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You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Scunthorpe United Football Club Ltd, R (on the application of) v Greater Lincolnshire LEP Ltd & Ors [2018] EWHC 3351 (Admin) (20 November 2018)
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Cite as: [2018] EWHC 3351 (Admin)

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Neutral Citation Number: [2018] EWHC 3351 (Admin)
Claim no CO/237/2018

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

20 November 2018

B e f o r e :

HH Judge Kramer
____________________

THE QUEEN on the application of
SCUNTHORPE UNITED FOOTBALL CLUB LIMITED Claimant
and
GREATER LINCOLNSHIRE LEP LIMITED Defendant
NORTH LINCOLNSHIRE COUNCIL
KMG CAPITAL MARKETS LIMITED
(a company registered in Cyprus)
MALTGRADE LIMITED Interested Parties

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Judgment: HH Judge Kramer

  1. This case concerns a challenge, by way of judicial review, by Scunthorpe United Football Club (the club) to a decision of the Greater Lincolnshire Local Enterprise Partnership (the LEP), made on 29th September 2017, concerning the grant of 1.9m to North Lincolnshire Council (NLC) for the construction of a road junction and roundabout to the west of Scunthorpe, currently lying on the line of the M 181, at what is referred to as the northern junction.
  2. The club is represented by Mr Roe QC and Mr Pennington-Benton, the LEP is represented by Mr Strachan QC and Mr Stedman Jones and NLC by Ms Hutton. The other interested parties, KMG Capital Markets Ltd and Maltgrade Limited, have been served but took no part in these proceedings.
  3. The evidence is to be found in the statements of Marcus Walker, dated 5th April 2018, which verifies the statement of facts, and his second statement, dated 1st October 2018, and the statements of Ruth Carver, a director of LEP, the defendant, dated 13th February 2018 and 10th July 2018 and Lesley Potts, head of economy and growth for NLC, dated 9th July 2018.
  4. Background and parties

  5. The claimant is a professional football club whose chairman is Peter Swann. The Defendant is a company limited by guarantee. Its members are the three local authorities serving Lincolnshire. The board is comprised of councillors from the member authorities and representatives from local businesses. The task of LEPs is to develop the economies of their regions. They compete nationally for funding from central government through "single local growth funds". They are responsible for investing such funds to deliver economic growth in their area in accordance with their Strategic Economic Growth Fund and Growth Deals signed between the LEP and Government. In the case of this LEP it is required to deliver 12,851 jobs and 1615 homes. For the period 2015/16 to 2018/19 it has received 98.7m of funds and for the period 2019/20 to 2020/21 is has been allocated 25m. LEPs are assessed annually by central government. The grant funding for the LEP is held by the local authority which releases payments to recipients at the request of the LEP. NLC is the local authority for Scunthorpe and its surrounds and has been awarded the 1.9m grant as a contribution towards the construction of the northern junction. The claimant challenges the lawfulness of the award and seeks an order that the decision to make the grant be quashed, or at the very least be declared unlawful. KMG Capital Markets Ltd is an investment vehicle which owns the land on which the northern junction is to be built and it proposes to build a business park to be used with the junction. Maltgrade Limited owns land further to the south on the M181 at which it is proposed that a terminal junction for the M 181 will, in due course, be built.
  6. Broad outline

  7. The claimant's primary case, put shortly, at grounds 2 to 4 of the statement of facts and grounds, is that the LEP did not give adequate consideration to the club's rival proposal to use the grant to develop a junction elsewhere, referred to as the southern junction, as part of its scheme to build a new football stadium at that location and that, in any event, the LEP did not adequately investigate the council's proposal; it argues that insufficient consideration was given to the outputs which each scheme could produce and in what time such outputs could be achieved. As a quite separate ground, ground 1, it asserts that LEP's decision was procedurally unfair because it was not informed of the detail of the NLC proposal.
  8. The defendant's case, in summary, is that this is a veiled attempt to make a merits challenge dressed up as a challenge on the ground of irrationality. The LEP was faced with rival bids which it investigated adequately by commissioning an independent expert report, considering its factual content and recommendations and reaching a conclusion which was far from irrational, indeed the defendant would say it was clearly the reasonable course to take, in the circumstances. The relevant circumstances relied upon were that preparatory works for the NLC bid were well advanced and it appeared that suitable outputs would be achieved within the time required by the grant whereas the club's proposal was at a more gestative phase and its delivery was highly speculative. Thus it was able to deal with the uncertainty as to the production of outputs by the NLC bid by making a decision in principle to award the grant but setting out conditions, including the confirmation of outputs which had to be fulfilled before the making of a final decision, and did not need to look in detail at potential outputs from the club's proposal.
  9. It denies there was procedural unfairness as there is no obligation on an LEP to inform rival bidders of the details of other bids; in any event the club knew the general nature of the NLC bid, namely that the northern junction was to be built in association with the development of a business park.
  10. The LEP also argue that relief should be refused, even if the allegations relied upon are made out, as this dispute is academic because first, the chairman of the club issued a public statement that it was not going to pursue its proposal to build its stadium at the southern junction, secondly, should it change its mind, even if its decision was quashed there would no longer be time for the claimant to construct its stadium at that junction within the period required by the grant, thirdly the claimant delayed in issuing the claim till the last day of the 3 month maximum period for making these challenges, fourthly the complaint has been overtaken by the making of the final decision to grant, in July of this year, which is not subject to challenge in these proceedings and fifthly it argues that whatever valid criticism there could be of the September 2017 decision it is highly likely that the outcome would not have been substantially different and I am thus bound to refuse relief by virtue of s.31 (2A) of the Senior Courts Act 1981. It also seeks to invoke s.31(6) as a reason for refusing relief.
  11. NLC, the first interested party, supports the arguments of the LEP. It highlights the planning obstacles faced by the club's scheme to demonstrate that the LEP's judgment as to whether it was likely to deliver any outputs in time was rational. It also points to changes in the case of the claimant as advanced in its skeleton argument and in its original grounds, most notably, as to the viability of the construction of the northern junction without the prior construction of the southern junction.
  12. History

