Councils (finally) prohibited from signing contracts with companies run by leaders of parish councils

Municipal councils have finally been prohibited from entering into any kind of business deals with companies run or owned by the leaders of parish councils.

The Supreme Administrative Tribunal laid down the law after two lower courts decided in “different ways” (in 2003 and 2019).

Explain reports, the higher court ‘understood’ that every time the president of a parish council is hired to carry out any kind of service for a municipality a situation of ‘conflict’ is incurred between his/ her personal business interests and the public interest of the municipality which he/ she is representing. Presidents of parish councils are part of the municipal assembly, and it’s here one finds the ‘conflict’, said the court.

The issue was raised after Lousada town council chose the company of a local parish council president to undertake repair work at a borough school.

A company rejected for the tender challenged the decision.

At an initial court hearing, magistrates ruled in favour of the council on the basis that the tender chosen was the cheapest. When the rejected company appealed, the central administrative court of the north upheld the first court’s decision. But now the STA has “changed the direction”, seeking to bring ‘uniformity’ to the subject which has overshadowed many council controversies in the past.

Indeed the STA could have gone further, for example prohibiting councils from business deals with companies connected to family members of parish council presidents as these deals are not unknown in local government and often generate bad feeling.