Executive Functions

June 26th, 2019 by James Goudie KC

In Williams v Caerphilly County Borough Council (2019) EWHC 1618 (Admin) the Claimant challenged two decisions taken by the Council, which operates executive arrangements: a Cabinet decision to adopt a Sports and Active Recreation Strategy for 2019-2020 (“the Sports Strategy” and “the Strategy Decision”); and a further and later Cabinet decision to close a Leisure Centre (“the Closure Decision”).

As regards the Strategy Decision, the first ground of challenge was that the Strategy Decision was unlawful because it was taken by Cabinet, when it should have been taken by Full Council, pursuant to the Local Authorities (Executive Arrangements) (Functions and Responsibilities) (Wales) Regulations 2007 (“the 2007 Regulations”).By Section 13 of the Local Government Act 2000 (“the 2000 Act”), where a local authority operates under executive arrangements any function not specified in Regulations made under Section 13(3) is the responsibility of the Council’s executive. Where Leader and Cabinet executive arrangements are in place, executive arrangements made by the local authority under Section 15 of the 2000 Act make further provision for the specific allocation of decision-making responsibility. By Section 13(3) of the 2000 Act, Welsh Ministers have power to make regulations including to the effect that a function that would by virtue of Section 13(1) fall as the responsibility of an authority’s executive, should instead be the responsibility of the authority itself.

Regulation 6(1) of the 2007 Regulations provides as follows for the discharge of specified functions by Full Council, as set out in column (1) of Schedule 4 which includes:-

“The determination of any matter in the discharge of a function which (a) is the responsibility of the executive; and (b) is concerned with the authority’s budget, or their borrowing or capital expenditure”.

This is not to be the responsibility of the executive where the person with authority under the arrangements made under Section 15 of the 2000 Act to make the determination,

(by Column 2)

“… (a) is minded to determine the matter contrary to, or not wholly in accordance with (i) the authority’s budget, or (ii) the plan or strategy for the time being approved or adopted by the authority in relation to their borrowing or capital expenditure; and (b) is not authorised by the authority’s executive arrangements, financial regulations, standing orders or other rules or proceedings to make a determination in those terms.”

Column 2 of Schedule 4 to the 2007 Regulations gave rise to four questions: (1) what was the function that was being discharged when the Strategy Decision was being taken; (2) was the discharge of that function concerned with any of the Council’s budget, its borrowing or its capital expenditure; (3) if the answer to (2) is yes, what part or parts of the budget are material; and (4) was the Strategy Decision contrary to or not wholly in accordance with the Council’s budget or any approved plan or strategy for borrowing or capital expenditure.

Counsel for the Claimant contended that the first two of these questions ought to be formulated differently so that the focus of attention was not the function being exercised, but rather the matter being determined. Swift J, however, considered that the formulation in terms of functions was correct, both as a matter of ordinary language, given the way in which paragraph 2, column 1 is phrased, and also as a matter of construction if the paragraph is read together with Section 13 of the 2000 Act. That Section is concerned with the allocation of responsibility for functions (i.e. responsibility for the exercise of relevant powers and duties of a local authority). This is clear both from Section 13(1) and (2) of the 2000 Act. Paragraph 2 of Schedule 4 to the 2007 Regulations should be read in the same way since it is by way of derogation from the default position stated in Section 13(2).

Swift J found that the function being discharged when the Strategy Decision was being taken was Section 111(1) of the Local Government Act 1972, rather than Section 19 of the Local Government (Miscellaneous Provisions) Act 1976. As regards the second question, whether the discharge of the Section 111 power, the decision to adopt the Sports Strategy, was “concerned with” the Council’s budget, borrowing or a capital expenditure, Swift J said:-

“11.    … The words “concerned with” have a flexible meaning. At one end of a scale, any decision that could, even indirectly, result in expenditure or borrowing might be said to be “concerned with” those matters. Yet that would not be a realistic application of those words in the context in which they appear. How they are applied must be guided by the purpose of paragraph 2 of Schedule 4 to the 2007 Regulations, namely that decisions which are inconsistent with a relevant budget or borrowing or capital expenditure plan should only be taken by persons authorised under the Council’s own executive arrangements to take decisions which have those consequences. Thus while the words “concerned with” are to be applied taking good account of the specifics of the decision in hand, the focus should be on the direct consequences of the decision. Applied to the facts of this case, I do not consider it is correct to say that the Strategy Decision was a decision concerned with the Council’s budget, borrowing or capital expenditure. Most obviously, the Strategy Decision was concerned with the Council’s policy for sports and leisure provision over the period to 2029. It was not in the nature of the Sports Strategy … that it was concerned with the Council’s budget, borrowing or capital expenditure. The Sports Strategy contained no decision that committed the Council, as a matter of law, to specific expenditure, capital expenditure or borrowing. The fact that the Sports Strategy might be described as a plan that if implemented would inevitably entail expenditure of Council funds, is not to the point. Such spending decisions are yet to be taken; when proposals for development are put forward they will have to be assessed by the Council, on their own terms. …”.