  13. The events leading up to the impugned decision start with the creation of the Lincolnshire Lakes Area Action Plan (the Action Plan), which is part of the Development Plan for this part of Lincolnshire and was formulated by a process of consultations starting in 2013 and culminating in its adoption on 10th May 2016, although the preparation for the scheme started in 2002. This provides for the creation of the Lincolnshire Lakes development, a 1.2billion plan consisting of the creation of 5 lakes and 6 villages on land between the river Trent and the West of Scunthorpe with up to 6000 homes, 23 hectares of strategic mixed area, such as for retail, offices and leisure, and areas allocated for natural and semi greenspace. The Action Plan followed rigorous assessment of flood risk management and drainage and transport. It envisaged that the M 181 would terminate at the southern junction and will provide a new link to the existing Scunthorpe urban area. The M 181 to the north of that junction was to be de-trunked to where it met the northern junction, which would provide a second western access to Scunthorpe and assist in relieving traffic capacity issues in part of the town. In their preparation of the Area Action Plan NLC investigated what infrastructure would be required to bring forward development within each village and concluded that if the northern junction was to come forward without the southern junction the 23 ha strategic mixed use area, 2.15ha district centre and villages 1, 2 and 5 could be delivered.
  14. In 2014 NLC was successful in a bid to the LEP for 2.9m to improve Berkley Circle in Scunthorpe. Consultation revealed that the delivery of the Lincolnshire Lakes infrastructure would negate the need for the redevelopment of Berkley Circle. This, together with the loss of 900 jobs at Tata Steel in Scunthorpe and thus a desire for short and medium term job creation, led NLC to the reallocation of the Berkley Circle money as to 1m to Normanby Enterprise Park and 1.9m to the construction of the northern junction. By this stage the northern junction had already been the subject of an application for planning permission, on 19th August 2013, and KMG had an outstanding application for outline planning permission for the adjacent business park, also made in 2013.
  15. It is a feature of the grant that it can only be awarded if it produces economic development which is evidenced by the production of some tangible economic benefit such as jobs or buildings. Furthermore, some of the outputs have to be delivered within the period of the grant, which in this case was by the end of the financial year 2020/2021. Prior to the involvement of the club with the northern roundabout scheme the output linked to the NLC scheme was the KMG business park.
  16. In 2015, Scunthorpe United came forward with proposals to build a football stadium near the northern junction on land owned by KMG for which it was granted hybrid planning permission on 9th March 2016; the stadium would have replaced the business park. Also in March 2016, NLC had applied for the 1.9m for the northern junction. On 4th May 2016 the LEP replaced NLC with the club as applicant for the scheme to ensure that the spending of the grant was supported by economic outputs, which on the club's scheme was the stadium and jobs it would provide. NLC could not rely upon the construction of new homes enabled by the northern junction because these had already been counted to support funding for flood defences and outputs cannot be double-counted, nor could it rely on the business park as that was replaced by the football stadium.
  17. The LEP recommended that the claimant's application for the 1.9m grant for the northern junction be approved subject to conditions, one of which was confirmation that the club owned the land. A draft contract was provided to the claimant by the LEP on 23rd August 2016 but it was never completed and the confirmation as to ownership was not forthcoming as KMG and the club did not agree terms for the transfer of the land. Shortly prior to this turn of events, in July 2016, full planning permission was granted for the northern junction and outline permission, which had been pursued by KMG, for the business park, the latter being subject to a requirement that KMG enter into a s.106 agreement relating to the construction of the junction.
  18. On 25th April 2017 the claimant informed the defendant it was not proceeding with the stadium at the northern junction. The following day NLC's chief executive asked the claimant to novate the grant for the junction to the council, although as the claimant had no right to the grant at that stage he could not have been using novate in the technical legal sense. Thereafter it sought to pursue its original bid for the grant to construct the northern junction.
  19. The claimant hosted a meeting with the LEP on 18th May 2017 where the club asked that the 1.9m be used to contribute to the construction of a stadium to be built off the proposed southern junction. They said that the club had entered into discussions with the relevant landowner, Maltgrade Limited, about a land transfer of this site. Mrs Carver was at the meeting for the defendant. The claimant alleges that she agreed to the use of the grant in this way, a fact which she disputes for what is, on the face of it, a good reason. The claimant does not seek to rely upon the existence of such an agreement and thus it is not a dispute I need to resolve. There then followed email exchanges between Mr Walker, for the claimant, and the LEP which Mr Strachan, for the defendant, criticises as being potentially misleading but again, not much turns on that. The upshot is that the LEP was faced with competing bids for the 1.9m grant funding. Its response was to commission an independent report from a suitable expert surveyor, Rachel Lister of Thomas Lister.
  20. Ms Carver informed Mr Walker of the instruction of Ms Lister by an e-mail dated 12th July 2017 and said she was to undertake an assessment of the current northern and southern junction proposals, that she would speak to those involved in the Lakes Project and contact him to ask specific questions and request information. Ms Lister made enquiries of the claimant by emailing Mr Walker a list of questions which he answered by an email dated 20th July 2017. In his email he said that Highways England, the authority responsible for the road, had said that the northern junction could not be brought forward without the development of the southern junction, that without the southern junction work on the Lincolnshire Lakes project could not proceed, but that the claimant's scheme would produce 4,256 homes, a yachting lake and marina as well as the football stadium providing or safeguarding several hundred jobs. His response also asserted that Highways England had detailed designs and costings for the southern junction and would submit planning consent imminently with the works to begin in January 2018, subject to receipt of 40% private funding, which could include the 1.9m grant. He forecast that the junction could be completed by January 2019.
  21. Ms Lister made enquires of other parties with a stake in the Lakes scheme at a meeting on 25th September 2017, including Highways England, the Homes and Community Agency, which provides loans for house building, NLC and the relevant department of state. At this meeting she was informed by Highways England that the construction of the southern junction could take 2.5 years and there was more than one landowner involved. Further, it was possible for the northern junction to be used as a temporary terminating point for the M 181 and any redesign for this purpose would take about 6 months. Other factors were identified by the attendees which favoured the construction of the northern junction.
  22. Ms Lister produced a report dated 27th September 2017 which, together with a paper from the LEP officers, was placed before the LEP on 29th September 2017 when it made the decision the subject of this application. In essence, the report identified that if the northern junction were to proceed the output would be the business park, that the scheme was well advanced in that it had planning permission and funding, provided it received the grant, and that the objection concerning its use as the terminal junction could be overcome. As regards the southern junction, it pointed out that there were major issues to overcome as feasibility studies and site surveys were yet to be done as a precursor to the scheme design and the procuring of planning permission, which would have an impact on the implementation of the scheme, and that even if these issues could be resolved the junction could not be completed for at least 3 years.
  23. The report also pointed out that the construction of the stadium at the southern junction was contrary to the development plan as it would require relocating one of the lakes. Further, full funding for the junction had yet to be secured, the suggested cost was 23m, the use of the 1.9m was essential to the funding but it could not be used for that purpose by the claimant as the 40% of the cost of the junction, which had to come from the private sector, could not include grant monies.
  24. The report recommended that the grant remain allocated to the northern junction subject to conditions, including requirements that there be written confirmation of outputs, that the scheme was deliverable as a non- terminating junction notwithstanding it might be temporarily used as such and that a programme for delivery be provided by NLC with key milestones and a quarterly drawdown of funding. The officer's report repeated some of the substance of the Lister report and followed its recommendation. It made particular reference to the absence of planning permission for the stadium at the new site and that discussions with the planning authority indicated that it would necessitate a redesign of the southern junction and redrawing of the flood risk strategy for the Lincolnshire Lakes, the risk that the southern junction proposal was also not viable due to the private funding required from sole developers and that the timescale for the completion of that scheme would make the delivery of outputs unachievable by the end of 2020/21.
  25. At its meeting on 29th September 2017, the LEP Investment Board, which comprised of a number of councillors and business representatives, stated that in January the Board had been asked to endorse "in principle" the re-allocation of the 2.9m for Berkley Circle and they now had to revise their decision due to the change in delivery partners due to the claimant not proceeding with the stadium development at the northern junction. It recorded that an external consultation was carried out to ensure a technically focussed impartial decision, that the planning authority did not support the claimant's alternative proposal (as to location) as it did not comply with the Area Action Plan, that the timescales produced by Highways England would make the delivery of subsequent outputs unachievable in the programme period, i.e. by 2020/21 and that NLC, as highway authority and the Housing and Communities Agency were keen to support the development of the northern roundabout as a priority. The board resolved to approve the grant of 1.9m to NLC subject to conditions as recommended by Ms Lister. The claimant was informed of the decision by an email dated 3rd October 2017.
  26. The claimant sent its letter of claim to the defendant on 4th December 2017. The defendant replied with its response and the Lister report on 18th December 2017. The claim was issued on 3rd January 2018. By this time, on 27th October 2017 and 2nd January 2018, Peter Swann of the claimant had announced in the press that the club had abandoned plans to build a new stadium but would redevelop its existing stadium instead; on 10th May 2018 it submitted to the NLC planning department a request for a screening opinion for the redevelopment of its existing stadium and the construction of 100 apartments.
  27. In the period 19th February to 8th May 2018 the information required to satisfy the 5 conditions of the grant was provided to the LEP. NLC submitted its detailed business case for the grant on 23rd April 2018. Following receipt of detailed Bills of Quantities in March 2018 the LEP commissioned a further report from Thomas Lister, which is dated 25th April 2018, dealing with a financial appraisal of the scheme.
  28. Permission to seek judicial review was given on 16th May 2018. The grant seems to have taken some time to reach the defendant as on 25th May 2018 it received its officer's report, which was supportive of the scheme, and approved the funding up to contracting stage but subject to the court's decision as to permission. On 28th June 2018 the LEP's solicitors wrote to the claimant's solicitors informing them of the 25th May decision and indicating that as permission for review had been granted the LEP proposed to take a final decision on the grant at its meeting on 20th July 2018. They asked for any further representations from the claimant on both the defendant's scheme and their proposals by 12th July 2018. This prompted the defendant's officer to advise that now that it was known that permission for judicial review had been granted the LEP would need to make a final decision as to whether to proceed to contracting stage, taking into account the then position with the scheme and the claimant's grounds of challenge. This was set out together with information and advice from the officer in a lengthy briefing paper to the LEP for the 20th July 2018 meeting. The claimant's solicitor's response did not provide further representations on either proposal but it did make clear that as far as the claimant was concerned it had abandoned the plans for the stadium on the Maltgrade land as it had not received the grant.
  29. On 13th July 2018 the LEP sent the claimant's solicitors the officer's report for the meeting due for 20th July asking for any representations by 19th July 2018. The report supported the making of the grant to NLC and advised against waiting until the outcome of the judicial review as the delay could jeopardise the ability to use the growth fund which had to be spent by the end of 2020/2021. The claimant's response dated 19th July made a number of points unrelated to the merits of either proposal but complained that they did not have sufficient time to put together meaningful submissions.
  30. The grant was awarded to NLC unconditionally at the meeting on 20th July 2018 and the claimant notified of this by a letter dated 6th August 2018.
  31. As at the date of the hearing a contractor has been chosen to construct the northern junction and the works are ready to proceed on signing the contract, which is awaiting among other things the outcome of these proceedings.
  32. The Law

