Consultation

October 30th, 2014 by James Goudie KC in Decision making and Contracts

The Supreme Court has on 29 October 2014 decided R (Moseley, in substitution of Stirling deceased) v Haringey LBC [2014] UKSC 56 on appeal from [2013] EWCA Civ 116.  The subject matter is the authority’s Council Tax Reduction Scheme (“CTRS”) and the Consultation Document (“the CD”) in relation to the draft CTRS.  The CD explained the reduction in Central Government funding and stated that this means that the introduction of a local CTRS in Haringey will “directly affect the assistance provided” to everyone below pensionable age who had been receiving Council Tax Benefit.  The CD also contained a Questionnaire asking how the reduction in relief should be distributed among claimants.  Following the consultation exercise the authority decided to adopt a CTRS under which the level of council tax relief was reduced for 2013-2014 by 19.8% from 2012-2013 level for all claimants other than pensioners and the disabled.

The Supreme Court unanimously allowed the claimant’s appeal.  They declared that the consultation exercise was unlawful.  However, they declined to order the authority to undertake a fresh consultation exercise. This would have been disproportionate in the circumstances.

The Supreme Court (paragraphs 25, 35 and 44) gave its endorsement to the four Gunning/Coughlan criteria of a fair consultation.

At paragraph 26 Lord Wilson added that two further general points emerge from the authorities: (1) the degree of specificity with which, in fairness, the public authority should conduct its consultation exercise may be influenced by the identity of those whom it is consulting; and (2) the demands of fairness are likely to be somewhat higher when an authority contemplates depriving someone of an existing benefit or advantage than when the claimant is a bare applicant for a future benefit.

The critical passages are at paragraphs 27/28 and 39-41:-

“27.       Sometimes, particularly when statute does not limit the subject of the requisite consultation to the preferred option, fairness will require that interested persons be consulted not only upon the preferred option but also upon arguable yet discarded alternative options. …

28.        But, even when the subject of the requisite consultation is limited to the preferred option, fairness may nevertheless require passing reference to be made to arguable yet discarded alternative options. …”

“39.       … Meaningful public participation in this particular decision-making process, in a context with which the general public cannot be expected to be familiar, requires that the consultees should be provided not only with information about the draft scheme, but also with an outline of the realistic alternatives, and an indication of the main reasons for the authority’s adoption of the draft scheme. …

40.        That is not to say that a duty to consult invariably requires the provision of information about options which have been rejected.  The matter may be made clear, one way or the other, by the terms of the relevant statutory provisions, … To the extent that the issue is left open by the relevant statutory provisions, the question will generally be whether, in the particular context, the provision of such information is necessary in order for the consultees to express meaningful views on the proposal. …

41.        Nor does a requirement to provide information about other options mean that there must be a detailed discussion of the alternatives or of the reasons for their rejection.  The consultation required in the present context is in respect of the draft scheme, not the rejected alternatives; and it is important, not least in the context of a public consultation exercise, that the consultation documents should be clear and understandable, and therefore should not be unduly complex or lengthy.  Never-theless, enough must be said about realistic alternatives, and the reasons for the local authority’s preferred choice, to enable the consultees to make an intelligent response in respect of the scheme on which their views are sought.”

Applying the law to the facts, the Supreme Court held that fairness demanded that the Consultation Document should briefly refer to alternative methods of absorbing the shortfall in government funding and to the reasons why the authority had concluded that they were unacceptable.  The consultation was premised on the assumption that the shortfall would be met by a reduction in council tax relief.  No other option was presented.  Neither was it reasonably obvious to those consulted what other options there may have been and the reasons why such options had been discarded.  Indeed, only an infinitesimal number of responses to the consultation alluded to other ways of meeting the shortfall.  Therefore, the consultation exercise was unfair and unlawful.  (However, it was not unlawful that the authority had failed to consult on the possible adoption of a Transitional Grant Scheme announced by Central Government only 5 weeks before the completion of the Consultation.

