Challenging local authority budgets in the face of cuts – R. (on the application of Hollow) v Surrey CC

This case concerned an unsuccessful claim against a Local Authority’s projected budget cuts to the provision for schools and special educational needs and disabilities (SSEND). This case is highly likely to go to appeal and if not, there are other cases waiting in the wings, set to give a more settled court view on this important area of law. How are local authorities to balance their budgets and competing needs for scarce funds? Whilst this might seem like the devil and the deep blue sea, services owed by way of legal duties have to be met and local authorities have to be alive to the very real hardship caused by ongoing cuts to vital services. This or another case on appeal will settle important points of law for those who either need to challenge a cut to their service or defend a decision to make the cuts.

Public & Regulatory

In this case, the mothers of five children with special educational needs and disabilities living in Surrey challenged Surrey County Council (SCC)’s decision to approve detailed service revenue and capital budgets for 2018-19, which included ‘savings’ in the SSEND budget totalling £21,001,000.

The claimants challenged one item in the budget described as “areas of focus”, which comprised approximately £11 million of the proposed cuts, on the grounds that:

  • the decision to make the savings had been taken “irrationally” (a public law ground) and failed to have regard to relevant consideration (a common law requirement);
  • the decision had been taken without consultation (as required by common law); and
  • the decisions were in breach of the public sector equality duty; the duty to ensure that decisions affecting children had regard to the need to safeguard and protect them, and promote their welfare; and the duty to keep provision for special educational needs under review.

SCC opposed this by setting out its rising budget pressures – including on its special educational needs and disabilities services, detailing the mechanics of its financial planning process, and highlighting the provisional nature of the particular budgets under review.

The claim failed on the basis that the relevant “areas of focus” were broad areas in which SCC could identify ways of reducing the costs of the SSEND services it provided. The savings identified in the budget represented projections income and expenditure at the relevant time and did not bind SCC to any particular course of action. The Court found that the evidence did not support a finding that SCC had failed to consider relevant considerations and it could not be said that no reasonable decision-maker could have reached the decision to include the areas of focus in the budget; it was a sensible and lawful way for the local authority to plan and manage its finances. Furthermore, there was no statutory obligation for SCC to produce such a “medium term” budget. Its purpose was to assist SCC in setting the council tax precept and manage its finances.

A common law duty to consult did not arise because the likely effect of a decision was that some services to a vulnerable group might be withdrawn or reduced.

SCC did not need to provide fully worked out proposals and reviews of their impact to comply with the public sector equality duty. It was not irrational for SCC to conclude that it had sufficient information to discharge its duties or that no consultation was needed to make good any insufficiency of information.

SCC had been alerted to the duty to promote children’s welfare and had been told that it was not possible to identify the impacts of the “areas of focus” and that they could be positive and negative. In the circumstances, that was sufficient. Also relevant was the duty on local authorities to consult at reasonable intervals a number of parties in order to keep the provision for special educational needs under review. These parties include children and young people with special educational needs and disabilities and their parents, and the governing bodies of various types of local school and Academy. The relevant consultation should consider the extent to which the provision is sufficient to meet the educational needs, training needs and social care needs of the children and young people concerned. The Court held that Parliament could not have intended that these extensive and onerous duties of consultation should be triggered every time a change was made to the provision of special educational needs and that no duty to consult arose in the current case.

What next?

It was reported that, shortly before the hearing, SCC conceded it would not make any changes to SEND [special educational needs and disabilities] services and that it estimated spending approximately £4 million more than its budget had anticipated during the 2018/19 financial year. However, the council indicated at the time that still intended to make the cuts in future financial years, and the claimant families therefore felt compelled to fight on to the hearing.

Following the failure of this claim, those interested in issues around local authority funding will look to any appeal in this case or another waiting in the wings to settle the important points of law it has raised.

If you would like more information on this, please contact Melanie Carter

This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.

All content on this page is correct as of April 2, 2019.