O v London Borough of Lewisham & Anor

O is an 11 year old boy with severe and complex difficulties. For many years a statement of special educational needs has been in place for him. In 2006, as he approached the time when he would transfer to a secondary school, it was appropriate for the statement to be reviewed. The London Borough of Lewisham, where he lives, accordingly amended the statement in February 2006. Part 4 of the amended statement identified the P school as the one where he would be placed from September 2006. This is a maintained day special secondary school.

O’s mother wished him to go to the PH School. This is also a maintained special school, but it is primarily a residential school and O’s mother wished him to be a boarder there. She appealed to the Special Educational Needs and Disciplinary Tribunal (‘SENDIST’) asking for the statement to be amended to reflect the school that she preferred for her son. She sought other amendments as well but these are not material to the present proceedings. In its decision of 5^th February 2007, SENDIST did not order Lewisham to make the alteration to Part IV which O’s mother wanted: it decided that the P School should still be named as the School where O was to be placed. O had already started at the P School in September 2006 and he continues to be a pupil there.

O’s mother appeals to this Court under s.11 of the Tribunals and Inquiries Act 1992 on the grounds that the Tribunal erred in law in its decision. SENDIST, the 2^nd Respondent, has not appeared or been represented on the appeal, but the London Borough of Lewisham seeks to uphold the Tribunal’s decision.

There are a number of provisions in the Education Act 1996 which concern the role to be played by parental preferences. Of immediate relevance in the context of a statement of special educational needs is Schedule 27 paragraph 3. This provides as follows:

In summary the Tribunal in the present case found that, although PH School was a very good school, ‘given our finding that [O] does not require a residential setting, to place him there would constitute over provision and an inefficient use of resources.’ They calculated that a place at PH School would involve approximately £20,000 more per year by way of reckonable costs than a placement at P School.

While he is a day pupil at P School, O’s mother is provided with respite care by Lewisham as part of its social services obligation under the Children Act 1989. It was argued on her behalf before the Tribunal that, if O was placed at PH School, she would not need this care (or, at least, not to anything like the same extent) and this saving ought to be brought into account in deciding the additional cost of a placement at PH School. There was evidence before the Tribunal that the saving would have been about £16,588 each year, making the additional cost of PH School, not £20,000 but about £3,500.

As to this argument, the Tribunal said ‘We do not accept Ms Gent’s [O’s mother’s solicitor] submission that we should bring into account the cost of [O]’s social care in considering the ‘efficient use of resources’, a concept which is inherently narrower in scope than s.9 of the Education Act 1996.’

Section 9 provides:

Mr Wolfe, on behalf of the Appellant, accepts that, on the authority of B v London Borough of Harrow [2000] ELR 109, the Tribunal could only take account of the costs (and any savings) to Lewisham as a local education authority when considering whether a placement at PH School would be an ‘inefficient use of resources’ for the purposes of Schedule 27 paragraph 3(3). However, he submits that the Tribunal should have considered the effect of s.9. He argues that s.9 does indeed have a wider scope than paragraph 3(3). ‘Public expenditure’ is not confined to costs or savings of Lewisham as an education authority but would also include savings on the costs of respite care. He argues that the Tribunal was right to recognise this but erred in law in apparently giving no consideration to the impact of s.9. He accepts that the effect of s.9 is of a lesser order than paragraph 3(3). If the conditions of the latter are fulfilled, the local education authority (and, on appeal, the Tribunal) is obliged to adopt the parents’ preference for a school placement. Section 9, by contrast, only requires the education authority and the Tribunal to ‘have regard’ to the parents’ wishes even if their choice would not involve unreasonable public expenditure. Nonetheless, he submits, if the Tribunal had had regard to s.9 and to the evidence that the true impact on ‘public expenditure’ was some £3,500 instead of £20,000, it might have agreed to order Lewisham to specify the PH School for O.