  33. I am concerned, principally, with a challenge to the September 2017 decision on the grounds of Wednesbury unreasonableness: Associated Provincial Picture House Ltd v Wednesbury Corporation [1948] 1 KB 223. Mr Strachan asks that I adopt a light touch approach in reviewing the decision on the grounds that LEP was making a form of political decision as to the distribution of public money. The question he says I should ask in examining the decision is, was it "so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the questions to be decided could have arrived at it?" a test taken from the speech of Lord Diplock in Council for the Civil Service Unions v Minister of the Civil Service [1985] AC 374 at 410G and adopted in R (D) v Parole Board [2018] 3 WLR 829 at paragraph 116. He went further, in reliance on R v Parliamentary Commissioner, Ex p. Dyer [1994] 1 WLR 621, arguing that the decision was so similar to a political decision on economic policy that it would not be open to challenge on the grounds of irrationality short of extremes of bad faith, improper motive or manifest absurdity.
  34. Mr Roe, too relies on ex. P Dyer as an example of a case where there are constitutional reasons for a light touch approach. He argues that this case is very different on its facts and is one where the court should exercise enhanced, that is beyond the normal, scrutiny of the decision because in contrast with the example referred to in Dyer, ex p Hammersmith and Fulham, [1991] 1 A.C. 521 there is no democratic oversight of the LEP's decisions.
  35. Mr Strachan's answer to Mr Roe's point is that there is oversight of the LEP's decisions in that it is accountable to central government, which monitors its spending regularly and if it does not secure the outputs for which it is funded it will not receive further funding. Further, the members of the LEP are local authorities and many of the directors are councillors, all of whom are democratically accountable. More fundamentally, however, it seems to me that the fact that the circumstances in ex p Hammersmith and R (D) v Parole Board were such that the decisions in question justified light touch review does not establish that where such circumstances do not apply, the level of review must be especially rigorous unless the facts of the case, for example challenges involving human rights, justify such an approach. I do not accept the contrast Mr Roe draws with the ex p Hammersmith type of case is of much assistance.
  36. As was pointed out by Lord Cooke in Ex p Daly [2001] 2 AC 532 at para 32 there is a danger that the adoption of what may be described as high threshold tests before treating a decision as susceptible to judicial invalidation is that it may suggest that there are "degrees of unreasonableness and that only a very extreme degree" can justify the court's intervention. In R v The Chief Constable of Sussex [1999] 2 AC 418 Lord Cooke said, at 452:
  37. "When, in Secretary of State for Education and Science v. Tameside Metropolitan Borough Council [1977] AC 1014, the precise meaning of "unreasonably" in an administrative context was crucial to the decision, the five speeches in the House of Lords, the three judgments in the Court of Appeal and the two judgments in the Divisional Court all succeeded in avoiding needless complexity. The simple test used throughout was whether the decision in question was one which a reasonable authority could reach. The converse was described by Lord Diplock, at p. 1064, as "conduct which no sensible authority acting with due appreciation of its responsibilities would have decided to adopt." These unexaggerated criteria give the administrator ample and rightful rein, consistently with the constitutional separation of powers." That, or a similar test, is generally adopted in judicial review; for example see Boddington v British Transport Police [1999] 2 AC 143 where the test used was as to whether the decision was "within the range of reasonable decisions open to the decision maker" per Lord Steyn at 175 H. Indeed, that is the key question in all judicial review, insofar as the decision is justiciable at all. The adoption of high threshold tests is a way of identifying the appropriate intensity of review to fit the context in which the decision was made. Hence, the adoption of a light touch approach in cases where there is parliamentary scrutiny, such as the Hammersmith case, or where the decision is entrusted to a body because of its skills, experience and expertise, such as the Parole Board in R(D).

