The claimant local authority applied for judicial review of the defendant secretary of state’s decision to reduce funding for childcare, quality and access projects that could be carried forward into the following financial year.

In November 2007 the secretary of state had announced a new grants scheme known as the Sure Start Early Years Childcare grant scheme to run for a three-year period from April 2008 to March 2011, which was offered to all local authorities in England pursuant to powers under the Education Act 2002. The purpose of the scheme was to improve the quality and availability of and access to early years learning for children below the age of full-time education. The local authority received an annual grant under the scheme and was entitled to carry forward any unspent capital from the previous financial year into the following year. Following a general election the new government sought to make savings. The secretary of state notified the local authority that it was to reduce the amount of unspent capital that could be carried forward by cutting funding for projects where funds had not already been “committed”. The secretary of state later determined that funds would only be “committed” where a building contract had been entered into, since such contracts could not be terminated without the imposition of penalties. The local authority argued that (i) there had been a lack of consultation; (ii) the choice of criteria used to determine committed funds was irrational; (iii) the secretary of state had failed to fulfil statutory duties under the equalities legislation. The court concluded, [2012] EWHC 1460 (Admin), that the secretary of state was under no obligation to consult and that the criteria identified could not be described as irrational. However, it quashed the decision on the basis that the secretary of state had not fully discharged the duty upon him under the equalities legislation at the relevant time, namely the Disability Discrimination Act 1995 and the Race Relations Act 1976. The decision had been taken before the Equality Act 2010 came into force. The court quashed the decision and directed that it should be reconsidered but only to give effect to the secretary of state’s obligations under s.149 of the 2010 Act. It further directed that the secretary of state need not consider any other issue save as to the extent that he was required to do so by law. The secretary of state reconsidered the matter and made a fresh decision. As part of the decision-making process he undertook a full equality impact assessment exercise. The local authority claimed that the second decision was also unlawful.

The local authority submitted that the decision adopted an unlawful and irrational approach to the criterion to be applied when deciding how much funding was to be cut; adopted an unlawful and unfair approach to the making of exceptions; was inadequately reasoned; and did not comply with the secretary of state’ s duty under s.149.

HELD: (1) There was nothing irrational in the approach adopted to the criteria to be applied. The argument related to exceptions was misconceived. The decision letter had made it perfectly clear to the informed reader why the matter was being decided as it was, South Buckinghamshire DC v Porter (No.2) [2004] UKHL 33, [2004] 1 W.L.R. 1953 followed. The equality impact assessment was not defective and the duty under s.149 had been demonstrably discharged when the decision was reviewed.

(2) (Obiter) The original decision had been made over five years ago in 2010 and that decision was reconsidered three-and-a-half years ago. The matter had become a carousel and was not a credit to the administrative law field or the co-operation that should exist between national and local government. There should have been negotiations between the parties and the litigation should have been compromised. There was no reason why mediation or others forms of alternative dispute resolution should not have a role in judicial review cases which did not raise any recurring principle or policy. However, in fairness to the parties the long delay periods was due to delays in the legal system.

Application refused

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