The purpose of this particular statutory duty was to ensure public participation in the local authority’s decision-making process.  Meaningful participation in these circumstances required that those consulted be provided with an outline of the realistic alternatives.  In the absence of specific statutory provision, reference to alternative options will be required where this is necessary in order for the consultees to express meaningful views on the proposals.

In summary, the Consultation Document presented the proposed reduction in council tax support as if it were the inevitable consequence of the Government’s funding cuts, and thereby disguised the choice made by the authority itself. It misleadingly implied that there were no possible alternatives to that choice.  In reality, therefore, there was no consultation on the fundamental basis of the CTRS.

 

Consultation and PSED

July 30th, 2014 by James Goudie KC in Decision making and Contracts

In R (Sumpter) v Secretary of State for Work and Pensions [2014] EWHC 2434 (Admin) Hickinbottom J summarised, at para 94, the general law in relation to a consultation process as follows:-

“i) Whether required by statute or (as in this case) voluntary, if performed, consultation must be carried out properly (R v North and East Devon Health Authority ex parte Coughlan [2001] QB 213 at paragraph 108).

ii) Key features of a proper consultation process were set out in R v Brent London Borough Council ex parte Gunning (1985) 84 LGR 168 at page 189 per Hodgson J (as approved by the Court of Appeal in Coughlan at paragraph 108), namely:

(a) consultation is undertaken at a time when the relevant proposal is still at a formative stage;
(b) adequate information is provided to consultees to enable them properly to respond to the consultation exercise;
(c) consultees are afforded adequate time in which to respond; and
(d) the decision-maker gives conscientious consideration to consultees’ responses.

iii) However, fairness is the touchstone: for consultation to be lawful, it must be fair.  That is the test.  Although consideration of the particular facets of fairness identified in Coughlan may assist, whether the consultation process is fair is a fact-sensitive question that depends upon all the circumstances of the particular case looked at as a whole, and without drawing artificial distinctions between particular stages of the whole process  (R (Medway Council) v Secretary of State for Transport [2002] EWHC 2516 (Admin) at [28] per Maurice Kay J (as he then was), R (J L and A T Baird) v Environment Agency [2011] EWHC 939 (Admin) at [52] per Sullivan LJ, and R (Royal Brompton and Harefield Hospital NHS Foundation Trust) v Joint Committee of Primary Care Trusts [2012] EWCA Civ 472 at [9] per Arden LJ; see also R (Osborn) v Parole Board [2013] UKSC 61 at [64]-[71] per Lord Reed JSC).

iv) It is a matter for the court to decide whether a fair procedure was followed: its function is not merely to review the reasonableness of the decision-maker’s judgment of what fairness required (Osborn at [65] per Lord Reed).

v) If it is alleged that a consultation process is unfair, it is for the claimant to show that the unfairness was such as to render the consultation process unlawful.  Especially with the benefit of hindsight, it may well be possible to identify how a consultation process might have been improved; but, even if it was less than ideal, it will become unlawful only if what has occurred makes it unfair as a matter of law.  That is a substantial hurdle: in Baird, Sullivan LJ said that “in reality a conclusion that a consultation process has been so unfair as to be unlawful is likely to be based on a factual finding that something has gone clearly and radically wrong (Baird at [51]; see also Royal Brompton at [13] per Arden LJ).

vi) The consultation documents must be intelligibly clear to the general body of interested persons, and present the issues fairly and in a way that facilitates an intelligent and effective response (R (Breckland District Council) v The Boundary Commission [2009] EWCA Civ 239 at [46] per Sir Anthony May P, and Royal Brompton at [8]-[14] per Arden LJ).

