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You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Grimsby Institute of Further and Higher Education, R (on the application of) v Learning and Skills Council [2010] EWHC 2134 (Admin) (12 August 2010) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2010/2134.html Cite as: [2010] EWHC 2134 (Admin), [2010] 3 EGLR 125 |
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Neutral Citation Number: [2010] EWHC 2134 (Admin)
Case No: CO/10720/2009
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
ADMINISTRATIVE COURT AT LEEDS
The Court House
1 Oxford Row
Leeds LS1 3BG
Date: 12 August 2010
Before :
HIS HONOUR JUDGE LANGAN QC
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Between :
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THE QUEEN on the application of GRIMSBY INSTITUTE OF FURTHER AND HIGHER EDUCATION |
Claimant |
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THE CHIEF EXECUTIVE OF SKILLS FUNDING (formerly THE LEARNING AND SKILLS COUNCIL) |
Defendant |
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Mr Peter Knox QC and Ms Ximena Montes-Manzano (instructed by Mr Rodger McCracken, the claimant’s in-house solicitor) for the claimant
Mr John Randall QC and Mr David Warner (instructed by Ms Cathy Robinson, solicitor, the defendant’s Head of Legal and Governance) for the defendant
Hearing dates: 16-18 June and 14-16 July 2010
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JUDGMENT
JUDGE LANGAN:
Introduction
1. This case has to do with the concept of legitimate expectation in public law.
2. At the material time the Learning and Skills Council (‘the LSC’) was responsible for securing the provision of further education (other than higher education) in England. The defendant is the statutory successor to the LSC,[1] but it will be convenient to use the acronym LSC to refer indifferently to the defendant and the LSC itself. As part of the carrying out of its functions, the LSC made grants to colleges in order to fund capital expenditure.
8. I am grateful to all the counsel engaged in the case for their considerable assistance.
The LSC: statutory provisions
10. The main duties of the LSC were set out in section 2(1) of the Act. The LSC
must secure the provision of proper facilities for –
(a) the provision of further education and training (other than higher education) suitable to the requirements of persons who are above compulsory school age but have not attained the age of 19,
(b) training suitable to the requirements of such persons,
(c) organised leisure-time occupation connected with such education, and
(d) organised leisure-time occupation connected with such training.
11. Section 3(1) of the Act provided that the LSC must secure the provision of reasonable facilities (which is a concept which differs from that of proper facilities[2]) for the same descriptions of education, training and organised leisure-time for persons who have attained the age of 19.
13. Section 19(1) of the Act required the LSC to “establish a committee (to be called a local learning and skills council) for each area of England specified by the Secretary of State.” Each local council was to perform in relation to its area such of the duties of the LSC as the LSC specified, and might exercise in relation to its area such of the powers of the LSC as the LSC specified.[3]
(1) The Secretary of State may make grants to the Council of such amounts and subject to such conditions as he thinks fit…
(2) The conditions may set the Council’s budget for any of its financial years.
The LSC: structure and procedures
The structure of the LSC
The financing of the LSC
Grant applications: the Capital Handbook
The Handbook: introductory material
20. The Handbook begins by stating its purpose which is to update
the arrangements for the administration, assessment and determination of applications to the Learning and Skills Council (LSC) for consent and capital support. It consolidates all general capital guidance provided by the LSC for further education (FE) sector providers (paragraph 1.1).
In this context, the LSC is seeking to both challenge and support the FE sector to develop world-class buildings for world-class teaching and learning… (paragraph 2.1)
Based on the additional capital funding for 2008-10 announced in the 2005 budget, if this level of funding continues and if most of it continues to be directed to the FE sector, the LSC estimates that the renewal and modernisation of the FE estate could be substantially completed by 2013-2014… (paragraph 2.2)
The LSC expects all FE colleges to produce a college property strategy on a three-year basis. In particular all colleges submitting a capital project application will need to have an agreed property strategy in place in order for the application to be approved… (paragraph 4.4)
The Handbook: AiP, AiD, and fee support
23. Applications for AiP and AiD are dealt with in paragraph 7 of the Handbook.
7.1 The LSC will continue to operate two levels of capital project approval for FE and 16-19 capital funding: approval in principle (AiP) and detailed approval. Prior to preparing and submitting an application, all providers should consult with the LSC local partnership team, LSC regional provider financial management team and LSC RPA [regional property advisor] to discuss the key education, finance and property aspects of the project.
