High Court judge rejects legal challenge by council over Ombudsman report in nursery fees case

The High Court has dismissed a council’s application for judicial review against the Local Government and Social Care Ombudsman (LGO) over a report that upheld a complaint of maladministration against the local authority in a nursery school fees case.

In Bournemouth, Poole and Christchurch Council, R (on the application of) v Local Government and Social Care Ombudsman [2025], David Lock KC, sitting as a Deputy Judge of the High Court, rejected all six grounds of challenge brought by the local authority, finding no reason to quash the report, and dismissing its application for an order preventing the publication of the report.

The judge said Bournemouth, Christchurch and Poole (BCP) Council sought the quashing of a report produced by the LGO dated 10 October 2022, in which the Ombudsman upheld a complaint of maladministration following a complain by Mr X.

Mr X complained that the local authority was responsible for maladministration when it failed to uphold a complaint he had made that he was wrongly required to pay fees to a privately operated nursery where his child was provided with childcare as part of the government’s Free Early Education Entitlement (“FEEE”) scheme.

After providing BCP with a series of draft reports and inviting its comments, the LGO produced a report which criticised the council.

Following this, BCP brought proceedings arguing that in doing so, the Ombudsman had proceeded on an “incorrect legal basis”.

David Lock KC said: “In summary, the council’s case is that the LGO made errors of law because it misunderstood how the FEEE statutory scheme operates, and submits that those errors of law should lead to this court quashing the report.”

He added: “The central dispute in this case is whether nurseries participating in the FEEE scheme are entitled to impose additional mandatory charges on parents. That dispute, in part, involves the Court determining the correct meaning of the words of the Guidance.

“It is the council’s case that the statutory scheme and guidance does not have the effect of requiring LAs to ensure that there are no compulsory charges and that there is no strict rule on exactly what goods and/or services must be free when delivered along with FEEE funded childcare.”

Hannah Slarks, on behalf of the Ombudsman, submitted that the “natural reading” of the Guidance is consistent with her interpretation of the statutory scheme.

She highlighted the provision in the Guidance that, whilst it is open to a nursery to seek to charge parents for various aspects of the overall provision of childcare the Guidance states that “these charges must be voluntary for the parent”.

She submitted that, although the word “must” appears within a paragraph which starts with the would “should”, the word “must” is consistent with the statutory scheme and has been chosen deliberately.

She therefore submitted that the meaning of the words “these charges must be voluntary to the parent” is “crystal clear” – particularly when the paragraph went on to give examples of how the charges could be made voluntary to the parent.

The judge said: “in my judgment and read as a whole, the relevant paragraphs of the 2018 Guidance [Early Education and childcare: statutory guidance for local authorities] are consistent with the statutory scheme. These paragraphs make clear that FEEE hours must be available to be accessed by a parent (or parents) without a parent being required to pay anything to the nursery provider.

“In my judgment, Ms Slarks is right to say that the “must” in the sentence that charges “must be voluntary” means “must” in the sense explained in the Guidance, namely it is a requirement of the statutory scheme. The use of that word properly reflects the statutory scheme and thus draws the attention of local authorities to the fact that, under the statutory scheme that local authorities are operating on behalf of the Secretary of State, any proposed charges for FEEE hours must be voluntary.”

The judge set out the council’s grounds to consider as follows:

• Ground 1: Did the LGO misunderstand the statutory scheme.
• Ground 2: Did the LGO confuse “top-ups” with other charges.
• Proposed ground 2A: The Council’s application to amend its grounds based on an alleged breach of the duty under section 26(6) of the Local Government Act 1974.
• Ground 3: Pre-determination and apparent bias.
• New ground 3A: Inconsistency.
• Ground 4: Departure from Guidance.
• Ground 5: Complaints about the terms of the LGO’s recommendations and publication.
• Ground 5A: The compensation recommendation.
• Ground 5B: The recommendation to get the Nursery to change its pricing policy.
• Ground 5C: The recommendation that the council should write to other providers.
• Ground 6: Publication of the report.