Mr Roscoe, on behalf of Lewisham submitted that s.9 did not specifically fall to be considered in circumstances such as the present where the issue was which of two maintained schools should be named in a statement of educational needs. He also argued that this was, in any case, an arid debate since s.9 gave the Appellant no greater assistance than paragraph 3(3) of Schedule 27. Critically, he argued, ‘public expenditure’ in s.9 is a term of no wider meaning than ‘resources’ in paragraph 3(3). The later expression, as the Appellant accepted, meant the resources available to the local education authority whose statement of educational needs was in issue. Respite care was not intended to fulfil an educational need. The Tribunal was wrong so far as it had held that ‘public expenditure’ in s.9 had a wider meaning than ‘resources’ in paragraph 3(3). In any case, the Tribunal in this case had had regard to the wishes of the Appellant that her son should be placed at PH school.

In C v Buckinghamshire County Council and Special Educational Needs Tribunal [1999] ELR 179 the parents could not invoke paragraph 3(3) because their preferred school was in the independent sector and the paragraph is only engaged where parental preference is for a maintained school. The parents submitted that they could, nonetheless, invoke s.9. The local authority argued that s.9 had no application at all in a special educational needs case since Part IV of the 1996 Act (which included Schedule 27) constituted a self-contained code for special educational needs. The Court of Appeal rejected the argument.

Sedley LJ gave the leading judgment. He observed that s.9 is on the face of it relevant to all statutory functions under the Act, including functions relating to children with special educational needs. He continued.

Mr Roscoe understandably emphasises Lord Justice Sedley’s comment that where the choice is between two maintained schools, the general duty in s.9 is ‘superseded’ by the more onerous duty in the Schedule. Likewise, he relies on a comment to similar effect by Sedley LJ in Oxfordshire County Council v GB [2001] EWCA Civ 1358 at para [16] where the judge said

Mr Roscoe submits that if paragraph 3(3) ‘supersedes’ or is ‘substituted for’ s.9 where the parental preference is for a maintained school, there can be no scope for s.9 in such a case.

However, in both of these two cases, the choice facing the Tribunal was between a maintained school and a school in the independent sector. It was not necessary for the Court to decide in either of them whether there was any obligation to have regard to s.9 in a case where the choice was between two maintained schools. Lord Justice Sedley emphasised the generality of the duty in s. 9. It was central to the decision of both cases that that general duty would continue to apply if the conditions of the more onerous obligation were not satisfied. In these two cases, paragraph 3(3) did not apply because the parents’ choices were for schools in the independent sector, but in my view, the same principle would apply if the obligation in that paragraph did not apply for some other reason. The fact that there is no obligation to comply with the parents’ wishes is not a sound reason for displacing the duty to have regard to them.

Accordingly, in my judgment s.9 does still apply even where the parents’ preference is for a school in the maintained sector. Of course, that will be of little relevance or help to a parent in the Appellant’s position if the term ‘public expenditure’ is no wider than ‘resources’. This was the central issue between the parties in the present appeal and I now turn to that question.

As a matter of first impression, the words of the statute are not so confined. The word ‘expenditure’ is qualified by the word ‘public’. That suggests Parliament’s concern was with the impact of a parent’s choice on the public purse. It is not, on its face, limited to a particular part of the public purse.

In the present context, the dispute between the parties is as to whether certain savings should be taken into account, but, on Mr Roscoe’s interpretation, parental preferences which involved expenditure out of the budgets of public bodies apart from the LEA would not be taken into account either. That would be a surprising attitude for Parliament to have taken in 1944 (when s.76 of the Education Act 1944, the predecessor of s.9, was first adopted).

This is not the first time that this issue has come before the courts. On at least three previous occasions, it has been argued, as Mr Wolfe does here, that a local education authority or the Tribunal should take account of public expenditure savings which would be made if the parents’ choice was accepted, even though the savings would be by a public body or service other than the local education authority.

