T, R (On the Application Of) v Trafford Metropolitan Borough Council

The Claimant is a disabled man who acts through his mother as litigation friend. He challenges the Defendant’s consultation on its proposal to cut its adult social care budget for 2015/2016. That consultation ran from 21 October 2014 to 12 December 2014. The Defendant is due to set its budget for 2015/2016 at a meeting on Wednesday 18 February 2015.

After a refusal of permission on paper by Blake J, I gave permission on Ground 1 but refused permission on Ground 2 at an oral hearing on 09 February 2015. Everything has been expedited and the hearing took place on Monday 16 February 2015.

The Claimant is aged 46 and has a diagnosis of autism and learning disabilities. He lives in a supported living placement and is dependent on 24 hour supported care. He is reliant on support to ensure he takes his daily medication, to prepare meals, to access the community and when completing household tasks. He has limited self care skills. It is said he would be extremely vulnerable and at risk should any of the support he receives be reduced.

The remaining ground of challenge is that the Defendant failed to provide adequate information on whether there are alternatives to the Defendant’s proposal, which would result in a lesser reduction of funding for adult social care services. The alternatives suggested are increasing council tax and using money from the Defendant’s reserves.

After some introductory paragraphs, I shall deal with the merits of the ground of challenge and then with the Defendant’s case that in any event the relief should be refused because to grant relief would be detrimental to good administration.

Originally, one statement had been filed by the Claimant’s mother. Since the permission hearing she has filed a second statement. Also on behalf of the Claimant, have been filed statements from L (a lady who has a disabled son and who is entitled to anonymity) and Stephen Lavery. Prior to the permission hearing, one statement had been filed by the Defendant. That was from Diane Eaton, Joint Director for Adult Services (Social Care). It was dated 5 February 2015. I now have 4 further statements from:

The Defendant’s statements and exhibits run to many pages. I will attempt to distill the essentials from them.

The Defendant’s total budget for 2014/15 was £414 million. The Defendant started to plan for the 2015/2016 budget in May 2014. For the year 2015/16 the Defendant was facing a budget deficit of £24.3 million. The scale of savings, in the context of 6 years of significant reductions in the money obtained from central government, means that the statutory task of balancing the budget has been difficult and time consuming. Mr Duncan described coming up with proposals to meet the target as a “huge challenge”. (Footnote: ¹)

The Defendant published draft budget proposals on 20 October 2014 in a Report entitled “Executive’s Draft Revenue Budget Proposals 2015/2016.” (Footnote: ²) The Report says that the Defendant’s budget would decrease by £10.2 million but, once other expenditure pressures were taken into account, the total budget deficit for 2015/2016 would be £24.3 million. 49% of this deficit would be met by efficiency and additional income streams. This would reduce the deficit to £12.3 million. Therefore, “Policy Choice Savings” of £11.7 million had been identified with a further £0.6 million of cuts still to be allocated. The Report also establishes that the Defendant’s good budgetary performance had allowed a sizeable margin to accumulate above the minimum £6 million in the General Reserve. No contribution from General Reserve had been assumed in the 2015/2015 draft budget (Footnote: ³). Also the Council Tax was to remain frozen at the 2010/2011 rate keeping it the lowest in the North West. (Footnote: ⁴)

There are 3 Directorates within the Defendant Council: Children, Families and Wellbeing Directorate (CFW), the Transformation Resources Directorate (TR) and the Economic Growth Environment and Infrastructure Directorate (EGEI). The Defendant’s finance section took the view that there was no way whereby the Defendant could avoid proposing reductions in all 3 Directorates. In 2014/2015 the CFW had a budget of £112 million, TR £25 million and EGEI £30 million. Had CFW been exempt from reductions then budget reductions would, in Mr Duncan’s opinion, have had to be passed to the 2 other Directorates, which would then have been unsustainable. After a careful and time consuming scrutiny, overseen by the Defendant’s Corporate Management Team, (Footnote: ⁵) (CMT) proposals for balancing the budget were sufficiently developed by mid July 2014 for a full day consideration by the CMT. Two meetings also took place in July, September and early October, involving the CMT and Executive members of the Council, to discuss the proposals developed by each of the Directorates and to agree the proposals that would be progressed. (Footnote: ⁶) It was after clearance at these meetings that the proposed budget was published, as formally approved by the Executive, on 20 October 2014. After this consultation began immediately.