  38. The question which I am asked to determine is whether the decision in issue was unreasonable, and the test is that set out by Lord Cooke, namely, was the decision in question one which a reasonable authority could reach? There is no stand-out circumstance surrounding the context in which the LEP's decision was made which points to either a low or high intensity examination of its decision. That is not to say, however, that I should not take into account the fact that the LEP is made up of local politicians and business people for the reason that they have an appreciation as to local social and economic needs which others, including the court, do not share and thus the court would find it difficult to conclude that a decision which depended on such expertise was irrational. The same applies to such of their decisions as are polycentric where, as here, the LEP has a broad discretion as to policy and public interest and will have a far better appreciation of the knock-on effect of the making or setting aside of its decision. The question as to whether by taking account of these matters I am conducting a light touch or ordinary review is a matter of form but not substance.
  39. Mr Strachan and Ms Hutton both place reliance on R(Khatun) v Newham LBC [2005] QB 37 for the proposition that where there is no lexicon of considerations which it is expressly or impliedly bound to take into account it was for the decision maker, subject to Wednesbury review, and not the court, to decide what matters were relevant and to decide the manner and intensity of the inquiry to be undertaken. Mr Roe, when dealing with R(Khatun), said that the claimant's attack was that there were relevant facts known to the LEP but which were not considered, but it was clear from his later submissions that he was critical of the defendant for not making further investigation prior to reaching its decision of 29th September 2017. He did not dissent from the approach suggested in R(Khatun) and it is one I adopt.
  40. Finally, on the issue of unfairness both Mr Strachan and Ms Hutton submit, on authority, that simple unfairness is not a ground for judicial review. That is not disputed by Mr Roe. He, however, relies upon procedural unfairness. In this regard Ms Hutton referred me to R v Gaming Board se p Benaim and Khaida [1970] 2 QB 417 per Lord Denning at 430 C and Sheridan v Stanley Cole (Wainfleet) Ltd [2003] 4 All ER 1181 per Ward LJ at para 33. It is clear from both cases that the boundaries of procedural irregularity, or when the principles of natural justice are to apply, or whether a hearing is unfair are fact, and subject, specific.
  41. Contentions