C v Special Educational Needs Tribunal (1997) ELR 390 was not produced to me, but it is referred to in one of the later authorities. Dyson J. was considering s.76 of the Education Act 1944. He said

I do not have full information as to the legislative scheme which existed at the date of this case, but currently (and at the time that the Tribunal made its decision), an LEA would be able to call for assistance from a Local Health Board, a Primary Care Trust or a local authority when the LEA needed ‘help in the exercise of any of their functions under [Part IV of the Education Act 1996]’ - see Education Act 1996 s.322. I see no reason why the ‘help’ should not take the form of information as to the costs of services which that other authority would incur or would save if the parents’ choice of school was adopted. The duty under s.322 is qualified where (I summarise) compliance would be unduly onerous or expensive. There may be situations where assessing the costs of services to an individual child would trigger these exceptions, but I do not imagine they are likely to be common. Moreover, where the provision of the information would demonstrate that the parents’ choice was an unreasonable public expenditure, one might expect the other authority to be eager rather than reluctant to co-operate. In a case such as the present, the information in question would provide detail of expenditure which would be saved if the parent’s choice was successful. Again, one might expect the authority, whose budget would be relieved, to be willing rather than unwilling to co-operate in supplying the information.

The second case is again one which I have seen only indirectly. In Edwards v Cornwall County Council (unreported 27^th July 2001) Hooper J. recorded a concession by counsel for Cornwall that the ‘Tribunal wrongly interpreted “public expenditure” as meaning “local education authority expenditure” and thus excluded from its consideration the first respondent’s expenditure to the extent to which it was part of the Social Services’ budget.’

Since the point went by concession, it does not carry the matter a great deal further except so far as it is possible to say that Hooper J. did not think the concession objectionable or manifestly wrong.

The third authority is S v Somerset County Council [2002] EWHC 1808 (Admin) in which Sir Richard Tucker, sitting as a Deputy Judge of the High Court, rejected the argument that the Tribunal had erred by failing to taking account of savings which would have been made to the local authority’s social services’ budget if the parents’ preferred school was named in their son’s statement of special educational needs.

Sir Richard Tucker referred to the judgments of Dyson J. and Hooper J. He preferred the former. He said:

I can most conveniently consider the reasoning of the judge in reverse order. In the final sentence of para [35] he refers to the Tribunal’s inability to discover what provision would be made by other agencies or the cost of those services. I have already made my comments on the similar observations by Dyson J. in C v SENT. With great respect to Sir Richard and Dyson J. I do not find this to be a persuasive indicator of the meaning of what is now s.9.

At the beginning of para [35] Sir Richard commented on the division in a statement of special educational needs between the educational requirements of the child (which the LEA is obliged to meet) and the non-educational provision which is specified in Part VI of the statement and which the LEA may, but is not required to provide – see Education Act 1996 s.324(5). Part VI may also include non-educational provision which the LEA (or, by inference, the Tribunal in the event of an appeal) are satisfied will be made available by a Primary Care Trust, a social services authority or some other body – see Education (Special Educational Needs) (England) (Consolidation) regulations SI 2001 No. 3455 Schedule 2.

In my view, though, Mr Wolfe made a sound criticism of this part of the reasoning. A statement of educational needs prescribes what will be provided in relation to the child’s educational needs. In the case of Part VI, services are specified which the LEA proposes to make available or which, it is satisfied, other bodies will provide. When an LEA or the Tribunal asks itself whether the parents’ preferred choice of school would involve unreasonable public expenditure, it is looking at a quite different question. Take the present case: the Appellant argued that if her choice of school was named in the statement, there would be a saving of costs by Lewisham’s social services department. These are services, then, which would be unnecessary if the parent’s choice is adopted. There would be no question of making any reference to those services anywhere in the statement. Correspondingly, it is of no relevance that the Tribunal could not require Lewisham’s social services (or some other authority) to provide those services.