7.2 All colleges and other qualifying providers with proposals that have a total capital cost of more than £10 million will normally be required to make an AiP application. Once the AiP application has been determined by the LSC, a detailed application will be worked up and submitted. All proposals with estimated costs of more than £10 million will normally be considered by the LSC at these two stages. All applications that have a total capital cost of less than £10 million will normally be considered once by the LSC as a detailed application.
7.3 The LSC will only accept applications when the college or other qualifying provider has reached a certain stage in the project design and preparation process. In the case of AiP applications, the proposal must be developed approximately to the Royal Institute of British Architects (RIBA) design stage C. In summary, the proposal should include the following:
• A project brief
• Floor plans and proposed elevations
• An estimate of construction and other relevant costs
• A clear indication of town planning issues including the identification of any onerous section 106 agreements.
7.4 In the case of detailed applications, the proposal must be developed in the design stage to beyond RIBA stage D. This means that the proposal should include the following:
• A fully completed project brief
• A detailed proposal showing spatial arrangements, material and appearance, as well as a cost estimate
• Evidence of full planning permission
• A breakdown of tendered and other relevant costs.
7.5 All capital applications should use the appropriate forms, contained within Annex E…
AiP-project fee support
8.3 In addition to the feasibility fee support outlined above, the LSC has now introduced project fee support arrangements where colleges can apply to the LSC for grant support towards the fee costs associated with developing and preparing capital project applications, both to the AiP stage and then to the detailed stage, and on a basis suitable for LSC determination. The purpose of these arrangements is to encourage colleges to bring forward more accurate and better founded applications by accessing grant funding for capital projects from the LSC at an earlier stage in the capital process, and to help reduce the financial burden on colleges of preparing capital projects.
8.4 In order to develop a project proposal to an AiP stage, colleges are likely to expend circa 15 per cent of the consultants’ total projected fees (usually up to 10 per cent of total project costs). Colleges can apply for project fee support on a matched funding basis towards maximum costs of £500,000 to take an application up to the AiP stage. This is not additional funding as such but is really an advance of support that would have been payable later with the aim of improving cash flow and incentivising better applications…
Detailed-project fee support
8.5 In order to develop a detailed project application, colleges are likely to have expended circa 45 per cent of the consultants’ total projected fees. Colleges that have approved AiP applications can apply for project fee support to enable them to develop the project to a stage where it can be considered as a detailed application. The amount of project fee support is determined by the rate of the indicative level of grant support the LSC will have agreed for the AiP application. The maximum allowable fee cost is up to £1 million. For example, this means that if a college spends £600,000 on fees between the AiP and detailed stage and the AiP was agreed at an indicative rate of 40 per cent, the college would be entitled to claim a grant of up to £240,000. As with the AiP project fee support, this is not additional funding but an advance of support to ease college cash flow…
The Handbook: Capital Projects Criteria
4 Given the scarcity of capital funds, a provider will be expected to contribute as much as it reasonably can to the costs of its projects.
5 The LSC’s maximum contribution towards the costs of a project will usually be no more than the sum the LSC considers necessary for the provider to be able to undertake the project. A provider will need to demonstrate the need for a particular level of grant support in confirming the affordability of the project.
6 An appropriate figure should be provisionally agreed with the LSC’s regional PFM [provider finance manager] director before proposals are finalised. Under the stage 3 criteria (see below), preference may be given to providers applying for less than the maximum available LSC support should there be competition for funds…
Providers are “required to demonstrate that they have diligently examined whether better value for money might be obtained by private sector investment” or through a public/private partnership (paragraph 9)
28. Stage 3: Selection of Proposals by the LSC. This section begins with paragraph 23:
The LSC will consider all proposals that pass the first two stages of the process against the seven selection criteria described at paragraphs 24-31.
The selection criteria are: the contributions which the project would make to the provision of proper and reasonable facilities for FE and work-based training in the area; quality assessments of the existing provision; economy (on a cost per square metre comparison with similar constructions in the same area); value for money; efficient space utilisation; projects required to meet legal requirements, such as health and safety legislation (which will be given preference); and financing (preference is to be given to public-private financed projects and loan-financed projects, in that order).
