Tough decisions

The pressing need to implement cuts has put local authority decision-making under the spotlight like never before. Winston Brown sets out how it can be done lawfully.

There have been a number of cases recently[1] where decisions by local authorities to cut services have been struck down as unlawful. For those working within local government reading the judgements it can be painful or embarrassing reading as it is clear that what is really being attacked is the quality and rigour of the work of officers and of the material which was put before councillors (the decision makers). Since the work done before the decision was taken and also the underlying report was found deficient the decision of members based thereon is declared unlawful. Needless to say an otherwise glittering career can be derailed by such events. This article captures the areas where local authority decisions have been struck down and discusses how the in house officer – be it a legal or policy officer or any other – can help ensure a robust and safe decision.

Having worked in senior legal roles in local government for several years I am aware of the background to many of these types of cases: it is 4 pm and someone who (we feel) has been sitting on a report for weeks emails a thirty page report across for clearance in lieu of publication by 5 pm! The report in fact recommends a major decision (such as one to cut funding to a local service) and you have about an hour to get your head around the background information in the report and come up with some sensible comments in the ‘legal comments’ section. Sometimes the officer who drafted the report cannot be reached and there may be little time to correct or improve the report. The courts have struck down local authority decisions with the benefit of hindsight into the legal considerations which the authority should have had in mind. When local authorities get the law wrong the blame often rests with the in house legal officer. To seek to redress the balance I set out the more salient legal issues which the in house officer (whether in legal or elsewhere) should have regard to before pressing the ‘publication button’ on a report proposing a cut in services. The hope is that a more robust decision results and that in the event of legal challenge we are at least confident we have done all we should have.

Has proper consultation been carried out?

One should assess whether there has been proper consultation. Several local authority decisions to cut services have been struck down due to lack of consultation. The authority may be required to consult pursuant to a relevant statute or absence statute the common law may require some consultation in circumstances where fairness requires that parties with an interest in the decision must be consulted. It was held in R v North and East Devon HA exp Coughlan [2001] QB 213 that for consultation to be proper:

• A consultation must be undertaken at a time when proposals are still in the formative stages
• The consultation must include sufficient reasons for particular proposals to allow those consulted to give informed consideration and an intelligent response
• Adequate time must be given for consultees to formulate a viewpoint
• The product of the consultation must be conscientiously taken into account when the ultimate decision is taken.

The decision maker is entitled to put before those consulted a narrow range of options or just a preferred option and invite comments on these. So in The Vale of Glamorgan Council v The Lord Chancellor and Secretary of State for Justice [2011] EWHC 1532 (Admin)[2] the government minister did not act unlawfully when he put out to consultation the option of merging two magistrates’ courts as part of a savings programme to save money. The court rejected the argument that the minister ought to have put forward other ideas for consultation such as those suggested by the consultees. In W, R (on the application of) v Birmingham City Council [2011] EWHC 1147 the court declared as unlawful a decision by Birmingham to restrict adult social services support to ‘critical’ needs only and no longer support those as having only ‘substantial’ or even lesser needs. There was a failure to have due regard to the duty under s. 49 A Disability Discrimination Act 1995 (see below) and a failure to consult.

In R (Boyejo and others) v Barnet London Borough Council and R (Smith) v Portsmouth City Council [2009] EWHC 3261 Admin the two councils decided to remove residential wardens or staff from residential homes. The decisions of both councils were struck down on various grounds but among the adverse findings was that Portsmouth’s consultation was inadequate: the council had clearly made up its mind already; there had been insufficient notice of relevant meetings (six to eleven days) to enable those affected time to formulate a response and the responses to consultation were inadequate. Take care not to confuse ‘information gathering’ with consultation: in R (on the application of ) Rahman v Birmingham city Council [2011] EWHC 944 (Admin) the council had conducted a survey to identify who used what voluntary services on route to cutting service provision. The court held that this could not be said to be consultation. It was just an information gathering exercise.

The court noted in Birmingham that a consultation process must provide consultees with sufficient reasons in support of particular proposals to allow an intelligent response to be made, and must ensure that the responses are conscientiously taken into account when the ultimate decision is taken. Birmingham’s consultation was inadequate in that the initial documentation led consultees to believe that needs unrelated to "personal care" would not be supported which was not the case. The final report to Birmingham’s Cabinet recommending the decision had also not made clear to members that an alternative to the move to critical only was to find the funds from elsewhere. The result was that members did not have all the options and issues before them. The fact that s. 49A DDA 1995 was not complied with meant similarly that there had been a failure to properly consult. The two in one sense stood and fell together.