In the Somerset case the parents’ choice of school would, it seems, have led to some savings on the part of the county council’s social services department. In the present case, the savings would be to Lewisham’s social services department. Mr Lewis submitted in that case and Mr Wolfe argues in this case that the savings must be taken into account when they will be incurred by one and the same authority even if they are attributed to a different budget.

Mr Wolfe expands on that argument. He says that the Education Act 1996 gives functions to a ‘local education authority’ but, by s.12(3), in the case of a London borough, that expression simply means the borough council. The respite care, which the Appellant’s choice of school would save, is provided under the Children Act 1989 which places responsibility on the ‘local authority’. Again, in the case of a London borough, that is the borough council. Thus, he argues, there is no separation in terms of corporate identity between Lewisham, as the LEA and Lewisham as responsible for social services. It makes no sense to distinguish between costs saved by the borough council in one capacity rather than another.

Mr Wolfe argues that the point can be made even more forcefully as a result of the Children Act 2004 (passed subsequent to the Somerset case). This makes provision for ‘children’s services authorities’, which are defined in s.65(1) as including a London borough council. By s.10 a children’s services authority is required to make arrangements to promote co-operation between the authority and certain other identified public bodies. By s.11 a children’s service authority must make arrangements for ensuring that their functions are discharged having regard to the need to safeguard and promote the welfare of children. By s. 18 a children’s services authority must appoint an officer for the purposes of its functions as an LEA and for its social service functions. The 2004 Act was passed following the inquiry into the death of Victoria Climbie and reflected the importance of co-operation between the various services concerned with children. The same idea has led Lewisham to set up in 2005 a single directorate that brings together education and social services functions for children and young people (in advance of the mandatory implementation date for s.18). It would, says Mr Wolfe, be contrary to these moves to distinguish between the role and expenditure of Lewisham as an education authority and its role as an authority providing social services to O and his mother.

I accept the arguments of Mr Roscoe that Parliament has maintained a distinction between the functions of a local education authority and a social services authority although both sets of functions may be entrusted to the same corporate entity. Section 322 of the Education Act 1996 envisages that a local education authority may request the assistance of, amongst others, a ‘local authority’ and in R v City of Wakefield Metropolitan District Council and Special Educational Needs Tribunal (unreported 29^th January 1998) Laws J. held that ‘local authority’ could include the council which was also the LEA. He said:

The Schools Standards and Framework Act 1998 s.52 requires an LEA to prepare a statement of planned expenditure for each year and a report of its expenditure at the end of each year. These are obviously references to the education budget of the council as opposed to its expenditure (and income) in relation to its other functions. There is power in the Education and Inspections Act 2006 s.162 for the Secretary of State by order to repeal references to local education authorities and to children services’ authorities and replace them with references to local authorities. However, no such order has yet been made.

While I go some way in agreement with Mr Roscoe, however, I do not accept that this is sufficient to undermine the more general point behind Mr Wolfe’s submissions. The legislative changes that have already been made reflect the good sense of looking at the totality of the child’s position under the alternatives being canvassed. Mr Wolfe referred to the decision of the Court of Appeal in R v Leeds City Council and Special Educational Needs and Disability Tribunal [2005] EWCA Civ 988 where Wall LJ said:

In his judgment at para [43] Judge LJ recorded his full agreement with what Wall LJ said about the ‘imperative, that so far as possible within the relative statutory frameworks, a holistic approach should be adopted by the various bodies with different responsibilities for C.’ Thomas LJ agreed with both judgments.

This guidance that LEAs and the Tribunal should inform themselves of the ‘full picture’ and adopt a ‘holistic approach’ accords with what I regard as the natural meaning of the term ‘public expenditure’ in s.9, namely that it is concerned with the impact of a parent’s choice on the public purse generally and not exclusively with the cost to the local education authority. Of course, as the Court of Appeal warned in the Leeds City Council case, that approach must be constrained by the statutory framework within which LEAs and the Tribunal operate, but I accept Mr Wolfe’s argument that for the Tribunal (or the LEA for that matter) to take account of savings to the local authority’s social services budget does not require the Tribunal or the LEA to go beyond that legislative framework.

