In times of increasing cuts to public funding, alternative methods of raising funds to provide services to local inhabitants are being considered by local authorities. Some local authorities may be considering disposing of land or premises owned by them in order to generate income.
However, local authorities considering taking such steps need to ensure that their actions are compliant with legislation that seeks to ensure that open spaces are kept available for public use and local authorities should be aware that disposals of such land may be held unlawful if the effect is to exclude the public from those areas.
The case of Muir v Wandsworth Borough Council  EWHC 1947 (Admin) (28 July 2017) provided guidance to local authorities on the scope of the restrictions that apply to disposals of open spaces.
In January 2015, the Wandsworth Borough Council (“the Council”) decided to invite expressions of interest for a lease of 10 or 15 years in respect of premises situated on Wandsworth Common.
Three pieces of legislation were relevant to the Council’s decision:
The Council was aware that the grant of a lease in these circumstances would amount to a disposal of open space and so complied with the requirement to advertise under section 123 of the 1972 Act. The Council received various expressions of interest, one of which was from the claimant, who proposed an educational and recreational facility for use by local maintained schools. The claimant’s application was rejected on the grounds that it did not provide sufficiently detailed information.
The Council’s principal valuer recommended that the lease be granted to a limited company (the Company), who intended to operate a private nursery at the premises for up to 62 school children aged two to five years.
The claimant applied for judicial review against the Council’s decision, on the grounds that the Council did not have the power to grant the lease to the Company for the provision of childcare at a nursery which had exclusive use of the premises and could therefore restrict entry to members of the public (Ground 1) and that the Council’s principal valuer had acted unlawfully in deciding to grant the lease to the Company because he did not have authority to do so under the Council’s constitution (Ground 2).
The Court rejected Ground 2 but upheld Ground 1, holding that the disposal was contrary to the statutory trust arising under section 10 of the 1906 Act pursuant to which the common is held on trust for the use and enjoyment of all local inhabitants and it was not a lawful exercise of the council’s power under the 1967 Order.
It was held that the obligation under section 10 of the 1906 Act applies equally to buildings in the open space. Local authorities will therefore need to ensure that care is taken not to prevent public use of such buildings for a significant period of time.
The decision to let the premises to a private company to operate a fee paying nursery would deny members of the public a right of access to the premises and would not provide them with any facilities. Facilities would only be provided for the cohort of children enrolled in the nursery and not for children generally. If local authorities are considering letting any such premises to private companies, then they will need to consider whether the services provided by any such company can be said to be for the benefit of the public as a whole, rather than just a specific group of people.
This decision does not prevent local authorities from allowing private companies to step into its shoes and provide facilities for the use of clubs, services or organisations and make a charge for those services. However, this must be distinguished from the circumstances of the present case in which the Council was allowing the Company to make an entirely different use of the premises and create a new charge for its use.
Local authorities who are considering disposing of open space land may wish to seek advice on the impact of this decision on their proposed plans. If you would like to discuss this, please contact a member of the Property Dispute Resolution team who will be happy to give you advice on your specific circumstances.