What does this mean for the in house officer one hour before publication deadline? If consultation is required review in detail what the report says was done in relation to consultation. Does the report confirm who was consulted and when? Was the method of consultation a sensible one i.e. does it capture all the relevant issues? Does the report make clear the nature of questions and issues put before the consultees and document the outcome of the consultation? Have all the options besides the recommended one been set out with clear reasons for rejecting them? Finally, is the proposed decision consistent with the outcome of the consultation process? For instance if the report recommends closure of a service which the consultees overwhelmingly oppose what reasons appear in the report to justify a recommendation to proceed with closure? In other words ensure that there are grounds for arguing the decision is nevertheless a reasonable one. If there is a statutory consultation obligation then of course ensure the consultation which was done meets the statutory standard and confirm this in the legal comments section. If the reported consultation is inadequate there may be time to invite the reporting officer to correct any deficiencies. In many cases such as one hour to publication there will not be so one’s choice is to either suggest the report be deferred so issues can be ironed out or the report goes ahead with a warning as to risks. Sometimes the report author can attend the meeting and verbally iron out apparent gaps in consultation and satisfy members. Or it may be that upon reading your comments members will themselves decide to defer the report or even that scrutiny members (see below) may be encouraged to ‘call in’ the decision to require defects to be corrected. This will be inconvenient but ultimately save time as it ensures a lawful and robust decision is taken.

Does the report give members sufficient information to discharge the public sector equality duty?

The new duty is contained in section 149 Equality Act 2010 and obliges public bodies such as local authorities to have due regard to the need to eliminate discrimination, harassment, victimisation and any other conduct prohibited by the Act; to advance equality of opportunity between people who share a relevant protected characteristic and those who don’t and to foster good relations between people who share a relevant protected characteristic and those who don’t (which involves tackling prejudice and promoting understanding).

It is essential that the impact of the proposed decision on different groups is understood and recorded so the decision makers have full awareness of the issues. Members should also have the specific nature of the duty in their minds so it should be drawn to their attention (as said for example in R (Brown) v Secretary of State for Work & Pensions [2008] EWHC 3158 (Admin)) so a summary of section 149 and its meaning in the legal comments section is probably indispensible where equality issues are engaged. Be careful that the report does not just ‘tick the box’ of an equality impact assessment (EIA): the cases continually stress that an EIA is but a possible tool to assist in assessing and paying due regard to the duty. A proper assessment of the equality issues should appear in the report[3]. The Equality and Human Rights Commission and the Cabinet Office have both published useful guidance on the new duty which it would be useful to consult at some point.

If you are not convinced that equality issues have been properly considered then it may be worth flagging these up in the legal comments section and inviting the report author and/or equalities officer to attend the meeting to speak to the issues. A minuted discussion at the cabinet or council meeting around the equality issues can (if push comes to shove) be relied on to show that equality was fully considered.

The government is also consulting on the Equality Act 2010 (Specific Duties) Regulations 2011 which will comprise ‘specific duties’ around publication of equality objectives and of certain pieces of information. It was hoped to bring the Regulations into force in July 2011 but they have not been approved before Parliament’s summer recess. The Lords will debate the Regulations in September 2011. You may also wish to note any relevant comments in relation to the specific duties whenever they come into force. There is no legal obligation to complete an ‘equality impact assessment’ although the Equality and Human Rights Commission still recommends that a similar document be prepared (which they prefer to call an ‘equality analysis’). Since case law and guidance underlines the importance of documenting the authority’s thinking leading up to a decision it is useful to complete an EIA. Your role is to ensure it makes sense, fully engages with all the issues and any alternatives and mitigation has been properly considered.

Are there any legitimate expectations engaged by the decision?

A ‘legitimate expectation’ arises where there has been an unambiguous promise made by the authority to a specific class of individuals or a person and detrimental reliance on the promise. The authority can only deviate from the expectation on the ground of some public proven interest. R (Nadarajah) v Secretary of State for the Home Department [2005] EWCA Civ. 13634 In the limited time for clearing a report you will not necessarily know whether there has been anything said or promised to an affected group or individual which could be said to amount to a ‘legitimate expectation’ but of course it should be considered. If advising early on at the preparatory stages then this is certainly an issue to be covered and you will be asking what has been told or promised to the affected group or individuals concerned, whether any legitimate expectation arises, whether it is an expectation as to process (e.g. to be consulted first) or as to substance (e.g. that funding continue for a specific period) and how to satisfy that expectation. If the authority is minded to act contrary to the expectation one would expect the report to set out compelling public interest grounds justifying this course even if expressed in terms which do not necessarily concede there is any legitimate expectation otherwise. In some cases it will not be clear but only a risk such might be argued. You may then wish to flag up the risk for the decision maker and decide if that should go into the public report.