Mr Roscoe argued that the term ‘public expenditure’ could not sensibly be given a different meaning to the term ‘resources’ in paragraph 3(3). It is the case that in B v London Borough of Harrow (above) the House of Lords interpreted the later expression to mean the resources of the local education authority. The Court of Appeal had been impressed by the fact that s.322(3)(a) relieved health authorities of the duty to comply with requests for assistance from an LEA if they considered that it would be unreasonable to do so ‘having regard to the resources available to them’ [my emphasis]. Paragraph 3(3) by contrast spoke of ‘resources’ without the same qualification - see B v London Borough of Harrow and the Special Educational Needs Tribunal [1998] ELR 351 per Otton LJ at p.362 and Simon Brown LJ at p.363-4. The House of Lords did not agree that this was a good reason not to read a similar limitation into paragraph 3(3) – see Lord Slynn [2000] ELR 109 at p.115. Nonetheless, I do not consider that the House of Lords’ interpretation of the word ‘resources’ in paragraph 3(3) requires an interpretation of s.9 which confines ‘expenditure’ not only to ‘public’ expenditure, but also to expenditure by the LEA.

In the course of argument I raised a different point in relation to the Harrow case. If Mr Wolfe is correct, the Tribunal in that case should have gone on to consider the impact of s.9, yet the House of Lords said nothing to suggest that this was required. I suggested that this was a point in Mr Roscoe’s favour. On reflection, I do not think that it does take the matter much further. The report of the House of Lords’ decision gives no indication that this possibility was canvassed by the parents. The argument focussed exclusively on whether the Tribunal ought to have considered the impact of the parents’ choice on other authorities for the purposes of paragraph 3(3). A potent reason why it was not necessary to look at other issues may well have been that the whole debate had become somewhat academic by the time the appeal was heard by the House. Following the Court of Appeal’s decision quashing the Tribunal’s decision, a further Tribunal hearing took place. On that occasion the Tribunal found that, even taking account of the impact on the resources of the other local authority, the parents’ choice of school would still have been an inefficient use of resources and not one which should therefore be specified in the statement. It was then, perhaps understandable, that the attention of the parties and the House should have centred exclusively on the extent of the duty of LEAs in paragraph 3(3) – the point which had been decided by the Court of Appeal.

Mr Roscoe also relied on the practical difficulties which might follow if the term ‘public expenditure’ was given the meaning for which Mr Wolfe contended. He submitted that the Tribunal, whose expertise was in the field of education, would not be equipped to consider the merits of arguments as to whether non-educational costs would be saved by naming the parents’ preferred choice of school. He also argued that the non-educational costs or savings might fluctuate. Thus, a council was entitled to recover all or some of the costs of respite care in certain circumstances – Children Act 1989 s.17(7). In the case of the Appellant, they could not do so because she was in receipt of income support - ibid s.17(9). However, if she were to take employment or otherwise lose her entitlement to income support, the position would change, the net cost of respite care to the council would diminish and the overall cost to the public purse of the PH School would be correspondingly greater. If the Tribunal was obliged to consider the impact of the parents’ choice on other public services, there would be even more scope for fluctuations in the financial position. The cost of a child’s health care (which the parents might argue would be saved by the adoption of their preferred choice of school) might go down if the child’s health improved.