29. Stage 4: Moderation Arrangements. This section starts with paragraph 32:
Local LSCs will determine the priority of competing capital applications according to the extent that they will contribute to meeting the LSC’s local and national targets and objectives. In the event of applications for capital grant exceeding the funds available, the LSC will put in place national moderation arrangements to determine the relative priority to be given to competing applications.
Narrative
30. I now turn to the history of this case.
The background
32. In 1993 much of the infrastructure of the colleges was in poor condition. In the 2005 budget, the government announced “a step change in capital investment in the FE sector.” Existing plans would enable government support for investment in the FE estate to rise to £250 million in 2007-08, while “Budget 2005 announces that an additional £350m of capital investment will be made over 2008-09 to 2009-10 to support the longer-term transformation of the further education sector.”[4]
From masterplan to AiP
After a further meeting with Peter [Newcome, the Principal of Franklin College] to share his views, the LSC felt it was important at this early stage to inform you of our support, in principle, and its further exploration.
As with any project of this magnitude, there will be many aspects to resolve. However, the potential benefits for learners in North East Lincolnshire are seen as considerable.
From the LSC funding perspective, there is an opportunity for FE colleges to obtain substantial support that is unlikely to be available again for some considerable time. Inevitably, both colleges will need to consider the financial implications but the LSC are hopeful that the Governing Bodies will recognise the benefits.
We do not want this to be a distraction from moving the overall scheme forward but we felt we need to determine, at an early stage, whether this radical plan is worthy of further investigation. If it is, then we need to move speedily into the next stage and prepare a feasibility study as soon as possible.
We appreciate this will require a degree of trust and mutual understanding requiring the best endeavours of both Corporations to make it happen. If you need any further information from the LSC then do let us know, we are more than happy to give any presentations to the governing body if that is appropriate.
The Corporation APPROVED the 10 year estates master plan and the submission of the detailed business case for the preferred option.
Lawrence Hart [of AA Projects, one of the professional advisors] advised that the next stage was to have discussions with the national LSC, so that the Institute could understand from an early state whether they supported the numbers. He advised that the meeting should take place within 4-6 weeks.
46. It is now possible to speed up the narrative somewhat.
52. Formal appointments of professionals were then made.
4 I confirm that in order to assist in marketing to, and negotiating with potential developers and partners, without prejudice to the determination of a detailed application in due course, that the Council has agreed that the project proposal would meet the Council’s projects criteria. The Council has also agreed that budgetary provision equivalent to 79% of the estimated total project cost (£93,749,000) should also be made for the project proposal for a period of up to twelve months pending receipt of a detailed application.
5 I must inform you, however, that the Council’s in principle support for these project proposals is subject to the condition that the project should be implemented in phases, broadly equal in terms in floor space and costs for which individual detailed applications should be made. To clarify this point, the assumption is that the college should have successfully completed phase 1 before implementing phase 2 and any further phases. The grant support intervention rate will be calculated for each phase of the proposal as and when they come forward to the Council for determination.
From AiP to detailed application
They had a good case, but they would have to come up with figures. We would support the proposal for a single AiD, if there was a real prospect of getting AiD. Mr Grindlay said that, if a sufficient case was put up, he would support it. He did say that we, as officers, would have a difficult time at the National Capital Committee. I told Mr Hardy [this must have been after the meeting, as Mr Hardy was not there] that the departure from AiP was a concern.
The collapse of funding
67. The National Council of the LSC met on 17 December 2008 as planned. The papers prepared for the meeting and the minutes are documents of considerable length. Put very shortly, the LSC found that it was running out of money. It did not have sufficient funds to grant AiP or AiD to applications which, on their merits, might have been successful. There had, as matters were later described in a draft Report of the Committee on Public Accounts,[5] been “a catastrophic mismanagement of the LSC capital budget during 2008 and neglect of oversight by those in senior positions in the LSC.”
