Ratio Decidendi
Local authorities had no power to enter into mutual insurance arrangements before the Localism Act 2011 general power of competence. The incidental powers under s.111 Local Government Act 1972 did not extend to establishing a mutual insurance company.
Facts
London councils proposed to establish a mutual insurance company. The arrangement was challenged as ultra vires.
Judgment Summary
The Supreme Court held the arrangement was ultra vires under pre-Localism Act powers. Section 111 LGA 1972 only permitted actions incidental to existing statutory functions, not entirely new ventures.
Key Quotes
"The power under section 111 is a power to do things incidental to existing functions, not to assume entirely new functions."
— Lord Hope
Subsequent Treatment
The Localism Act 2011 general power of competence now permits such arrangements.