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England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Attfield, R (on the application of) v London Borough of Barnet  EWHC 2089 (Admin) (22 July 2013)
Cite as:  WLR(D) 303,  EWHC 2089 (Admin)
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| THE QUEEN
on the application of
|- and –
|THE LONDON BOROUGH OF BARNET
James Goudie QC and Edward Capewell (instructed by HB Legal) for the Defendant
Hearing date: 2nd July 2013
Crown Copyright ©
Mrs Justice Lang:
"The grant of permission to apply for judicial review is limited to ground 1 of the grounds for judicial review (that the decision to vary parking charges was outwith the powers conferred by the statute). I take the view that there is an arguable case on that issue.
Permission is refused on ground 2 (inadequacy/irrationality of reasons) and ground 3 (irrationality of the decision) which I consider to be unsustainable."
"7.2.5 CPZs are the primary tool for managing parking. However, in areas where CPZs are not introduced but the streets are adversely affected by high volumes of daytime parking as a result of commuting or other pressures, the Council will seek to implement waiting restrictions at appropriate locations leaving other kerbside parking uncontrolled so as to promote safety and assist traffic movement."
"7.3.4 In designating parking the Council sets charges for permits, vouchers and for paid-parking. In setting the former the Council recognises that the ownership of a permit gives the holder a right to use a vacant parking space – a right that a person without a permit does not have. This right has a value and Barnet therefore may set a permit charge that is greater than that required to cover the operational costs of running a permit parking scheme. The same principle applies to vouchers."
"7.3.5 In considering whether permit and voucher charges should vary in different parts of the borough, or for different hours of operation, or different levels of congestion and "useability" the Council considers that the fairest and most equitable methodology is to levy a standardised flat-fee across the borough."
"7.3.6 The Council recognises that parking charges must not be set for the purpose of raising revenue but, having invested in the parking service such revenue as is considered necessary, will use any surplus generated as a result of its charging strategy for the purposes set out in the RTRA as amended."
"7.3.7 Barnet does not designate specific projects as being funded by the parking surplus – rather the surplus contributes to the overall expenditure on permitted uses. This ensures residents do not feel that any contribution that they may have made to the surplus is being used in an area that does not affect them. The surplus is instead seen as being used throughout the borough. "
"Resident Permit Parking"
"7.6.14. In setting the charge the Council does so on the basis that aside from covering operational costs, the value of a permit to a holder may also be considered. The ownership of a permit gives the holder a right to use a vacant parking space – a right that a person without a permit does not have. Consequently Barnet sets a permit charge that is greater than that required to cover the operational costs of running a permit parking scheme in reflection of this value. Consideration will be given to affirming this by making a policy statement "freezing" the permit value in real terms, increasing it only in line with inflation."
"Risk Management Issues
4.1 The Special Parking Account is a ring fenced account that makes a surplus each year which is then transferred into the General Fund. It has previously provided £5m per annum into the General Fund. However, in 2009/10 a reduction in income to the SPA meant that a reduced amount was transferred into the General Fund and this is likely to be repeated again this if we fail to maximise income in parking.
The service is currently facing a number of challenges. These include:
• Parking income across London is down by 22%.
• Lack of available funding for signs and lines and the maintenance of pay and display machines, which means that a relatively significant proportion are out of order at any one time.
• High sickness levels among Civil Enforcement Officers (CEOs); in the first quarter of 2010/11 parking lost a total of 379 days to sickness, equivalent to on average of 15.8 sick days each per annum.
• Reduced income to the Specialised Parking Account as a result of the economic conditions, the severe winter and the issues identified above. This has had an impact on the Council's General Fund.
Specialist Parking Account (SPA)
The SPA is a ring fenced account that makes a surplus which is transferred into the General Fund each year. It has previously provided £5m per annum into the General Fund. However, in 2009/10 a reduction in income to the SPA meant that a reduced amount was transferred into the General Fund and this is likely to be repeated again this year.
It is anticipated that regardless of whether the service is delivered in-house or externally this issue of a reduced transfer into the General Fund will remain and will need to be addressed."
"9.4.1 Special Parking Account (SPA)
The SPA is a ring fenced account that makes a surplus account which is transferred into the General Fund each year. It has previously provided £5m per annum into the General Fund for transportation and highways related work. However, in 2009/10 a reduction in income to the SPA, meant that a reduced amount was transferred into the General Fund and this is likely to be repeated again this year. The reasons for this reduction are currently being investigated and are considered to be in part due to the snow levels last winter, general economic downturn and out of order pay and display machines.