76. On 27 May 2009 the Institute sent the pre-action protocol letter to the LSC.
80. There remained the question of the Institute’s wasted expenditure. The LSC sent out a questionnaire about costs incurred by applicants for grants whose cases would not be going any further. 209 colleges returned the questionnaire duly completed. In round figures: the total amount spent by colleges on costs relating to capital projects which did not obtain AiP or AiD was £340 million[6]; £94 million was due to the colleges under the established arrangements for fee support; the gap between the two figures was £246 million. The latter sum was simply something which the LSC could not afford.
The Law
Preliminary
83. Mr Randall put before the court nine propositions of law, which provided him with headings for what I found an impressive and comprehensive review of the subject of legitimate expectation in public law. In this section of the judgment, it will be convenient to set out those propositions, together with Mr Knox’s response and, where this seems to be required, some observations of my own.
First proposition
84. “Save in an exceptional case, a legitimate expectation founded on a representation requires that representation to be clear and unambiguous.” The authorities relied upon are R v Inland Revenue Commissioner, Ex parte M.F.K. Underwriting Agents Ltd[7] and R (Association of British Internees: Far East Region) v Secretary of State for Defence (hereafter ‘ABCIFER’)[8].
85. Mr Knox accepted this proposition, subject to the qualification that a statement must always be read in context. One has to consider, as was said in the judgment of the Court of Appeal in ABCIFER how “on a fair reading” a statement “would reasonably have been understood by those to whom it was directed.”[9]
86. There is no real difference between counsel on this point.
Second proposition
87. “A legitimate expectation founded on a past practice requires there to have been a specific undertaking to an individual or group whereby its continuance is assured.” The authority relied upon is R (on the application of Bhatt Murphy (a firm)) v The Independent Assessor.[10]
88. Mr Knox did not question the proposition but, rather, turned it to the advantage of the Institute by relying on the following passage from the judgment of Laws LJ in the Bhatt Murphy case.
43 Authority shows that where a substantive expectation is to run the promise or practice which is its genesis is not merely a reflection of the ordinary fact (as I have put it) that a policy with no terminal date or terminating event will continue in effect until rational grounds for its cessation arise. Rather, it must constitute a specific undertaking directed at a particular individual or group by which the relevant policy’s continuance is assured…
44 I will give two concrete examples from the cases. In Ex p Khan [1985] 1 All ER 40 the Home Office promulgated specific criteria for the admission of children into this country for the purpose of adoption here. The appellant sought entry for his prospective adoptive child. He relied in terms on the published criteria which he fulfilled. But he found his application blocked by a further, unannounced criterion which he did not satisfy. This court allowed his appeal.
“This”, Mr Knox said, “is my case.”
Third proposition
89. “Although an abuse of power through acting with conspicuous unfairness can arise without any legitimate expectation being infringed, such cases are highly exceptional.” Although this proposition, which was accompanied by a lengthy review of the authorities,[11] was accepted by Mr Knox as being “what the authorities say”, I would myself put it slightly differently. It seems to me that abuse of power cases are properly characterised as legitimate expectation cases. The expectation is, however, not based on a specific representation, but is of a more general kind, namely, that a public authority will not act so unfairly that its conduct amounts to an abuse of power.[12] But, perhaps more importantly, it is common ground that cases of legitimate expectation not founded on a representation are highly exceptional.
Fourth proposition
90. “The requirements for legitimate expectation in public law are now sufficiently developed to stand separately from private law doctrines such as estoppel, and should do so, being more sensitive, and tailored to, the particular context of public law.” The authorities relied upon are R (Reprotech (Pebsham) Ltd) v East Sussex County Council,[13] and the Bhatt Murphy case which was previously cited.[14]
91. Mr Knox accepts this proposition, but reminds the court that the moral values of estoppel have been absorbed into public law. Further, while the remedies in private and public law cases are quite different, the approach of the court to the interpretation of statements is the same.
Fifth proposition
92. “Legitimate expectation not being the same as estoppel, detrimental reliance is not essential to making it out, though it remains highly relevant.” There was extensive citation of authority in support of this proposition,[15] which was accepted as correct by Mr Knox.