On Ground 1, the council submitted that the LGO made an “error of law” in its approach to the statutory scheme because it failed to understand that the 2018 Guidance recognises that if a parent with FEEE entitlement chooses to send their child to a provider during core hours, the provider is entitled to charge an extra fee to cover its costs during those hours.

The judge rejected this submission.

BCP also submitted as part of this ground that, in effect, these were matters between the nursery and Mr X and the council should not, in effect, be asked to intervene in such arrangements.

Considering this argument, the judge said: “I do not accept that the Council’s role is as limited as the Council suggests. The Council has a public law legal duty under s7 CA to ensure that nursery providers who are part of the statutory scheme are providing childcare to eligible children “free of charge”.

“It has entered into a contract with the Nursery under which the Nursery agreed to “deliver the funded entitlements consistently to all parents, whether in receipt of 15 or 30 hours and regardless of whether they opt to pay for optional services or consumables”: see clause 2.2. It also agreed that “Funded early education is part time place for each eligible child and must be completely free at the point of delivery”. I thus do not accept that the Council had no responsibilities in ensuring that the Nursery delivered on its commitments as part of the scheme. I thus refuse the Council permission on this part of its case.”

On ground 2, the council submitted that the LGO’s final report did not reach any conclusion as to whether the charges which were labelled “general extras” were (a) charges which were intended to bridge part of the difference between the government rate and the private rate or (b) were genuine charges for additional services provided by the nursery or consumables.

The judge accepted this. However, he observed there would only be an error of law by the LGO if the LGO needed to do so in order to resolve the complaint.

He said: “In my judgment, criticising the LGO over allegedly incorrect labelling of different types of mandatory charges does not assist the Council.

“It was sufficient for the LGO to conclude that the charges were mandatory (as it did) and that, in making mandatory charges, the Nursery was acting outside of the statutory scheme and in breach of the terms of its Provider Agreement with the Council. Once that conclusion was reached it was open to the LGO to conclude that it was maladministration for the Council to have rejected Mr X’s complaint and, by implication, not to have responded appropriately to the actions of the Nursery which was incorrectly imposing mandatory additional fees. The label given to those additional fees by the LGO does not seem to me to be particularly important.”

He rejected the council’s case under ground 2.

Turning to the council’s proposed ground 2A, the judge noted that the council applied to amend its grounds based on an alleged breach of the duty under section 26(6) of the Local Government Act 1974.

Section 26(6) of the Local Government Act 1974 provides:

“(6) A Local Commissioner shall not conduct an investigation under this Part of this Act in respect of any of the following matters, that is to say, …

(c) any action in respect of which the person affected has or had a remedy by way of proceedings in any court of law:

Provided that a Local Commissioner may conduct an investigation notwithstanding the existence of such a right or remedy if satisfied that in the particular circumstances it is not reasonable to expect the person affected to resort or have resorted to it”.

The council’s proposed amended pleadings advanced the case that it would have been open to Mr X to have commenced judicial review proceedings “on whether the Council failed to comply with its statutory obligation in respect of FEEE and/or departed unlawfully from the Guidance”.

The judge noted: “It is common ground that the LGO failed to examine the question as to whether s26(6) applied to this complaint. On that basis, the LGO accepted in open correspondence that it was responsible for a material error of law in the way that this complaint was adjudicated upon. The LGO offered to quash the report on that basis alone but.... that offer was not accepted by the Council.”

He added: “The Council’s case is that Mr X could have brought a Judicial Review action against the Council seeking to quash the adjudication on his complaint either because the Council had failed to follow the proper procedure under the Complaints Regulations or on the basis that the Council had failed to appreciate that the imposition of mandatory fees by the Nursery was a breach of the terms of the FEEE scheme and a breach of the terms of the Council’s contract with the Nursery. Given my findings under grounds 1 and 2 above, I accept that Mr X would have had good prospects of success in such a claim.

“I thus accept that (a) the LGO erred in law in failing to consider s26(6), and (b) that, as consideration of the issues under s26(6) is a matter of jurisdiction, the effect of this error was that this report was made without the LGO having, at that time, any legal power to hand down a report.”

