In Anderson v Chesterfield High School UKEAT/0206/14/MC, Mr Anderson is currently the elected Mayor of Liverpool.  This is an executive post and regarded as full-time.  The position carries with it an annual allowance of almost £80,000.  He had previously held positions as Councillor of Liverpool City Council, the Leader of the opposition on the Council and ultimately at the time of his election as Mayor, Leader of the Council, which was in effect a full-time post with an annual allowance of approximately £50,000. 

Prior to his election as Mayor, he was employed by a neighbouring Local Authority, Sefton Metropolitan Borough Council (“Sefton”) at Chesterfield High School. Once elected Leader of Liverpool City Council he had ceased to work at the School. 

Sefton agreed that he should continue as an employee. This was on the basis that he would be paid the maximum allowed as paid leave to enable employees to hold public office by Section 10 of the Local Government and Housing Act 1989 (208 hours per annum).  His post was held open.   Sefton also continued to pay pension contributions.

This arrangement continued until the School became an Academy.  His employment then transferred by a TUPE transfer to the Respondent, now independent of Sefton.

The Respondent was concerned that the arrangement was “inequitable”,  principally because the Respondent was paying some £4,500 per annum to the Claimant but the pupils at the school received no benefit.  The Respondent accordingly terminated the agreement.  The Claimant claimed, inter alia that he had been dismissed unfairly.

The ET found that he had remained an employee and had been dismissed for “some other substantial reason”, a potentially fair reason.  However, the dismissal procedure was unfair, and his claim for unfair dismissal was upheld.  He was entitled only to a basic award subject to a Polkey deduction and contributory fault.

Mr Anderson appealed.  The EAT on 14 April 2015 upheld the decision of the ET on the basis that the deductions were justified on the facts found by the ET and that the Respondent had acted reasonably in taking the view that a continuation of an arrangement whereby Mr Anderson was paid (albeit a modest amount) by a publicly funded school, without having to provide any services, for an indefinite period was of no value to the Respondent and might lead to significant criticism.  It was entitled reasonably to regard the arrangement as inequitable and unsustainable and to terminate Mr Anderson’s  employment.

His Honour Judge Serota QC said:-

“13. No concern appears to have been given as to what the public perception might be of the expenditure of public money to a full-time politician who was not expected or required to provide any services in return.”

“57. In my opinion the principal reason for the “dismissal” was obvious. The realisation that a continuation of an arrangement whereby the Claimant, an elected official of a neighbouring Local Authority, was paid (albeit a modest amount) by a publicly funded school without having to provide any services for an indefinite period was considered to be of no value to the Respondent and might lead to significant criticism if the arrangement became public.  The Respondent was reasonably entitled to regard the arrangement as inequitable and unsustainable.  It was also the case that the Respondent considered that the arrangement (including the indefinite holding open of the Claimant’s post) led to some instability within the school.

58.       The Employment Tribunal’s conclusions on the Polkey deduction and deduction for contribution were conclusions to which it was entitled to come.  Its conclusion that the Claimant was party to a misuse of public funds was certainly within the range of reasonable responses of a reasonable employer.  Further, the Claimant’s conduct can reasonably be regarded as culpable or blameworthy.  The finding that the Claimant would have been dismissed in any event had a “fair” dismissal procedure been followed is unassailable as a finding of fact that the Employment Tribunal was entitled to make.  I am unable to see how consultation would have made any difference.  …

59.      It seems to me as though the Claimant has simply not given sufficient attention as to how the arrangement he made with Sefton and so continued with the Respondent might look to outsiders.  The Claimant was entitled to receive almost £80,000 per annum from Liverpool for his role as elected Mayor, yet also procured a payment (albeit modest) from public funds for which he provided, and was not expected to provide, any service.  It was, more likely, considered to be a reverse form for a zero hours contract, whereby the Respondent was bound to make payment of salary but the Claimant was not bound to provide any services.  It is certainly fairly arguable that this arrangement may strike members of the public as constituting a misapplication of public monies. …

60.      What most people would consider the Respondent’s desire to extricate itself from this arrangement, which could have been a public relations disaster for the school, would seem to me to be a clear example of SOSR for ending the employment relationship with the Claimant.  I am satisfied that this is the conclusion to which the Employment Tribunal came and to which it was clearly entitled to come.  In the circumstances, the appeal is dismissed.”