Sixth proposition
94. This proposition requires some exegesis from me. In R v North and East Devon Health Authority, Ex parte Coughlan,[16] there is in the judgment of the Court of Appeal a somewhat involved discussion of the role of the court in legitimate expectation cases. The starting-point is to determine what was the legitimate expectation of a member of the public as to how he would be treated by a public authority. There are at least three possible outcomes of the enquiry. (1) The court might decide that the authority was only required to bear in mind its previous policy or representations giving them the weight it thought right, but no more, before deciding whether to change course. (2) The court might decide that the promise or practice induced a legitimate expectation of being consulted before a particular decision is taken. (3) The court might decide that a lawful promise or practice has induced a legitimate expectation of a benefit which is substantive.
95. Once it has been decided into which category a legitimate expectation falls, the role the role of the court differs according to the category. In category (1), the court is limited to reviewing the decision on conventional Wednesbury grounds.[17] In category (2), the court has to determine whether the decision was procedurally fair, and will require the opportunity for consultation to be given unless there is an overriding reason to depart from it. In category (3), the court will have to decide whether to frustrate the expectation is so unfair as to amount to an abuse of power and, when necessary, to decide whether there is a sufficient overriding interest to depart from what has been promised.
96. Coughlan was decided in 1999. R (Bibi) v Newham London Borough Council[18] came before the Court of Appeal two years later. As I read the latter decision, it is dealing not so much (as is suggested by the sixth proposition) with the allocation of cases between the Coughlan categories, but rather with rhe resolution of cases which fall within category (3), where the relevant legitimate expectation is that of a substantive, and not merely a procedural, benefit. Bibi qualifies Coughlan in two respects. First, doubt is expressly cast on the approach which suggests that the question for the court in a category (3) case is whether the authority by reneging on its promise was acting so unfairly as to be an abuse of power. This question provides an uncertain guide, because a major part of the problem in legitimate expectation cases “is that it is often not adequate to look at the situation of the disappointed promisee” apart from the situations of the promisor and (sometimes) of many other persons to whom promises have been made.[19] Secondly, doubt is cast by implication upon what was said in Coughlan about the remedy in category (3) cases. The judgment of the court, which was handed down by Schiemann LJ, contains the following passages:
40 The court has two functions – assessing the legality of actions by administrators and if it finds unlawfulness on the administrators’ part, deciding what relief it should give. It is in our judgment a mistake to isolate from the rest of administrative law cases those which turn on representations made by authorities. The same constitutional principles apply to the exercise by the court of each of these two functions.
41 The court, even where it finds that the applicant has a legitimate expectation of some benefit, will not order the authority to honour its promise where to do so would be to assume the powers of the executive. Once the court has established such an abuse it may ask the decision taker to take the legitimate expectation properly into account in the decision making process…
43 While in some cases there can only be one lawful ultimate answer to the question whether the authority should honour its promise, at any rate in cases involving a legitimate expectation of a substantive benefit, this will not invariably be the case.
97. Mr Knox was prepared to accept in general terms that the judgment in Bibi provided the road along which the court now has to go: but he emphasised that Bibi should not be considered in isolation from other cases on legitimate expectation, and he drew my attention to two other passages in the judgment in Bibi:
39 But, on any view, if an authority, without even considering the fact that it is in breach of a promise which has given rise to a legitimate expectation that it will be honoured, makes a decision to adopt a course of action at variance with that promise then the authority is abusing its powers…
59 But when the authority looks at the matter again it must take into account the legitimate expectations. Unless there are reasons for not giving effect to those legitimate expectations then effect should be given to them.
Seventh proposition
98. “(1) It is clear that in non-ECHR/EU cases, the test of proportionality has not been substituted for the Wednesbury principle.[20] (2) That being so, many of the comments about balancing the public and private interests in Coughlan[21] have to be read with caution.” I have divided this proposition into two parts in order to take account of Mr Knox’s response.
99. Mr Knox accepted sub-proposition (1) as correct. Several authorities were cited by Mr Randall: the point was perhaps most clearly articulated in 1991 in the decision of the House of Lords in R v Secretary of State for the Home Department, Ex parte Brind.[22] Mr Knox, however, rejected sub-proposition (2), on the basis that Coughlan had been approved in, and survived, Bibi.[23] I have already referred to the Coughlan categories. The controversy here is focused on category (3), where a promise resulting in a substantive legitimate expectation has been broken. It was common ground in Coughlan that the public authority could break its promise (to permit the claimant to remain in a particular care home for the rest of her life) if, and only if, an overriding public interest required this. The court said:[24]
Both [counsel] adopted the position that, while the initial judgment on this question has to be reached by the health authority, it can be impugned if improperly reached. We consider that it is for the court to decide in an arguable case whether such a judgment, albeit properly arrived at, strikes a proper balance between the public and the private interest.
