London Councils defends handling of POPLA contract

PwC raises concerns over deal with BPA in draft annual audit of government body

London Councils has defended itself after auditors raised concerns over the handling of its contract to operate an appeals service for parking on private land, which it was awarded by the British Parking Association (BPA).

PwC raised its concerns about the legality of the contract in its draft annual audit for the year ending 31 March 2014.

PwC states that, having taken independent legal advice, it concluded that London Councils’ transport and environment committee (TEC) did not have the legal powers to enter into the contract with the BPA. 

The auditor also draws attention to a potential conflict of interest arising from Nick Lester, London Council’s corporate director of services, also being a director of the BPA at the time the contract was signed in October 2012. It flags this up as a “related parties parking relationship”.

However, London Councils has dismissed suggestions that Nick Lester’s role represented a conflict of interests. “There is no conflict of interest because Nick Lester is not a member of London Councils’ decision-making body, the transport and environment committee,” A London Councils spokesman told Parking Review. “Nick Lester was not a member of the BPA’s relevant decision-making board and absented himself from other discussions on the matter.”

PwC was required to scrutinise the contract after an objection was raised in September 2013 by parking campaign group the NoToMob.

The BPA’s Parking on Private Land Appeals (POPLA) service was launched in October 2012 to listen to representations made by drivers issued parking charge notices by members of the BPA Approved Operator Scheme. London Councils won the three-year contract, building on its experience of running the Parking and Traffic Appeals Service (PATAS), a tribunal that adjudicates on penalties issued by London boroughs and Transport for London.

The PwC report, carried out for the Audit Committee, stated: “Having taken our own independent legal advice, we are of the view that TEC did not have the legal powers to enter into the contract. It is common ground that local authorities have a general power of competence under section 1 of the Localism Act 2011, which could provide them with the power to enter into such an arrangement and to delegate this to TEC. 

“It is our view that such a delegation was not properly secured. The income and expenditure derived from the contract and recorded within the accounts is therefore unlawful.”

The auditor acknowledges that London Councils disagrees with its position, writing: “It is the view of management that the service was and is currently being delivered by TEC on behalf of all the participating authorities with their consent and proper authority.”

The PwC report adds that London Councils is taking steps to delegate the powers to participating boroughs “with their consent and proper authority”.

London Councils said some changes to the process have been set up: “We agree with PwC that a formal delegation from the boroughs will put the matter beyond doubt and securing this delegation is in progress.” 

The PwC probe followed allegations from NoToMob that London Councils used powers in the Local Authorities (Goods and Services) Act 1970 to sign the contract with BPA. “These powers only apply to public bodies while the BPA is a limited company,” said a NoToMob spokesman. “London Councils is now trying to use Section 1 of the Localism Act 2011 unlawfully to fix this.”

However, London Councils refutes this, stating that the powers it exercises in running POPLA are in Section 1 of the Localism Act 2011. 

The BPA’s chief executive, Patrick Troy, told Parking Review: “This is a matter for London Councils to resolve with its auditors. London Councils continues to deliver the POPLA service on behalf of the BPA. The service has provided independent redress for some 40,000 motorists where previously none existed. The contract with London Councils expires on 30 September 2015 and we are currently inviting interested parties to bid for a new contract from 1 October.”