Councils must give reasons when calculating personal budgets, says Court of Appeal

The Court of Appeal has upheld a decision that the Royal Borough of Kensington and Chelsea failed to give adequate reasons when it calculated a disabled woman's personal budget.

In Savva, R (on the application of) v Royal Borough of Kensington and Chelsea [2010] EWCA Civ 1209, Rafaela Savva appealed against a High Court judgement in March 2010 rejecting her assertion that the way the council calculated her personal budget of £170.45 per week was unlawful.

Kensington and Chelsea meanwhile cross-appealed against the decision of Pearl J that it had failed to give adequate reasons for setting the budget at that level.

The local authority pointed to the fact that there are some 5,000 recipients of personal budgets for which it is responsible, and argued that it would be unduly onerous for it to have to provide reasons behind every decision.

Both appeals were rejected. Giving the lead judgement, Lord Justice Kay ruled that the way in which the council used its Resource Allocation System was proper, and that it was entitled to use methodology recommended by the Department of Health.

But the judge added: “When a local authority converts an established right – the provision of services to meet an assessed eligible need – into a sum of money, the recipient is entitled to be told how the sum has been calculated.”

Lord Justice Kay said he accepted the burden would not be insignificant “but it is what fairness requires”.

He added: “If a local authority were entitled to notify a bald figure without any explanation, the recipient would have no means of satisfying himself of herself that it was properly calculated.”

The judge argued that the provision of adequate reasons could be achieved with reasonable brevity. “In the present case, I would consider it adequate to list the required services and assumed timings (as was actually done in the FACE assessment), together with the assumed hourly cost”.

Lord Justice Kay said: “I appreciate that some recipients require more complicated arrangements which would call for more expansive reasoning but if that is what fairness requires, it must be done.”

The judge suggested that counsel for Mrs Savva’s suggestion – that the provision of adequate reasons would extend to every decision having to include an explanation of the council’s RAS – “goes too far”.

On whether the duty to provide reasons could be satisfied by notice in the decision letter that reasons would be provided on request, which would be attractive to councils if few such requests were made, Lord Justice Kay said there was a dearth of authority on the point and “such as there is seems equivocal”.

However, he added: “It seems to me to be a matter of common sense that, in a case such as this, if a recipient is made a timely offer of the provision of reasons on request, the court would reject an application for judicial review based on a failure to provide reasons where no such request had been made.”

The judge acknowledged that the cross-appeal had become academic, in that after the High Court decision, Kensington and Chelsea had since revisited the matter and produced a new decision, supported by reasons.

Ed Archer