Eighth proposition
102. Mr Knox agreed with this proposition, subject to the qualification that, while maladministration is not a ground for judicial review, “it is still relevant in deciding whether it is fair to allow a public body to change its practices.” I have to say that I do not really understand the qualification. It seems to me, with respect, to come close to contradicting the main proposition, at any rate in legitimate expectation cases. The question must always be whether the act of the pubic body is unlawful.
Ninth proposition
103. “In deciding what, if any, relief should be granted, the court will take into account (a) whether the decision challenged is in the macro-political field, and/or (b) involves social or political value judgments as to priority of expenditure, and/or (c) the nature and clarity of the promise or prior practice in question.” There was, once again, extensive citation of authority.[25]
104. This ninth proposition is, I think, incontrovertible. Mr Knox limited his response to saying (and I agree) that it is simply not realistic to characterise the decisions in this case as having been made in the macro-political field.
Discussion
The claim as pleaded
By so encouraging the Institute, the LSC implicitly represented to it that if and when it obtained AiP, (a) its application for AiD would be dealt with and approved in the usual way (subject to satisfying the LSC of relevant criteria) and (b) the LSC was and would continue to be properly financed and organised, so that it could deal with (and approve) such application in the usual way. Accordingly, the Institute had a legitimate expectation to this effect. Had it not been for this encouragement, the Institute would not have undertaken a project of this magnitude.
106. This formulation was criticised by Mr Randall on the basis that one could not derive from it any clear meaning, phrases like “the usual way”, “properly financed” and “properly organised” being shot through with ambiguity. In my judgment, the criticism is not a sound one. The meat of the alleged representation – for it seems to me that one is looking at a single representation expressed in alternative ways – is that the Institute’s application for AiD would be dealt with on its merits and without regard, as Mr Knox put the matter early in his closing submissions, to the financial state of the LSC.
The alleged representations
108. In his closing submissions, Mr Knox set out the representations on which the Institute was relying. They fell into two main groups, of which the second was further sub-divided. (1) There were representations made in the Institute’s Capital Handbook. Even if these stood alone the Institute would, on Mr Knox’s submissions, be entitled to succeed. (2) There were representations made otherwise than in the Handbook. These were: (i) representations made prior to 13 October 2006, namely (a) on 18 August 2006, (b) on 15 September 2006, and (c) in the undated letter from Ms Lyon which was produced at the meeting of 26 September 2006; (ii) representations made on the 13 October 2006; (iii) representations which were (a) implicit in the dealings of the LSC thereafter, and (b) particularly in the AiP letter of 31 January 2008.
109. I will consider these groups of alleged representations in turn.
Group 1 representations: the Capital Handbook
110. The parts of the Handbook which Mr Knox treated as central to his submission are paragraphs 7.3 (the stage to which a project must be developed before it can be considered for AiP), 8.5 (fee support leading to the application for AiD) and, more particularly, Annex A. There is within Annex A, at paragraph 6, reference to competition for funds; and, at paragraphs 23-31 the criteria for selection of projects. Finally, there is paragraph 32 of Annex A, the reference to moderation arrangements to determine the relative priority to be given to competing applications where insufficient funds are available to meet all applications.
111. The thrust of Mr Knox’s submissions was that Annex A was limited to the stage at which AiP was being sought. A finding to this effect is vital to the case resting on Group 1 representations because, if Annex A extends to the AiD stage, paragraph 32 opens the door to the refusal of an application on the footing that the LSC has insufficient funds to meet all applications which have received AiP. There was, in Mr Knox’s submission, no suggestion in the Handbook that, once AiP had been obtained, there was going to be any competition for grants. Two of the selection criteria, those relating to preference being given to projects which are put forward in order to meet legal requirements and which are to be financed on a public-private basis or on loan, supported the view that the Annex applied only up to AiP.