9.4.2 It is anticipated that regardless of whether the service is delivered in-house or externally, the issue of a reduced transfer into the General Fund would remain. This will need to be addressed through the Parking Service recovery plan, and also through procuring a new supplier."
"As discussed yesterday afternoon we have worked out what the consequences would be for parking permits if we looked to recover the £1.3m that we did not want to find from bus lane monitoring.
The original permit proposal produced additional income of £488,740 so the new proposal needs to make £1788,740. Option 1 makes £1,203,733 and Option 2 £1818,803 so if we go with option 1 the balance would need to come from pay and display charges.
Can you tell me which of these you want to go for?
Current charge £40 Option 1 £80 Option 2 £100
Current charge £1 Option 1 £3 Option 2 £4."
"The only way we are going to be able to spend any money on Highways or pavement repairs (and the next section of potholes are just beginning to appear) is to use any surplus from the parking fund."
"8.2 Paragraph 3.8 of the Council's Financial regulations requires that the Cabinet Resources Committee (CRC) approves changes to fees and charges that are significantly different from inflation.
9.1 The fees and charges levied on users of Council services have been reviewed as part of the development for the 2011/12 budget and Council tax setting. Fees and charges are an important element of Council income as they contribute approximately £80m per year to the cost of delivering services, which is not then required to be met from Council tax. The Environment and Operations element of this total is approximately £22.5m, of which, around half relates to parking.
This report seeks approval to any changes that are higher than could be reasonably taken to be in line with inflation."
"The net projected surplus on the SPA is available for the implementation of parking schemes and as a general support for public transport improvement projects that fall within the criteria set out in the Highways Act 1980."
"32. ...Budgeting for a surplus is specifically contemplated and permitted by section 55(4) which also allows an authority to apply the surplus to a wide range of traffic and highways management purposes. That is precisely what the Council is planning to do in the present situation.
34. …the operating surplus on the SPA was £2,745,000 in 2009/2010. The table below shows the Council's actual expenditure on a number of 'traffic management' purposes, together with the section 55(4) purposes under which they fall:
|Identified usage||Actual expenditure||Statutory provision|
|Safer routes||£104,000||section 55(4)(e)|
|Highway Investment Programme||£1,970,000||section 55(4)(d)(ii)|
|Roads/footways programme||£693,000||section 55(4)(d)(ii)|
|Highways maintenance||£2,676,000||section 55(4)(d)(ii)|
|Concessionary fares||£8,366,000||section 55(4)(d)(i)|
|SEN transport||£1,610,000||section 55(4)(d)(i)|
35. You can therefore see that the amount of money the Council spent last year on traffic management purposes to which the SPA surplus could lawfully be put, exceeded the amount of the surplus on the SPA by some £12,674,000. In 2010/2011 the "gap" between expenditure and the SPA surplus is expected to be around £13,641,000. The gap is met by monies from the general fund, which, as I have explained, is under considerable pressure due to the overall reduction in funding which the council faces. It is lawful, and entirely prudent, for the council to aim to maintain the funding of the SPA so that the account can continue to make a contribution to the costs of the important identified usage listed in the table above.
38. The increased charges are necessary to ensure sufficient investment in the council's road network is wholly in accordance with the Council's duty under section 122 RTRA 1984 and its powers under section 55 of that Act."
The statutory provisions
"(1) A local authority may by order designate parking places on highways…in their area for vehicles or vehicles of any class specified in the order; and the authority may make charges (of such amount as may be prescribed under section 46 below) for vehicles left in a parking place so designated…"
"(2) An order under this section may designate a parking place for use (either at all times or at times specified in the order) only by such persons or vehicles, or such persons or vehicles of a class specified in the order, as may be authorised for the purpose by a permit from the authority operating the parking place…and
(a) in the case of any particular parking place and any particular vehicle, or any vehicle of a particular class, the authority operating the parking place, may issue a permit for that vehicle to be left in the parking place while the permit remains in force, either at all times or at such times as may be specified in the permit, and
(b) …may make such charge in connection with the issue or use of the permit, of such amount and payable in such manner, as the authority by whom the designation order was made may by order prescribe."
"(1A) Subject to Parts I to III of Schedule 9 to this Act, where the authority by whom a designation order is made with respect to any parking place in Greater London…impose charges to be paid for vehicles left in a parking place designated by the order, those charges shall be prescribed by the designation order or by a separate order made by the authority."
"(1) A local authority shall keep an account of their income and expenditure in respect of parking places designated for which they are the local authority and which are—
(a) in the case of…the council of a London borough…parking places on the highway;
(2) At the end of each financial year any deficit in the account shall be made good out of the general fund…and (subject to subsection (3) below) any surplus shall be applied for all or any of the purposes specified in subsection (4) below and, in so far as it is not so applied, shall be appropriated to the carrying out of some specific project falling within those purposes and carried forward until applied to carrying it out.
