Coalition Watch - edition 2



Welcome to the second edition of the Public Law & Regulation team's Coalition Watch alert series.

In our first Coalition Watch we considered some of the radical changes proposed by the Coalition Government during its first 100 days in office.

In the last fortnight covered by this edition, things have surely been quieter? It's August. Parliament is away for the long summer recess. The Prime Minister has been on holiday in Cornwall (and concerned with the delivery of things even more important than the Coalition Programme). The Deputy Prime Minister has been minding the shop. Her Majesty's Opposition is distracted by its own elections for a new leader.

All true. But, as we describe below, there has still been a fair amount of activity in government. The machinery of public administration does not stop for the summer holidays, and the Coalition has continued to put in place the building blocks for its autumn agenda.

Perhaps we have also begun to witness what we might, tentatively, predict as the beginning of a trend?

The Coalition is often compared with the Thatcher government of 1979-1983, for its combination of reforming zeal, small state instincts, and willingness to administer strong fiscal medicine to an ailing economy. As with that government, any such agenda is bound to arouse powerful sentiments, and opposition. In the early 1980s this was often expressed on the streets. Will it now more frequently be argued over in the courts?

News reports refer to two judicial review challenges to Coalition policy. The public sector union Unison is seeking a judicial review of what it claims is the Department of Health's inadequate consultation on radical reforms to the health sector. Meanwhile, sexual equality campaign group the Fawcett Society is similarly challenging the Treasury's alleged failure to carry out an equality assessment of the impact of the emergency June budget.

Certainly, 30 years has been a long time in the development of public law. The legal tools available for a challenge to government are much greater than they once were, and it would hardly be surprising if a number of organisations sought to use them. But how will the courts deal with these challenges in the face of a democratically legitimate government pursuing an active legislative programme in Parliament? Can public law challenges hope to do much more than simply attract publicity to an issue or create some short term delays in the implementation of Coalition policy?

This is a theme to which we are sure we will be returning in future editions.

In the meantime, please read on for news of the last fortnight's developments.

If there is anything you would like us to cover in future Coalition Watch alerts or if you wish to comment on this edition, please feel free to email the team at - we welcome your comments.

The Public Law & Regulation team.

1 Constitutional change

Devolution and Sovereignty

There are no new updates to report this week. Watch out for the next edition of Coalition Watch.

Voting Reform

There are no new updates to report this week. Watch out for the next edition of Coalition Watch.

Parliamentary Reform

  1. Summer Recess
    The Coalition has shortened the House of Commons summer recess. The House usually returns from recess at the beginning of October, after the annual party conferences have taken place. This year the House of Commons will undertake business during two weeks in September before a further recess for the party conferences.

    During this week, a number of important bill readings are due to take place, including the second readings of the Parliamentary Voting System and Constituencies Bill and the Fixed Term Parliaments Bill, and the third Reading of the Identity Documents Bill.

    The House of Lords will remain in recess until 5 October.

  2. The Committee on Lords Reform
    The first edition of Coalition Watch focused on the Coalition's policy for reform of the second chamber. The Committee on Lords Reform will begin work in earnest when Parliament returns from the summer recess. The membership of the Committee has been taken from front bench members of the three main parties, both in the House of Commons and the House of Lords. The Committee is to be chaired by the Deputy Prime Minister. The Coalition intends that the first draft of the bill is to be ready by the end of 2010.

Our comment

Both items of news this week show a determination by the Coalition to get on with its reforms. According to Parliamentary records, this will be the first time that the House of Commons has returned from the summer recess in September since 2004. While the impending party conferences mean that the increase in Parliamentary time is not great, the Coalition will have eight days in which it will further the passage through Parliament of a number of important bills.

Debates in the House of Lords have queried the membership of the Committee on Lords Reform. The Coalition has not included cross bench peers, back bench members, or members outside the three main parties. The Committee has been predominantly chosen on the grounds of democratic and political legitimacy. Whether or not this membership will yield the most productive debate, the Coalition remains resolute that it is now looking at how an elected second chamber will function, not whether one is required. The remit of the Committee is to produce a Bill, and it has a limited period of time to do so.

Human Rights & Civil Liberties

  1. Identity Documents Bill
    The Identity Documents Bill will go through the Report Stage and also have its third reading in the House of Commons on 15 September 2010.