I return to the Report. There are sections of particular relevance:

The Report therefore set out the problems in raising council tax as perceived by the Defendant. The effect is that if the Defendant increases council tax by 1.99%, which is the maximum that it could without holding a referendum, that would generate £700,000 additional income. The reason for this is that the additional council tax income of £1.6 million would be offset by a loss of £0.9 million government funding. (Footnote: ⁷)

Therefore, in relation to the possibility of increasing council tax, anybody reading the Report would understand the contribution of council tax to the Defendant’s income, the difference between projected income and expenditure, and that the Defendant did not propose to increase council tax for the reasons given.

As to the use of reserves, paragraph 2.7 of the Report said:

“2.7

Use of Reserves

It has been one of the Council’s policies of the Medium Term Financial Strategy to reduce and/or keep low the use of reserves supporting long term budgetary expenditure, using reserves instead to finance one-off or short term service investments. Due to the good budgetary performance of the Council, this had allowed a sizeable margin to accumulate above the minimum £6 million in the General Reserve. A total of £2 million of General Reserve was utilised in 2014/2015 to fund the budget, however as this contribution is one-off, it cannot be relied upon and its removal has resulted in a further funding pressure of £2.0 million. No contribution from General Reserve has been assumed in the 2015/2016 draft budget.”

Mr Duncan deals with this at paragraphs 41 – 47 of his statement. He explains that he had advised the Council that it should keep at least £6 million in its General Reserve (Footnote: ⁸). The “sizeable margin” which had accumulated above the £6 million was apparently £4.289 million, but there were already a number of commitments assigned against the General Reserve, the largest being provision for the write down of the deficits on the Learning Disability pooled budget of £3.022 million. He therefore says that “in the circumstances there was almost no scope to avoid any significant elements of the £24.3 million savings in 2015/2016 by calling on the General Reserve. Finally, he explains that the reserve is essentially the Council’s savings fund and it is not sustainable to use the reserves to meet recurring day to day expenditure which is why, in paragraph 2.7 of the Report, the reserve is described as being used “to finance one off or short term service investments.”

In relation to the planning process prior to 21 October 2014, Joanne Hyde and Diane Eaton both emphasise the very substantial involvement of senior managers from each of the Council’s 3 Directorates. The evidence also shows that this was a very large project between May and October 2014. In that period Diane Eaton said she spent part of almost every week working on the budget proposals. She met Councillor Young, the Executive member for Adult Services and Wellbeing, twice a month.

Before the public consultation there was a statutory staff consultation on 10 October 2014. The public consultation was in respect of:

A website (Footnote: ⁹) was developed with an opening page, with a summary of each of the Directorate’s proposals, stating that full proposals could be viewed in the budget report, then a page which listed the ways in which people could give feedback and a link to the Report. There were also media briefings and a media press release which was put on the Defendant’s website and twitter account.

On the website, alongside the budget proposals were the consultation documents. A letter introduced the consultation. That was from Deborah Brownlee, the then Corporate Director of CFW. That letter explained the consultation and that the Defendant wished to hear public views. The letter asked for the questionnaire to be filled in and stated that consultation meetings were being held across Trafford in November/early December. There was a specific section on Adult Social Care proposals with a relevant questionnaire.

Diane Eaton says that the covering letter was sent by first class post to every person in receipt of social care position or, where appropriate, their carers. It was sent in the week commencing 23 November 2014. A letter was addressed to the Claimant at his home address (Footnote: ¹⁰). Jane Le Fevre confirms this. In reality there is no challenge on the distribution of the consultation process, merely on its content, or rather lack of content.