However, the judge then outlined Section 31(2A) of the of the Senior Courts Act (SCA), which provides:

“The High Court—

(a) must refuse to grant relief on an application for judicial review, and

(b) may not make an award under subsection (4) on such an application,

if it appears to the court to be highly likely that the outcome for the applicant would not have been substantially different if the conduct complained of had not occurred”

He continued: “If the LGO had considered this matter properly (as she accepts she ought to have done), it is highly likely if not inevitable that the LGO would have concluded that any application by Mr X for judicial review against the Council would have been refused permission because the court would have considered that Mr X had an appropriate and more convenient other remedy, namely continuing his complaint against the Council through the LGO.

“I also accept that, if the LGO had properly considered the matter and gone on to adjudicate on the issues on its merits, the LGO would be highly likely to have produced very largely the same report as the report that was provided to the Council and Mr X in this case. As I indicated above, the LGO got the law right in its analysis and was justified in saying that the Council was wrong to have rejected Mr X’s complaint. If the LGO had to reconsider and produce a fresh report, there is no basis for suggesting that the conclusions of the report would be changed.”

The judge concluded: “It would be pointless to quash this report and to ask the LGO to reconsider the matter because it is highly likely, if not inevitable, that the LGO will produce the same report again. Thus, for all those reasons, I refuse permission to the Council to amend its grounds so as to raise this point.”

Outlining the council’s third ground of appeal, the judge noted: “The core of the Council’s complaint about bias and/or predetermination is at paragraphs 69 and 70 of the Statement of Facts and Grounds which says:

“69. From the start of the investigation, the LGO has proceeded on the basis that “free must mean free”: paragraph 44(1) above. This was because the investigators seem to have thought that they should act in accordance with their understanding of what Mr King said after the Leicestershire top-up case. Mr King was the former LGO, and the former head of the organisation for which the investigators worked.

“70. For reasons explained at paragraph 26-8 above, this was a serious oversimplification. But it led the investigators to a blinkered and incorrect view of the facts and how the Guidance should apply. Their view that the Nursery had in some way acted contrary to the Guidance, whether by way of a “top-up” or “disguised top-up” or in some other way, was pre-determined”.

Dismissing the ground, the judge found that when approaching the facts related to the complaint, the LGO had a “proper understanding” of the statutory scheme and was entitled to approach the case on the basis that the council ought to have realised that any proposed changes were required to be voluntary.

He said: “I accept the Council’s case that the LGO approached this investigation on the basis that mandatory charges were not permitted by the statutory scheme. That is, as I read it, what is meant by the expression “free must mean free”. However, in my judgment that was a correct approach because this was the core element of the statutory scheme. Hence the LGO was entitled to approach the case in that way. It cannot be unlawful for the LGO to approach an investigation with an accurate understanding of the statutory scheme.”

Ground 4 was not pressed by the council at the hearing.

Grounds 5A, B and C, which were based on concerns about the terms of the LGO’s recommendations, were also rejected.

The judge noted: “I consider that the LGO has a wide discretion to make recommendations and, in the end, these are only recommendations. It ought to have been abundantly clear to the Council that the main concern raised by the LGO was that the Nursery was charging mandatory additional fees and that this was not permissible under either the statutory scheme or under the Provider Agreement.”

Finally, in its sixth ground, the Council sought an order to prevent the LGO publishing its report.

The judge observed that the ground was “unusual” for two reasons. He said: “First, the LGO says that it has not yet made a decision whether to publish and so the challenge is premature.

"Secondly, the Council has not applied for an order to prevent it being identified as the local authority which is the subject of these proceedings. It follows that, as this judgment will become public in due course, all of the material parts of the report will come into the public domain in any event. It thus appears to me that there are serious questions about the utility of the relief that the Council seeks.”

The judge rejected ground 6 and dismissed the challenge.

Commenting on the outcome of the ruling, the Local Government and Social Care Ombudsman, Amerdeep Somal, said: “We welcome the judge’s decision, which brings to a conclusion a protracted case that has spanned a number of years.

“While we acknowledge councils will want to make justified challenges, we will take a robust stance to defend our decisions, which are based on evidence and arrived at after a great deal of careful consideration.

“I am pleased the judge has agreed with our position and understanding of the facts, law and guidance surrounding this case.”

Lottie Winson