“Local authorities cannot subsidise transport fares in breach of fiduciary duty.”
The GLC implemented a 'Fares Fair' policy, reducing London Transport fares by 25% and funding this through a supplementary rate. Bromley LBC challenged this policy as ultra vires and unreasonable.
Whether the GLC had power to subsidise transport fares through rates and whether this breached their fiduciary duty to ratepayers.
The House of Lords held that the GLC's policy was ultra vires, as it breached their fiduciary duty to ratepayers and the statutory requirement to run transport on ordinary business principles.
This case refined the principles from Roberts v Hopwood and demonstrated how fiduciary duty limits local authority discretion. It remains important for understanding the balance between local democracy and legal constraints on public spending.
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OSCOLA Citation
Bromley LBC v Greater London Council [1983] 1 AC 768 (HL)
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