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Secretary of State for Education – No need to go back to the drawing board

10 June 2014
In R (Essex CC) v Secretary of State for Education, the Administrative Court provided a good illustration of the limited nature of remedies available in judicial review proceedings.  Having previously quashed a decision for failure to comply with statutory duties under equality legislation, the Court was faced with a challenge to a renewed decision that reached a virtually identical outcome.  This time, however, the Court dismissed the challenge, holding that the new decision had appropriately addressed possible discrimination issues and was otherwise rational.

The case concerned a change in the policy of the Secretary of State for Education (then known as the Department for Children, Schools and Families) concerning the power of local authorities to carry forward unspent capital grants for a given year into the following financial year.  In June 2010, the substantial cuts in public funding prompted the Secretary of State to notify local authorities that the amount of unspent capital that could be carried forward was to be reduced for projects for which funds had not yet been "committed".

A disagreement arose as to the meaning of the word "committed" in this context.  The Secretary of State determined that funds would only be "committed" where a contract for building works or the purchase of assets had been concluded, since the termination of such contracts would result in significant penalties. On that basis, he assessed that funding could only be carried forward in relation to five contracts entered into by the claimant local authority. This decision was originally challenged by Essex County Council on three separate grounds: lack of consultation, irrationality and failure to fulfil statutory duties under equality legislation.

In a judgment handed down on 17 May 2012, the Administrative Court dismissed the challenges based on irrationality and lack of consultation, but quashed the decision on the basis that the Secretary of State had not fully discharged his equality duties, as he had failed to assess the impact of the proposed measures on the relevant disadvantaged groups.

Following this ruling in 2012, the council decided to proceed with all the disputed projects, funding them from its own resources while awaiting the final outcome of the challenge.  The Secretary of State's new decision, however, arrived at essentially the same conclusion, even once equality criteria had been taken into account.

The local authority challenged the renewed decision on various grounds, all of which were dismissed by the Administrative Court in its 6 June 2014 judgment (which is yet to be reported).  Among other things, the claimant argued that the Secretary of State had abdicated his decision-making role by treating the previous Administrative Court ruling as sufficient to confirm the rationality of his approach, rather than considering the new situation in which the building work had actually been undertaken by the claimant. The Court disagreed, noting that the previous ruling on rationality was not the only factor that was considered by the respondent in reaching his renewed decision. There was nothing wrong with the Secretary of State referring to the Court's original judgment as one of the relevant considerations, and the approach adopted by the respondent was, and indeed remained, rational even in the changed circumstances.  As the decision had been reached - this time - following due consideration of equality legislation, the Court ruled that it should stand.

Overall, this case may serve as a warning to others that it is generally inadvisable to base important or strategic choices on a court ruling that a decision has to be re-made, because as long as the specific failure is rectified by the decision-maker, there is always a possibility that the same outcome will be still reached.

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