The High Court has handed down an important judgment on local authority funding reductions. Jonathan Auburn and Peter Lockley look at its findings in a case concerning Hackney Council's approach to Special Educational Needs funding and Education and Healthcare Plans.
In R (AD & Ors) v London Borough of Hackney  EWHC 943 (Admin), Mr Justice Supperstone rejected a multi-faceted challenge to Hackney’s provision of Special Educational Needs (“SEN”) funding and its method of drawing up Education and Healthcare (“EHC”) Plans, in a ruling that will have important ramifications for legal challenges to local authority funding decisions.
The Court held that Hackney was entitled to apply a banded approach to costing SEN provision, and gave important rulings on a number of commonly used forms of legal challenge to local authority funding decisions, including statutory have regard duties relating to childrens’ welfare and equality duties.
The Claimants’, parents of local children with SEN, challenged Hackney’s use of a banded system for funding provision for children in mainstream schools with EHC Plans, and its decision to reduce the amounts in each band by 5%. On the various grounds of challenge, the court held that:
- A banded system was not an intrinsically unlawful way to discharge the duty in s.42 of the Children and Families Act 2014, notwithstanding the absolute nature of that duty [§§38-39]. Nor was the particular system operated by Hackney unlawful, either before or after the 5% reduction.
- The Court set decided the test for determining when an administrative system is unlawful because it produces substantive unlawful results in individual cases [§47], which was the allegation in the present case. Previously courts had only set a test for claims pf systemic procedural unfairness. On the facts, there was no evidence that Hackney’s system inherently produced failures to meet the s.42 duty [§§49-51], particularly as the impact of the reduction in an individual case could be mitigated by the flexibility to provide additional funding [§68];
- In maintaining a banded system and reducing the level of funding in each band, Hackney did not breach the welfare duties in s.175 of the Education Act 2002 or s.11 of the Children Act 2004 [§55], or the Public Sector Equality Duty (“PSED”) in s.149 Equality Act 2010 [§59]. Even though express consideration had not been given to those duties, they had been discharged in substance, because the decisions in question were ‘all about’ welfare and eliminating discrimination [§§55; 59]. Hackney had conscientiously considered how to ensure that the needs of SEN children would be met when deciding on the 5% reduction, it had also properly considered their welfare and equality needs [§68].
- The duty to consider sufficiency of provision in s.27 of the CFA 2014 was not engaged. The Court followed the recent decision of the Divisional Court in R (Hollow and ors) v Surrey County Council  EWHC 618 in holding that s.27 required only a global review of sufficiency from time to time, linked to the authority’s local offer [§§69-79]. As a result, it is now abundantly clear that dicta to the contrary in the cases of R (DAT and BNM) v West Berkshire Council  EWHC 1876 (Admin) and R (KE) v Bristol CC  EWHC 2103 (Admin) are wrong and should not be followed.
- No public consultation was required at common law, as an aspect of the PSED, or under s.27. The Court restored orthodoxy on the common law position by again declining to follow KE v Bristol: the duty arises only in cases of legitimate expectation or, exceptionally, ‘conspicuous unfairness’ [§§87-88]. The supposed ‘duty of inquiry’ inherent in the PSED is no more than an aspect of the broader Tameside duty to equip oneself with adequate information [§83]. That may or may not require public consultation, depending on the facts. In the present case, Hackney had adequate information to carry out a detailed analysis of the impacts of the 5% reduction, and furthermore had consulted with the Schools Forum, which had the appropriate technical expertise [§84].
The ruling will be welcomed by local authorities for the clarity and common sense it brings to the various issues above. Welfare, equalities and consultation obligations are not traps for unwary decision-makers. Box-ticking assessments are not required just for the sake of meeting them. Hackney had made a clear commitment to continue to meet the absolute duty in s.42 to secure provision for SEN children, and backed it up by a detailed analysis of the financial implications of the proposed reduction, which showed that needs would still be met. Its clear and conscientious focus on meeting the s.42 duty was enough to discharge all of the relevant duties.
The Court also dismissed a challenge to the format adopted by Hackney in writing EHC Plans. There is nothing unlawful in placing Section E (Outcomes) next to Section F (Provision). This does not violate the principle that provision should be made to meet needs (which are identified in Section B. Nor is it contrary to the statutory scheme for EHC Plans, which does not specify the plan format beyond stipulating that the different sections should be ‘separately identified [§105]. As the Court observed, it merely ‘enables the reader to see what the provision was trying to achieve for the child’ [§107]