  2. Review of Counter-terrorism legislation
    The Home Office is consulting on the Coalition's review of the operation of counter-terrorism legislation. The review covers the following powers:
    • Control orders
    • Stop and search powers and the use of terrorism legislation in relation to photography
    • The use of the Regulation of Investigatory Powers Act 2000 (RIPA) by local authorities and access to communications data more generally
    • Extending the use of 'Deportation with Assurances'
    • Measures to deal with organisations that promote hatred or violence
    • The detention of terrorist suspects before charge, including how we can reduce the period of detention below 28 days

    Liberty and other civil liberty organisations were invited to make representations as part of the review and Lord Macdonald of River Glaven QC has been asked to provide independent oversight.

  3. Immigration Cap
    The Migration Advisory Committee has launched a consultation on the annual limit of the number of non-EU migrants admitted to work in the UK. The limit will only apply to skilled workers (under Tiers 1 and 2 of the points based system).

    The consultation will be open for submissions until 7 September 2010. The Coalition intends to implement the cap from April 2011.

  4. Equalities Consultation
    While the Equalities Act 2010 was enacted by the previous government as one of its final pieces of business in April 2010, there is no indication that the Coalition is planning to dilute it. The Government Equalities Office has opened a consultation on the public sector 'equality duty', which is enshrined in the Act and is due to come into force in April 2011. In the consultation, the Coalition is asking for views on proposed draft regulations which will impose specific duties on certain public bodies to help them meet their obligations under the general equality duty.

The consultation will be open for submissions until 10 November 2010.

Our Comment

The Coalition's work on human rights and civil liberties continues throughout the summer recess. The Coalition's overall review of counter-terrorism legislation is necessary and desirable; and it deserves to be commended for consulting with human rights groups and incorporating independent oversight into the process.

While this and other changes are likely to be widely welcomed, the proposed immigration cap has already begun to attract criticism from business groups concerned that it will limit their ability to recruit well-qualified staff and therefore to drive their businesses out of recession. Indeed, some say that the temporary cap currently put in place to prevent pre-emptive avoidance of the proposed new rules is already having that effect. There is an obvious area of tension here, not only within the constituent parts of the Coalition, but between the societal and pro-business policies of its largest member.

The above analysis was written by Chris Warburton in Wragge & Co's Public Law & Regulation team.

2 Managing the Machinery


  1. Significant announcements include:
    1. Local Better Regulation Office
      As part of the Coalition's commitment to reduce the number and cost of quangos, the Department for Business, Innovation and Skills has confirmed that a review of the Local Better Regulation Office (LBRO) will be carried out. The LBRO is a relatively recently created body, having been established under legislation passed only in 2008. The review is to examine how successful it has been in achieving its objectives of creating the conditions for regulatory reform at local level and delivering its 'Primary Authority Scheme'. It is expected that the review team will present its recommendations in September 2010.
    2. Food Standards Agency
      The Government confirmed that the Food Standards Agency (FSA) will be retained, albeit with some restrictions to its remit. The FSA will continue with a focus on food safety policy and enforcement.
    3. Salaries of Quango Personnel
      In a further drive to make government as transparent as possible and following the publication of the salaries of the highest earning civil servants, the Cabinet Office has published the salaries of quango personnel earning more than £150,000. It is the first time this information has been published in one place and some of it has never been made public before.

  2. Potential mergers of note include:
    1. National Crime Agency
      A Home Office consultation (deadline for responses 20 September 2010) has proposed the establishment of a new National Crime Agency (NCA) to 'lead the fight against organised crime, protect our borders and provide services best delivered at national level'. This proposal is that what will clearly be a powerful new body will harness and exploit the intelligence, analytical and enforcement capabilities of the existing Serious Organised Crime Agency (SOCA) and the Child Exploitation and Online Protection Centre and better connect these capabilities to those of a nationally applicable nature within the police service, HM Revenue and Customs, the UK Border Agency and a range of other criminal justice agencies.

      The National Policing Improvement Agency is intended to be phased out as part of the proposed reforms. The Government's ambition is to establish the NCA by 2013.

  3. The Government has also created the following new quangos:
    1. Groceries Code Adjudicator
      Following the Competition Commission's investigation on the supply of groceries in the UK and the refusal of major retailers to offer suitable undertakings to establish an Ombudsman scheme, the Coalition Government has taken forward the work of the previous government and agreed to the establishment of an independent body to monitor and enforce the Groceries Supply Code of Practice (GSCOP). Primary legislation will be introduced to set up the Groceries Code Adjudicator (GCA). The GCA will be based within the Office of Fair Trading (OFT) but its activities will be independent from the OFT's normal competition and consumer activities.

