High Noon for Doncaster Budget
No sounds of crackling gunfire echoing across the metaphorical Doncaster prairies. Just a tense Administrative Court encounter on 24 July 2012, effectively between Peter Davies, as Elected Mayor of Doncaster MBC and the Council itself. For the Claimant was seeking judicial support for a decision of the Council over a contrary one of the Mayor.
But (subject to any appeal) it was the Council that in effect wound up at Boot Hill (courtesy of Hickinbottom J), leaving the Mayor to blow the smoke from his legal sixshooter and carry on implementing his library streamlining strategy which involved (amongst other things) closing two libraries (see R (Carol Buck) v. Doncaster Metropolitan Borough Council [2012] EWHC 2293 (Admin).
Whilst factually the case concerned the Council’s endeavours to reverse the effects of the Mayor’s library strategy (which proposed fewer, better served libraries and involved the closure of two libraries) it is also an important constitutional decision on the limitation of the powers of local authority members to control relevant decisions of council executives, particularly concerning elected mayors.
Background
Following consultation, the Mayor and his Cabinet decided to proceed with the new service-delivery proposals for Doncaster libraries which affected 14 out of the Borough’s 26 libraries, two of which as mentioned were to close. The Mayor’s draft budget was framed accordingly. By 43 votes to 6 the Mayor’s budget was approved but with a significant amendment under the ‘Libraries’ heading. This included the creation of ‘a contingency budget to provide support for 14 Community Libraries’ (to include reopening the two already closed facilities). The amendment stated that the ‘fund will be available to ensure that no library is allowed to fail and to ensure delivery of the Library Services within communities’. The Claimant submitted through her counsel that the amendment was intended to ensure so far as possible that the Mayor’s library service proposals did not proceed.
However, the Mayor decided to stick with his proposals and not reopen the closed libraries. The central issue therefore was whether it was lawful for the Mayor and Cabinet to act so as to thwart the intention of full Council.
Law
Hickinbottom J noted the way that the Local Government Act 2000 had changed local government decision processes ‘by removing most decision-making from the full Council altogether, and putting it into the hands of a small executive’. It is the executive which by default is responsible for the discharge of Council functions with those reserved to Council being specified by statute or statutory regulation (see the Local Authorities (Functions and Responsibilities) (England) Regulations 2000 (S.I. 2000/2853). These functions include calculation of the authority’s Council Tax requirement (per sections 67 and 31A of the Local Government Finance Act 1992). In particular (by section 31A(2), English billing authorities must calculate the aggregate of:
‘(a) the expenditure which the authority estimates it will incur in the year in performing its functions and will charge to a revenue account. . . for the year in accordance with proper practices, [and]
(b) such allowance as the authority estimates will be appropriate for contingencies in relation to amounts to be charged or credited to a revenue account for the year in accordance with proper practices’.
Schedule 4 to S.I. 2000/2853 (mentioned above) outlines circumstances where functions are not to be the responsibility of an Authority’s Executive. As the Court noted, paragraph 2 of Schedule 4 provides that these include discharging any budget, borrowing or capital expenditure function of the authority, if the executive is minded to determine the matter contrary to or not wholly in accordance with the authority’s budget. Paragraph 3 of the same schedule provides that the circumstances also include executive functions in relation to which a plan or strategy has been adopted or approved by the authority. In this case the matter will not be the responsibility of the executive if the executive is minded to determine the matter ‘in terms contrary to the plan or. . .strategy adopted or approved by the authority’.
Doncaster Council’s Budget and Policy Framework Procedure Rules (within its Constitution) defines ‘budget’ as follows. This is the identification and allocation of financial resources for the following financial year(s) by Full Council including: revenue budgets; capital budgets; the Council Tax Base; the Council Tax level; borrowing requirements; prudential indicators; the medium-term financial strategy and the level of uncommitted reserves. It also includes any resolution of full Council identified as a budgetary decision causing the total expenditure financed from Council Tax, grants and corporately held reserves to increase above that stated in the approved budget. In the event of a conflict, paragraph 2.36 of the Constitutions Guidance issued in 2000 indicates (as the Judge put it) that ‘the full Council may ultimately carry the day by a two-thirds majority’.
Claimant’s Submissions
The Claimant submitted that the budget amendment passed by more than a two-thirds majority required the Mayor to reverse the library service restructure, reopen the two libraries that had been closed and to retain or as necessary re-employ relevant employed staff to previous levels. This was in the light of section 31A(2)(a) of the 1992 Act (as noted above) which involves the Cabinet deciding what it will do and not what it might or could do. And, in the Claimant’s view, ‘the budget process gives the full Council a once-a-year decision-making opportunity to review any aspect of an authority’s services, and set its own specific and detailed requirements for such services, which it is able to enforce against the executive by amending the draft budget proposed by the executive, by the required two-thirds majority, to include provision for that agenda.’
