Local government

Legal considerations for setting up an LATC

Mark Stocks Mark Stocks

A roundup of the legal issues surrounding setting up a local authority trading company.

In our recent webinar, in which we discussed our report Spreading their wings: Building a successful local authority trading company (LATC), we had the opportunity to look at the legal considerations at each stage of the process in more detail. 

Peter Ware, Head of Government and Infrastructure at Browne Jacobson, joined us to speak about the legal factors that are key to the successful implementation of an LATC, and our Public sector advisory teams raised some questions coming from the sector, with a specific focus on the Teckal exemption.

The questions that were raised with Peter were: 

  • What are the most commonly used powers and what do they allow local government to do?
  • What is the Teckal exemption and what does it allow local authorities and their trading companies to do?
  • What are the risks associated with Teckal and how can it go wrong?
  • How can the control and functions test associated with Teckal be applied and what risk should local authorities have in mind?
  • Is the concern of state aid relevant to local authority trading companies and, if so, what kind of issues are arising?
  • If you were talking to an authority considering setting up an LATC, what key piece of advice would you give them?

To find out more, please download the attached Q&A or our Spreading their wings report