Our comment:

The Coalition's willingness to look at the continuing role of the LBRO shows that, in its desire to reduce the number of arm's length bodies, nothing is sacred. Prior to the general election it was the policy of the largest party within the Coalition to strengthen and expand the role of the LBRO. While this may still occur as a result of the work now being carried out, it is notable that the review is not being framed in those terms.

The GCA is a rare (though not the only) example of a new arm's length body being established by the Coalition; a slight counterbalance to the number of bodies being abolished. However, its circumstances are unique. Prior to the election the Competition Commission decided that the GSCOP was a necessary and proportionate remedy to address the adverse effect on competition it had identified in investigating the supply of groceries in the UK and also that it was necessary to ensure 'compliance' with the GSCOP through effective monitoring and enforcement. It determined that it did not have sufficient powers to set up such a monitoring body under current legislation. The GCA is that body, and it would have been extremely difficult for the Coalition to ignore the Competition Commission's report and reject the need for it.

Regional and Local Government

  1. City Mayors
    As part of the Localism Bill, which the Coalition intends to pass by November 2011, the Coalition has proposed that the largest 12 cities in England be given elected Mayors. At the present time this would affect the structure of local government in Birmingham, Bradford, Bristol, Coventry, Leeds, Leicester, Liverpool, Manchester, Newcastle, Nottingham, Sheffield and Wakefield. The proposals would be subject to 'confirmatory referenda'. The Coalition aims that each Mayor would be elected by May 2012.

  2. Local Government Pension Scheme
    Our first edition of Coalition Watch reported the demise of the Audit Commission. Nonetheless, for the time being it is business as usual and to inform Lord Hutton's inquiry into public sector pensions, the Commission has published an information paper which aims to inform the debate about the long- term health of the Local Government Pension Scheme (LGPS) in England by examining the technical issues about LGPS and summarising the main choices for policymakers and employers.

Our comment:

The proposal for directly elected city Mayors - a Boris Johnson for each of the 12 largest cities in England - is a potentially important element of the Coalition's aim to revitalise public engagement with local government, and a counterbalance to its effective abolition of the regional tier of government. However, the choice of the words 'confirmatory referenda' is an interesting one, and the Coalition has so far declined journalists' requests to clarify its meaning.

'Confirmatory' suggests that the referendum will take place after the event - otherwise, why use it at all, since a referendum before the event is surely just a referendum? Perhaps the proposed approach is similar to that of the Referendum on UK membership of the EEC in 1975, three years after Parliament had voted for membership and more than two years after it had taken effect. This may be the Coalition's strategy; it is less likely that the electorate will vote to remove a system which has already been put in place than that they will positively vote for change in advance.

If this is the strategy, it may be influenced by the failure of the previous government's referendum on the creation of a regional assembly for the North East of England in 2004 - a failure that fatally wounded that administration's regional government agenda. Perhaps the Coalition is determined that the same thing should not happen to it. In any event, perhaps the whole issue is a paradox. Whatever one may think about directly elected Mayors, it can hardly be said to be an anti-democratic policy. Is it necessary to ask the electorate, in a democratic referendum, whether it wants greater democracy?

The public sector pensions debate, meanwhile, highlights the need for a careful balancing exercise. The 2010 Spending Review will consider the long-term affordability of public sector pensions. But cutbacks on eligibility or thresholds for public sector pensions may not necessarily result in savings to the taxpayer in the long-term as it could result in increased public expenditure on means-tested benefits at a later stage.

The above analysis was written by Ravi Randhawa in Wragge & Co's Public Law & Regulation team.