R (Silus Investements) v Hounslow LBC (2015) EWHC 358 (Admin) the Claimant’s grounds of challenge included breach of a legitimate expectation of consultation.  The Council had represented that there would be consultation on the proposed designation of a Conservation Area.  Therefore it had of course to comply with the minimum standards of a lawful consultation procedure, as expressed in Gunning/Coughlan, and recently approved by the Supreme Court in Moseley. Lang J found that those standards had not been met.  First, the consultation notice was not accompanied by “sufficient reasons for particular proposals to give intelligent consideration and an intelligent response”.  The summary and details given were “too brief and superficial to provide for a meaningful consultation”: para 54.  Second, a 7 day consultation period was too short for consultation to work fairly or effectively, para 55.  Third, the product of consultation was not “conscientiously taken into account”, because the decision was made before all the consultation responses were received: para 57.  There had been unfairness.

R (T) v Trafford MBC [2015] EWHC 369 (Admin) was primarily concerned with whether the Council was under a common law duty to include alternative options in its consultation on proposed budget savings.  Stewart J held that the Council was under no such duty.  On the proper interpretation of Moseley in the Supreme Court it is only sometimes that fairness will require consultation upon arguable yet discarded alternative options.  Moseley does not cast doubt on what was said by the Court of Appeal in Rusal. The Council were entitled “lawfully to present their preferred option and to consult on the best way to achieve that”: paragraph 37(vii).  The point in Moseley was that the consultation document was misleading.  If an authority does not consult on rejected options, and presents only a preferred option for consultation, that is not misleading.  It was legitimate to focus the consultation on savings in services when circumstances dictated that it was not realistic to increase council tax or use reserves: paragraph 38.

Budget cuts and consultation featured yet again in R (L & P) v Warwickshire County Council [2015] EWHC 203 (Admin), in which Judgment was given by Mostyn J on 5 February 2015.  The primary ground of challenge alleged that the Council had acted unlawfully in not consulting (at common law) on its savings target for its Integrated Disability Service (“IDS”) for children.  However, this, along with other savings targets, had been identified in February 2013.  The Judge, applying Nash v Barnet LBC [2013] EWCA (Civ) 1004, (2013) PTSR 1457, held that grounds for challenge “first arose” in February 2013 and the challenge therefore was far out of time.

The Judge went on, however, to consider the ground on its merits.  He began by identifying a constitutional issue, which he put this way:

“The decision to set a local authority budget at a certain level and to make reductions in certain areas must surely be the very quintessence of a political decision.  A challenge to a budget proposal should normally be made through elected representative or, if dissatisfied with what they are doing, by seeking to unseat them at an election. That is what local democracy is all about. The main challenge here does to my mind raise a serious constitutional question.”

Mostyn J went on “whole-heartedly” to agree with the statement of Collins J in the Lincolnshire library closure case, Draper v Lincolnshire County Council (2014) EWHC 2388 (Admin), at para 53:

“The overwhelming objection to the decision does not in itself mean that it is unlawful. The decision to make the £2 million cuts was a political one which was not and cannot be challenged in the courts.  It can of course when it comes to electing councillors. The need for cuts will inevitably produce hard decisions for many, but that does not make them unlawful.”

Mostyn J added, however, a caveat:

“That does not mean of course that every political decision made by an elected county council is immune from challenge in judicial review proceedings. It does mean however that I must be especially careful that I do not cross the line into the political arena and get lured into making a judgment about the merits of a democratic decision which imposes a cut.”

The Judge duly recognized that in some circumstances there is no statutory obligation to consult but the common law nonetheless imposes one, in order to satisfy the requirements of procedural fairness, but said Mostyn J:

“Plainly, the circumstances where the judges will intervene to tell a decision maker, who may very well be an elected representative, how procedurally to make his or her decision will be very circumscribed.”

