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You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Essex County Council, R (on the application of) v Secretary of State for Education [2012] EWHC 1460 (Admin) (17 May 2012) URL: https://www.bailii.org/ew/cases/EWHC/Admin/2012/1460.html Cite as: [2012] EWHC 1460 (Admin) |
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OF
JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
![]() ![]() Strand London WC2A 2LL |
||
B e f o r e :
____________________
THE QUEEN ON THE APPLICATION ![]() ![]() |
Claimant | |
v | ||
![]() ![]() |
Defendant |
____________________
of
the Stenograph Notes
of
WordWave International Limited
A Merrill Communications Company
165 Fleet Street London EC4A 2DY
Tel No: 020 7404 1400 Fax No: 020 7404 1424
(Official Shorthand Writers to the Court)
Essex
County Council) appeared on behalf
of
the Claimant
Mr A Swift QC and MS H STAUT (instructed by Treasury Solicitors) appeared on behalf of
the Defendant
____________________
OF
JUDGMENT
Crown Copyright ©
"i) To improve the qualityof
the learning environment in early years settings to support delivery
of
the Early Years Foundation Stage ("EYFS"), with a particular emphasis on improving play and physical activities and ICT resources;
ii) To ensure all children, including disabled children, are able to access provision.
iii) To enable private, voluntary and independent ("PVI") providers to deliver the extension to the free offerfor
3 and 4 year olds and to do so flexibly."
"We intend to identify areas where savings can be made and where underspends are expected, by discussing the position with LA [Local Authorities] over the next coupleof
weeks. We will discuss your situation with you and I ask you to consider very carefully any areas were funding is not already committed and where you may be able to make savings. We also need to know where there are any potential underspends on the allocation that you currently have."
"Children's Centres
Essex
are required to deliver 26 Children's Centres, these will be unaffected and will be delivered, subject to previously stated time restraints.
Any other projects over and above this figure,for
which funding has been allocated from the Children's Centre funding stream, but which are uncommitted contractually (ie no contract signed or order placed) are to be frozen as at today's date.
Do not proceed with these projects any further.
This funding will be regarded by the DfE as unallocatedfor
the purposes
of
this exercise...
CCQ&A (large projects/grants)
Similar criteria as the Children's Centres are to be applied to the CCQ&A funding stream. Where an allocation has been made to a setting, but payment has not been made, the funding is to be regarded as committed only if an order has been placed or a contract been entered into and signed. If this cannot be demonstrated then this amount will be regarded as unallocated, even if the allocation has been approved by a working group/committee and the setting received notification. The key element is the entering into a legal agreement, either contract or order. Please note that documentation may be required to substantiate this.
Please advise which projects DO NOT have a signed contract. If projects are subject to a letterof
intent or allocated to a contractor under a partnering agreement, please advise this also.
Contingency to be regarded as unallocated and to remain frozen as at today's date.
Lisa, please can you update the attached spreadsheet with actual dates where the forecast date has passed...
Any projects that are to have Tender documents issued before the endof
July may proceed using your own judgement. The DfE have advised us that this is in an exercise and the outcome will hopefully be known within the next 2 to 3 weeks."
"The presenceof
a signed contract with a building contractor, to carry out the construction
of
the project, as at 7 July 2010".
This prompted a return email 20 minutes later:
"The DFE need to be made aware that their definitionof
'being under contract' is too narrow and recognise the complexity and liability
of
the LA and this may need to be done at Ministerial level by our senior management or the Leader
of
ECC.
See Derek Beer's response."
There then follows a comment by the legal adviser to Essex
:
"In response to the question posed by Harriet's emailof
9:56, the legal position this places ECC in should the funding be withdrawn is that ECC will nevertheless continue to be contractually bound to various parties.
This would run counter to the government's normal approach in the current cost-cutting exercise, which is to acknowledge contractual commitments."
"You mention that the purposeof
the final stage is to make sure that the information held by DfE is correct and so I write to point out that there appears to have been an error in the classification
of
certain projects
of Essex
County Council as 'non-committed'.
