Reports to members on cuts to services

In an age of austerity budgets, Paul Feild sets out the learning points following a recent High Court case involving cuts to funding of short breaks for disabled children.

The High Court decision of R (DAT & BNM) v West Berkshire Council [July 2016] [1] (‘West Berks’) has significant implications for local authorities considering austerity budgetary decisions which impact on people receiving statutory services.

This case provides a helpful signpost in terms of what needs to be in a report to members which recommends potential cut(s) in services. It emphasises that author(s) of such reports will need to make sure all of the legal considerations that elected members will need to consider are highlighted and an adequate explanation as to the options open to members in their decision making.

Background

The matter in dispute related to a decision of the full West Berks Council on 1 March 2016 in setting their annual budget. There were 47 cuts proposed including a cut in provision for holiday break funding for disabled children.

The decision was challenged by judicial review by two of the families affected. The judge the Hon Mrs Justice Laing DBE found against West Berks.

There were two key issues related to:

• Whether or not the West Berks Council has been properly advised as to their decision making in the 1 March 2016 council budget report; and
• The second issue - following notice of an application for judicial review a further full Council meeting members was called. Members were asked to re-consider their earlier 1 March 2016 decision regarding the holiday funding cut. Here the objection was that the Council's power to set aside their earlier decision was not adequately explained to the members.

The Council lost on both matters and the 1 March 2016 decision regarding the holiday break funding was quashed.

Facts of the West Berks case

Background history

West Berks Council provided children with short breaks where the Council’s assessment was that they have a statutory need for a short break. It also had a power to provide such breaks for children who did not have such a statutory need, which it exercised when it considered it appropriate. It had made provision for short breaks for disabled children since 2008. Indeed provision was increased between 2008 and 2015. Between 2008 and 2011 that provision was supported by specific funds from the Government.

But then budgetary pressures emerged. To address the need, officers prepared an austerity budget. A draft annual budget proposal was duly proposed and approved by the Council’s Executive and presented to the full Council on 1 March 2016. The report proposed many cuts. West Berks decided in setting the budget, to increase council tax by the maximum it could (1.99%), to impose the maximum social care levy (a further 2%), to increase fees and charges, and to make cuts to 47 different public-facing services. Those cuts included a 12.8% cut in the budget for children’s short breaks.

Prior to the report being presented, because of the anticipated need to make savings, West Berks Council consulted with a wide range of people and entities between 3 November and 14 December 2015. Its premise was that RSG would be reduced by 25%. When the Council was told, in December 2015, that the reduction was to be 44%, it initiated further consultation, which proposed additional savings of £2.1m.

The Council emailed its 900-strong community panel, and used Twitter, Facebook and local newspapers. The Council’s officers also consulted the voluntary sector organisations that provided short breaks. There was a meeting with affected families and providers. The feedback was that some would not be able to provide a service if funding were reduced. Others said that they had other funding (some of it uncertain) or that they made charges and could increase them, or that they did not make charges and would not do so, or that they might.

Notwithstanding the representations, the officers’ recommendation was that the cuts should proceed and this recommendation was made to the Executive which it in turn made a recommendation to the Full Council that the budget be approved with the cuts.

The full West Berks Council met on 1 March and approved the budget with the cuts.

The Council then received a letter from solicitors acting on behalf of children affected (the “Claimants”) claiming that the cuts were unlawful and an application for judicial review would be made. The Council in response determined that a more comprehensive detail report on the children’s holiday aspect of the budget should be re-presented to the full council for decision. The Council re-affirmed its previous decision.

The judicial review application

An application for judicial review was made by the Claimants to the High Court of the decision of West Berks Council made on 1 March 2016 (‘decision 1’), and of a further decision made on 31 May 2016 where members were asked to review their earlier decision (‘decision 2’). Both decisions were taken by the full West Berks Council.

Decision 1 was only one aspect of the decisions which the West Berks Council made, as part of the process of setting its budget, to cut funding. It related to reducing funding to voluntary sector organisations that provide short breaks for disabled children (‘short breaks’).

Decision 2 was taken after the Claimants were given to permission to challenge decision 1. Decision 2 re-affirmed decision 1.

In making the budget, West Berks Council was required to balance its duty to make a lawful budget against the competing needs of 47 different aspects of its services to the public in its area.