3 Regulation

Reducing Regulation

  1. Voluntary measures to reduce regulation on business
    The Coalition has suggested that voluntarily responsibility deals to reduce waste and increase recycling will reduce the need for further regulation on the business community. Voluntary responsibility deals will look to work with businesses and encourage competition between signatories.
  2. Voluntary sector taskforce
    The Minister for Civil Society and Minister for Business and Enterprise have announced that a new taskforce has been established to identify the regulatory burdens on the voluntary sector. The taskforce aims to make it easier to run charities, voluntary groups and social enterprises by freeing up resources and time by removing unnecessary bureaucracy. This is intended, in the words of the Coalition, to 'help mobilise the Big Society'.
  3. Task Force on Farming Regulation
    The Coalition has announced the establishment of a new task force to reduce the bureaucratic burdens that English farmers and food producers face.
  4. Vetting and Barring Scheme revisions
    The start date for voluntary registration of the scheme has been postponed until the scheme has been revised back to 'proportionate levels' by the Home Office in partnership with the Department of Health and Department of Education. The VBS is designed to protect children and vulnerable adults by preventing those who pose a known risk from gaining access to them through their work. The scope of the revisions will be announced shortly.
  5. Ban on wheel clamping
    The Home Office Minister has announced that the Freedom Bill (anticipated to be introduced to the Commons in November 2010) will include a ban on wheel clamping on private land. This will criminalise the practice.

Our comment:

Promoting voluntary measures appears to be one of the Coalition's key strategies to decrease regulation, and we can expect to see much more of it.

The reduction in administration costs and time (as well as other factors such as being good for the environment or the community) are intended to give the target audience sufficient incentive to do it for themselves. Business sectors are being asked to take their lead from existing examples, such as the grocery sector's 'Courtauld Commitment' which has been tackling food and packaging waste since 2005 and achieved a halt in the growth of packaging waste by 2008. This strategy has the benefit of common sense, and to that extent is welcome. If businesses can get together to create appropriate self-regulatory mechanisms, the state need not intervene. The idea has a long and often successful history - think of the Advertising Standards Authority - but there has been no previous attempt to encourage its systematic adoption across a range of policy areas.

Moreover, while the carrot is certainly clear, what is the stick? It is not clear what the Coalition's approach will be if there is a shortage of volunteers or, equally, a proliferation of uncommitted or incapable volunteers. And how is any self-regulatory system to be monitored to ensure that is effective?

Apart from creating an extra bank holiday - and sadly we can report no such proposal - a ban on private wheel clamping is probably the most populist measure the Coalition might hope to introduce. Although provisions to regulate wheel clampers exist in current legislation, they have never been brought into force. It would appear that the Coalition will count the removal of such dormant provisions as an achievement towards reducing the regulatory burden on society. But is banning wheel clamping on private land really a measure for the Freedom Bill? Whether or not it is deregulatory depends entirely on where you stand. It certainly looks that way to the average car driver, but must look rather different from the perspective of a land owner, for whom a total ban is surely the ultimate form of regulation. Sometimes, one person's freedom requires another person's restraint.

Reorganisation of Regulation

  1. Health regulation

    1. Foundation Trusts and Monitor
      As indicated in the first edition of Coalition Watch, the Health White Paper (Equity and Excellence: Liberating the NHS) proposed a number of changes to the way the NHS is regulated. In particular, it will remove the two-tier system that exists for secondary care, so that all NHS trusts will become Foundation Trusts by 2013. Foundation Trusts will have greater independence from the Department of Health, and the role of Monitor (the independent regulator for Foundation Trusts) will therefore be extended to turn it into a fully fledged economic regulator.
    2. Food Standards Agency
      The remit of the Food Standards Agency is to alter, with responsibility for nutrition policy in England transferring to the Department of Health, and the FSA's role relating to Country of Origin labelling and other non-safety related food labelling and composition policies passing to DEFRA. The FSA in England will continue to develop and enforce food safety policy.
    3. Personal health budgets
      The previous government's pilot of personal health budgets has been extended by a Coalition injection of cash. Personal health budgets could see patients given cash to purchase the NHS care they choose. (See our previous alert).

  2. Licensing
    1. Licensing Act 2003 overhaul
      The Home Office has announced its intention to consult on proposed measures to reduce underage and excessive drinking and the consequent costs to the taxpayer. The measures include new penalties for problem premises and give more powers to local communities to consider licensing issues. They also include the scrapping of alcohol disorder zones.
  3. Police reform
    The Home Office has published a new consultation 'Policing in the 21st Century: Reconnecting Police and the People'. The deadline for responses falls on 20 September 2010. The paper aims to make the police service in England and Wales more accountable to the public and responsive to local people, more focused at a national level and more effective at tackling crime, as well as providing better value for money. A number of the proposed changes will feature in the Police Reform and Social Responsibility Bill, which will be published in the autumn.

