22 November 2013

There have been a lot of hard decisions made by local councils over the last few years. Overall budgets must be reduced and specific cuts are never popular. Whenever such cuts are made (and, in fact, whenever councils take policy and strategic decisions), councils are obliged to follow due process and have regard to obligations to consult in a range of legislation including, for example the Local Government Act, Education Act or Equality Act.

Consultation must generally be specific and the responses must be properly considered by the decision makers. When this does not happen, in theory, affected members of the public can bring Judicial Review proceedings to overturn the decision. That in turn can jeopardise the entire financial settlement of the Council’s budget.

Which may be why courts appear to be very reluctant to overturn such decisions, even where they expressly find that the council has breached its duties (including consultation duties).

A high profile example of this was the claim brought by Mrs Nash against Barnet LBC’s decision to outsource most of its services to Capita earlier in the year. Although the Court of Appeal confirmed that Barnet had not properly consulted, it dismissed Mrs Nash’s claim on the basis that it had not been commenced quickly enough – a legal interpretation which many practitioners have considered harsh in the factual circumstances.

However, even where the court was unable to find a time limit to exclude such a claim, it appears that it will exercise its discretion not to overturn the council’s decision. Early in November, The Court of Appeal refused to overturn North Somerset Council’s decision to cut its Youth Services budget despite confirming that it had failed to consult sufficiently.

The Council cut funds for Youth Services by £360k and finalised its overall budget accordingly. A representative youth (Mr Hunt) brought Judicial Review proceedings for failure to consult and consider public sector equality duties under the Education act and the Equality Act. The first instance judge found that consultation was sufficient but Mr Hunt appealed. The Court of appeal (6 Nov) agreed with Mr Hunt that the Council failed to consult properly, however decided not to quash the decision on the basis that the Council’s overall budget has now been set and depends upon this reduction – ie changing the youth services budget would necessarily impact elsewhere. The delay between first instance and appeal hearing has made any relief impractical.

So, despite being substantively right, the applicant is granted no relief. Then, to add injury to insult, the court has now ordered costs against him on the basis that his appeal was not successful. Despite him being right.

The costs point is perhaps not as harsh as it may appear because Mr Hunt did have legal aid. In essence therefore it is a decision on which public fund should pay the costs of the process (the Council or the legal aid budget).

Nonetheless, the underlying message appears to be that procedural failures by an authority to consult in connection with budget cuts are unlikely to result in the decision being reversed in court once the overall council budget has been set. This reflects the difficulty in which many councils find themselves in financially tough times, but does somewhat undermine the concept of members of the public holding authority to due process.

Ian Tucker comments on emerging issues from a litigation perspective.

Key contact

John Houlden

John Houlden Partner

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