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Government contracts and public law

Published online by Cambridge University Press:  02 January 2018

Sue Arrowsmith
Sue Arrowsmith*
Affiliation:
University College of Wales, Aberystwyth
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Extract

In carrying out their functions government bodies frequently enter into contractual arrangements, both with private persons and with other public authorities. Like private individuals, for example, they make leases, employment contracts, and contracts of procurement to obtain the goods and services they require. Frequently they make contracts with the public in the course ofproviding public services and amenities – for example, in running public transport services, or in providing facilities such as recreation centres or museums to the public on payment of a fee. In addition, the government uses contract as a method ofcontrolling behaviour as an alternative to enacting regulations. It may, for instance, control the behaviour of those granted licences to trade or carry on other activities through contractually stipulated conditions

Type
Research Article
Information
Legal Studies , Volume 10 , Issue 3 , December 1990 , pp. 231 - 244
Copyright
Copyright © Society of Legal Scholars 1990

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References

1 Local authorities may regulate market and street trading in this manner. Another example has been the use of contractual provisions to regulate the holders of franchises for the independent television networks: see Lewis, ‘IBA Programme Contract Awards’ (1975) Public Law 317.

2 See, eg Turpin, Government Procurement and Contracts (1989) pp 73–79; Puri, Australian Government Contracts (1978) Ch 9; Arrowsmith, Government Procurement and Judicial Review (1988) pp 81–101 (Canada); and, eg Nash Jr, and Cibinic Jr, Federal Procurement Law, vol 1 (1977) Ch 8 (United States).

3 See Brown & Garner, French Administrative Law (3rd edn, 1983) Ch 8 and pp 125–130.

4 See, eg Hogg, Liability of the Crown (2nd edn, 1989) at pp 1–3; Harlow, ‘“Public” and “Private” Law: Definition without Distinction’ (1980) 43 Modern Law Review 241; Samuel, ‘Public and Private Law: A Private Lawyer's Response’ (1983) Modern Law Review 558; Mitchell, ‘Causes and Effects of the Absence of a System of Public Law in the United Kingdom’ (1964) Public Law 95.

5 Case of Proclamations (1611) 77 ER 1352. There is of course the exception of those extraordinary powers which the Crown has by virtue of the prerogative, but these are limited to fairly specific subject matter.

6 Banker's Care (1700) 90 ER 270. The continued validity of this proposition is almost universally accepted by writers: see, eg Turpin, above, n 2, at p 83; Puri, above, n 2, at p 45; Hogg, above, n 4, at p 163; Aronson and Whitmore, (1982) at pp 187–188.

7 For the controversy on this point and the Commonwealth authority see Arrowsmith, above, n 2, at pp 113–118.

8 New South Wales v Bardolph (1934) 52 CLR 455 at 474–475 per Evatt J (decision affirmed at 493 (HC)). This was the reasoning also of Coke CJ in the Bankers Case, above, n 6, at 271.

9 ‘The Executive Power Today: Bargaining and Economic Control’ in Jowell and Oliver, eds, The Changing Constitution (2nd edn, 1989) at 193. See also Daintith, ‘Legal Analysis of Economic Policy’ (1982) 9 Journal of Law and Society 191; Page, ‘Public Law and Economic Policy: The United Kingdom Experience’ (1982) 9 Journal of Law and Society 225. It is true though that in the last few years the use of procurement has declined a little, with more emphasis on value for money: see Turpin, above, n 2.

10 The position is generally thought to be as stated in New South Wales v Bardolph, above, n 8. For discussion of the other authority see Street, Governmental Liability (1953) at pp 84–98. In many Commonwealth jurisdictions both the need for an appropriation and the effect of the absence of an appropriation on a contract have been dealt with expressly by statute: see Hogg, above n 4, at pp 164–166.

11 Whether there is a legal requirement of a separate appropriation for the cost of a ‘secondary’ policy implemented through contract (as, for example, where additional costs are incurred by virtue of a decision to place a contract in a depressed region) is unclear: see Arrowsmith, above, n 2, at pp 225–226. This is not a problem which is peculiar to contract.

12 This is not always the case as Daintith, above, n 9, shows.

13 Above, n 9, at pp 216–217.

14 See Turpin, above, n 2, at p 262.

15 See the discussion of Judicial Review and of the Ombudsmen below.

16 British North America Act 1867 30 and 31.

17 Ibid, s 91(6).

18 Ibid, s 92(7).

19 Ibid, s 93

20 This view can first be seen clearly in Canada in the ‘Green Book’ proposals put to the 1945 Dominion-Provincial Conference on Reconstruction. Before this it had generally been accepted that the constitutional division applied both to extraordinary and ordinary powers - the ‘co-ordinate’ view of federalism.

21 For a summary of statistics illustrating this growth see Petter, A., ‘Federalism and the Myth of the Federal Spending Power’ (1989) 68 Canadian Bar Review 34 at 36.Google Scholar

22 See P. W. Hogg, Constitutional Law of Canada (2nd edn, 1985) at pp 119–127, and the authorities cited there. The same is true in Australia: see, eg Campbell, ‘Commonwealth Contracts’ (1970) 44 Australian Law Journal 14; Aronson & Whitmore, Public Torts and Contracts (1982) pp 188–189.

23 Some have suggested the power comes from the Royal Prerogative, but the objection to this is that the division of prerogative powers follows the division of legislative powers and also that any spending done in the exercise of prerogative powers requires a Parliamentary appropriation. On the difficulties over the attempts to locate a general spending power in other constitutional provisions see Petter, above, n 21. (And none of these other suggestions can anyway explain the existence of a general power to regulate by contract as opposed simply to spending money.).