vii) To be fair and proper, consultation must be performed by the decision-maker with an open mind.  However, an open mind is not the same thing as an empty mind (R (Royal Brompton and Harefield NHS Foundation Trust) v Joint Committee of Primary Care Trusts [2011] EWHC 2986 (Admin) at [16] per Owen J, adopting a phrase used in the course of argument by Neil Garnham QC).  Therefore, whilst a decision-maker cannot have a predetermined option, such that consultation is a sham, he may have a preferred option; but he must disclose that to potential consultees “so as to better focus their responses” (R (Sardar) v Watford Borough Council [2006] EWCA 1590 (Admin) at [29] per Wilkie J).  A consultation may properly be focused upon a limited number of options or even a single proposal.

viii) The process must be considered as a whole; and, therefore, where a decision-maker is in fact prepared to accept and consider further representations after the close of the formal consultation, then those subsequent events can be taken into account in assessing whether the process was fair; although it may be appropriate to give those subsequent events less weight, because (eg) the opportunity to make representations was not given such widespread publicity as was given during the formal process (Baird at [52]).

ix) In cases where there has been a consultation exercise, and it is decided to have a further consultation, the fairness of that further exercise must be considered in the context of the earlier and fuller consultation process.  In such cases, it may not be unfair to any interested party for the further consultation exercise to be more limited, whether as to the identity of consultees, or the content and duration of the consultation (R (Milton Keynes Council) v Secretary of State for Communities and Local Government [2011] EWCA Civ 1575, especially at [36]-[38]).

x) Proper consultation is an important part of the decision-making process.  The purposes of requiring fairness in procedural matters such as consultation include to ensure high standards of decision-making by public bodies, to enable parties interested in the subject matter to identify and draw to the attention of the decision-maker relevant factors which he may have overlooked to enable responses that will best facilitate a sound decision, and to avoid the sense of injustice which a person affected by a decision may otherwise feel if not given a proper opportunity to have their views known and taken into account (Osborn at [67]-[70]) per Lord Reed, and Baird at [41] per Sullivan LJ).  However, the obligations imposed upon a decision-maker in the course of consultation must not be unreasonably onerous, otherwise effective decision-making might be impaired and decision-makers might become reluctant to engage in voluntary consultation where (as in this case) there is no statutory duty to consult.”

At paragraph 117 the Judge added:-

“… R (Medway Council) v Secretary of State for Transport [2002] EWHC 2516 (Admin) … R (Montpeliers and Trevors Association) v City of Westminster [2005] EWHC 16 (Admin) … show that, although a decision-maker may formulate options on which to consult and restrict the consultation to that option or those options, in certain circumstances it may be unfair and unlawful to exclude an option from a consultation exercise.  They make clear that a decision-maker, as long as he keeps an open mind, might have a very much preferred option: what he cannot do is, for practical purposes, exclude a legitimate option.”

As regards the PSED, the Judge said, at para 137:-

 “The duty requires a “conscious directing of the mind to the obligations” (R (Meany) v Harlow District Council [2009] EWHC 559 (Admin) per Davis J (as he then was)), “due regard” being the appropriate regard in all the circumstances.  In R (Hurley) v Secretary of State for Business, Innovation and Skills [2012] EWHC 201 (Admin) at [78], Elias LJ illuminatingly explained:

“The concept of ‘due regard’ requires the court to ensure there has been a proper and conscientious focus on the statutory criteria, but if that is done, the court cannot interfere with the decision simply because it would have given greater weight to the equality implications of the decision than did the decision-maker.  In short, the decision-maker must be clear precisely what the equality implications are when he puts them in the balance, and he must recognise the desirability of achieving them, but ultimately it is for him to decide what weight they should be given in the light of all relevant factors.”

In R (Bailey) v London Borough of Brent Council [2011] EWCA Civ 1586 at [102], Davis LJ emphasised the importance of not interpreting the duty in such a way as to make decision-making unduly and unreasonably onerous.”

