Councillors and Ostensible Authority

Hampshire ALC has recently received several queries about councillors contacting, negotiating with or approaching third parties without formal authority from their council.

This raises the issue of ostensible authority, where a third party may reasonably believe that an individual is authorised to act on behalf of the council.

In some circumstances, a council could find itself contractually bound by an agreement entered into by someone who appeared to have authority, particularly where the third party has already relied on that agreement by carrying out work, spending money or taking on other obligations.

Councils should therefore ensure they have clear policies and procedures setting out:

• Who has authority to approach suppliers or other third parties
• Who can negotiate terms or contracts
• What approvals are required before commitments are made

What Should Councils Do?

Councils may wish to review their existing standing orders, financial regulations and internal procedures to make sure responsibilities and levels of authority are clearly understood.

It is also important that councillors and officers know when formal Council approval is required before discussions with third parties move into negotiation or commitment.

Clear internal arrangements can help protect both the council and individual councillors and reduce the risk of unauthorised commitments being made.