The ‘in-house’ exemption
Produced in partnership with Lee Digings of Lee Digings Associates
The ‘in-house’ exemption

The following Local Government practice note produced in partnership with Lee Digings of Lee Digings Associates provides comprehensive and up to date legal information covering:

  • The ‘in-house’ exemption
  • What are the Teckal and Hamburg exemptions?
  • Teckal
  • Award of contracts to controlled persons under PCR 2015
  • Hamburg
  • Award of contracts which establish or implement co-operation between contracting authorities under PCR 2015

The search for alternative service delivery models to improve efficiency and effectiveness in the public sector is nothing new. Arm’s length delivery of services through corporate structures and shared services arrangements of various kinds are prominent among the models being deployed. These models can be seen in a wide variety of settings including both back office functions and frontline public service delivery.

The purpose of this Practice Note is to outline the public procurement issues that arise when contemplating public sector delivery models of this kind.

The 1999, Teckal judgment brought it home that, contrary to what might be expected, it is unsafe to regard arrangements within the public sector (so-called ‘in-house’ arrangements) as matters on which the public procurement rules have no bearing.

To escape the public procurement rules and the requirement of competition, the public sector delivery model had to be structured so that it came within either the Teckal exemption or, alternatively, within the later Hamburg exemption (see below).

Directive 2014/24/EU, the EU Public Contracts Directive codified both the Teckal and Hamburg exemptions, clarifying the definition of both in the process. For England, Wales and Northern Ireland, those rules were implemented via the Public Contracts Regulations 2015 (PCR 2015), which were retained in domestic law following the UK’s withdrawal from the EU. For background reading, see Practice Note: Brexit—the implications for public procurement.

This Practice Note

Popular documents