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You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Luton Borough Council & Nottingham City Council & Ors, R (on the application of) v Secretary of State for Education [2011] EWHC 217 (Admin) (11 February 2011) URL: https://www.bailii.org/ew/cases/EWHC/Admin/2011/217.html Cite as: [2011] EWHC 217 (Admin), [2011] ELR 222, [2011] ACD 43, [2011] BLGR 553 |
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QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
THE QUEEN on the application of (1) LUTON BOROUGH COUNCIL & NOTTINGHAM CITY COUNCIL (2) WALTHAM FOREST LONDON BOROUGH COUNCIL (3) NEWHAM LONDON BOROUGH COUNCIL (4) KENT COUNTY COUNCIL (5) SANDWELL METROPOLITAN BOROUGH COUNCIL |
Claimants |
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- and - |
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THE SECRETARY OF STATE FOR EDUCATION |
Defendant |
____________________
Miss JEMIMA STRATFORD QC and Mr OLIVER JONES (instructed by London Borough of Waltham Forest Legal Services)
Mr PETER OLDHAM QC and Mr TOM CROSS (instructed by Dickinson Dees LLP) for London Borough of Newham
Mr HARRY MATOVU QC and Mr TONY SINGLA (instructed by Kent County Council Legal and Democratic Services)
Mr NIGEL GIFFIN QC and Ms RACHEL KAMM (instructed by Bevan Brittan LLP) for Sandwell Metropolitan Borough Council
Mr JAMES GOUDIE QC, Mr CLIVE SHELDON and Mr ROBIN HOPKINS (instructed by The Treasury Solicitor) for the Secretary of State for Education
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Crown Copyright ©
Mr Justice Holman:
The essential issue
The BSF programme and how it operated: a very simplified summary
The situations of the claimants in outline
The new government and the statements of the Chief Secretary to the Treasury
The decision and announcements of the Secretary of State
"I have therefore concluded that where financial close has been reached on a particular LEP, then the agreed set of projects under that LEP should go ahead. This reflects the financial negotiations and contracts that have been signed. This means that even where financial close has not been reached on particular school projects within that LEP, they should nonetheless go ahead where formally agreed as part of the creation of the LEP.
Where financial close has not been reached, I am clear that projects should stop as part of the ending of the BSF programme. In particular, I do not wish to allow the creation of new area-wide exclusivity agreements over many years with a single contractor."
"This is the point where contracts are signed between the promoting authority and the private sector partner for the creation of the LEP together with two or more of the first schools to be delivered (known as 'sample schools'). There are further 'closes' at school level during the life of the LEP. Approval is given after evaluation of a final business case and at this point local authorities receive a confirmation of BSF funding."
"66. The Secretary of State formed the view that the option of funding projects in a second or further wave where OBC had been granted after 1st January 2010 was inconsistent with the government-wide approach to the funding of projects approved between the start of the calendar year and the date of the General Election. Having discussed this issue with the Chief Secretary to the Treasury, the Secretary of State considered that there was no justification for departing from the approach taken by his ministerial colleagues.
67. When assessed against the tests set down in the Chief Secretary to the Treasury's instruction to members of Cabinet of 17th May 2010, the Secretary of State formed the view that these projects were not affordable, delivered questionable value for money, and did not remain genuine priorities for the Government. Furthermore, the Secretary of State was satisfied that ceasing further wave projects where OBC approval had been granted since 1st January 2010 was unlikely to result in greater expenditure to the public purse than if funding was continued. In other words, the Secretary of State was of the view that the cost to local authorities of meeting potential liabilities to private sector partners was considerably less than the cost of continuing to fund all of the projects that had obtained OBC approval."