After 21 October 2014 steps were taken to promote the consultations including:

A six page summary budget proposal was handed to everyone who attended the consultation events. This summary set out headline figures and summarised the proposals for each of the Council’s Directorates. It also signposted people to the budget webpage for further information.

Seven public meetings were held across the Borough. Apart from at the first meeting, the leader of the Council began by showing a short film and delivering a presentation. (Footnote: ¹¹) After the presentation the meetings became informal workshops with between six and ten residents seated at a table with a Senior Officer and an Executive Member of the Council. Residents were encouraged to discuss the service proposals and write their comments or questions on feedback cards which were selected and labelled for each Directorate. In the discussion, according to Joanne Hyde, many questions, not confined to the specific proposals, were raised. These included why the Council had not proposed increasing council tax (amongst others). Information was provided as to how much council tax was to increase in order to make up the shortfall in the budget. Also a “mythbuster” sheet was provided to the facilitators of the public meetings. This provided the answer to 14 frequently asked questions. Specifically in respect of council tax increases the mythbuster sheet explained the proposal to freeze for the fifth consecutive year and then stated:

“…if the Council increased council tax by 2% this would raise £1.6 m, but we wouldn’t receive the additional grant of £0.9 m meaning the overall benefit would only £0.7 m.

Council tax would have to be raised by another 30% to avoid any budget cuts. This would need to be agreed by the residents of Trafford in a referendum.”

In respect of reserves the mythbuster stated:

“The Council uses its reserves for emergency purposes and one-off projects. They have also been used in the past to provide short term support to the annual budget. If the Council used reserves to maintain its services we would quickly run out and the need to find savings would only be delayed for a short time. The Council has instead taken a pragmatic and longer term approach and decided to try to “reschedule” services instead to make the provision more sustainable for the future.”

On 28 November 2014 a video of the leader of the Council was published and posted on the “Join the Conversation” page of the budget website. It was also tweeted and appeared on facebook. It showed the leader explaining how a 30% increase in council tax would be required to avoid the budget shortfall. The leader also answered questions that had been frequently asked during the consultation. The text in respect of council tax reads:

“Why can’t the Council increase council tax to save some services? ”

•

The Council is proposing to freeze the council tax for the fifth consecutive year.

•

As a result it will receive additional grant from the government of £900k.

•

Each year the government sets a limit on the amount the Council could increase its council tax by without holding any referendum with its residents. Last year the limit was 2%. If a council was to increase council tax by 2% this would raise £1.6 million, but we wouldn’t receive the additional grant of £900k meaning the overall benefit would be only £700k.

•

Council tax would have to be raised by over 30% to avoid any budget cuts. This would need to be agreed by the residents of Trafford in a referendum. The cost of holding a referendum is expensive and there is no guarantee that any proposal would be successful. If the vote was against a large increase, the Council would have to prepare an alternative budget, issue new bills to all residents and also have to pay for the costs involved with this.

Turning specifically to the Adult Social Care consultation, the Directorate commissioned an independent company, “Indigo”, to do most of the consultation exercise. The consultation exercise involved paper survey forms being sent to 5384 users of Adult Social Care services and street surveys and drop-in sessions across the Borough. Five focus groups were held and two events were held for adults with learning disabilities. An email and electronic comment box was placed on the consultation website and a telephone number was also published. These events were all publicised on websites with links on the webpage. Appreciating that certain groups might need extra support to engage with the consultation, there were signposts to sources of support. The nine changes proposed by the Council to the way it delivers adult social care were listed in the Social Care Information Questionnaire, inviting comments on each. There was also an “easy read” summary of the adult social care proposals. This consultation reached 6527 people, 998 of whom gave their views about the proposals. These have been summarised in a table. Some people did not just comment on the proposals. As the Summary Report says “There were five alternative ideas suggested instead of the Adult Social Care proposals. These included reducing Trafford MBC wages, reducing Council spending, increasing council tax, other money raising ideas and government issues.” Diane Eaton who attended some of the public sessions says that she recalls a number of people suggesting putting up the council tax and all comments and suggestions were collated during these meetings.

