Jun 10, 2009
LAML Appeal Judgement – Time for Clarity
The outcome of the LAML Appeal is now known and can be downloaded here. LAML, for those new to this blog, was the creation of a new insurance mutual, the first in over 100 years, by ten London local authorities. In summary, following on from the LB of Brent decision to transfer their business to LAML, rather than a private sector provider a legal challenge was mounted. The baseline is that LAML now has to cease trading following that judgement.
It is not for me to comment on the legality or otherwise of LAML, although my general feeling can be summarised as 'what a pity'! However, returning to fact rather than emotion, LAML has made a difference in several ways:
Those local authorities who were due to renew their insurance premiums found that they were down by up to 15% when LAML was brought into the equation
The market segment they entered was largely a monopoly so LAML provided some competition
Local authorities are always being asked to innovate to help reduce costs, and this was a real innovation – see my earlier Hats off to LAML
So what does the future hold? For LAML, sadly nothing! However, for those with an eye of efficiency the compelling need is for clarity from central government. The public sector is facing a potential financial meltdown in 2011/12 and will need all the help in the world to find innovative ways of delivering cashable savings without hitting the quality of front line services. What can it do and not do in terms of innovation in the light of this judgement? What are the defined limits of local authority 'well being' powers? Please can we have some clarity, Minister!