Home > Uncategorized > Competing duties: MUST councils divest?

Competing duties: MUST councils divest?

The Health and Social Care Act 2012, which transferred public health duties to local authorities includes this wording:

“Each local authority must take such steps as it considers appropriate for improving the health of the people in its area.”

I’ve underlined the word MUST, as it seems to me this is rather important.  We are constantly told that local authority pension funds have a legal (fiduciary) duty to maximise returns and therefore have to be invested in tobacco, even though LA pension funds are empowered to consider ethical issues in their statement of investment principles, and even though pension funds in other jurisdictions with similar fiduciary duties have successfully divested from tobacco.

The 2012 Act uses a very strong word in ‘must’, a word which may be helpful to those of us who wish to see LAs divest.   Given that remaining invested in tobacco would send, at best, mixed messages to the population about the desirability of smoking, and given that any such investments would be used to maximise smoking, by the industry, it seems fairly clear that it is inappropriate for a local authority to be invested in tobacco.  Such investments are used to further the business objectives of the tobacco companies which are in direct contradiction with the duty to improve public health.  If a local authority concludes that divesting from tobacco is appropriate for improving the health of the people in its area, then on my reading it must divest.

Of course if an organisation has contradictory duties then a judgement has to be reached about which duty overrides the other, a decision ultimately for the courts.  What does seem clear though is that quoting the fiduciary duty as a defence, without regard to the other duties of the local authority, may not be a sufficient response.





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