The Claimants sought from the High Court:

• a declaration (in relation to each of the grounds on which the Claimants argue that the decisions were unlawful);
• an order quashing those decisions in part; and
• a mandatory order requiring a new decision about the funding for short breaks

The High Court decision

The judge determined that she would consider the two decisions in turn. She first considered the decision of 1 March 2016 and observed the key issue before her was the legality issue that is whether, in substance, members were given the help they needed on the legal issues which they had to consider before making a cut to the funding for short breaks.

The judge stated that in making the cuts decision the Council was required to take specific aspects of the law into consideration. These aspects had to be addressed in the body of the report and their implications explained to members so as the members could consider them and take them into account in reaching their decision in the light of the facts. The specific legal provisions identified as being key to the decision were:

The Children Act 1989 (‘the 1989 Act’)

Section 17(1) of the 1989 Act imposes on local authorities a general duty to safeguard and promote the welfare of children in their area who are in need by providing a range and level of services appropriate to those children’s needs. A child ‘in need’ includes a disabled child (section 17(11)). ‘For the purpose principally of facilitating the discharge of’ that general duty, every local authority ‘shall have the specific duties and powers set out in Part 1 of Schedule 2’ to the 1989 Act (section 17(2)).

Paragraph 6(1) of Schedule 2 to the 1989 Act imposes a duty on every local authority to provide services ‘designed… (c) to assist individuals who provide care for [disabled children] to continue to do so, or to do so more effectively, by giving them breaks from caring’. That duty must be performed in accordance with regulations made by Secretary of State (paragraph 6(2)). [2]

The Breaks for Carers of Disabled Children Regulations 2011 SI No 707 (‘the 2011 regulations’)

Regulation 2 defines ‘carer’ and ‘disabled’. Regulation 3 is headed ‘Duty to make provision’. Regulation 3(1) provides that in performing the duty imposed by paragraph 6(1)(c) of the 1989 Act, "a local authority must

i. have regard to the needs of those carers who would be unable to continue to provide care unless breaks from caring were given to them; and

ii. have regard to the needs of those carers who would be able to provide care for their disabled child more effectively if breaks from caring were given to them to allow them to—

(a) undertake education, training or any regular leisure activity,

(b) meet the needs of other children in the family more effectively, or

(c) carry out day to day tasks which they must perform in order to run their household”.

Regulation 4 headed ‘Types of services which must be provided’, provided:

“(1) In performing their duty under paragraph 6(1)(c) of Schedule 2 to the 1989 Act, a local authority must provide, so far as is reasonably practicable, a range of services which is sufficient to assist carers to continue to provide care or to do so more effectively.

(2) In particular, the local authority must provide, as appropriate, a range of—

(a) day-time care in the homes of disabled children or elsewhere,

(b) overnight care in the homes of disabled children or elsewhere,

(c) educational or leisure activities for disabled children outside their homes, and

(d) services available to assist carers in the evenings, at weekends and during the school holidays.”

Regulation 5(1) requires an authority, before 1 October 2011, to prepare a statement for carers in their area (‘a short breaks services statement’) which gives details of the range of services provided in accordance with regulation 4, eligibility criteria, and how the range of services is designed to meet the needs of carers. That statement must be published, kept under review, and, where appropriate, revised (regulation 5(2) and (3)).

Section 11 of the Children Act 2004 (‘the 2004 Act’)

Section 11(2) of the 2004 Act imposes a duty to make arrangements for ensuring that when exercising any function in a way which affects a child are discharged having regard to the need to safeguard and promote the welfare of children.

Section 27(2) of the Children and Families Act 2014 (‘the 2014 Act’)

Section 27(1)(a) of the 2014 Act imposes a duty on a local authority to keep under review, among other things, its social care provision for children with disabilities.

Section 27(2) requires it to consider the extent to which that provision is sufficient to meet the social care needs of the young people concerned.

Section 27(3) of the 2014 Act imposes a duty on a local authority to consult with a wide range of local bodies when it exercises the functions imposed by section 27.