"While I recognise that the ongoing cost of projects in contract imply a level of funding commitments, I could not agree to a specific number at this stage ahead of your Department's Spending Review Settlement. We therefore agreed an approach to manage down the costs to a bare minimum in the three areas that I set out later in this letter The DfE will need to manage costs of any BSF and Academy commitments and risk within its final capital settlement . To achieve the scale of capital savings necessary, the DfE will need to cancel projects that are now being frozen "
The effect on the claimants and the grounds of challenge
i) A challenge to the rationality of the decision as a whole;
ii) A submission that by adopting the "rules based" approach that he did, the Secretary of State unlawfully fettered his discretion under the Education Act 2002;
iii) A challenge that, even if otherwise rational, the decision breached substantive legitimate expectations of each of the claimants;
iv) A challenge that, additionally or alternatively, the decision making process breached a legitimate procedural expectation of consultation, as the claimants were not consulted before the decision was taken;
v) A submission that in reaching and applying the decision, the Secretary of State failed to discharge statutory duties under the equality legislation.
Rationality
" the Secretary of State is exercising a broad discretionary power in a social, economic and political context. He has to balance a number of complex, and perhaps conflicting, social and economic variables in order to determine what he believes is the fair, effective and efficient solution to the central issue in question It is trite law that this court must be cautious in interfering with such an exercise of discretionary power, unless there are solid legal reasons for doing so, and must not allow itself to become an umpire of a social and economic controversy that has been settled by due political process. " (my emphasis)
Fettering discretion
"14 (1) The Secretary of State . may give, or make arrangements for the giving of, financial assistance to any person for or in connection with any of the purposes mentioned in subsection (2)."
Those purposes are very wide and general ones, and include "the provision of education or educational services". By section 15, "financial assistance" includes "grants".
"61. In setting the framework for his decision-making, the Secretary of State was clear that the approach had to be based on general principles, and not based on the specific arrangements of every affected BSF project. The Secretary of State did not wish to pick 'winners', being petitioned on a school-by-school basis and required to arbitrate between the merits of the claims of different local authorities or different projects (whether by reference to state of development or to the needs of the particular area). He considered that such an approach would be both unacceptably time-consuming and potentially subjective and thus unfair."
"The general rule is that anyone who has to exercise a statutory discretion must not "shut his ears to the application." I do not think there is any great difference between a policy and a rule. There may be cases where an officer or authority ought to listen to a substantial argument reasonably presented urging a change of policy. What the authority must not do is to refuse to listen at all. But a Ministry or large authority may have had to deal already with a multitude of similar applications and then they will almost certainly have evolved a policy so precise that it could well be called a rule. There can be no objection to that, provided the authority is always willing to listen to anyone with something new to say "
"An authority with broad discretions would be acting arbitrarily if it decided one case after another with no discernible rationale or consistency between applicants. It is to enable a public authority to guard against such arbitrariness that the law recognises the wisdom and acceptability of having a policy for the exercise of administrative discretions But public law is also jealous to guard the discretion which a permissive power carries with it, and discretion is negated if any inflexible rule is adopted for the exercise of the power. That is why British Oxygen lays down principles which permit, and indeed encourage, the adoption of a policy but forbid the decision-maker to allow the policy to ossify
What is required by the law is that, without falling into arbitrariness, decision makers must remember that a policy is a means of securing a consistent approach to individual cases, each of which is likely to differ from others. Each case must be considered, therefore, in the light of the policy but not so that the policy automatically determines the outcome."
"According to [the] criteria determined by the Secretary of State, Newham's wave 5 projects will not go ahead through BSF PfS is not able to review the application of the Secretary of State's decision on specific cases and all future capital investment and allocations to Newham will be determined by the outcome of the capital review [viz the still awaited James review]."
Substantive legitimate expectation
"The more the decision challenged lies in what may inelegantly be called the macro-political field, the less intrusive will be the court's supervision. More than this: in that field, true abuse of power is less likely to be found, since within it changes of policy, fuelled by broad conceptions of the public interest, may more readily be accepted as taking precedence over the interests of groups which enjoyed expectations generated by an earlier policy."
"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 the promise then the authority is abusing its powers."
"Where an authority is considering whether to act inconsistently with a representation or promise which it has made and which has given rise to a legitimate expectation, good administration as well as elementary fairness demands that it takes into account the fact that the proposed act will amount to a breach of the promise. Put in public law terms, the promise and the fact that the proposed act will amount to a breach of it are relevant factors which must be taken into account."