(3) If the local authority so determine, any amount not applied in any financial year, instead of being or remaining so appropriated, may be carried forward in the account kept under subsection (1) above to the next financial year.
(4) The purposes referred to in subsection (2) above are the following, that is to say—
(a) the making good to the general fund…of any amount charged to that fund under subsection (2) above in the 4 years immediately preceding the financial year in question;
(b) meeting all or any part of the cost of the provision and maintenance by the local authority of off-street parking accommodation, whether in the open or under cover;
(c) the making to other local authorities, or to other persons of contributions towards the cost of the provision and maintenance by them, in the area of the local authority or elsewhere, of off-street parking accommodation, whether in the open or under cover;
(d) if it appears to the local authority that the provision in their area of further off-street parking accommodation is unnecessary or undesirable, the following purposes—
(i) meeting costs incurred, whether by the local authority or by some other person, in the provision or operation of, or of facilities for, public passenger transport services, and
(ii) the purposes of a highway or road improvement project in the local authority's area
(e) in the case of a London authority, meeting all or any part of the cost of the doing by the authority in their area of anything—
(i) which facilitates the implementation of the London transport strategy, and
(ii) which is for the time being specified in that strategy as a purpose for which a surplus may be applied by virtue of this paragraph;
(f) in the case of a London authority, the making to any other London authority of contributions towards the cost of the doing by that other authority of anything towards the doing of which in its own area the authority making the contribution has power—
(i) to apply any surplus on the account required to be kept under subsection (1) above; or
(ii) to incur expenditure required to be brought into that account.
"(1) It shall be the duty of every local authority upon whom functions are conferred by or under this Act, so to exercise the functions conferred on them by this Act as (so far as practicable having regard to the matters specified in subsection (2) below) to secure the expeditious, convenient and safe movement of vehicular and other traffic (including pedestrians) and the provision of suitable and adequate parking facilities on and off the highway…
(2) The matters referred to in subsection (1) above as being specified in this subsection are—
(a) the desirability of securing and maintaining reasonable access to premises;
(b) the effect on the amenities of any locality affected and (without prejudice to the generality of this paragraph) the importance of regulating and restricting the use of roads by heavy commercial vehicles, so as to preserve or improve the amenities of the areas through which the roads run;
(bb) the strategy prepared under section 80 of the Environment Act 1995 (national air quality strategy);
(c) the importance of facilitating the passage of public service vehicles and of securing the safety and convenience of persons using or desiring to use such vehicles; and
(d) any other matters appearing to the local authority to be relevant."
"(1) Powers conferred on a local authority may be exercised for the public purpose for which the powers were conferred and not otherwise. A very clear statement of this principle is to be found in Wade & Forsyth, Administrative Law, 8th ed. (2000), pp 356-357. The corresponding passage in an earlier edition of that work was expressly approved by Lord Bridge of Harwich in R v Tower Hamlets London Borough Council, Ex p. Chetnik Developments Ltd  AC 858, 872:
"Statutory power conferred for public purposes is conferred as it were upon trust, not absolutely – that is to say, it can validly be used only in the right and proper way which Parliament when conferring it is presumed to have intended."
The principle is routinely applied, as by Neill LJ in Credit Suisse v Allerdale Borough Council  QB 306, 333 who described it as "a general principle of public law"."
"No statutory power is of unlimited scope. The discretion given by Parliament is never absolute or unfettered. Powers are conferred by Parliament for a purpose, and they may be lawfully exercised only in furtherance of that purpose: "the policy and objects of the Act" in the oft-quoted words of Lord Reid in Padfield v Minister of Agriculture, Fisheries and Food  AC 997, 1030. The purpose for which a power is conferred, and hence its ambit, may be stated expressly in the statute. Or it may be implicit. Then the purpose has to be inferred from the language used, read in its statutory context, and having regard to any aid to interpretation which assists in the particular case. In either event, whether the purpose is stated expressly or has to be inferred, the exercise is one of statutory interpretation."
"Taxes are imposed upon subjects by Parliament. A citizen cannot be taxed unless he is designated in clear terms by a taxing Act as a taxpayer and the amount of his liability is clearly defined."
"They were made contrary to the Bill of Rights. They were an attempt to levy money for the use of the Crown without the authority of Parliament: and that is quite enough to damn them: see Attorney-General v Wilts United Dairies Ltd (1921) 37 TLR 884; (1922) 38 TLR 781." (per Lord Denning at 652).