  4. Miscellaneous
    1. Pathfinder mutuals
      The Cabinet Office has introduced the first wave of 'Pathfinder' mutuals - public service spin-offs run by entrepreneurial frontline public sector staff. 12 businesses have been established in a range of fields, including education, social care and housing services, to develop innovative ways to provide public services. The Pathfinders will be supported by expert mentors from some of the country's most successful businesses and leaders in employee ownership models.

Our comment

The influence of the Coalition's 'Big Society' programme (to better empower communities to bring about change from the bottom up) is beginning to pervade the approach to the reorganisation of regulation. However, the introduction of greater freedoms (such as those given to Foundation Trusts) will often necessitate the introduction of further regulation (such as the extension of the powers of Monitor) to ensure that the new powers are not abused. Such are the paradoxes of deregulation.

By removing an element of central oversight, the success of grass-root initiatives (like certain strands of the licensing and police reform programmes which extend the role of communities in decision-making) will rely on the commitment and participation of the people on the ground. This could lead to an accentuation of the divide between areas that are well-placed to take advantage from the opportunities such freedoms offer and those areas that do not. But is this the basis for a 'postcode lottery', or merely the quite proper result of localism in action?

As we noted in our introduction to this edition of Coalition Watch, the Government's overarching policy on health sector reform is already the subject of legal challenge. Unison (the public service trade union) has commenced a judicial review of the Department of Health's White Paper, stating that the public should have been adequately consulted as to whether it wanted such radical changes, and arguing that the changes are already in the process of implementation so that the consultation is not genuine.

As highlighted in the first edition of Coalition Watch, the Department of Health currently has five open consultations concerned with the implementation of the policies in the White Paper. The judicial review is therefore likely to focus minds again on the extent to which consultation and engagement with the public is required before a democratically elected government introduces legislation into Parliament.

The 2007 judgment of the High Court in Greenpeace v. Secretary of State for Trade and Industry made it clear that where a government makes a public promise to consult then the public have a legitimate expectation that the government will act in accordance with its promise. But this is not the same as saying that a government must consult before issuing a White Paper where it has made no promise to do so.

Nonetheless, if the Coalition chooses to consult, it must certainly do so properly in accordance with public law requirements. But it is difficult to see that, with legislation to be introduced into Parliament in the autumn, any challenge to current consultations could ultimately make a difference - in the long run, the only public scrutiny that will really matter is that provided by the public's elected representatives through the legislative process.

The above analysis was written by Robyn Farmer in Wragge & Co's Public Law & Regulation team.

4 Money and everything else


  1. Ministry of Defence
    The Secretary of State for Defence has announced a full review of how the Ministry of Defence is run and of potential reforms to the Armed Forces. He is establishing a Defence Reform Unit that will lead in the reorganisation of the Ministry of Defence into three 'strategic pillars', as well as commissioning the first major Strategic Defence and Security Review for over a decade.

    The strategic element of the review is a timely re-appraisal of the UK's security requirements. But the Secretary of State was clear that both this and the wider reform proposals are predominantly motivated by the need to save substantial sums from the current defence budget.

  2. Spending Challenge
    The Treasury has published on its Spending Challenge some 44,000 ideas for saving public money that were proposed by members of the public. It is now inviting the public to rate them.

  3. NHS Consultants' Pay Rewards
    In the last financial year, the NHS spent over £200 million on bonus payments to NHS consultants in the form of what are known as 'Clinical Excellent and Distinction Awards'. The Department of Health has announced a UK-wide review of the awards with a view to assessing whether the scheme, which has been largely unchanged since its establishment in 1948, remains fair and affordable.

  4. Energy Waste
    The Coalition is beginning the process of publishing real time data about public sector energy consumption, beginning with the 18 departmental headquarters in Whitehall, in order to create a culture of transparency and reduce waste. The total cost of energy usage across the public sector estate was £2.6 billion in 2008-2009.

  5. Efficiency and Reform Group
    John Collington, the Home Office's Group Commercial Director, will become the new head of procurement in the Efficiency and Reform Group. He will spearhead a new cross-government approach to procurement, allowing government to use its scale to ensure it always gets the best value for money.

  6. External Efficiency Review
    Sir Philip Green, who runs the UK's largest privately family owned clothing retailer Arcadia Group, has been asked by the Prime Minister to lead an external Efficiency Review into government spending.

