Street Lighting PFI Contract by lpe53845


									Cabinet Member for Strategic Planning & Transport                  SPT16 (09/10)
and Cabinet Member for Finance and Resources

Street Lighting PFI Contract                                       Key Decision:

October 2009                                                       Part I

Report by Executive Director for Customers and                     Electoral
Communities                                                        Division(s):

1.    Background

1.1   On 19 August 2009 the County Council announced that it had selected Tay
      Valley Lighting (“TVL”) as its preferred bidder for the Street Lighting PFI
      Contract and gave officers authority to negotiate and settle the contract with
      TVL, by way of delegated authority provided by the Cabinet Report dated 30th
      July 2009.

1.2   TVL and their funders are now seeking a certificate from the County Council
      under Section 3 of the Local Government (Contracts) Act 1997 in line with
      those given in connection with other major contracts such as the Materials
      Resources Management Contract and the Crawley Schools PFI.

2.    Discussion

2.1   The Local Government (Contracts) Act 1997 (“the Act”) removed the main
      hurdle faced by local authority PFI schemes by removing uncertainty over
      whether or not such a contract is outside the powers of the authority. Banks
      and other financial institutions had shown some reluctance in financing deals
      because of this risk. The Act confirms that local authorities have a general
      power to enter into contracts and to permit a certification process whereby a
      nominated officer signs a certificate stating the powers relied upon to enter
      into the transaction.

2.2   The certification process requires a named officer to describe the contract
      and its purpose and state that the contract is of a type which may be
      certified. The officer is also required to certify that the authority has power to
      enter into the contract and state the powers relied on. The main effect of
      issuing the certificate is to remove from the local authority the right to argue
      that the contract is void and of no effect by virtue of it being outside of the
      powers of the authority.

2.3   However, because the certificate is issued not by the authority but by an
      individual officer, in law the officer who signs will be potentially liable in a
      personal capacity in the event that the contract is in fact subsequently held
      to be outside the authority’s powers. This means it is necessary for the
      authority to put in place protection for the signatory in the form of a personal
      indemnity even though the real risk of a claim should be very remote.

3.    Proposals
3.1   That the Head of Legal Services be authorised to provide a certificate (or
      certificates, as the case may be) under Section 3 of the Local Government
      (Contracts) Act 1997 in connection with the street lighting PFI contract with
      Tay Valley Lighting (West Sussex) Ltd.

3.2   That the Head of Legal Services be personally indemnified by the County
      Council with regard to the provision of such certificate (or certificates) as
      authorised under 3.1 above.

4.    Consultation

      The Head of Legal Service, the Executive Director for Customers and
      Communities, the Finance Director and West Sussex County Council’s
      external legal advisors have all been consulted.

5.    Resources Implications and Value for Money

      No expense is incurred immediately in giving either the certificate or the

6.    Risk Management Implications

6.1   The giving of the certificate enables the County Council to enter into the
      Street Lighting PFI Contract.

6.2   The Head of Legal Services will receive advice from Bevan Brittan LLP
      Solicitors before signing the certificate and take appropriate measures to
      assure himself as far as reasonably possible that the giving of and the
      contents of the certificate are appropriate and correct in all particulars.

6.3   The County Council will also receive advice from Bevan Brittan LLP Solicitors
      on the appropriate form of the certificate.

7.    Customer Focus Appraisal

      A Customer Focus Appraisal is not required for the matters addressed in this
      report. However, a Customer Focus Appraisal was carried out in March 2008
      for the Street Lighting PFI project itself.

8.    Crime and Disorder Act Implications

      There are no foreseeable crime and disorder implications associated with this
      report. However, the successful implication of the PFI project is expected to
      bring about benefits in terms of reductions in crime and the fear in crime.

9.    Human Rights Act Implications

      There are no foreseeable Human Rights Act implications associated with this
Kieran Stigant
Executive Director for Customers and Communities

Background Papers

Report to the Cabinet Members for Strategic Planning and Transport and
Finance and Resources of July 2009.

Contact:    David Rowlands, x 77093

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