" the Council's interpretation of section 111(1) [Local Government Act 1972] would allow it to charge for the performance of every function, both obligatory and discretionary, which provided a service….Such a construction of the subsection cannot possibly be justified, and I say this before even considering the point that, in the absence of express statutory authority, the power to charge can only be implied, in the words of Atkin LJ in Attorney-General v Wilts United Dairies Ltd, 37 TLR 884, 886, "as necessarily arising from the words of a statute".
He added, at 75B:
"A further point which commended itself to the Court of Appeal … was the argument that, since the council was not obliged to provide the service in question, it could state on a "take it or leave it" basis that it was willing to provide it for a reasonable fee, as if entering into a contract. I consider this to be an untenable proposition which, if correct, would justify a local authority in charging for any discretionary service, but which in reality is in conflict with the second principle enunciated by Atkin LJ in Attorney-General v Wilts United Dairies Ltd, 37 TLR 884, 887 (already cited)" ["It makes no difference that the obligation to pay the money is expressed in the form of an agreement. It was illegal for the Food Controller to require such an agreement as a condition of any licence…"]
"The revenue which local authorities raise for themselves consists partly of miscellaneous receipts such as rents, fees and charges for services. But, in addition, local authorities have long had limited powers of taxation….Today the non-domestic rate and council tax are the primary sources of locally raised tax revenue for local authorities. In addition local authorities are in receipt of large subsidies from the central government…"
"it was common ground in the light of inter alia R v Manchester CC ex parte King (1991) 89 LGR 696 that the Council was not entitled to make a profit from the licensing regime."
"What can lawfully be taken into account in considering whether to introduce a controlled parking zone, and if one is to be introduced, in considering what charges should be imposed?"
"Doing this makes clear that the Act of 1984 is not a fiscal measure. It contains no provision which suggests that Parliament intended to authorise a council to raise income by using its powers to designate parking places on the highway and to charge for their use. To adapt words used by Nolan LJ in Reg. v Manchester City Council, Ex parte King (1991) 89 LGR 696, 712, had this been the intention of Parliament the extent of the fund-raising powers conferred on the council would be enormous, since they have a monopoly over the granting of permits for on-street parking within their area and would have golden opportunities to augment their revenue. The Act of 1984 makes provision for crossings, playgrounds, parking places both off and on the street, traffic signs, speed limits, bollards and other obstructions. All its provisions, leaving aside section 55(4) for the moment, are concerned in one way or another with the expeditious, convenient and safe movement of traffic and the provision of suitable and adequate parking facilities on and off the highway. This is reflected in the wording of section 122(1). There is its policy; there are its objects."
"Mr Cran's submission is much simpler: it is that in setting charges the on-street parking account must be looked at on its own; section 55(4) only comes into play if there happens to be a surplus at the end of the year.
This too has its attractions, not just of simplicity, and I am persuaded that it is right. Mr Hockman's submission leads inevitably to a balancing exercise that leaves undesirable scope for argument. Further, it does not follow that, because section 122(1) refers to the exercise of the 'functions conferred' on local authorities by the Act, every such function must be exercised with reference to every factor which might, however indirectly, secure the expeditious, convenient and safe movement of traffic. One sees that the encouragement of the provision of off-street parking facilities (by which must be meant privately financed facilities) is one of the matters to which section 45(3) requires the local authority to have regard. Section 45(3) is not directed to the determination of charges, only to the determination of what parking places are to be designated. It may perhaps also be said that Mr Cran's interpretation pays more attention to the word 'surplus', which implies an excess and tends to suggest an excess over that which is required.
If Mr Hockman were right in the far-reaching effect which his submission gives to section 122(1), it would logically follow that a local authority could take into account the matters referred to in section 55(4) not only when setting its charges but also when deciding whether or not to make a designation order. Yet, looking at the Act as a whole, it is difficult to believe that Parliament intended, for example, that the desirability of funding concessionary fares for the elderly and disabled, or the desirability of building an underpass, should be taken into account in deciding whether or not to designate parking places, and Mr Hockman has not gone so far as to suggest that this conclusion would be wrong. On his interpretation of the provisions, one would have to say that concessionary fares could lawfully be taken into account but reasonableness required that the weight to be given to them should be nil.
By contrast Mr Cran's submission gives full recognition to the fact that the Act of 1984 is not a revenue raising Act. Where there is ambiguity the citizen is not to be taxed unless the language of the legislation clearly imposes the obligation.