    The claimant

  42. Mr Roe both in his skeleton and in argument dealt with grounds 2 to 4 of his challenge in a composite manner and I shall follow that approach.
  43. His first point can be summarised in this way. The LEP had to give consideration to the merits of the rival proposed outputs but they failed to do so. In the case of the defendant's scheme they knew no more than that a business park was proposed but they did not have details as to what outputs this would provide, or indeed whether the business park was sufficiently viable to produce the outputs. This was particularly important, on his case, because the claimant's witness, Mr Walker, says that KMG's earlier proposal for a business park was abandoned as it was not financially viable. The fact that the LEP dealt with the need for outputs from the NLC scheme by conditions may be a way of ensuring that the money was not spent until it was satisfied that there would be outputs, but is no answer to the complaint that the LEP was not in a position to judge the merits of the rival schemes, for at the point it did not know what the NCL outputs were. As regards the NLC's scheme's outputs, the LEP made no enquiry as to what these might be.
  44. The second point is that a further essential consideration in judging the two schemes was as to the time when they could be delivered. Mr Roe says that there was no consideration given to the timing of the NLC proposal whereas there was some evidence that the club's proposal would produce some outputs by April 2021 on the basis, he says, that the LEP concluded that the southern roundabout would take 2.5 years to build. He points to the evidence of Ruth Carver that the outputs justifying the grant did not all have to be provided by April 2021: all that was required was that some of the predicted outputs were provided and the money spent in that period. In this light he says that the absence of any assessment as to the time by which the club's scheme would produce outputs prevented the LEP from making a rational assessment of the merits of its scheme. He adds that if they were in doubt as to whether the claimant's scheme could provide a roundabout and outputs in time it could have dealt with this by granting it the award but imposing conditions as it did with the NLC bid.
  45. He deals with the point that at the time of the making of the decision the obstacles to his client's scheme were insuperable (his word, the defendants say formidable) by relying on Mr Walker's second statement in which he says that with ongoing discussion with NLC as planning authority, the planning objections, which related to the location of the new stadium by the southern junction, could have been overcome in a matter of days or at the most weeks. In any event, even if there were insuperable obstacles to building his client's stadium, that would not be a reason to award the grant to NLC in the absence of a sufficient assessment of the timing of its outputs. This is the fourth point in his skeleton.
  46. Mr Roe's third point was that as the northern junction could only act as a temporary junction for the M 181, the southern junction would have to be built at some stage anyway but this was not weighed in the balance when the decision was taken. He also says that it was factually incorrect to conclude that the 40% private contribution to the construction of the southern junction could not have included the 1.9m grant money.
  47. Finally, on the rationality point, Mr Roe says that this is not an academic claim, notwithstanding what Mr Swann has said in the past as to not moving to a new stadium, because Mr Walker has said that this may still be an option or the grant could be used in conjunction with current stadium redevelopment. In any event, there is a public interest in an unlawful grant award being struck down. As regards the argument that the claim has been overtaken by events, he says that the July 2018 decision, though now depicted as a complete review of the situation and a fresh decision, was no more than a confirmation of the earlier decision to grant with conditions in September 2017 and furthermore, when the July decision was made, the LEP were aware that his client's solicitors were saying that they did not have time to make representations. Although the club has not sought to strike down the July decision, he argues that as it results from a decision which was not lawfully taken that should not prevent the court, at the very least, granting a declaration as to the lawfulness of the September decision.
  48. Mr Roe accepts that unfairness of itself is not a ground for judicial review. He argues that it was unfair for the LEP not to give his client information about NLCs proposals so that they could make submissions about them. He does not suggest that this is a requirement of every grant bidding process but it was in this case because the NLC proposal involved the resurrection of the business park scheme by a body which was a member of the LEP. Whereas NLC would have a knowledge of his client's scheme by virtue of its planning function, there had been correspondence between Mr Walker and the planning department of the NLC about this in July 2017, and they should have been told what they were up against.
  49. That part of the claimant's pleaded ground 4 which appears to be a complaint about the provision of reasons to the claimant was not developed or pursued in argument.
  50. The Defendant