Section 3 of the Local Government Act 1999 (‘the 1999 Act’) and the statutory guidance issued under it

Section 3(1) of the 1999 Act imposes a duty on a local authority to ‘make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness’. Section 3(2) requires a local authority to consult various people ‘for the purpose of’ deciding how to fulfil the duty imposed by section 3(1). In deciding how to fulfil that duty, and in making decisions about consultation, a local authority must have regard to guidance issued by Secretary of State. [3], [4]

The statutory guidance is short. It is aimed specifically at, and ‘sets out clear expectations for’ councils which are ‘considering changing funding to local voluntary or community groups’. Paragraph 7 of the guidance says that ‘Authorities should seek to avoid passing on disproportionate reductions – by not passing on larger reductions to the voluntary and community sector and small businesses as a whole than they take on’.

Section 149 of the Equality Act 2010 (‘the 2010 Act’)

Section 149(1) of the 2010 Act requires a public authority in the exercise of its functions to have due regard to the three needs listed in section 149(1)(a), (b) and (c).

Those are the need:

(a) to eliminate discrimination, harassment, victimisation and any other conduct prohibited by or under the 2010 Act,

(b) to advance equality of opportunity between those who have a relevant protected characteristic and those who do not, and

(c) to foster good relations between those who have a relevant protected characteristic and those who do not.

Section 149(3) explains what having due regard to need (b) entails.

Section 149(4) explains further, by reference to section 149(3)(b), that taking steps to meet the needs of disabled people that are different from the needs of people who are not disabled includes, in particular, steps to take account of their disabilities.

Section 149(5) explains further what need (c) entails. Complying with section 149 may involve treating some people more favourably than others, but that does not permit conduct which would otherwise be prohibited by the 2010 Act (section 149(6)).

Section 149(7) provides that the ‘relevant protected characteristics’ are listed in section 149(7) of the 2010 Act. They include age and disability. They differ from those listed in section 4, because ‘marriage and civil partnership’ is absent. ‘Disability’ is defined in section 6.

The Judge considered that the budget setting report ought to have highlighted the above provisions and within the text advise members on how they should apply those principles within the legislation. She said:

"the question, rather, as I have suggested, is whether members were given the help which they needed to answer the questions posed by those provisions in the context of this case. I appreciate that, just as some people can utter prose without realising that that is what they are doing, it is possible for members to comply with the law, as it were, unconsciously, if their minds have been directed to the issues, in substance, which the law requires them to consider: cf per Lord Bingham in R v Somerset County Council ex p Fewings [1995] 1 WLR 1037 at p 1046B-H. But as he recognised in that passage, that conclusion is difficult to reach if members’ minds have not been directed to the relevant statutory language, and thus to the question which they should address. A paraphrase of the statutory test which includes some, but not all, relevant matters is not enough. Express reference to the statutory test (or an accurate paraphrase or summary, as the case may be) ensures a focus on all the factors which Parliament or (in the case of delegated legislation) the executive, with the necessary Parliamentary sanction, has prescribed."

She continued:

"There is no trace in the materials given to members of any reference to the express language, or to the substance, of regulations 3 and 4 of the 2011 regulations, or of section 27(2) of the 2014 Act. The Council had to consider, for example, in reducing the funding to voluntary sector organisations, whether the provision which remained would, in short, be sufficient, either simpliciter, or so far as was reasonably practicable. I do not say that, if that was officers’ view, and it had been conveyed to members, they could not so have concluded. But there is no trace in the report and appendices of any guidance for members about any of the issues posed by regulations 3 and 4, or by section 27(2). There is no reference, either, to the duty imposed by section 11 of the 2004 Act, or the best value guidance, to which the Council was required to have regard. In other words, members’ attention was not drawn to mandatory relevant considerations. I conclude that on those grounds, also, decision 1 was unlawful."

The highlighted text above in a nutshell sums up why the West Berks 1 March 2016 decision 1 was found to be unlawful. Simply put there was insufficient legal guidance in the report to enable the members to make a lawful decision.

The second West Berks decision

Following the first decision officers received a letter from solicitors acting for the Claimants and a further report was drafted. It was presented to full council on 31 May 2016. This report did address the absence of legal considerations in the previous decision. It recommended:

The Council considers the report and its appendices and resolves that the decision of the 1st March 2016 be reaffirmed.