The projects in question are set out in the attachment to this email and total £12,874,400.
It appears that the projects have been classified as non-committed on the basis that the county council's partners have not yet concluded contractual arrangements with third parties. However, the county council is contractually bound (and, indeed, someof
the partners may have, subsequent to our reply to your original message which referred to projects under contract, have completed contractual arrangements with third parties).
The contracts between the county council and the entity procuring the service provide by virtueof
Cls. 5 and 6 and Schedule 2 that ECC agrees to make the project payments if the entity proceeds in accordance with the project plan. There are no further sign-offs by the council or opportunities
for
the council to withdraw funding.
The specific contractual detail is as follows:
'Cl. 5.1 THE COUNCIL shall make paymentsof
Capital Funds to THE PROVIDER
for
the Project Period in accordance with Clause 6.
Cl. 5.2 THE COUNCIL shall make payments to THE PROVIDER in a timely manner in accordance with the Project Plan.'
Cl. 6 is a link to the billing provisionsof
Schedule 2. Neither Clause 6 nor Schedule 2 requires anything further approvals from the county council. Subject to the Provider proceeding in accordance with the agreed Project Plan, ECC is bound to make the payments set out in the plan.
The net effect therefore is that the county council is now contractually bound to make these payments and if the DfE funding is withdrawn ECC will have no money to meet these contractual obligations, which would run counter to the government's normal approach in the current cost-cutting exercise, which is to acknowledge contractual commitments."
"This contract may be terminated only by the council on giving reasonable written notice to the school..."
And clause 14 in both contained a force majeure clause:
"For
so long as such circumstances prevail, no party shall be liable
for
any failure or delay in the performance
of
its obligations and/or duties under this contract to the extent that such failure or delay is caused by circumstances beyond that party's reasonable control."
"Since allocating you the grant, we have been informed by the DfE that all awardsfor
which there is not a signed contract with the builder they consider unallocated and, therefore, subject to clawback by central government.
We are vigorously contesting this interpretation on the grounds that we have always expected those awarded the grant to procure the contractor, and that our contract is with the organisation awarded the grant. However, we are still awaiting the DfE response to our argument.
In the lightof
this, I must tell you that you should not, until this is resolved, sign any contracts following tenders. This is because, if the DfE maintains its position, EEC will not be able to claim grant and will be unable to pay you the grant awarded by the panel."
"For Essex
the impact is likely to be greater. LAO [the Department's legal adviser] has advised that the contracts entered into by
Essex
with providers prior to the grant
of
planning consents and tenders are binding, and that breaking them will likely lead to penalties. However, whilst the reduction we are recommending is significant, so is the remaining allocation. We are protecting a sizeable 2010-11 base allocation and still granting some carry-forward.
Essex
would be left with a revised 2010-11 allocation
of
£20.3 m and offered support to re-prioritise their capital programme accordingly."
"I have considered the formof
contract which
Essex
have purportedly entered into with a number
of
providers. Once executed these would be binding on
Essex
in the usual way (even if they were entered into in breach
of
planning procedures and/or the proper tender process - at least until a Court orders otherwise). The statement on the front page that the contract becomes void if not returned after 30 workings days would not alter the position - this is probably intended to mean that the contract terms can be withdrawn if they are not signed up to in that time, but they would become binding whenever both parties sign. The termination clause does appear to allow
Essex
to withdraw from the contract without penalty however, so that they can mitigate any losses incurred if they do not receive the funding to enable them to proceed. In addition, clause 14 provides that neither party will be liable
for
any failure or delay in the performance
of
its obligations under the Contract to the extent that such failure or delay is caused by circumstances beyond that party's reasonable control - which arguably a withdrawal
of
the department's funding would be."
"Together with our architectural advisers (NPS) we have now considered your representation and have been able to partially accept your changes. Where we considered that funds were committed according to the criteria we issued we have been able to accept the changes (totalling £2.2m). However, where we have found there was no evidenceof
commitment to construct at the date
of
our original request we have been unable to accept the amendment (£12.9m). On that basis I can confirm that your revised allocation
for
2010-11 is £20,320,905."
