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 …”.

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”.

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”.

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.

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.

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.

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.

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).” 

In R (T) v Sheffield City Council [2013] EWHC 2953 (QB) 4 mothers challenged by judicial review the decision of the Council to stop paying subsidies to 20 nurseries.  They did so on 5 grounds: (1) failure to consult fairly; (2) breach of the PSED; (3) breach of the best value duty; (4) breach of duties imposed by the Childcare Act 2006 (“CA 2006”); and (5) irrationality.  All the challenges failed.

As regards flawed consultation, Turner J observed (para 30) that whether consultation is undertaken at a formative stage “is bound to be fact sensitive” and that “the important point” is that “when the process starts the ultimate decision should still be fully capable of being moulded and influenced by the response”.  At paras 32 and 35 he stated:-

“32. It is also important to put the issue of consultation into context. There will be many cases in which it will not be possible precisely to time the beginning (or even the end) of the consultation process. For example, it is by no means unusual for particular proposals to have been preceded by earlier different but related proposals upon which there has already been some level of pertinent consultation. The existence of the prior period of consultation does not, of course, obviate the need to consult further but it may have an important influence on the timing, content and duration of the process of consultation which follows.”

“35. The time reasonably to be allowed for a response to a consultation process is, again, a highly fact sensitive issue. Once more, context is important. Where, as here, the issue upon which consultation is to take place is one in which interested parties have already been recently engaged the time reasonably required for any formal consultation period may well be shorter than in circumstances where the proposal is without precursors.

As regards the PSED, under Section 149 of the Equality Act 2010, Turner J said (para 53):-

“Of course, a mere generic, background level of concern is not of itself sufficient to comply with the requirements of the Act but it is not insignificant that those responsible for taking the decision in this case were not approaching their responsibilities from a position of ignorance about the social and demographic context in which they were operating. Further, Cabinet members were engaged in the process of assessing and developing proposals as part of a continuous process and the records of meetings are snapshots only of the route which they are following.

As regards the best value duty under Section 3 of the Local Government Act 1999, and Guidance issued by the Secretary of State, Turner J concluded (para 67):-

“There is no substance in the complaint that the defendant impermissibly distorted the outcome of its decision making process in a way calculated to preserve funding for itself as opposed to the nurseries. In any event the Guidance, thankfully, does not require a formulaic “pound for pound” approach. …”

As regards CA 2006, Turner J said:-

“70. Section 1 of the 2006 Act is described as a “general duty” and cannot be approached in the context of the position of an individual or individuals. It is necessary to look at the population of those affected as a whole. In this case, it was perfectly open to the defendant to conclude that the decision to prioritise intervention over subsidy would have the overall effect of improving the well-being of young children and to reduce inequalities in the well-being of young children in the Sheffield area. It is not for the court to substitute its own views for that of the democratically elected local authority.”

“71. Much the same can be said of section 3(2). I do not see how it can be contended that redistributing resources away from nursery subsidies and towards individual cases of need cannot, at least arguably, result in a better integrated provision of early childhood services and a maximisation of the benefit to be derived by young children and their parents. Whether it actually does or not is a matter upon which the defendant is in a far better position than this court to judge.

72.Within the factual parameters of this case it is difficult to see how section 3(3) could be any more than peripherally relevant if at all. This sub-section too applies to all those children and parents affected by the actions of the decision maker and cannot be applied to a limited class in isolation. The withdrawal of funding from twenty nurseries does not on the face of it constitute a general failure to identify parents or prospective parents who would otherwise be unlikely to take advantage of early childhood services. There is simply no evidence in support of this contention and it is misconceived as a matter of law.

73. The duty under section 6 is more obviously pertinent to the issues arising in this case but it is subject to the constraints of reasonable practicability. This issue was clearly and directly considered by the defendant. The requirements of section 6 are also set out in the overarching EIA. There is simply no legitimate basis in this case upon which this court can substitute its own view as to what is or is not reasonably practicable for that reached by the defendant.”

As regards irrationality, Turner J said:-

“77. I am in no doubt that the claimants genuinely believe that the defendant’s decision was irrational in the sense that they consider that the balance of argument was firmly weighted in favour of the retention of the grants, at least for some further period, and they cannot understand why this did not happen. It is not, however, for this court to attempt to re-balance the arguments and form its own conclusion on their respective merits.”

Turner J’s conclusion was as follows:-

78. The twenty nurseries affected by this decision which provide valuable facilities to the families which they serve are to be commended on the contribution they have made and continue to make to their local communities. I hope that, despite the termination of the subsidies, they are all able to survive and flourish but I must recognise that some may not. In an ideal world, it would not be necessary to make hard choices about the distribution of funds between competing but thoroughly meritorious causes but, particularly in the present economic climate, sacrifices even of highly socially desirable initiatives are sometimes unavoidable. Councils are democratically elected to make decisions and some of these are bound to be contentious and unpopular. Ultimately, however, the decision in this case, controversial as it undoubtedly was, complied with the standards imposed by public law and must remain undisturbed.”