However the Judge considered that the drafting of the report and advice on the night appeared to curtail the members' options in decision making. The Judge observed:

"I do consider that the way in which the issue was presented to members on 31 May gave a clear impression that they were expected to apply a rubber stamp to the decision of 1 March 2016, and a clear impression that they could not decide to rescind it. This is not altered by the fact that the summary report for the meeting is expressed in more open terms and says, for example, next to the side heading ‘Financial’: ‘Should the Council subsequent to this further Review rescind on its decision, further savings from another area would need to be sought’. The recommendation of that report was that the decision of 1 March 2016 ‘be re-affirmed’. In my judgment this state of affairs gives rise to a very clear appearance of predetermination. This means that decision 2 has no effect."

The key point was while on this occasion the correct legal content regarding the matter to be determined was present, the members were not given clear advice as to what was the range of their powers in so far as what the full council could do about their earlier decision.

Lessons for councils

There are a number of points to be made. While there was nothing adverse said about the quality of the consultation or the way that West Berks Council had gone about consulting the relevant stakeholders, that was not the only consideration. Although West Berks had gone to considerable lengths in their consultation, the key issue for the court was the drafting of the budget report and the need to have the right level of legal content that be effective in highlighting all the necessary legal considerations and how the decision should be made.

The court's message was; if there is insufficient legal guidance in a report to enable members to make a lawful decision and unless further guidance is given at the meeting itself, a decision relating to the cutting of statutory services will be open to judicial review. This is a stark conclusion for officers and their lawyers, but sound in logic.  

Furthermore, following commencement of judicial review when the second report was drafted, while that report contained the relevant legal content pertinent to the service area subject to the cut, it did not explain what the decision options were for the Council to consider including the making of a fresh decision. The Judge considered that members were simply being invited to, as it were, ‘rubber stamp’ their earlier decision. In other words the power of the Council to reverse its previous decision regarding that budgetary item and consider the matter afresh was not adequately explained.

Of course, judges are only going to consider the matters which are presented before them. In this instance it was certainly possible to have drafted a more comprehensive budget report but the case is silent on the other matters in the report which if they had also been subject for judicial review as well would equally not have had the complete legal considerations set out in the report. The simple observation is that other measures taken by West Berks could equally have been struck down too if those measures were also decided without appropriate legal guidance.

Implications for local government practice

Proper consultation

While West Berks carried out an effective consultation process, it is often the case that this is the first hurdle to trip up the difficult process of planning for austerity measures to be implemented. There is published guidance under S.3 Local Government Act 1999 which should be considered mandatory when cuts are envisaged. There is Cabinet Office Guidance but it is no substitute for checking there are not specific statuary provisions and guidance for each item. Professional legal advice must be consulted.

Early advice on legal implications

The key learning point for practices is that reports which seek members' decisions in reductions of services will need to have all the relevant legal considerations highlighted with sufficient explanation for members on how to make their decision.

This is all very well if there is several items but if there are dozens of austerity measures, then the legal implications will need to be identified at a much earlier stage and engineered into the process as much as to inform as all the other aspects which make up a sound committee report.

Getting members to understand the issue

While not wanting to pre-determine matters, there is nothing wrong with training members on how they should tackle austerity budget decision making and doing so reasonably close to the time when they will be called upon to make the decisions.

It is no good hoping that they will pick it up on the night.

Presentation

Clearly if there are dozens of items to be considered with specific considerations clarity of the presentation of report content, choices open to members and recommendations will be vital. Considerations should be given to presentation in the form of tables, colour coding and relevant legislation. As an example the Equality Act duties should be subject to briefings for members prior to the items occurring as a matter for decision, because the Equality Act may impact on many of the items up for consideration.

Meeting management

Furthermore, in the example of West Berks budget there were many items (47) which were to face cuts. Each of them could have been the subject of judicial review and as the case illustrates each would have required the same level of explanation and detail. Realistically this may be too difficult a task for members and officers to consider in a one evening meeting, and it may be better to spread the matters over a longer period whether it be an early afternoon start or over several evenings.

Final observation

If the level of detail and information together with the time necessary to properly consider austerity budgetary measures is provided, it is not inconceivable members may not agree with all the recommendations, which could be democracy in action of course...

Dr. Paul Feild is a Solicitor and Deputy Monitoring Officer at Thurrock Borough Council and a member of the BDTLegal Governance Team. He can be contacted This email address is being protected from spambots. You need JavaScript enabled to view it..