  51. Mr Strachan's response to the claim is that not only was the decision within the bounds of rationality but it was the right decision, albeit that he does not have to persuade me of the latter. He asked me to start with an overview as the applications appeared to the LEP when it made its decision. The LEP was facing rival bids. It commissioned a report from an independent expert who sought information and views from both bidders and other relevant parties, such as Highways England. It concluded that the northern junction bid was well advanced in that it had planning permission and funding, was ready to proceed and the output identified was a business park which had outline planning permission. In contrast, the claimant put forward an inchoate scheme for a junction which was yet to be designed and the subject of a feasibility study. It had no planning permission and the funding for the full scheme had not been identified. The output was a stadium for which no planning permission existed and would have great difficulty obtaining planning permission as its proposed siting contravened the development plan which had been approved just the previous year. In addition, if the stadium was to be built by the southern junction the LEP was informed that a new flood study would be required. Against that background the independent expert had cast substantial doubt as to whether the claimant's scheme could produce any outputs within the grant period but that the defendant's scheme was capable of so doing and this could be ensured by the grant being conditional upon the assurances she set out in her report.
  52. In reply Mr Roe indicated that, put in that way, looking at the decision overall, one could see why it might be said that it was not irrational, but that was to mischaracterise the challenge. The claimant's case invites the court to look at the way that the decision was reached, hence the concentration on the LEP's suggested failure to inform itself adequately as to the relative outputs and timings for the schemes.
  53. Dealing with the argument about the failure to ascertain and thereby compare relative outputs, Mr Strachan argues that there was no purpose in the LEP considering and weighing the relative benefits of the claimant's outputs where it appeared most unlikely that there would be any outputs from the southern junction scheme within the grant period. They were justified in coming to that conclusion in the light of the information in the Lister Report and their knowledge and expertise as councillors and local business people that planning permission which is not only contrary to a recent development plan but flies in the face of it, in that it consists of a large building which is to be constructed on land which is designated in the plan to be a green gateway into Scunthorpe with no large buildings, is likely to be very long in the coming. There was nothing irrational in treating the business park as an achievable output in that, despite what Mr Walker says as to the reasons for its abandonment, KMG had pursued and obtained planning permission for the park as recently as 2016, so it was far from an abandoned proposal. He questions what Mr Walker knows as to the reasons for the earlier abandonment of the business park for he does not speak on behalf of KMG, does not reveal from where he got this information and gives no detail as to why he is suggesting it was abandoned due to commercial unviability. Furthermore, given the likelihood of the northern junction being constructed by 2019 and thus producing outputs within the grant period, there was nothing irrational in awarding the grant but making it subject to conditions as to time lines and outputs which had to be satisfied before the grant could be finally awarded.
  54. As to the investigation and weighing of the timing issue he makes the same point. The facts as identified in the Lister report were sufficient to reach a conclusion that outputs were likely to be delivered on time with the northern junction but not the southern junction. The 2.5 years for the construction of the southern junction was a best case scenario but the design of that junction would have to take account of the traffic flow from the stadium to which it was attached. There was no traffic assessment provided for the flow from the stadium and given that there was yet to be a planning application for the stadium and permission was unlikely in the near term, that was likely to further delay the completion of the southern junction and it was only after that that the stadium could be completed and the outputs created, which on any view would be a long way off.
  55. Mr Strachan pointed to the evidence of Highways England to Rachel Lister, and which she reported on, which supported the view that the 1.9m grant could not form part of the 40% private funding for the southern junction. This contradicts Mr Walker's evidence that it could be used for this purpose. He submitted that an allegation that some fact is mistaken is not a proper ground for judicial review unless it was shown, among other things, that the fact of the mistake was uncontentious and objectively verifiable; he relies on E v Secretary of State for the Home Department [2004] EWCA Civ 49 at para 62. Accordingly, he argues that the claimant's contention that the Lister Report, relied on by LEP, was incorrect in asserting that the grant could not be used as part of the 40% private contribution is not relevant for the purposes of judicial review.
  56. The third point, that relating to the merits as between building the north or south junction first is said, by Mr Strachan, to demonstrate that the claimant's case amounts to no more than a merits-based challenge for the question as to which was to be built first was a matter of judgment for the LEP. Indeed, the level of investigation into outputs and timing were matters for the defendant in respect of which the court should not intervene. In any event, the Lister report identified the relative merits of building the northern junction in advance of that in the south, including as to how one could overcome the fact that the northern junction was not originally intended to be a terminal for the M 181 by its temporary use for that purpose. He adds that the same arguments as apply to the outputs and timing argument apply here as the building of the junctions is bound up with the question as to which scheme would provide outputs within the grant period.
  57. In relation to the complaint of procedural unfairness Mr Strachan challenges the assertion that the claimant did not know that the alternative proposal involved the building of a business park as, in the covering email with its response to the questions from Rachel Lister, Mr Walker made representations as to why the club's scheme was preferable to the use of the KMG commercial park in connection with the northern junction scheme. But in any event, there is no obligation to inform one bidder of the plans of other bidders. Furthermore, the claimant was given the opportunity to make further representations before the final grant hearing in July 2018 and it made none of the points it now makes to suggest the business park is not viable, indeed it declined to make any representations at all.
  58. The defendant's alternative case is that even if there was some error in the decision making process no relief should be granted.
  59. First, the claim is academic because the claimant has announced some time ago it is not proposing to develop at the southern junction and the decision has been overtaken by the July decision based on the further information available to the LEP. This clearly showed that the northern scheme was in a position to proceed and produce the required outputs in time whereas the southern scheme had not got off the ground so could not possibly produce any outputs in the grant period, and there was no other scheme being suggested.
  60. Secondly, even if the complaints are made out, the court can be entirely satisfied that it is highly likely the decision would have been the same, in which event it must refuse relief: s.31(2A) of the Senior Courts Act 1981. Mr Strachan says that is clear from the facts known at the time and the fact that the decision was made final on 20th July 2018 after providing the claimant with an opportunity to make representations.
  61. Thirdly, the relief should be refused because of the undue delay in making the application and the grant of relief would prejudice NLC in the delivery of the northern junction and all that flows from it. It would also be detrimental to good administration as further delay due to relief being granted could result in the funding expiring and the loss of the northern junction.
  62. The 1st interested party

  63. Without wishing to do a disservice to Ms Hutton's complete and well-structured submissions, she covered much the same ground as had Mr Strachan and her submissions do not require repetition in the judgment; she adopts his arguments. She fleshed out the planning history and demonstrated that far from NLC ceasing discussions with Mr Walker when the claimant sought to have the grant transferred to the southern junction, as he suggests in his statement, with the implication that NLC did so in order to preserve the grant for the northern junction, the council had invited the claimant to have further discussions with it about alternative locations for the stadium in its letter of 27th July 2017, a letter in which it explained why the claimant's revised plan for a statement at the south junction were contrary to the action plan. She also placed some emphasis on the fact that NLC were originally going to seek the grant for the northern junction before the claimant took an interest in the site, so it was always intended that the northern junction would be built first and that this would unlock development on the land served by the junction.
  64. She pointed me to the fact that Mr Walker has said in his October 2018 statement that the building of the southern junction was essential as, if not built, the northern junction cannot be more than a temporary solution and it was not clear how long this situation would be allowed to persist. He said the temporary nature of the northern terminal junction risked the proposed housing around the northern junction whereas when he made that statement the claimant had received Ms Potts's statement exhibiting the Highways England letter of 4th July 2018 which stated that if the southern junction was not constructed, the northern junction would be retained as the terminal junction. She also demonstrated that Mr Walker was incorrect when he verified the statement of facts and grounds which stated, at paragraph 21, that without the southern junction there would no northern junction and the lakes development would be limited to 499 homes. She asked me to look at this evidence in support of an assertion that Mr Walker's credibility was in doubt. Where all that is before the court is written evidence, it is difficult, save in clear cases, to reach conclusions on credibility but Ms Hutton's submissions have led me to look more closely at Mr Walker's evidence and less inclined to take all he says at face value.
  65. Discussion