"BSF Wave 6a OBC Approval
I am pleased to inform you that consideration of the Outline Business Case (OBC) for the Luton Wave 6a OBC BSF project has been completed and that the OBC has been approved. OBC approval demonstrates that the project is robust and is prepared for procurement, and I would like to congratulate you and your team for reaching this significant milestone.
PfS will work with the LA and the LEP during the stage 1 and stage 2 processes up to FBC. During that period the LA and LEP will need to show evidence of value for money in terms of the costings of the facilities and also continuous improvement in terms of costings as set out in the SPA and KPI requirements. As part of this process the LA should engage with PfS to compare the LEP costings with those of the PfS Benchmarking System.
Conditions Precedent
Approval has been granted with the following Conditions Precedent:
That the statutory consultation process is satisfactorily completed by the end of May 2010.
Funding
The total funding approved is £43,688,759 plus £4,579,100 ICT funding. A list of schools, the opening dates you have committed to and the status of the approved funding is set out on the table below."
"Whilst we are of course sympathetic to matters arising out of your control that lead to cost increases, you should assume this level of funding to be fixed and that no further central funding will be available for these schools.
Please note that a location factor of 1.07 has been used to calculate the funding and the Public Sector tender price indices used to calculate inflation are included in your Funding Allocation Model. Funding for your non-sample projects remains indicative and will be subject to adjustment at Stage 0 for changes in the location factor and inflation forecasts.
Moving Forward
You will continue to be supported by PfS, and your main point of contact is the Project Director Mark Friday.
Please note that if the project is changed in any significant way from the agreed OBC, you should inform your PfS Project Director. You may be required to obtain the Department's written consent to the proposed changes, to ensure the project continues to be supported. PfS will assist and advise you if this is necessary.
Finally, I wish you every success with your project and look forward to receiving the first of your Final Business Cases, which will be expected in August 2010.
Yours sincerely,"
Procedural legitimate expectation and the duty to consult
"It is important to have in mind that while this area of the law is pre-eminently concerned with fairness we are obliged, sitting here, to pay due respect to another principle: the principle of legal certainty. It would be intolerable if our jurisprudence did not make it reasonably clear to the public administrators when the law obliges them to consult persons or bodies affected by their decisions, and when it does not."
That proposition must apply with especial force in relation to democratically elected ministers of the highest rank as it does to administrators.
"But the court will (subject to the overriding public interest) insist on such a requirement, and enforce such an obligation, where the decision maker's proposed action would be so unfair as to amount to an abuse of power, by reason of the way it has earlier conducted itself What is fair or unfair is of course notoriously sensitive to factual nuance 'the categories of unfairness are not closed, and precedent should act as a guide not a cage.'"
"Accordingly for 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 equality duties challenge
"76A(1) A public authority shall in carrying out its functions have due regard to the need
a) to eliminate unlawful discrimination and harassment, and
b) to promote equality of opportunity between men and women."
"71(1) Every body or other person specified in schedule 1A [which includes the Secretary of State] shall, in carrying out its functions, have due regard to the need
a) to eliminate unlawful racial discrimination; and
b) to promote equality of opportunity and good relations between persons of different racial groups."
"49A(1) Every public authority shall in carrying out its functions have due regard to-
a) the need to eliminate discrimination that is unlawful under this Act;
b)
c) the need to promote equality of opportunity between disabled persons and other persons;
d) the need to take steps to take account of disabled persons' disabilities, even where that involves treating disabled persons more favourably than other persons;
e) the need to promote positive attitudes towards disabled persons; and
f) "
"274. It is the clear purpose of section 71 to require public bodies to whom that provision applies to give advance consideration to issues of race discrimination before making any policy decision that may be affected by them. This is a salutary requirement, and this provision must be seen as an integral and important part of the mechanisms for ensuring the fulfilment of the aims of anti-discrimination legislation. It is not possible to take the view that the Secretary of State's non-compliance with that provision was not a very important matter. In the context of the wider objectives of anti-discrimination legislation, section 71 has a significant role to play."
i) The decision maker who has to take decisions that do or might affect disabled people (or persons of 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 exercise of 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 discharge of 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.
Other matters
(i) Sandwell; permission
(ii) Waltham Forest
(iii) OBC indicative approved schools
(iv) Newham; costs
Outcome
Final observations