Council defeats legal action over scrapping of subsidies for 20 nurseries

A city council has successfully fought off a judicial review challenge to its decision to stop paying subsidies to 20 nurseries.

Four mothers, whose children attended the nurseries affected, put forward five grounds of challenge to Sheffield City Council’s decision on 27 February 2013:

  • Breach of the common law duty to hold a fair consultation;
  • Breach of the public sector equality duty;
  • Beach of the Best Value duty and statutory guidance;
  • Breach of the duties imposed by the Childcare Act 2006; and
  • Irrationality.

The council defended its decision to axe the grant payments, pointing to changes to Government policy on early years and the redistribution to fund free early learning.

In T & Ors, R (on the application of) v Sheffield City Council [2013] EWHC 2953 Mr Justice Turner rejected the mothers’ case.

The judge found that:

  • The consultation by the council was undertaken at a formative stage and he was entirely satisfied that Sheffield conscientiously took into account the views of those who contributed to the consulation process. Taken as a whole, the consultation process was fully compliant with the common law standards referred to in the Coughlan case.
  • The defendant authority fulfilled its duties under s. 149 of the Equality Act 2010. The criticisms raised by the claimants in the case did not adequately take into account the broad picture but concentrated on too fine a level of detail of analysis.
  • The social value of the nurseries had been drawn to the attention of the defendant in a briefing paper in December 2012 and a Cabinet report prepared for the 27 February meeting reminded the Cabinet of its duty in terms of Best Value.
  • There was no substance in a claim that the council had impermissibly distorted the outcome of its decision making process in a way calculated to preserve funding for itself as opposed to the nurseries.
  • The council had not breached the duties in sections 1, 3(2), 3(3) and 6 of the 2006 Act as claimed.
  • The process of assessment carried out by Sheffield was thorough and conscientious. “The defendant was fully equipped to embark on the exercise of decision making with all the information which it had accumulated and with which it had been presented over the period leading up to the Cabinet meeting of 27 February 2013. The defendant was fully aware of why the grants had been paid to the nurseries and the potential consequences in the event that the grants were terminated.”
  • He was “in no doubt” that the claimants genuinely believed that the council's decision was irrational in the sense that they considered that the balance of argument was firmly weighted in favour of the retention of the grants, at least for some further period, and they could not understand why this did not happen. “It is not, however, for this court to attempt to re-balance the arguments and form its own conclusion on their respective merits.”

Mr Justice Turner concluded: “The twenty nurseries affected by this decision which provide valuable facilities to the families which they serve are to be commended on the contribution they have made and continue to make to their local communities.

“I hope that, despite the termination of the subsidies, they are all able to survive and flourish but I must recognise that some may not.”

He added: “In an ideal world, it would not be necessary to make hard choices about the distribution of funds between competing but thoroughly meritorious causes but, particularly in the present economic climate, sacrifices even of highly socially desirable initiatives are sometimes unavoidable.

“Councils are democratically elected to make decisions and some of these are bound to be contentious and unpopular. Ultimately, however, the decision in this case, controversial as it undoubtedly was, complied with the standards imposed by public law and must remain undisturbed.”

Cllr Jackie Drayton, Cabinet Member for Children, Young People and Families at Sheffield, said: “We of course welcome the findings of the judge. It’s good to have confirmed that the council process was done in a fair, thorough and conscientious way.

“But I want to stress that we really do recognise the incredible contribution these providers make to the children and families in their area, but because of the draconian cuts – of £180m – to the council’s budget over the last three years from this Conservative Government, and those cuts have been deeper, faster and harder than we ever imagined, unfortunately we simply are no longer able to continue supporting these providers in this way.”

Cllr Drayton added: “We never wanted to go to court to defend our decision, but if we had not fought this case, then we would have to continue to find £1.6m year on year to pay these grants and this is money we no longer have.”

Douglas Johnson, Equality Rights Worker at Sheffield Law Centre, said: “We’re obviously very disappointed at the judgement, even though the judge praised the contribution the community nurseries make to their local communities.”

“It is clear the judge accepted the council’s evidence that Cabinet members had read very detailed equality impact assessments, even though they had not been made public. He was satisfied that the Cabinet members were fully engaged in the process and conscientiously made the decision to divert funding to Prevention and Early Intervention. The judge stressed this is the role of elected members of the council, not the court.”
 
Sheffield Law Centre said the four nurseries where the claimants’ children attended were still open, although others had already closed as a result of the decision.