24 And see Scott, ‘The Constitutional Background of Taxation Agreements’ (1955) 2 McGill Law Journal 1 at 6 and Driedger ‘The Spending Power’ (1981) Queens Law Journal 124 where the view is expressed that government's must automatically have the powers possessed by private individuals.

25 Liability of the Crown (2nd edn, 1989) at p 166. For a similar statement see Constitutional Law of Crown (2nd edn, 1985) at p 126.

26 It would generally be accepted by those who believe that the constitution as originally drafted did not intend to provide for this kind of ‘administrative federalism’ that a loose interpretation to uphold such a position might be acceptable if otherwise justified, according to the usual loose principles of constitutional interpretation.

27 Above, n 21.

28 And the arguments made by commentators and the federal government in favour of a general spending power are of this kind.

29 This particular problem was dealt with to a very limited degree in Clause 7 Meech Lake Accord, proposing that the federal government shall provide reasonable compensation to a province which chooses not to participate in a shared-cost programme, but only if the province carries on its own programme, and if this programme is compatible with federal objectives.

30 Above, n 21, at 49–50. There has in the past been remarkably little consideration of the question in the courts but in Brown v YMHA Jewish Community Centre for Winnipeg Inc (1989) 1 SCR 1532 the Supreme Court of Canada briefly expressed its approval of the existence of an unlimited ‘federal spending power’.

31 ‘Judicial Review of the Contractual Powers of Public Authorities’ (1990) 106 Law Quarterly Review 277.Google Scholar

32 A recent example is R v Enfield London Borough Council, exp Unwin (1989) Times, 16 February.

33 See the article cited above, n 31.

34 See also R v Basildon DC, ex p Brown (1981) 79 LGR 655 at 674, CA per Dunn LJ: Australian National University v Burns (1982) 43 ALR 25 at 38 (FC — Full Ct) per Sheppard J.

35 [1985) 2 All ER 699.

36 Parliamentary Commissioner Act 1967, s 5(3), Sch 3, para 9. There is an exception for contracts relating to the compulsory acquisition of land (ibid). This applies also to land which could have been acquired compulsorily.

37 See Williams, Maladministration: Remedies far Injustice (1976) at p 65.

38 See, eg Select Committee on The Parliamentary Commissioner for Administration, Fourth Report, Minutes of Evidence Session 1979–80, HC 444, para 74.

39 Ibid, paras 74–75.

40 Local Government Act 1974, s 26(8), Sch 5, para 3.

41 Para 3(2).Google ScholarPubMed

42 Para 3(3). The exception is not limited as with the Parliamentary Commissioner to land which could have been acquired compulsorily.Google ScholarPubMed

43 Ibid.

44 See, eg Inns of Court Conservative and Unionist Society, Let Right be Done (1966).

45 See, eg Parliamentary Debates, HC vol 734, cols 135–136 (David Weitzmann), col 157 (Sir John Hobson) Cols 148–149 (Fletcher-Cooke).

46 See, eg Parliamentary Commissioner for Administration, Annual Report 1983, HC 322 Session 1981/2, para 9; Justice, ‘The Local Ombudsman: A Review of the First Five Years’ (1980) para 37.

47 See Fourth Report, Session 1977–78, HC 615, paras 23–24; Fourth Report, Session 1979–80, HC 593, paras 3–8.

48 See, eg Royal Commission on Standards of Conduct in Public Life, Cmnd 6524 (1976) paras 82–83; Justice, ‘Our Fettered Ombudsman’ (1977) para 35; Justice, ‘The Local Ombudsman: A Review of the First Five Years’ (1980) paras 35–37; Report of the Committee of Inquiry into the Conduct of Local Authority Business, Cmnd 9797 (1986) paras 9–73.

49 The government has repeatedly rejected suggestions that these exclusions should be removed: see, eg its response to the Select Committee reports in n 47, above, in Cmnd 7449 (1979) paras 13–14, and Cmnd 8274 (1981) para 3; and to the report on the Conduct of Local Authority Business above, n 48.

50 See, eg Parliamentary Debates HC vol 734, col 171 (Niall MacDermott).Google Scholar

51 Parliamentary Commissioner Act 1967, s 5(3), s 12(3); Local Government Act 1974, s 26(1), s 34(3).Google Scholar

52 This is clearly recognised, for example, by the Select Committee on the Parliamentary Commissioner for Administration in its Fourth Report for 1977–78, HC 615, para 23.Google Scholar

53 Interestingly the possibility that investigations should be allowed on matters of this kind was recognised by Niall MacDermott in his speech, above, n 50, and he said that the government would look into this; but in the end the blanket exclusion was not altered.

54 See, eg the statements of Sir Ian Bancroft, Head of the Home Civil Service, to the Select Committee on the Parliamentary Commissioner in Session 1977–78, HC 444; and of Nigel Lawson to the same Committee in Session 1979–80, HC 593, para 84.Google Scholar

55 See, eg Lord Trenchard, Minister of State for Department of Industry in evidence to the Parliamentary Commissioner, Session 1979–80, HC 593, para 80.

56 Meaning a breach which was not a motivating factor in the termination of the contract.

57 Parliamentary Commissioner Act 1967, s 5(2); Local Government Act 1974, s 26(6). Under these sections it is for the Commissioner to decide whether or not it is reasonable for the complainant to pursue a legal remedy.

58 Cmnd 7449 (1979) para 13. Similar arguments have been put forward by government spokesmen in the House of Commons on many occasions.

59 For example, as already explained, transactions in relation to the compulsory acquisition of land, and the provision of driving licences. However not all activities which have been investigated (eg the services of the Public Trustee) are of that type.

60 See, eg Parliamentary Debate, HC vol 734, col 144 (John Lee).Google Scholar