113. In my judgment, the submissions made by Mr Randall are to be preferred. For the reasons advanced by him, I do not accept that Annex A is to be restricted in the manner suggested by Mr Knox: and, as soon as one treats the moderation arrangements as applicable at AiD stage, the implied representation on which reliance is placed melts away. Representations, even implied representations, have to be clear and unequivocal. Nothing in the Handbook seems to me to come anywhere close to implying that, once AiP has been obtained, the availability of funds to the LSC becomes irrelevant.
Group 2(i) representations: representations prior to 13 October 2006
Representation 2(i)(a): meeting on 18 August 2006
114. The relevant pleading is in paragraph 5B(1) of the Amended Grounds of Claim.
At a meeting on 18 August 2006, Mr Green of the LSC informed the representatives from the Institute (Professor Khan, Mr Adrian Clarke and others), from Hereford School and Franklin Sixth Form College: (a) that the LSC fully supported the masterplan; (b) that a “total new rebuild should be considered as an option for all parties”; (c) that the LSC had an additional £350 million over the next three financial years. (The LSC relies on the Institute’s own minute of this meeting).
Representation 2(i)(b): meeting on 15 September 2006
117. The pleading is in paragraph 5B(3) of the Amended Grounds of Claim:
At a meeting on 15 September 2006 to discuss option 4, attended by Professor Khan, Mr Ellis, and Mr Clarke for the Institute, by Mr Bob Flockton for the LSC, and representatives from the North East Lincolnshire Council and Dyers (who had drawn up the masterplan):
(a) There was discussion about the financial backing for the project and the requirement for it to be considered within “two year window of opportunity with the LSC”;
(b) Mr Bob Flockton confirmed that the LSC had agreed the project in principle and to explore what level of funds would be available to support the development costs.
Representation 2(i)(c): Ms Lyon’s undated letter
120. I have precisely the same problem as with representations 2(1)(a) and 2(1)(b). The letter is expressly supportive of the Institute’s plans, albeit cautiously so (“we need to determine… whether this radical plan is worthy of further investigation”). But the letter, read as a whole, is tentative in nature and, once again, falls far short of being able to bear the weight which Mr Knox seeks to place upon it.
Group 2(ii) representations: meeting on 13 October 2006
123. Mr Green was an impressive witness, who gave his evidence in a measured and transparently honest manner. Mr Ellis was argumentative and, on one other significant part of the history, has been shown up as unreliable.[26] Mr Clarke’s recollection was exposed in cross-examination as being patchy and uncertain. The only safe course (which I adopt without hesitation) is therefore to accept what Mr Green said. I will set out the bulk of my notes of the relevant part of his cross-examination:
I can’t recall ‘world class buildings’ being mentioned at the meeting. We did not encourage [colleges] to come back with mega-schemes.
Colleges were not asked for big buildings. They were asked to go away, look at their estates and come back with proposals.
I can’t recall the LSC using the phrase ‘once in a lifetime.’ I think ‘support’ rather than ‘encourage’ was the word used. It was a positive message.
The extra £350m over 3 years was not mentioned, but there was a slide showing the money available.
I don’t think [LSC officers] said there was an under spend. They did say that there were insufficient projects coming forward so that Yorkshire and Humberside were not doing well compared to other regions. Yorkshire and Humberside were missing out on the opportunity to get [funds] from the national budget.
I don’t recall it being said that there would be competition for AiD among projects which have AiP
Group 3 representations: representations after 13 October2006
Representation 3(i):“implicit in all other dealings”
Representation 3(ii): letter of 31 January 2008
126. This letter was put forward by Mr Knox as coming close to an express representation. He attached particular importance to the passage in which Professor Khan was informed that budgetary provision for 79 per cent of the cost of the project was being made for a period of up to 12 months pending receipt of the detailed application. This was, Mr Knox submitted, tantamount to saying “the money will be there if you satisfy the criteria.”
127. This letter had not been pleaded as a representation in the Amended Grounds of Claim and was not dealt with, or complained about, by any of the witnesses for the Institute. It raised its head only in Mr Knox’s cross-examination of one of the witnesses for the LSC towards the end of the case. I appreciate the force of Mr Randall’s objection that “it is grossly unfair to bounce the defendant into a legitimate expectation argument based on this letter.”
