With several well-known retailers getting into difficulty recently, it would be understandable if people are hesitant to become involved in retail opportunities. However, thriving retail developments can play an important role in maintaining healthy and successful communities. It is therefore in the interest of local authorities for retail to succeed in their areas and there are several roles they can play in facilitating this. However, there are also regulatory and legal issues to consider and it is important for local authorities to work within these.

A local authority might be involved in a retail development as a landowner or as a body potentially interested in acquiring or disposing of land. It might be required to consider applications for planning permission for retail development. It might have a role in distributing funding. In meeting the requirements of these roles, there will be some key issues to understand and take account of.

The need for local authorities to take reasonable decisions

There are a range of decisions that a local authority might be required which would be relevant to retail development. Whilst on the face of it, an opportunity for retail development might seem superficially attractive, it will be important for a local authority to ensure that it takes a decision that is reasonable. This means that it must consider all relevant matters, disregard irrelevant factors, observe procedural requirements, act for proper purposes, not act in bad faith and not take a decision that is so unreasonable that no reasonable local authority could have taken it.

The restrictions on land disposal by local authorities

Local authorities have power to dispose of their land but is subject to an obligation to obtain the best consideration that can reasonably be obtained unless the disposal is for a short tenancy or the local authority has the consent of the Secretary of State, or in Wales the Welsh Ministers. If a local authority intends to sell freehold land or long leaseholds in its land, it will be important for it to consider how any proposed arrangements will enable it to comply with the best consideration duty. Local authorities will also need to be aware of any other legal requirements which might affect the disposal of particular land. or example, if land in England is on a local authority’s list of assets of community value, disposal of it will be subject to moratorium periods and other requirements in the Localism Act 2011 and the Assets of Community Value (England) Regulations 2012.

The need to comply with the law relating to public procurement and State aid

A local authority could acquire and dispose of land without this necessarily involving public procurement. However, if an arrangement involves a contract whereby a local authority receives works, services or supplies from another body in return for payment, this will be subject to public procurement legislation. The local authority will need to plan its arrangements accordingly. It will need to establish whether or not its arrangements will be covered by public procurement legislation and to plan its timing and resources accordingly.

The long-term implications of decisions made and actions taken

Local authorities will be keen to obtain the immediate benefits of any projects in which they are involved but their communities are likely to achieve greater benefits as a whole if they consider the impact their decisions will have on communities in the long term. In Wales, the Well-being of Future Generations (Wales) Act 2015 imposes particular obligations on public bodies to balance the importance of short-term needs against the need to safeguard the ability to meet long-term needs. It is a point to which any public bodies could usefully have regard.

Recent retail difficulties do provide cause for concern and it is to be hoped that any areas affected will be able to resolve problems. This should not deter local authorities from recognising the role they can play generally in encouraging retail for the benefit of their communities.

This article was originally published in Local Government News, and can be found here.


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