Swift J concluded that the Sports Strategy did not amount to expenditure outside the Council’s Budget for 2019-2020 or outside its Capital Programme, and that the Strategy Decision was not, by reason of paragraph 2 of Schedule 4 to the 2007 Regulations, a decision required to be taken by the Council in full session. It was a decision that the Cabinet had authority to make.

As regards the second ground of challenge to the Strategy Decision, that it was unlawful because it was taken without information as to the cost of implementing the Sports Strategy, Swift J said:-

“17.    My conclusion is that the Strategy Decision was not unlawful by reason of a failure to take account of the likely costs of implementing the Sports Strategy. The Strategy Decision did not commit the Council to any specific expenditure. …

  1. In the premises, the second ground of challenge fails. Once the nature and substance of the Sports Strategy, … is taken into account, it was not Wednesbury unlawful for the Council to adopt the Sports Strategy without information about the likely cost that its implementation might entail. Given that the Strategy Decision did not commit the Council to any specific programme of work, it was open to the Council, to proceed on the basis that information about the cost of implementation was not a material consideration at that stage, and that such financial considerations would be addressed step by step as implementing plans came forward. This ran a political risk if implementation turned out not to be possible; but that is not a matter going to the legality of the decision.”

As regards the third ground of challenge to the Strategy Decision, that it was unlawful by reason of failure to comply with obligations under the Local Government (Wales) Measure 2009, and in particular Section 2, the general duty in relation to improvement, and Section 5, the obligation to consult, Swift J dismissed that ground of challenge, holding, at paragraph 20, that the duties under the 2009 Measure were not material to that decision. He said:-

“20.    …The first point is the way in which the Section 2(1) duty is formulated. It is not – for example, in the manner of the public sector equality duty under Section 149(1) of the Equality Act 2010 – expressed in terms of an obligation to have regard to prescribed considerations whenever a decision is taken. Rather, it is an obligation to “make arrangements to secure continuous improvement in the exercise of functions”. This suggests that the Section requires relevant authorities to put in place free-standing measures to improve decision-making processes by reference to the criteria listed at Section 2(2) of the 2009 Measure. These arrangements are distinct from what a relevant authority might do in the exercise of its ordinary substantive functions; the Section 2 arrangements are intended to improve the way in which those other functions are used. This conclusion is reinforced by the obligation at Section 3 of the 2009 Measure for relevant authorities, each year, to set improvement objectives in respect of the exercise of their functions; the obligation at Section 13 to make arrangements to collect information to permit assessment of whether the improvement objectives have been met; the provisions at Section 18 for the Auditor General for Wales to assess the compliance of each relevant authority with the requirements of Part 1 of the 2009 Measure (including Section 2); and the power under Section 21 for the Auditor General to carry out inspections of a relevant authority’s compliance with the Part 1 obligations. Taken together these provisions are a pragmatic framework for assessing compliance with the Section 2 improvement duty.”

Swift J continued:-

“21.    None of this is to say that the Section 2 duty is not enforceable through judicial proceedings. However, it does indicate that Section 2 is aimed at matters which are in their nature arrangements for the improvement of the exercise of functions; this is something discrete from a relevant authority’s “ordinary” executive decision-making. My conclusion is that neither the Section 2 duty, nor the Section 5 obligation to consult is a criterion for the legality of the Strategy Decision, because that decision was not in the manner of a decision to make improvement arrangements, and for that reason was not a decision within the scope of Section 2 of the 2009 Measure.

  1. Second, this conclusion is not affected by the judgment of Underhill LJ in R(Nash) v Barnet London Borough Council [2013] EWHC 1067 (Admin). …”

“27.    … the challenge to the Strategy Decision based on the 2009 Measure fails. The proposal to adopt the Sports Strategy was not an arrangement falling within the scope of Section 2(1) of the 2009 Measure; in consequence the Section 5(1) obligation to consult did not arise.”

Swift J went on to reject a submission by the Council that the 2009 Measure had fallen into desuetude following the enactment of the Well-Being of Further Generations (Wales) Act 2015.

The fourth ground of challenge to the Decision was based on the PSED. It succeeded.  Otherwise, the challenge to the Closure Decision failed.

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