Turning to the three circumstances where the common law will impose a duty to consult, (i) where there has been a promise to consult, (ii) where there has been an established practice of consultation, or (iii) where, in exceptional cases, a failure to consult would lead to conspicuous unfairness, the Judge observed that for each of (i) and (ii) “the duty must be predictable and finite in scope”, and that as for (iii) not only must the case be “exceptional” but the unfairness must be of a very high level”, it must be “conspicuous”.  Reverting to the constitutional issue, Mostyn J added that:

“In each instance where the decision not to consult has been made by a democratically elected representative the court should be very slow to intervene, for obvious constitutional reasons.”

Mostyn J having set out the principles to be applied in working out whether a duty to consult arises or not, the next question would be how it should be carried out.  Obviously it must be carried out fairly.  The Judge referred to the authorities, including at Court of Appeal level, that consultation will only be so unfair as to be unlawful when something has gone “clearly and radically wrong”, a “strong test”, a “high test”.  Mostyn J ruled that this remained the test post-Moseley in the Supreme Court, saying that his view was supported by R (Robson) v Salford City Council (2015) EWCA (Civ 6. 

The primary ground of challenge failed because it was not a category (i) case, as none of the promises of consultation promised consultation on whether in principle the cuts should be made, and all of the promises made were to consult, which was done, about the ways and means of achieving the targeted savings; nor was it a category (ii) case; and the question was whether it was a category (iii) case, which would be “very rare”. Mostyn J stated that the Warwickshire case did not come “remotely close” to “conspicuous unfairness amounting to an abuse of power”.  He said:

“This case was an example of a budget being regularly and constitutionally set by a local authority in the present time of austerity.  All democratic procedures and safeguards were followed. It simply cannot be said that to make that decision without prior consultation was so conspicuously unfair as to amount to an abuse of power.  On the contrary, it was an example of democratic power being properly, lawfully and constitutionally exercised. If the people of Warwickshire did not like that decision they could have voted out the councillors three months later.”

He added:

“My overriding conclusion is that the claimants here are voicing their complaints in the wrong place.  Rather than raising them in a court room they should raise them in councillors’ surgeries and ultimately in the voting booth.   As I have said earlier, that is what local democracy is all about.”

The Warwickshire case also concerned statutory consultation on the Local Offer (social care, education and health) under the Children and Families Act 2014.  The Judge observed that not only did a vast number of people and bodies have to be consulted before a Local Authority publishes its Local Offer, but also a “huge amount of information”,  a  “very extensive range of information”, must be referenced.  Mostyn J observed:

“Although the prescriptions are extremely extensive it is important to understand that the requirement is no more than to publish information about what services are expected to be available.  Section 30 of the 2014 Act incorporates a publication obligation, no more, no less.”

The Judge rejected a challenge that the Local Offer consultation was unfair. It was not a consultation about whether particular provision should be made.  He said:

 “… it must be very clearly understood what the purpose of the consultation is.  It is about what appears in the Local Offer, which is a compendium of information.  I remind myself of the words of section 30.  The local authority has a duty to publish information about certain provision it expects to be available.”

The Judge also rejected a challenge that alleged that the IDS proposals, and the local LSCB’s thresholds document, were unlawful or contrary to the 2013 “Working Together to Safeguard Children” statutory  guidance.  He said, referring to Section 17 of the Children Act 1989:

 “It would not make sense for any child with any “mental disorder” to be entitled automatically to receive a section 17 assessment conducted by a social worker given the mutability of the term mental disorder.  I agree with Mr Goudie QC that it may, for example, be entirely inappropriate for a child with dyslexia or dyspraxia to receive a social care assessment under section 17.  In my judgment the guidance should not be read as insisting that every disabled child should initially be the subject of a full-blown social worker assessment.  Alternatively, if it does say that then local authorities and safeguarding boards would have good reason for departing therefrom.  The approach taken in the threshold document strikes me as eminently reasonable in terms of initial deployment of resources.”