129. Mr Randall put his point succinctly:
The sentence does not support the paragraph 28 representation. It is a late thought to salvage a fatally flawed case.
I agree.
Conclusion on representations
The claim based on practice
The claim based on conspicuous unfairness
137. In his closing submissions Mr Knox put the conspicuous unfairness claim in this way:
My clients were encouraged to apply for a very substantial grant in circumstances in which it was known that they would incur very substantial fees. The fees were bound to be far greater than the subsidised amount [reference was made to the Capital Handbook]. They have not been accused of extravagance. It is unfair to turn them down at the last moment on the ‘no money’ basis… The fault lay with the LSC, not with us.
The true analysis
Disposal
140. It follows from what I have said that the claim for judicial review must be dismissed.
Quantum
Envoi
[1] With effect from 1 April 2010, pursuant to the Apprenticeships, Skills, Children and Learning Act 2009.
[2] See the descriptions of facilities which are proper and facilities which are reasonable in sections 2(2) and 3(2) respectively.
[3] Section 20(1).
[4] HM Treasury, Budget 2005: Investing for our future – fairness and opportunity for Britain’s hard-working families, HC (2004-05) 372, paras 6.54-6.55.
[5] This is in the hearing bundle: I have not seen the Report in its final form.
[6] This figure excludes £45 million spent by colleges after 1 January 2009 despite their having been told by the LSC in December 2008 that they should not incur any further material costs.
[7] [1991] 1 WLR 1545 at 1569 G-H.
[8] [2003] QB 1397 at paragraphs 72, 73.
[9] [2003] QB 1397 at paragraph 56.
[10] [2008] EWCA Civ 755: see in particular paragraphs 40-46 (Laws LJ).
[11] R v Commisisoners of Inland Revenue, Ex parte Unilever Plc [1996] STC 681; ABCIFER [2003] QB 1397; Rowland v Environment Agency [2005] Ch 1.
[12] See ABCIFER, supra, at paragraph 72; Rowland v Environment Agency, supra, at paragraph 68.
[13] [2003] 1 WLR 348 at paragraphs 6 (Lord Mackay of Clashfern), 33-35 (Lord Hoffmann).
[14] R (on the application of Bhatt Murphy (a firm) v The Independent Assessor [2008] EWCA Civ 755 at paragraphs 40, 43 (Laws LJ).
[15] R v Secretary of State for Education and Employment, Ex parte Begbie [2000] 1 WLR 1115 at 1131G (Laws LJ); R (Bibi) v Newham LBC [2002] 1 WLR 237 at paragraphs 29-31 (Schiemann LJ, delivering the judgment of the Court of Appeal); R (Bancoult) v Secretary of State for Foreign and Commonwealth Affairs (No 2) [2009] 1 AC 453 at paragraphs 60 (Lord Hoffmann), 135 (Lord Carswell).
[16] [2001] 1 QB 213 at paragraphs 55 to 60.
[17] Associated Provincial Picture Houses Ltd v Wednesbury Corpn [1948] 1 KB 223.
[19] [2002] 1 WLR 237 at paragraphs 33-37.
[20] Associated Provincial Picture Houses Ltd v Wednesbury Corpn [1948] 1 KB 223.
[21] R v North and East Devon Health Authority, Ex parte Coughain [2001] QB 213.
[22] [1991] AC 696, particularly at 762, 763 (Lord Ackner).
[23] R (Bibi) v Newham LBC [2002] 1 WLR 237.
[24] [2001] QB 213 at paragraph 52.
[25] For (a): R v Secretary of State for Education and Employment, Ex parte Begbie [2000] 1 WLR 1115 at 1131 C-D (Sedley LJ); R (Bibi) v Newham LBC [2002] 1WLR 237 at paragraph 23 (judgment of the Court of Appeal). For (b) R (Bibi) v Newham LBC loc cit at paragraph 64. For (c): R (Bancoult) v Secretary of State for Foreign and Commonwealth Affairs (No 2) [2009] 1 AC at paragraph 182 (Lord Mance, dissenting as to the result).
[26] In his first witness statement he verified the original Grounds of Claim, which stated that the meeting of 29 July 2008, at which the move from a two phase to a single phase project was discussed, had been called at the instance of the LSC: that is now acknowledged to have been wrong.