Furthermore, the later decision of the Mayor not to spend the money as required by the amended budget was a decision ‘contrary to, or not wholly in accordance with. . .the authority’s budget’ (per paragraph 2 of Schedule 4 to the 2000 Regulations) and therefore beyond the power of the Mayor. Also argued was that the budget amendment was a decision contrary to a ‘plan or strategy’ adopted or approved by the authority (per paragraph 3 of Schedule 4) and that the Mayor’s decision to defeat the effect of the budget amendment was taken for an improper purpose under the principle in Padfield v. Minister of Agriculture, Fisheries and Food [1968] AC 997.
Outcome
The Court, however, did not agree. The Judge said that it would be: ‘. . .a remarkable invasion of the executive function of the Mayor if, as part of the budgetary process, the full Cabinet could interfere and reverse such an executive decision by amending the budget to give, not only an allocation of funds for the library service, but a direction that the funds must be spent and spent precisely in accordance with the direction that they have made.’
In the Court’s view, section 31A(2) of the 1992 Act does not give the Council the powers contended for by the Claimant. Section 31A ‘only imposes on the full Council an obligation to make calculations’. It is not, as the Judge pointed out, ‘. . .written in terms of giving it wide ranging decision-making powers’. For given the careful scheme set up by the 2000 Act for the allocation of executive and non-executive functions ‘it would be astonishing if such a scheme were to be completely upset by provisions relating to the calculation of council tax’. In the Judge’s view, the essential purpose of section 31A is to ensure that an authority’s books balance by setting council tax at an appropriate level. But whilst the Council may allocate more or less funds to the Mayor, what it cannot do in approving the budget ‘is to require the Mayor to expend money in a particular way or, unless the executive propose to act in a way contrary to plans and strategies reserved to the full Council, to expend money on a particular function.’
The budgetary process is geared to ensuring that there is no ‘budget deficit’ but it ‘certainly does not allow the full Council to micro-manage the authority’s functions and interfere with the executive functions of the Mayor and Cabinet’. In the very nature of a budget, fixing ‘a budget for any head cannot require the Mayor to spend that money on that head at all, or in a particular way: it simply allocates funds for the executive to spend.
Consequently: ‘If and in so far as the full Council purported by their budget amendment to direct the Mayor and Cabinet to spend money allocated in the budget in a specific way, that amounted to an interference with their executive functions – and would be an unlawful interference by the full Council in the proper role of the Mayor and Cabinet.’
Hickinbottom J then considered the extent to which the budget amendment did in fact give the Mayor such a direction. He noted that the amendment was in terms of creating a particular ‘contingency’ fund (more apt for section 31A(2)(b) (see above) than for 31A(2)(a)) and the amendment suggests no direction to the Executive to spend the money in any or any specific way. In the Judge’s view the Mayor was simply treating the amendment ‘as a budget allocation, and indeed as a true contingency fund’. But if the amendment did in fact require the Mayor to reopen the closed libraries, ‘that would be clear interference at a particularly micro-management level into the executive function of the Mayor’.
Nor was the Judge impressed by the submission that the amendment, even if not properly part of the budget process, was ‘a plan or strategy that the full Council had properly reserved to itself and made’. Amongst other things, the budget amendment was not written as a plan or strategy, nor at anything like a high strategic level. Neither did the amendment comply with relevant formalities in the Constitution and nor had the Council ever approached it as a plan or strategy.
As to the Padfield point (discretionary powers must be exercised for the purpose for which they were conferred), since Hickinbottom J found that the decision as to how to provide library services is an executive one for the Mayor and not for full Council, his decision cannot have been improper. Indeed, in the Judge’s view, it would have been unlawful for the Mayor to have followed the Council’s direction since this would improperly have fettered the Executive’s decision-making facilities. The Court also found the decision to be rational and (as indicated) in pursuit of a proper purpose.
Comment
This is an important decision on the constitutional relationship between council and executive following the changes wrought by the Local Government Act 2000. This tilts the power balance noticeably onto the Mayor’s side in the light of a purposive and a textual examination of the relevant law. But whilst a directly elected mayor will in practice have more substantial democratic standing (given his or her specific election), the legal analysis canvassed in Buck would seem equally applicable to leader and cabinet executives. For under section 9C of the 2000 Act, a leader and cabinet executive is just as much an executive as that of a mayor and cabinet and therefore equally subject to regulation 4 of and Schedule 4 to S.I. 2000/2853.
Nevertheless, the situation at Doncaster is not entirely typical since the directly elected mayor is from a different political party from that of the majority of Council members. And this gives rise to some inevitable polarisation on issues of particular political conviction. In practice therefore most authorities should be able to resolve such conflicts behind the scenes before ‘curtain up’. However, if this decision endures, it does provide a useful analysis of this important area of law for local authority monitoring officers and those they advise.
Dr. Nicholas Dobson is a Senior Consultant with Pannone LLP specialising in local and public law is also Communications Officer for ACSeS. He can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it.
© Nicholas Dobson August 2012.