By analogy, if not indeed direct application, I conclude that the difficulties of interpretation presented by these provisions must be resolved by adopting the narrower construction for which Mr Cran contends: it was the intention of Parliament that local authorities, in determining charges to be made in pursuance of the designation of parking places, should not have regard to the manner in which section 55(4) of the Act of 1984 would permit any resulting surplus to be spent. And manifestly the same would apply to the decision whether or not to make a designation order."
I agree with McCullough J's interpretation of the statutory provisions, and their purpose. Having regard to the narrow interpretation which the courts must apply in cases where taxes or fees are imposed, I do not consider that the Defendant was authorised to exercise the charging power in section 45(2)(b), having regard to the objects in section 122, for the purpose of funding the wider transport purposes listed in section 55(4). Expenditure on section 55(4) purposes is only permitted where there is a surplus in the SPA. As McCullough J said, at 364H, use of the term 'surplus' indicates an excess beyond the amount required.
"12 I am content, as were the parties (save in one respect for the defendant), to follow McCullough J.'s construction and interpretation of the statutory provisions. Section 45 is plainly not intended to provide a general revenue raising power. It must be exercised for the statutory purposes set out in s.122 , namely, "to secure the expeditious, convenient and safe movement of vehicular and other traffic (including pedestrians) and the provision of suitable and adequate parking facilities on and off the highway". If there is not a statutory justification for the exercise of powers, then the fact that they will raise revenue through charging will not render them compliant. I also agree with McCullough J. that the statutory purpose of providing "suitable and adequate parking facilities on and off the highway" applies to the designation of parking places on and off the highway. However, s.45 provides, without qualification, that the authority may designate parking places on-street, with or without charges and the production of a surplus is specifically contemplated by s.55 . Accordingly, as it seems to me, the authority is not bound, when setting a charge, to reflect only the immediate statutory purpose of providing sufficient on-street parking or of paying for it. As McCullough J. recognised in Cran, charges may need to be set at a level which has the desired effect, namely to ration the availability of on-street parking with the intention of encouraging the use of off-street parking (which is one of the matters to be considered under s.45(3)). Furthermore, s.45 provides an authority creating a charging scheme with wide powers to differentiate between users of on-street parking facilities, vehicles and periods for charging.
13 Ms Lieven QC, for the defendant, sought to support the Secretary of State's guidance of August 1992 ( above) to the effect that raising revenue may be a secondary purpose of the exercise of the s.45 power. In my view, when designating and charging for parking places the authority should be governed solely by the s.122 purpose. There is in s.45 no statutory purpose specifically identified for charging. Charging may be justified provided it is aimed at the fulfilment of the statutory purposes which are identified in s.122 (compendiously referred to by the parties as "traffic management purposes"). Such purposes may include but are not limited to, the cost of provision of on-street and off-street parking, the cost of enforcement, the need to "restrain" competition for on-street parking, encouraging vehicles off-street, securing an appropriate balance between different classes of vehicles and users, and selecting charges which reflect periods of high demand. What the authority may not do is introduce charging and charging levels for the purpose, primary or secondary, of raising s.55(4) revenue. In this aspect too, I agree with McCullough J.'s interpretation of the statutory intention."
"At the commencing of the submissions made on behalf of the Claimant by Mr Coppel AC, it was a repeated complaint that the budgeting for a surplus was evidence of an improper purpose. I disagree, and in the course of his submissions Mr Coppel appeared to concede that there was nothing to prevent budgeting for a surplus provided that the designation of parking spaces and the decision to charge were justifiable in pursuit of the s.122 purposes. It follows, in my view, that the authority's decision-making process should be examined for the application of the statutory purposes. The mere fact that the likelihood of a surplus was recognised or that the mandatory application of a surplus under the terms of s.55(4) was acknowledged, is not determinative of the legitimacy of the parking orders."
"The claimant set out to establish that the authority had an ulterior motive for the introduction of charging, namely the generation of revenue. This argument the claimant seeks to justify by demonstrating that from the outset the authority had budgeting for a surplus of income over expenditure. …It is plain from the documentary evidence that the objective of the authority was to make the improvement of parking facilities for motorcyclists self-financing. It is not suggested that this was an improper objective. As originally conceived the scheme would provide a comparatively modest year on year surplus. In my judgment, budgeting for a modest surplus does not render the scheme ultra vires, nor does it, of itself, comprise evidence of ulterior motive. It was, and is, accepted by the authority that charging measures may not be introduced for the purpose of increasing, either its general income, or its income to be applied for transport policy purposes. The obvious consequence of the unexpected size of the surplus produced by the experimental orders was that the charge had been set too high and it was, accordingly, reduced. Having regard to the underlying objectives of managing demand and balancing the interests of different categories of motorists, it seems to me that this was an appropriate response."