 

Predetermination

July 28th, 2014 by James Goudie KC in Decision making and Contracts

In IM Properties Development Ltd v Lichfield District Council [2014] EWHC  440 (Admin) Patterson J held that an e-mail sent by a committee chairman to members of the same political party telling them to vote in a particular manner fell within Section 25(2) of the Localism Act 2011 and was not to be taken as a predetermination.  She found, at para 86, that the tenor of the e-mail was not “so strident” as to remove the discretion on the part of the recipient as to how he or she would vote.  Patterson J added: “The debate shows a far reaching discussion between members and displays no evidence of closed minds in relation to the decisions that had to be taken”; and “A fair minded and reasonable observer in possession of all the facts would not be able to conclude on the basis of all the evidence that there was any real possibility of predetermination as a result of the e-mail …”.

 

Officers’ Reports

June 30th, 2014 by James Goudie KC in Decision making and Contracts

In R (Sky Blue Sports & Leisure Ltd) v Coventry City Council [2014] EWHC 2089 (Admin), in which the Claimants unsuccessfully sought judicial review of the City Council’s Decision to lend £14.4 million to the company, ACL, that manages the stadium, the Ricoh Arena, at which Coventry City Football Club played, the Claimants’ assertions included that Council Members had failed to take into account relevant considerations in making the Decision because their Officers’ Report that recommended the Decision had allegedly been deficient and misleading.  Hickinbottom J rejected these allegations as not being arguable.  As regards the legal principles to be applied when considering a challenge of this kind, the Judge said, at paragraph 139 (emphasis added):-

            “i) A local authority acts unlawfully if, in making a decision, it fails to take into account a material consideration …  For these purposes, a consideration is material if the decision-maker might have decided the matter differently had he taken it into account …

ii) Decision-makers … (usually councillors, in full Council or in a committee to which decision-making is delegated) often act on the basis of information provided by its officers in the form of a report. Such a report usually also includes a recommendation as to how the application should be dealt with. In the absence of contrary evidence, it is a reasonable inference that, where a recommendation is adopted, the decision-making councillors follow the reasoning of the report.

iii) The councillors are not deemed to know something that the officers know, but which is not transmitted to them …

iv) The officers’ report is therefore often a crucial document. It has to be sufficiently clear and full to enable councillors to understand the important issues and the material considerations that bear upon them; and decide those issues within the limits of judgment that the law allows them. However, the courts have stressed the need for reports also to be concise and focused, and the dangers of reports being too long, elaborate or defensive. The councillors do not have to be provided with every detail of every relevant matter, but only those matters which are so relevant that they must be taken into account, i.e. the salient facts which give shape and substance to the matter such that, if they are not considered, it can be said that the matter itself has not been properly considered

The assessment of how much and what information should go into a report to enable it to perform its function is itself a matter for the officers, exercising their own judgment

v) Of course, if the material included is insufficient to enable the decision-making councillors to perform their function, or if it is misleading, a decision taken on the basis of a report may be challengeable. However, when challenged, officers’ reports are not to be subjected to the same exegesis that might be appropriate for the interpretation of a statute: what is required is a fair reading of the report as a whole

vi) In construing reports, it also has to be borne in mind that they are addressed to a “knowledgeable readership”, including councillors “who, by virtue of that membership, may be expected to have a substantial local and background knowledge” … As in this case, they may have been given briefings prior to the meeting at which the decision is taken. Furthermore, in deciding whether they have got sufficient information to make a properly informed decision or request further information or analysis, again that involves the exercise of judgment on their part. They are entitled to ask for more. Given the experience and expertise of councillors, coupled with the fact that they are democratically elected, the judicial approach to challenges to their decisions should be marked by particular prudence and caution …”

At paragraph 160 the Judge said (emphasis added):-

“…   As I have indicated, officers’ reports are to be read broadly and as a whole. Reading the Hastie Report thus, I consider the belated criticism of it unfounded. In my view, it set out, properly and succinctly, the important relevant matters that the councillors were required to take into account, including the relevant risks of the proposal as well as the potential benefits. The courts have been rightly cautious about requiring officers’ reports to be too full (see paragraph 139(iv) above): the dangers of such a requirement are obvious. A focused and succinct report, such as Mr Hastie’s Report in this case, is in my judgment positively to be commended.”

