Kent in-housers seek to cut £3m of legal costs by 2014

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  • Anon 2 May, 8:35pm - I disagree and believe your argument is flawed.
    The best way to drive down the costs of the public sector is to out-source its functions to cheaper alternatives. This model, though well meaning is the state extending its functions and deliberately distorting the market.
    The perception is that KCC operating on a nod-wink basis with this spin out. It not only is a breach of the state aids rules, but violates the procurement principles.

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  • The way state aids (sic) is rferred to makes it sound like an illness. If state aid is defined as an advantage conferred on a selective basis to undertakings by public authorities to ensure that government interventions do not distort competition and trade inside the EU, then it is hard to see what state aid is being given or conferred here. Also, as nothing is being procured, then it is difficult to see what procurement principles are violated.

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  • In addition to the state aid issue KLS also appear to be in breach of the Teckal exemption. Have they ever furnished a satisfactory explanation of how they meet the Teckal criteria?

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  • Teckal is not engaged since KCC is not using the ABS for any of its legal services and not procuring anything from it. Those will continue to be supplied by the in-house team.

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  • Paul,
    I suggest you read this article on Kent County Council's legal strategy from March 2011, http://www.thelawyer.com/competition-kent-county-council/1007295.article.
    Not only does Geoff Wild confirm that Kent does apply Teckal for some of its external services he also undermines his best state aids argument (that there is no distortion on trade in other member states) by listing several international law firms that will be disadvantaged by this measure.
    I hope everything has been done correctly, but I fear that Kent County Council could learn from the story of Icarus.

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  • So how do Geldards fit into all this? It looks like they're on a promise to deliver legal services for Kent.

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  • Interesting reference to an earlier article on Wild. This talks about Teckal in the context of other KCC companies (Kent Top Travel and Kent Top Temps), but not its legal services. Presumably this is because neither Geldards nor the new ABS will be selling their services to Kent, but will target other external clients. No state aid, no procurement, no Teckal. Clever.

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  • Of course state aid doesn't require the sale of any services. Simply the initial transfer of funding and the Council deciding to act as an undertaking is enough. It doesn't look that clever to me.

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  • Let's hope that before setting up Kent Top Temps they had read cases C41/90 and C55/95 very very carefully.

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  • Sadly this situation underlines just how little expertise there is in state aid within UK law firms.
    I'm convinced that if this was a breach of any other kind of EU competition law, several law firms would have already taken action.
    As it stands, it is the law firms who are being disadvantaged but it appears they don't have the expertise to resolve the problem. Is it any wonder that public sector organisations are so unwilling to instruct law firms for state aid advice?

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