“Local authorities must act reasonably, owing fiduciary duty to ratepayers.”
Poplar Borough Council, led by George Lansbury, paid their workers wages significantly above the national average and equal pay for men and women. The district auditor challenged this as unreasonable expenditure.
Whether a local authority can lawfully pay wages above market rates and whether they owe a fiduciary duty to ratepayers in spending decisions.
The House of Lords held that the Council had acted unreasonably and breached their fiduciary duty to ratepayers by paying excessive wages.
This case established important principles about reasonableness in local government decision-making and fiduciary duties to taxpayers. It prefigured the Wednesbury test and remains relevant to local authority spending powers.
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OSCOLA Citation
Roberts v Hopwood [1925] AC 578 (HL)
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