The main issue in the case, however, was whether or not the loan amounted to State Aid.  The Judge, applying the objective test of the Market Economy Investor Principle, ruled, at paragraphs 86-132 inclusive, that it did not.  A private investor in the Council’s position, as an investor in the stadium company seeking to protect its existing investment, may have made the same investment on the same terms.

Moreover, in rejecting an allegation that the Council’s conduct had been underhand and reprehensible, the Judge observed, at paragraph 35: “The Council was here engaged in the commercial field, and (subject to its public duties) it was entitled to act in the way that it considered was best in protecting its own commercial interests, namely its share in ACL”.

 

Delegation

June 24th, 2014 by James Goudie KC in Decision making and Contracts

In order to comply with the provisions in Section 101 of the Local Government Act 1972 with respect to delegation of functions to officers, it is not essential for the scheme of delegation actually to identify the officers.  Lewis J in R (Pemberton International Ltd) v Lambeth LBC [2014] EWHC 1998 (Admin) holds, at paragraph 53, that it suffices that the scheme “sets out the process by which the officers authorised to exercise certain functions can be identified”.  This may be “a certain group of officers”.

 

Decision Making

May 1st, 2014 by James Goudie KC in Decision making and Contracts

In R (Bridgerow Ltd) v Cheshire West and Chester Borough Council [2014] EWHC 1187 (Admin) a local authority’s decision refusing to renew a sexual entertainment venue licence under the Local Government (Miscellaneous Provisions) Act 1982, as amended, was set aside where, in breach of the authority’s Constitution, the decision was taken by the full panel of twelve councillors instead of the three to whom it was delegated under the Constitution.  Stuart-Smith J emphasized that it is important that the manner in which executive functions are carried out is transparent and reliable.  A decision being taken by the wrong persons is a serious procedural irregularity, especially when political proportionality is involved.

 

GPOC

March 6th, 2014 by James Goudie KC in Decision making and Contracts

There is an area within Harrogate known as the Stray.  It is proposed as the finish of the first stage of the Tour de France 2014.  There is a snag.  The Stray is governed by the Harrogate Stray Act 1985 (“the 1985 Act”).  The Stray is owned by the Duchy of Lancaster and managed by the Harrogate Borough Council (“the Council”).  Council wishes to use GPOC under Section 1 of the Localism Act 2011 (“the 2011 Act”), but this is prevented by Section 2 of the 2011 Act, on account of the 1985 Act.  The Council asked the Secretary of State (“the SoS”) to use his powers under Section 5 of the 2011 Act to make an Order temporarily (23 June – 8 July 2014) to disapply or amend parts of the 1985 Act to enable the Stray to be used for the sole purpose of hosting the Tour de France.  The SoS has, following a 6 week consultation, agreed.  He has issued a draft.  The Harrogate Stray Act 1985 (Tour de France) Order 2014, to be laid before Parliament, in accordance with Section 7(2) of the 2011 Act, and an accompanying Explanatory Document.  The SoS is satisfied that the draft Order serves a purpose under Section 5(1) of the 2011 Act, that the conditions under Section 6(2) have been met, and that the appropriate consultation has been carried out in accordance with Section 5(7).

This is the first time the SoS has used his powers under Section 5 of the 2011 Act.  Appendix A to the Explanatory Document details the Parliamentary scrutiny procedure that follows the laying of the draft Order (the negative resolution procedure).

With respect to GPOC, the Explanatory Document stated that the Council had presented a “compelling case” to host the Tour de France 2014: “the general power of competence is a broad power and the economic merits of hosting the Tour are significant”.  GPOC applied, because an individual with full capacity would have the power to hold a cycle race on someone else’s land, subject to complying with any applicable legal restrictions and obtaining the landowner’s consent.

The SoS considered whether to seek to amend the 1985 Act.  However, this would likely take more time than is available and involve more public resource, including more Parliamentary time.  The 2011 Act was expressly drafted to allow for the temporary repeal by Order of primary legislation, and so is “ideally suited to the purpose”.