Long term solution- better risk management

The reality is that one hour before the publication deadline affords insufficient time to turn a report heading for a bad decision into a good one. To avoid getting into this situation in the first place it is suggested that the authority takes a project management and risk based approach to pending decisions. I would suggest an ongoing forum of key officers and legal advisors reviewing forthcoming decisions to ensure the necessary work is being done well in advance of the final decision and to a high standard. All decisions on the council’s forward plan [5] would be on the agenda as well as other council decisions which have been rated as ‘risky’ which is code word for controversial and likely to be challenged. As work is being done for example carrying out initial consultations officers can stand back and ask themselves if sound and robust processes are being followed and we are doing everything necessary to ensure the final recommendation to members has been properly consulted upon and all relevant considerations will be before the relevant decision makers.

Make better use of scrutiny [6]. In many authorities scrutiny is seen as a ‘thorn in the flesh’ especially to the executive (or cabinet) since they exist to hold the executive to account and where necessary require through call in for a decision to be reconsidered or gaps filled in. This is how it should be. However, scrutiny members are also meant to be the eyes and ears of the community. Scrutiny members as councillors will be in touch with local issues and able to feed those views in through policy recommendations, the scrutiny work program and via call in. In the Birmingham case the controversial decision to restrict adult funding to critical needs only was not called in. One wonders whether any of Birmingham’s scrutiny members would have come up with the criticisms the court later levelled. Perhaps not but by engaging with local disgruntled groups through dialogue should help identify their concerns and enable officers to see if they can be met or mitigated. If this fails at least the authority is forewarned (and forearmed) of the arguments against its decision it will face in a judicial review challenge.

If scrutiny call in a decision it is an opportunity to correct any defects e.g. if lack of consultation scrutiny members could require more consultation. Of course to use scrutiny in this ‘due diligence way’ will require mutual agreement between the executive and scrutiny. A different legal advisor to scrutiny from the one who cleared the cabinet/executive report should help in this independent mindedness of the role. We like to think we get it right at the cabinet/executive stage. I would argue in this regard that call in properly managed can be the authority’s final safeguard. Remember also that scrutiny may co opt any person onto its committee or sub committee and a representative of an affected group could be appointed under this power. This could be a route adopted if members wanted an ‘expert’ or ‘inside’ view from someone working in the affected sector. Such a person would not have voting rights but at least scrutiny members would have a more informed view from the grass roots [7].

To move to this level of rigour poses internal problems as members and senior officers (including chief executives) will want a decision taken on the night and not delayed for ‘legal niceties’. But if the decision is struck down in judicial review delay will be the least of your problems. In some cases you have to put your foot down and insist the report be deferred to a later meeting to allow deficiencies to be corrected. Of course in some authorities this is not seen as a smart career move but deficiencies may be such that you have no choice. At the very least I would suggest you put on record your concerns so if it all hits the fan you have an audit trail when the inevitable recriminations begin post the embarrassing judicial review decision against the authority. An alternative is to simply run the risk i.e. pass the report and allow a potentially flawed decision to be made in the hope no one will challenge it. From a risk management point of view this should not be the approach if the decision is controversial (such as cutting support to vulnerable adults as per Birmingham) since you should assume a challenge may well be made. The longer term solution is to have a project management approach to clearing reports allowing time for legal issues to be considered and addressed to lead to an all round robust and safe decision.

Winston Brown is a solicitor with Fletcher Day LLP specialising in public law and employment issues. He was formerly Legal Partner and Deputy Monitoring Officer at London Borough of Barking and Dagenham.

1 e.g. W, R (on the application of) v Birmingham City Council [2011] EWHC 1147 and R (on the application of Rahman) v Birmingham City Council [2011] EWHC 944 to mention but two.

2 R (on the application of Robin Murray & Co) v Lord Chancellor [2011] EWHC 1528 (Admin) is to similar effect.

3 R (on the application of Rahman) v Birmingham City Council [2011] EWHC 944

4 see further R (on the application of Jenkins) v Marsh Farm Community Development Trust [2011] All ER (D) 06 (Mar); see also Luton Borough Council & Nottingham City Council & Ors v Secretary of State for Education [2011] EWHC 217 (Admin) in which five local authorities successfully applied to have a decision to cut Building Schools for the Future (BSF) funding to them struck down on the basis that they had not been consulted contrary to a legitimate expectation that they would be so consulted and there had been a failure to consider the various equality duties then in force

5 Section 13 of the Local Authorities (Executive Arrangements) (Access to Information) (England) Regulations 2000 requires local authorities to publish pending key decisions on a forward plan coming up over the next 4 month period. A ‘key decision’ is one involving significant savings or expenditure or one with significant effect on communities in two or more of the authorities’ wards. (Some councils include full council decisions also on their forward plans)

6 Section 21 Local Government Act 2000 obliges authorities operating executive arrangements to appoint an overview and scrutiny committee with specific remit to scrutinise and review decisions of the executive.

7 S. 21 (10) Local Government Act 2000 empowers the scrutiny to co opt a non voting member onto the committee or sub committee. Members co opted in relation to education matters can vote in certain defined circumstances under schedule 1 of the 2000 Act.