  66. Before reviewing the rival contentions it is necessary to explain that as regards employment, outputs must be permanent jobs and cannot include employment engaged in creating the output, for example the construction workers engaged in building the junction, which appeared at times to be an output relied upon by the claimant.
  67. It was necessary for the LEP to consider what outputs would be provided by the proposed scheme within the grant period as the funding required such an outcome. Beyond those requirements there was no lexicon of material matters which the LEP was required to consider. Following Khatun, subject to Wednesbury review, it was for the LEP to decide upon the manner and intensity of the inquiry to be undertaken into any relevant factor. Faced with competing bids, the inquiry it invoked was the production of the Lister Report from an independent expert. The production of that report gave each bidder the opportunity to make their pitch as to why their bid should be accepted. The report made investigations of not only the bidders but other relevant bodies who would have an influence in the development such as Highways England, and the Homes and Community Agency.
  68. The Lister Report and the paper from the LEP's officer with the history, a summary of the Lister Report and a recommendation were before the LEP board at the meeting at which the decision was taken on 29th September 2017. Could no reasonable authority possessed of that material suppose that the enquiries they had made were sufficient? That is the key question in relation to the claimant's points 1 to 4, see Khatun at para 35. In answering the question it is necessary to identify what it was that the LEP were seeking to achieve by their decision.
  69. The 1.9m grant had been earmarked by the LEP to build a road junction to further the Lincolnshire Lakes development. The construction of the northern junction will open up the development to the construction of 2,378 homes with the building of 3 villages as well as the 23ha business park and a 2.15ha district centre; see the statement of Ms Potts of NLC. In addition to the wider development the primary objective of the northern junction was to improve traffic movement and reduce congestion and take advantage of the fact that the land owner was prepared to provide the land for free; see paragraph 2.3 of the Lister Report. When the alternative proposal for the southern junction came into being, the focus of the LEP continued to be as to the building of a junction although the question as to its location was now in issue. In order to award the grant the LEP had to ensure that it produced an economic output.
  70. In relation to the northern junction it could not rely upon the housing development which would be unlocked due to the prohibition on double-counting. Thus, in order to justify the grant for any junction it needed some other output. Either the stadium and the jobs it created, or even any houses built due to the southern stadium, so far as there was no double-counting, and the business park or any jobs it created due to the northern junction were outputs which could justify the awarding of the grant. It is important to recognise that LEP were not seeking to use the grant to build a football stadium or a business park, these were necessary by-products to justify the road junction grant. Thus, the question for the LEP when it came to consider the awarding of the grant was as to whether it would result in an output. The nature of the output was a matter for the judgment of the LEP. It can be no criticism of the LEP, in the context of a judicial review, to say that if they chose the southern scheme over the business park scheme it would have produced more valuable outputs.
  71. When looked at in that way the central question for the LEP, and the one to which it addressed itself, as is clear from their decision, is which of the road junction schemes was deliverable and would provide an output in the grant period. The information they had before them demonstrated that the northern roundabout was well advanced and came with an output, the business park. There was nothing before them to suggest that the park would not proceed: not only were they told that the developer was prepared to provide its land for the junction, which is some indication of its commitment, but why would KMG be pursing the business park if it did not regard it as commercially viable?
  72. Clearly there was uncertainty as to the delivery of the outputs from the business park scheme as it lay in the future, but they dealt with that by a condition, as recommended by the expert and their officer, thus there was no question of the grant being paid without the confirmation being provided.
  73. Also included in the report was comparative information as to funding and planning permission. This pointed to the fact that the delivery of the northern roundabout and its outputs was likely to be achieved within the grant period but there was huge doubt as to whether this was the case for the southern option. Mr Strachan is correct in his observation that there was no point in making further enquiry as to what outputs might come from a scheme which looked unlikely to be delivered in time. But again, it was a matter for the judgment of the LEP what further investigation should be made of the claimant's bid in the light of the negative evidence concerning the chances of it being delivered.
  74. Mr Roe's suggestion that it was irrational to deal with future uncertainty as regards the NLC scheme by conditions but not to deal with the claimant's scheme in the same way is undermined by the fact that the evidence as to the advancement of each scheme was different. Given the LEP's wide discretion in these matters, it was for them to judge how best to ensure that the outputs from the NLC scheme could be secured and whether that was a realistic option with that of the claimant.
  75. Mr Walker's evidence that he could have overcome the planning obstacles in a matter of weeks is of no assistance to the claimant on this issue. The submission by the claimant to support the grant application for the southern roundabout was that it would provide a football stadium at that location, not at such other location as the claimant and planning authority might agree. There was no obligation on the LEP to enquire whether the claimant had some more achievable proposal to support the application.
  76. In the light of the above consideration I do not consider that no reasonable authority possessed of the material before the LEP could suppose that the enquiries they had made were sufficient. Quite the opposite, although I do not need to go so far, they had quite sufficient information to decide which proposal they should choose in order to get a road junction and economic output within the requisite time scale.
  77. Stripped of the complaint that the decision to choose the northern over the southern roundabout was made on information which any reasonable decision maker would have realised was inadequate, Mr Roe's point 3, that no proper assessment was made as to the benefits of the southern option as opposed to that in the north amounts to no more than a merits-based challenge. In fact, the ultimate submission on this point changed in the course of proceedings as the claimant's original case as to the amount of housing which could be developed following the building of that junction was based on a misunderstanding of the evidence of Ms Potts. What this submission ultimately came to, in my judgment, was that since the southern junction was going to be built anyway, would it not have been sensible to build that one first? This is one of those decisions which the court is not qualified to make, involving expertise and knowledge as to the situation in Scunthorpe and where this fits into the development of the Lakes scheme. It is classically an area of decision that falls squarely within the discretion of the decision maker.
  78. The suggestion that one bidder must be made aware of the details of another bidder's proposal was not supported by any authority and was accepted by Mr Roe not to be a proposition which would ordinarily give rise to a valid challenge on the ground of procedural unfairness. The factor unique to this case, and upon which he relies, is that he claims that unknown to the claimant it was competing against a version of its own scheme promoted by a member of the LEP; he makes no complaint that there was unfairness in the fact of membership. Further, as planning authority, NLC would know some of the detail of his scheme.