The Explanatory Document observes that no precedent is set for any future events on the Stray.  If the Council wished again temporarily to disapply Sections of the 1985 Act in order to use GPOC to host an event on the Stray, another Order under the 2011 Act would be required again to amend the 1985 Act for that purpose, and the same statutory process would apply to any such future 2011 Act Order.

The SoS’s decision making process was governed by considerations of “proportionality” (para 3.5 of the Explanatory Document), “fair balance” between public and private interests (para 3.6), “necessary protection” (para 3.7), and “reasonable expectation” of being able to exercise “rights and freedoms” (para 3.8).  Further, the SoS is satisfied that the draft Order under the 2011 Act is compatible with ECHR rights (para 3.16) and with legal obligations arising from membership of the EU (para 3.17).

Chapter 4 of the Explanatory Document sets out in detail the consultation undertaken. Those who supported the proposal included the Duchy of Lancaster.

 

Decision Making

February 27th, 2014 by James Goudie KC in Decision making and Contracts

As Cranston J observed at the outset of his Judgment in Bishops Stortford Civic Federation v East Hertfordshire District Council [2014] EWHC 348 (Admin) the case was a judicial review that raised some “important issues” about the “lawful operation of local government and the role of the Courts”.  The main issue arose out of the intervention by Councillor Tindale at a (Planning) Committee Meeting.

Cranston J set out the following principles:-

  1. Unless there is an express provision in the Council’s Constitution or other documents preventing attendance, any Councillor can, with the Committee’s permission, in principle attend and address it: para 30;
  2. There are, however, limits, as where the Councillor has a disqualifying interest, but participation in the development of policies and proposals should not normally exclude from decision making Meetings: para 31;
  3. Councillor Tindale’s motives were irrelevant in law: para 33;
  4. As regards whether Councillor Tindale’s address had “polluted the well”, a detailed analysis of what Members said is neither necessary nor appropriate: “the cut and thrust of political debate is not conducive to refined textual analysis”: para 37;
  5. In the case of a collective decision, one has to consider the “general tenor of the discussion” rather than the individual views of Committee Members, “let alone the precise terminology used”: para 39;
  6. “The taking of statements when councillors are asked to explain their voting is especially to be deplored”: Prudence is the sensible judicial approach in this context”: para 41.

 

Public Sector Equality Duty

February 12th, 2014 by James Goudie KC in Decision making and Contracts

PSED claims continue to be pursued.  In R (Rotherham MBC and others) v SoS for BIS (2014) EWHC 232 (Admin) the claim succeeded (paras 84-93 inc): (i) there is no duty to carry out a formal EqIA; (ii) the duty is at most to consider undertaking an EqIA, along with other means of gathering information, and to consider whether it is appropriate to have an EqIA; (iii) the requirement is to have “due regard” to the statutory requirements in s149(1) of the Equality Act 2010; (iv) that is regard that is “appropriate in all the circumstances”; and (v) if an authority’s decision is a high level budget decision a PSED may be carried out “further down the line”; BUT (vi) the decisions in this case were “in no sense preliminary or provisional”; and (vii) an after the event assessment “cannot save the decision making”.  This was an instance of a PSED challenge succeeding where other challenges (to the Regional allocation of EU Structural Funds) failed.  In R (Unison) v Lord Chancellor [2014] EWHC 218 (Admin) all the challenges (to ET and EAT fees) failed, including (paras 57-69) PSED and (paras 70-90 inc) indirect discrimination, failed, notwithstanding that it is a “continuing duty”; “the … importance of the duty”, and the facts that the duty is “an essential preliminary to public decision-making”, is not a matter of ticking boxes, and “must be undertaken conscientiously and with rigour”, and that the authority “must collect, collate and consider all relevant information as to the likely impact of the proposals”.  However, “the weight to be given to countervailing factors is a matter for the assessment of the public authority and not for the Court, unless that assessment can be challenged on conventional public law grounds as being outwith the range of reasonable conclusions”; and “it is for the public authority to decide what is relevant and irrelevant, subject only to challenge on conventional grounds”; and an authority “cannot be expected to speculate, investigate or explore matters ad infinitum” or “to make assessments with a degree of forensic analysis which a QC might deploy in Court”.  The Divisional Court approved the summary of the principles applicable to the s149 duty by Wilkie J in R (Williams) v Surrey County Council [2012] EqLR 656 at para 16.  It could not be maintained that the Lord Chancellor did not consider the differential impact on groups with various protected characteristics merely because he dismissed those concerns.  Any defects in his conclusions which triggered a public law remedy should be dealt with in the substantive grounds of challenge, and not by way of criticism of the lengthy and detailed review undertaken in the assessment before the conclusions were reached.

