

The Corporate Manslaughter and Criminal Homicide Act came into force in April across the UK and makes it much more likely that councillors and senior council officers will be prosecuted in the event of the death of an employee or service user – such as children in local authority care. The Act makes senior managers (which, legally, includes councillors) responsible where a person has died because an organisation failed in its duty of care. While the charge of corporate manslaughter (corporate homicide in Scotland) cannot lead to a jail sentence, it can lead to an unlimited fine. A local authority found guilty of causing the death of a child by negligence could expect to receive a large fine: under previous legislation, Transco was fined £15m and Balfour Beatty £10m. Local authorities can protect themselves against the costs of a legal case, but not against the fine.

 

Councils should review risk management policies, considering whether systems provide proper protection to staff and service users. Alan Hunter, technical claims manager at Zurich Municipal, says that local authorities have already improved risk management strategies. “Claim numbers are dropping and have been dropping for the last three or four years,” he explains. “One of the factors in this has been improved risk management processes.” The Act does not remove the potential for officers to also face common law manslaughter charges where they have caused a person’s death. There are some exemptions from the Act – including in some instances for the police and other emergency services, for child protection officers and in a civil emergency – but crown immunity no longer protects public bodies from prosecution.

 

Civil Contingencies Act

 

The Civil Contingencies Act has been law since 2004, drawn-up because of recognised weaknesses in responses to the outbreak of Foot and Mouth disease in 2001 and severe flooding the previous year. It provides clearer and stronger responsibilities on local authorities and other public bodies on how they must respond to serious emergencies. An emergency is defined as an event or situation which threatens serious damage to human welfare or the environment, or war or terrorism that presents a serious threat to security. Organisations that must take a co-ordinating role in civil emergencies are called ‘core responders’ and include local authorities, police, fire authorities, NHS bodies and the Environment Agency. Organisations that must co-operate with them include utility and transport companies.

 

Core responders must assess the risk of emergencies, put in place emergency plans, make business continuity management arrangements and plan the provision of information to the public. Councils must also support business and voluntary bodies to make their own business continuity management arrangements. Graham Page, practice leader for public sector at Zurich Risk Engineering, says: “Local authorities respond very well to civil emergencies. Under the Civil Contingecies Act they have responsibility for maintaining their business continuity. They have to make sure they can maintain their services. By going through business continuity management planning they will have to identify and analyse the risks they face and create a plan for dealing with them – either to manage the risks, or eliminate them.” Page points out that the nature of those risks may vary significantly, from the political implications of a crisis, to the inability of a contractor to continue to provide key services, such as refuse collection.