There then follows a breakdown of
how that sum was made up. Included within it is a carry forward allowance from 2009-10
of
£11,386,998:
"I understand that some local authorities will have incurred some abortive fees. Usually such costs are met from revenue funding rather than capital. However in this case if you are in this position, up until the dateof
this letter, you can choose whether to count costs already incurred against your revenue allocation or your revised capital allocation. After the date
of
this letter, you will need to account
for
abortive costs in the usual manner."
1. Lackof
consultation.
2. Irrationality in the choiceof
criteria.
3. Failure to fulfil statutory duties under the equalities legislation.
"Accordinglyfor
this secondary case
of
procedural expectation to run, the impact
of
the authority's past conduct on potentially affected persons must, again, be pressing and focussed. One would expect at least to find an individual or group who in reason have substantial grounds to expect that the substance
of
the relevant policy will continue to enure
for
their particular benefit: not necessarily
for
ever, but at least
for
a reasonable period, to provide a cushion against the change. In such a case the change cannot lawfully be made, certainly not made abruptly, unless the authority notify and consult."
"The 'in principle' decision taken at the beginningof
August 2010 [perhaps at the end
of
July, given the history which I have recited] was not as detailed as that. Essentially, we adopted a single criterion
of
whether or not funding was 'contractually committed' and
for
that purpose we assumed (based on the advice we had received from the architectural advisers) that it would be 'contractually committed' if a contract with a builder had been entered into or an order
for
the purchase
of
a capital asset made - ie what had been explained to
Essex
in Mr Chaney's email
of
29 July 2010. Where authorities had particular situations
for
which they considered those criteria to be inappropriate, however, we considered their cases individually, as we did
for Essex
."
"(1)Every body or other person specified in Schedule 1A (which includes a Minister)...shall, in carrying out its functions, have due regard to the need—
(a)to eliminate unlawful racial discrimination and victimisation; and
(b)to promote equalityof
opportunity and good relations between persons
of
different racial groups."
Section 49A(1) provided:
"(1) Every public authority shall in carrying out its functions have due regard to—
(a) the need to eliminate unlawful discrimination and victimisation...
(c) the need to promote equalityof
opportunity between disabled persons and other persons;
(d) the need to take steps to take accountof
disabled persons' disabilities, even where that involves treating disabled persons more favourably than other persons."
"i) The decision maker who has to take decisions that do or might affect disabled people (or personsof
different race or sex) must be made aware
of
his duty to have 'due regard' to the identified goals.
Ii) The due regard must be fulfilled before and at the time that a particular decision is being considered. Attempts to justify a decision as being consistent with the exerciseof
the duty when it was not, in fact, considered before the decision, are not enough to discharge the duty.
Iii) The duty must be exercised in substance, with rigour and with an open mind. The duty has to be integrated within the dischargeof
the public functions. It is not a question
of
'ticking boxes'. However the fact that the duty has not been specifically mentioned (although it is good practice to do so) is not determinative
of
whether it has been performed.
Iv) The duty is non delegable.
V) The duty is a continuing one.
Vi) It is good practice to keep an adequate record showing that the equality duties had been actually considered and pondered. That disciplines decision makers to undertake their equality duties conscientiously."
"Fourthly, the duty imposed on public authorities that are subject to the section 49A(1) duty is a non–delegable duty. The duty will always remain on the public authority charged with it. In practice another body may actually carry out practical steps to fulfil a policy stated by a public authority that is charged with the section 49A(1) duty. In those circumstances the duty to have 'due regard' to the needs identified will only be fulfilled by the relevant public authority if (1) it appoints a third party that is capableof
fulfilling the 'due regard' duty and is willing to do so; and (2) the public authority maintains a proper supervision over the third party to ensure it carries out its 'due regard' duty."
"He submits that theSecretary of State
personally (the duty being non delegable) was well aware
of
his duties under the relevant statutory provisions and did have the required due regard."