 

 

Decision Making and Contracts

October 9th, 2013 by James Goudie KC in Decision making and Contracts

R (Buck) v Doncaster MBC (2013) EWCA Civ 1190 raises important issues as to the division of powers between a directly elected executive and the full council of a local authority.  At first instance Hickinbottom J made the general observation that, if, by an appropriately worded budget amendment, the full Council could override executive decisions of the Mayor, and replace those decisions with their own, the ultimate executive decision-making power would not lie with the Mayor, but with the full Council, contrary to the intention of the Local Government Act 2000 governance scheme.  The Court of Appeal agreed.  The Master of the Rolls said (at para 17) that, in view of the objective of the relevant provisions of the 2000 Act, it would be extraordinary (and frustrate the evident intention of Parliament) if the full Council could direct the Mayor whether and, if so, how to spend the money which had been authorised by the budget.  It would mean that the full Council could take over responsibility for almost any executive matter, simply by writing some sufficiently specific provision about it in the annual budget.  If the budget-setting powers of the full Council extend to prescribing exactly what expenditure is to be incurred in what specific respects, then it can use those powers to determine exactly what the executive authority will do.  Nor is there any limit to the degree of detail into which such prescription could descend.  This kind of micro-management by the full Council was plainly not intended by the 2000 Act. 

Full Council has no power to interfere with the executive function of the Mayor, except where the Mayor proposes to exercise the function in a way that is (i) contrary to, or not wholly in accordance with, the authority’s budget, or (ii) is contrary to a plan or strategy adopted or approved by the authority.  So what does determining a matter in a manner “contrary to or not wholly in accordance with the authority’s budget” mean?  At para 20, the Master of the Rolls, with whom McCombe LJ and Gloster LJ agreed, said: “In my view, it means determining a matter which will result in incurring expenditure in excess of that for which budget approval has been given by the full council.  That does not only mean that the executive may not incur expenditure in excess of the aggregate of the entire budget, although it certainly includes such a restriction  on the executive’s spending power.  …  it also means that the executive may not incur expenditure in excess of heads of expenditure specified in the budget.” 

To summarise, the full Council may allocate more or less funds than are requested by the Mayor in his proposed budget.  It is the final arbiter of what goes into the budget.  The budgetary process is geared to avoiding any budget deficit by ensuring that the revenue expenditure will not be exceeded.  But it does not allow the full Council to micro-manage the authority’s functions and interfere with the executive functions of the Mayor.  The full Council cannot require the Mayor to expend money in a particular way, or, unless he proposes to act in a way contrary to the plans and strategies reserved to the full Council, to expend money on a particular function. 

As regards “contrary to a plan or strategy”, the Master of the Rolls said:

“24.       … The language of “plan or strategy”,  read in the context of the Functions Regulations, denotes something that operates at a general level.  It cannot embrace any and every decision that may be taken on an individual issue.  If it did, it would undermine the basic distinction between executive and non-executive functions which lies at the heart of the relevant part of the 2000 Act.  The basic idea is that the full council may in certain respects set the policy framework for the authority, but its detailed implementation is a matter for the executive (provided that what it does is not contrary to and is wholly in accordance with the budget).”