  79. Mr Strachan expressed doubt as to how little Mr Walker knew of the KMG business park scheme given that he said he had intimate knowledge of the original KMG scheme from his time working for NLC and had mentioned the lack of outputs achievable from the KMG commercial park in his e-mail accompanying his answers to the Lister questions, at the time the claimant made its bid. Mr Walker does not say in his statement that he did not know about this, he refers to this fact not coming to light and that "we" had not been told about this, which may be careful wording on his part.
  80. Leaving aside Mr Strachan's doubts on this subject, I cannot see how the absence of a departure from the normal procedure of arranging bids in this case can be regarded as procedurally unfair. The difference it made to the claimant was that it could not use its previous knowledge of the KMG park, seemingly obtained by Mr Walker when he was a council officer, to make representations as to the merits of the NLC bid. As it is not generally the case that bidders are given the opportunity to talk down other bids, why should it be any different if one of the bidders has some inside information on another bid which they would use if they have the opportunity? Indeed, it may be seen as unfair if one bidder could spy on another or use materials which may have been subject to obligations of confidentiality in order to make disparaging submissions against other bidders. It would also be highly impractical if they were permitted to do so for there would then be a complaint that the object of such comment should be given a right of response. As to NLC having knowledge of the club's bid Mr Roe does not point to any information from NLC which could have influenced the decision. There was the position as to the planning problems, but this was a matter which Ms Lister had to look at anyway to make her appraisal of the relative schemes and was a problem of which the Mr Walker was well aware following his correspondence from the NCL in June and July 2017.
  81. The Defendant has raised s. 31(2A) of the Senior Courts Act 1981. This provides that I must refuse to grant relief on an application for judicial review if it appears highly likely that the outcome for the applicant would not have been substantially different if the conduct complained of had not occurred. This is an unnecessary consideration as the conduct complained of has not occurred. Had it been the case that I accepted that LEP should have made further inquiry as to the detail of the outcome of the competing schemes, which is the essence of the complaint, or told the claimant that the rival NLC bid depended on the development of the business park as an output, I would nevertheless have concluded that it was highly likely that the outcome would have been no different. My reason for this conclusion is that, on the evidence, the claimant's proposal was flawed by the fact that its proposal was contrary to the development plan. Without access to a relatively swift planning permission the stadium would not be available in time to provide an output. I am not persuaded by Mr Walker's evidence that the conflict with the development plan is not the obstacle suggested by Mr Strachan.
  82. Mr Walker claims that he could have overcome the planning difficulty in days or weeks. I was surprised by that suggestion and am not persuaded that he is correct. I am surprised because Mr Walker's expertise is planning and he would be expected to know the difficulties faced by a developer seeking permission for a development which was contrary to the development plan and the delays this can cause. The relevant development plan document had only been approved in 2016, so it could not have been suggested that a departure was merely a recognition that conditions had changed since the introduction of the plan. The area in the region of the southern roundabout was designated as a green gateway, thus a large building would have been wholly inconsistent with the plan, as was made clear to him in the letters from NLC in June and July 2017. His argument that the Masterplan exists at a high level and thus may be subject to change to accommodate development does not overcome the problems arising from this designation. The southern junction is where the M181 comes into Scunthorpe, it is the gateway. It is either green or one does away with the green gateway altogether.
  83. Perhaps more pertinently, Mr Walker was invited to discuss alternative proposals for the siting of the stadium by the NLC in July 2017 when he was informed that his amended proposal, which would have necessitated moving a planned lake, was still contrary to the development plan. He did not come up with any proposals at that stage to circumvent the planning difficulty and even as at 1st October 2018, when he made his second statement for these proceedings, he has not revealed what his scheme is, or would be, if the stadium was built at the southern junction. The inference is that he has, and had, no alternative worthwhile plan. This is particularly the case where, as here, Mr Walker claims that if the decision were quashed the claimant would be in a position to proceed with its planning application for the stadium at this junction. He was, on his evidence, responsible for the Lincolnshire Lakes scheme with detailed knowledge of the project, so if anyone should be able to find a way around the plan it should be him and yet he has produced nothing. I am also struck by the fact that though written to in June and July 2017 and informed that the stadium scheme was contrary to the development plan, he chose not to say anything about this or how these problems were to be overcome in his email and response to Rachel Lister of 20th July 2017.
  84. In view of my decision it is not necessary to consider the effect of s. 31 (6) of the Senior Courts Act 1981. I have not received detailed submissions on undue delay or on the allied question, prompted by the wording of the section, as to whether there needs to be some causal connection between the delay and the adverse results, such as prejudice, or whether the risk of a finding of prejudice is simply a punishment for undue delay. Accordingly, I make no decision on this issue.
  85. The dispute as to whether the claim is academic does not require resolution and is itself academic. There is much to be said for the proposition that I should refuse relief because there has been a final decision in July 2018 which stands unchallenged; I do not accept that the striking down of the September decision would necessarily result in the July decision being unlawful, having looked at the care with which it was reached. Further, time has moved on and a quashing of the decision now would not enable the claimant to resurrect its stadium scheme in time to provide the required outputs. If the decision were taken again the case for the northern junction would be even more overwhelming. What holds me back from ruling on the point that the claim is academic is that it would be an artificial exercise because in making the decision to refuse relief as it no longer served any purpose, albeit such relief would otherwise be justified, I would need to take account of the facts of the unlawful act giving rise to the claim in considering the exercise of my discretion. As there has been no unlawful act that is not possible.
  86. Conclusion

  87. The LEP's decision on 29th September 2017, taking into account the information before the LEP as to the rival bids, was one of which it cannot be said that no reasonable decision maker in its position could suppose that the inquires they had made were sufficient. There was no procedural unfairness in not giving the claimant details of the NLC bid. The challenge based on the alleged failure to give sufficient weight to the benefits of the southern over the northern junction is indeed a merits challenge for which judicial review is not available. As these conclusions dispose of the arguments ranged against the defendant, I am not satisfied that the decision was one which no reasonable authority, in this case a local enterprise partnership, could reach.
  88. If I am wrong about that I find that it is highly likely that even if any of the complaints had been made out, the outcome for the applicant would not have been substantially different.
  89. The claim is dismissed.
  90. Approved HHJ Kramer 20.11.18


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