In my judgment these are not factors which alter the outcome of the exercise of statutory interpretation. Although the Tribunal’s focus is a child’s educational needs, his or her non-educational requirements are not concepts which are alien to it. The Tribunal may have to grapple with these for the purpose of deciding what should be included in Parts III and IV of the statement. And, as the Court of Appeal said in the Leeds City Council case, as far as possible and consistently with the legislative framework it is desirable that a Tribunal inform itself of the ‘full picture’ and adopt a ‘holistic approach’. As for possible change in circumstances, this is inherent in the system already. Mr Wolfe gave the example of transport expenses. In deciding whether the parents’ choice would involve an inefficient use of resources, the Tribunal must take account of only the marginal cost of providing transport to the alternative schools – see, for instance, Oxfordshire County Council v GB (above) at para [18]. The marginal cost would be nil if the LEA had to provide transport for other children in any case and if the car, bus or taxi could take an additional child without further expense. However, the position would be liable to change if those other children no longer needed the transportation. The possibility that the calculus of expenditure and savings may change is not a good reason for the Tribunal doing the best it can to assess the position at the date of the hearing.

Accordingly, I respectfully differ from the conclusion which Sir Richard Tucker reached in the Somerset case. In my judgment, the term ‘public expenditure’ in s.9 is not confined to the expenditure of the Local Education Authority. Mr Wolfe referred me to the decision of the Court of Appeal on 12^th February 2003 in Helen S v Somerset Council [2003] EWCA Civ 195. I observed that this was a refusal of permission to appeal and, as such, was not something which should ordinarily be cited. I had not appreciated at the time that it was a refusal of permission to appeal from Sir Richard Tucker’s decision in the same case. As such, it is right to note that Sedley LJ considered that it remained an ‘open question’ as to whether the term ‘public expenditure’ in s.9 was confined to the education budget of the LEA in question. Permission to appeal was refused because on the facts of that case, the Court of Appeal considered that, even if the Tribunal had taken into account the social services’ costs savings involved by choosing the parent’s preferred school, the decision would have inexorably have been the same given the Tribunal’s views about the relative educational advantage of the two competing candidate schools.

This question has three aspects.

Mr Roscoe argues that the Tribunal did take account of the Appellant’s preference for the PH School: the appeal had been substantially about whether that school or the P School should be named in the statement. I do not find this argument convincing. The Tribunal’s approach was to view the Appellant’s preference exclusively through the prism of paragraph 3(3). It is implicit in its decision that it considered s.9 not to be relevant to its decision. As Mr Wolfe acknowledged, even if it could not be said that the Appellant’s preference did not involve unreasonable public expenditure, the Tribunal’s duty was only to have regard to that preference. But if her preferred school did not involve unreasonable public expenditure the impact of s.9 had to be considered at least.

The second aspect is whether the Tribunal would inevitably have named the P School because, even taking account of the savings on the costs of respite care, the PH School was still a more expensive option. I would not reach this conclusion and Lewisham did not really urge me to do so. On the evidence before them, the additional cost of the PH school, taking account of the savings on respite care was some £3,500. That additional cost is very considerably less than the extra cost, some £20,000, if no allowance was made for the savings. It is possible that the Tribunal might have decided that a difference of this size should not be categorised as ‘unreasonable public expenditure’

The third aspect is whether the Tribunal would anyway have named the P school on educational grounds. In its decision it said this,

The Tribunal also found that PH was a very good school.

The finding that a change of school could destabilise O would be a reason not to name it in the statement even if the Tribunal had taken account of the costs savings. However, I cannot say that that would inevitably have been the outcome. The finding that O did not need residential schooling for educational reasons was also a factor, but principally because of its impact on the efficiency of the use of resources. If the Tribunal had taken account of the evidence that the cost of the PH School was very considerably matched by savings on other public expenditure, it is possible that the Tribunal would nonetheless have specified the PH School.

Overall, I cannot say that the result would necessarily or inevitably have been the same even if the Tribunal had properly directed itself in law. Of course, that does not mean that the Tribunal would then have named PH School, but it is sufficient for the Appellant’s purposes if there was a possibility that it would have done so.

Accordingly, the appeal succeeds and the decision of the Tribunal will be quashed.