R (Nash) v Barnet LBC [2013] EWCA Civ 1004 (“Nash”) concerned whether a decision and an impending decision by Barnet Council to outsource a high proportion of its functions and services to private-sector organisations was lawful.  The judicial review challenge was brought by a local resident.  There were three grounds of challenge: non-compliance with “best value” consultation obligations; breach of the PSED; and breach of fiduciary duty to council tax payers.  A procurement challenge was not pursued. 

The challenge failed at a rolled-up hearing: [2013] EWHC 1067 (Admin), (2013) LGR 515.  The Court of Appeal dismissed the Claimant’s appeal. 

The first question was whether the claim was in time.  The Claimant sought to rely on the House of Lords decision in R (Burkett) v Hammersmith & Fulham LBC [2002] 1 WLR 1593 (“Burkett”), where outline planning permission had been preceded by a resolution approving the award subject to certain conditions, and the resolution was subject to, amongst other things, completion of a Section 106 agreement; and where property rights were affected. 

The Court of Appeal said (para 45) that the Council “was entitled to emphasize the general importance of compliance with the time limits set for judicial review proceedings, given the various public interests generally involved in public law cases”. 

The essence of the argument on behalf of the Claimant was that even if she could have raised her challenge at an earlier stage, there was no obligation on her to do so, that Burkett permitted her to raise the legal challenge at the time of the final decision to do the act, that all the Council had decided to do in 2010/2011 was to initiate a procurement process, and thereafter move on from time to time to the next stage of the process, and that the Council had not committed to awarding any contract, let alone any particular contract, until its December 2012 decision. 

The Court of Appeal, however, ruled that Burkett, properly analysed, “simply will not bear so open-ended an application”.  They agreed with the first instance Judge as follows:- 

“I do not believe that Burkett is authority for the proposition that in every situation in which a public-law decision is made at the end of a process which involves one or more previous decisions – what I will refer to as “staged decision-making” – time will run from the date of the latest decision, notwithstanding that a challenge on identical grounds could have been made to an earlier decision in the series. In my judgment it is necessary in such a case to analyse carefully the nature of the latest decision and its relationship to the earlier decision(s). I believe the true position to be as follows. If the earlier decision is no more than a preliminary, or provisional, foreshadowing of the later decision, Burkett does indeed apply so that the later, “final”, decision falls to be treated as a new decision, the grounds for challenging which “first arise” only when it is made. But if the earlier and later decisions are distinct, each addressing what are substantially different stages in a process, then it is necessary to decide which decision is in truth being challenged; if it is the earlier, then the making of the second decision does not set time running afresh. I accept that the distinction may in particular cases be subtle, but it is in my view nonetheless real and important.” 

Burkett was concerned with a merely provisional decision.  In Nash the Council was not provisionally resolving to enter any outsourcing contract at all.  What the Council was doing was actually deciding to enter into a procurement process by way of competitive dialogue.  That process then, and in accordance with the Public Contracts Regulations (“the PCR”) 2006, proceeded in stages.  Thus, in contrast with the initial resolution in Burkett, work was lawfully and foreseeably done and money was expended precisely because of such decisions.  The decisions thus had and were intended to have legal effect: not, of course, in terms of sanctioning a binding contract in terms of authorising and causing the initiation of the procurement process, with attendant inevitable heavy expenditure and significant use of time and resources.  Without such decisions, those things could not and would not have been done.  Those decisions are thus properly to be regarded as substantive.  They are not to be regarded as contingent or provisional, even though there was no guarantee at all that any outsourcing contract or contracts might ultimately result.  A failure to comply with the procedure at any stage inevitably undermines the integrity of all that follows. Accordingly, the right of action is complete immediately and cannot be improved by allowing the procedure to continue to a conclusion. Where there has been a failure to comply with the proper procedure the later award of the contract does not constitute a separate breach of duty; it is merely the final step in what has already become a flawed process. The approach adopted in Burkett can simply be transposed to a procurement challenge whether under the PCR or by way of judicial review. 

The Court of Appeal further observed that there was “nothing in fairness or certainty” such as to justify the Claimant not issuing proceedings until after the final decision.  The prior decisions had been made at public meetings, had been published and were widely known.  On the contrary, considerations of fairness and certainty “all weigh strongly in favour of the Council”.  The Court of Appeal added:-

“It is inconceivable that the Council (or the potential tenderers) would have gone down the very costly and time-consuming process of procurement and competitive dialogue had it been envisaged that a challenge on the grounds of lack of consultation on the whole strategy of outsourcing might at the very end of the day be made. That is quite different from the inherent and understood risk that the procurement process might not ultimately result in any concluded procurement contract.”