  7. High Speed 2 - Exceptional Hardship Scheme
    The Coalition has opened for applications the exceptional hardship scheme for those who are most adversely affected by the proposed High Speed 2 rail line between London and Birmingham and wish to apply for financial compensation. This contains the clear implication that it remains committed to the future of the line.

Our comment:

The Coalition continues to seek ways, large and small, to save money and tackle the deficit. In truth, all of the measures spoken of at the moment amount to something of a phony war, prior to the major announcements that will be made when the Spending Review concludes on 20 October 2010.

Nonetheless, two big themes have emerged. The first is the substantial structural change that is likely to be required in the 'big spending' departments - of which the Ministry of Defence (MoD) is a classic example - in order to function effectively on a substantially reduced budget. How painful this is likely to be for the MoD depends in part on whether any replacement for the Trident nuclear deterrent is (as it has been in the past) separately funded, or whether it is required to be financed from the departmental budget, requiring tough choices to be made about the value of the deterrent when compared with conventional forces.

The second theme is the likelihood of an increasing tendency towards cross-department procurement of goods and services used across all of government. Traditionally, the effect of schemes to save money by utilising the volume purchasing capacity of the government as a whole have had limited take-up. But the issue was the first to be highlighted by Sir Philip Green on his appointment to lead an external Efficiency Review - he compared the current approach each store within the Arcadia Group buying its own clothes, implying that it was simply bad commercial practice - and is also the subject of a new function within the Efficiency and Reform Group. It seems likely that the Coalition will approach this issue with fairly serious intent.

Conversely, the Coalition's Spending Challenge website seems more an exercise in being able to say that the public has been consulted than a genuine attempt to locate good ideas. Indeed, if good ideas are as hard to find as they are in the 44,000 suggestions currently made, departments will have a really unenviable task in responding to the Spending Review. More likely, the British public has responded to the Challenge with its collective tongue in cheek, which is perhaps no bad thing. Among the suggestions made are sending young offenders to Eton (allegedly cheaper), connecting prison exercise bikes to the National Grid (both healthy and climate change friendly) and the inevitable 'scrap this website'.


  1. Trust Ports
    Earlier in 2010 the Dover Harbour Board published proposals for its privatisation. The Coalition has asked it to put additional information into the public domain to facilitate consultation on the proposals.

    The Port of Dover is one of a large number of 'trust ports' in the UK. Mechanisms for their privatisation already exist in law. If the Coalition approves the sale of Dover it is likely to be the first of many trust port privatisations.

  2. Northern Rock
    The Coalition has announced that the government guarantee for the wholesale liabilities of Northern Rock plc will expire at the end of October 2010, ahead of the timetable originally planned. This has been billed as one (small) step towards the ultimate independence of the bank.

  3. High Speed 1
    High Speed 1 is the line that carries high speed train services from London to the Channel Tunnel, and High Speed 1 Ltd is the government owned company that operates the line. The Coalition is currently considering interest from potential purchasers with the intention of privatising the line at the earliest opportunity.

  4. Audit Commission
    The Audit Commission, as we reported in the last Coalition Watch, is being abolished. At least part of it is also being privatised. Its audit practice, which is the fifth largest in the country, will be transferred out of public ownership. The Coalition states that 'a range of options will be developed for converting the audit practice into a business independent of Government which could be sold to the private sector'.

Our comment:

It might seem curious to list the Audit Commission under the heading of privatisations. It is not naturally viewed as the kind of body that would be capable of privatisation in the traditional sense. Yet, as the Coalition has pointed out, a large part of its activity consists of auditing local government and the NHS; an activity that will, following abolition, need to be carried out by private sector audit practices. The skilled and experienced body of auditors who work for the Commission could readily be established as a business in their own right, capable of sale to firms of auditors who will no doubt be prepared to pay for the unique expertise, experience and contact list that they will thereby acquire.

According to the Chairman of the Commission, who has spent much of the last fortnight busily defending the reputation of his organisation, there has already been considerable interest in an acquisition. The Coalition has therefore, by privatising the activity of local government and NHS audit, also created the market in which it can privatise the public sector auditors themselves. All of which begs the question how many more instances there will be of improbable privatisations as the Coalition attempts to shrink the state and shift economic activity into the private sector.

