Bromley London Borough Council v Greater London Council [1983] 1 AC 768 (HL)

Facts

  • The Greater London Council (GLC) was responsible for London's transport system under the Transport (London) Act 1969.
  • GLC implemented the "Fares Fair" policy, substantially reducing public transport fares and increasing local rates.
  • The policy intended to encourage public transport usage and reduce traffic congestion, claiming to align with the Act's goal of creating an "integrated, efficient, and economic system of public passenger transport."
  • Bromley London Borough Council challenged the GLC's policy on the basis that it exceeded the powers conferred by statute and imposed an undue financial burden on ratepayers.
  • The House of Lords reviewed whether the GLC had acted within its statutory authority and fiduciary obligations.

Issues

  1. Whether the GLC’s implementation of the "Fares Fair" policy was within the statutory powers granted by the Transport (London) Act 1969.
  2. Whether the broad interpretation of "economic" to include social and political considerations was permissible under the Act.
  3. Whether the GLC breached its fiduciary duty to ratepayers by significantly increasing rates to fund reduced transport fares.
  4. Whether the GLC’s actions amounted to acting ultra vires—beyond its legal powers.

Decision

  • The House of Lords held that the GLC’s interpretation of its statutory powers under the 1969 Act was incorrect and too broad.
  • The statutory focus on an "economic" transport system required financial and operational efficiency, not the pursuit of general social policy objectives.
  • The GLC breached its fiduciary duty to ratepayers by funding reduced fares through a substantial increase in rates.
  • The "Fares Fair" policy was ultra vires because the GLC acted beyond its statutory authority.
  • The House of Lords emphasized that public bodies must act strictly within the boundaries conferred by statute.

Legal Principles

  • The doctrine of ultra vires prohibits public bodies from acting beyond the express or implied limits of their statutory powers.
  • Statutory terms, especially "economic," must be interpreted according to their ordinary meaning, focusing on financial and operational efficiency rather than broad policy goals.
  • Public bodies, in exercising discretionary powers, must balance statutory objectives with fiduciary responsibilities to those affected, particularly ratepayers.
  • Compliance with statutory language and purpose is essential to ensure the legality and accountability of public actions.

Conclusion

The House of Lords affirmed that the GLC’s "Fares Fair" policy was unlawful as it exceeded statutory powers and breached fiduciary duties, reasserting the fundamental principle that public bodies must operate strictly within the limits of their statutory authority.

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