Meanwhile, with the proposed privatisation of High Speed 1, the Coalition is merely continuing the policy of the previous government. In fact, the High Speed 1 line was never intended to be in public ownership. The line was planned to be constructed and run as an entirely private sector opportunity, and it was only when its owners sank beneath their weight of debt that the government stepped in and, rightly viewing the line as key national infrastructure, took on both the company and its debt.

The principal objective of privatisation will therefore not be to raise money for the Treasury, but to shift existing debt off the government's books. The history of High Speed 1, like that of Northern Rock, is a lesson in the ultimate limitations of the free market. In a truly free market, failing businesses are allowed to fail. But in reality, where a business is sufficiently important to the national economy, the government will always need to step in and stand behind it. There are no doubt many lessons here for the proposed High Speed 2 line, and for other key national infrastructure projects to be brought forward in the life of this Parliament.

The 'Big Society'

  1. Future Libraries Programme
    The first ten areas to join the 'Future Libraries Programme' have been announced. The Coalition is seeking to highlight examples of innovative practice at local level which suggest how libraries may ensure cost savings while delivering more relevant services to their local communities. Those who have signed up and been selected for the scheme are promised only 'practical support and advice'.

  2. Voluntary Sector Taskforce
    As reported in the Regulation section of this edition of Coalition Watch, the Coalition has established a taskforce to look at the regulatory burden placed on charities, voluntary groups and social enterprises, with the aim of 'flushing out' that burden and proposing legislative or other changes needed to make it easier for the third sector to operate. The taskforce has been asked to report early in 2011.

  3. Social Mobility Review
    The Deputy Prime Minister is to lead the Coalition's efforts to improve social mobility and has appointed Alan Milburn, a Secretary of State under the previous government, as an independent reviewer who will prepare an annual review of the progress being made towards improving social mobility.

Our comments:

In the last edition of Coalition Watch we reserved judgment on whether the 'Big Society' was rhetoric that would fade away in time, or whether it would turn into a more substantive driver of government policy. The last fortnight gives us little evidence for either conclusion.

Nonetheless, assuming the Coalition to be serious in its efforts to reinvigorate community engagement and see it as a viable alternative to top-down government intervention, it is essential that a framework exists in which community groups and charities can function effectively without themselves being caught up in unnecessary regulation. To that extent, the Voluntary Sector Taskforce has to be welcomed, but it must deliver a strong report making viable proposals for change, and do so quickly.

The above analysis was written by John Cooper in Wragge & Co's Public Law & Regulation team.

5 Outstanding/Omissions

The Coalition is making a clear effort to end what it sees as an era of very interventionist government. And the restoration of civil liberties is prominently on the agenda. But what is conspicuously no longer on the agenda - at least in the immediate future - is any attempt to replace the Human Rights Act 1998 with a so-called British Bill of Rights.

This proposal was based on the manifesto pledge made by the largest party within the Coalition to 'protect our freedoms from state encroachment and encourage greater social responsibility'. In fact, the Political Reform Draft Structural Reform Plan states that the creation of a British Bill of Rights is now no more than an 'ongoing' policy.

It may be that the Human Rights Act is now safe because compromise is the nature of Coalition government. However, an alternative possibility is that the original policy has been quietly shelved, or in any event redefined to the point of being significantly different, because it has been overwhelmed by further consideration and better argument.

As we reported in the first edition of Coalition Watch, it is likely that the repeal of the Human Rights Act would have little practical effect on the law. Moreover, many prominent lawyers - most notably Lord Hope, Deputy President of the Supreme Court, taking the unusual step of speaking extra-judicially about a piece of legislation that is politically contentious - have publically come out in favour of retention of the Act.

If the Act is retained, or in any event if its provisions are simply reproduced in the proposed British Bill of Rights, it will no doubt come as a disappointment to many who might have thought they were voting for something different. Perhaps that is why, for the time being, the issue has been quietly dispatched into the (at least) medium length grass.

Regardless of whether the current policy is born of compromise or deliberation; the Commission investigating the creation of a Bill of Rights can only make proposals consistent with the European Convention on Human Rights. This must severely limit the role that such a Bill could play in changing the United Kingdom constitution.

The above analysis was written by Chris Warburton in Wragge & Co's Public Law & Regulation team.

If there is anything you would like us to cover in future editions of Coalition Watch or wish to comment on from this edition, please feel free to email the team at - we welcome your comments.


Key Contact

John Cooper, partner, +44 (0)870 730 2878,

This analysis may contain information of general interest about current legal issues, but does not give legal advice.