Feedback from all consultation will be presented to the Defendant’s members with final proposals for budgets and an equality impact assessment based on the feedback. The exercise will inform any decision made by members setting the budget.

The proposed full budget is to be before the Council for approval on 18 February 2015 and council tax will be calculated by reference to the overall budget provision. Demands have to be sent out, so as to comply with the relevant regulations, so that residents have 14 days notice prior to 1 April 2015. If any savings proposals recommended in the budget are not adopted, the Report will recommend as a temporary measure that the shortfall in relation to the Defendant’s savings target is met from Reserves.

The two questions which the Claimant places before the Court are:

The Claimant relies on the fact that the Defendant chose to consult. There was no statutory requirement. The question is as to the common law requirement in those circumstances. In R v North and East Devon HA Ex p Coughlan (Footnote: ¹³) the Court of Appeal said that, whether or not consultation is a legal requirement, if it is embarked upon it must be carried out properly. (Footnote: ¹⁴) The Court of Appeal then defined “properly” by reference to the criteria in R v Brent LBC ex parte Gunning (Footnote: ¹⁵).

In R (Moseley) v London Borough of Haringey (Footnote: ¹⁶) the Supreme Court endorsed the criteria in R v Brent LBC ex parte Gunning which set out common law principles of a fair consultation:

“First that consultation must be at a time when proposals are still at a formative stage. Second, that the proposer must give sufficient reasons for any proposal to permit of intelligent consideration and response. Third…that adequate time must be given for consideration and response and, finally, fourth that the product of consultation must be conscientiously taken into account in finalising any statutory proposals.”

However, Moseley went further in explaining the common law duty. The case itself concerned a particular statutory provision. (Footnote: ¹⁷) The Supreme Court held that in the context of a scheme such as a Council Tax Reduction Scheme with which the general public could not be expected to be familiar, the consultation document should have contained a brief outline of the alternative options and reasons for their rejection.

Lord Wilson (Footnote: ¹⁸) considers the law in paragraphs 23 – 28. He endorses the Gunning criteria, paragraph 25; also:

Lord Reed says he is generally in agreement with Lord Wilson “but would prefer to express my analysis of the relevant law in a way which lays less emphasis upon the common law duty to act fairly, and more upon the statutory context and purpose of the particular duty of consultation with which we are concerned.” (Footnote: ²¹) He then points out that the common law imposes a general duty of procedural fairness on public authorities, but the content of that duty varies almost infinitely depending upon the circumstances, there being no general common law duty to consult persons who may be affected by a measure before it is adopted. Returning to the situation in the Moseley case, he says that it was not concerned with the common law procedural fairness duty but with a statutory duty of consultation, which duty varies greatly depending on the particular provision in question its context and the purpose for which the consultation is to be carried out. Moseley was not concerned with circumstances in which a duty of fairness is owed and the problem with the consultation was that it was not “unfair” as that term is normally used in administrative law.

Finally there is a one paragraph joint judgment from Lady Hale and Lord Clarke as follows:

“44.

We agree that the appeal should be disposed of as indicated by Lord Wilson and Lord Reed. There appears to us to be very little between them as to the correct approach. We agree with Lord Reed that the court must have regard to the statutory context and that, as he puts it, in the particular statutory context, the duty of the local authority was to ensure public participation in the decision-making process. It seems to us that in order to do so it must act fairly by taking the specific steps set out by Lord Reed in his para 39. In these circumstances we can we think safely agree with both judgments.”

There is much debate between the parties. The Defendant says it is essential to recognise that the broad approach taken in the joint judgment of Lord Wilson and Kerr is rejected, not only by Lord Reed but also by Lady Hale and Lord Clarke. I do not read the judgment in that way. According to Lady Hale and Lord Clarke there is no dispute between Lord Wilson and Lord Reed. Naturally, they agree with Lord Reed that the court must have regard to the particular statutory context. It seems to me that this is clear also from Lord Wilson’s judgment (Footnote: ²²). They then agreed that the local authority “must act fairly by taking the specific steps set out by Lord Reed in his para 39.” I note, that there is nothing in Lord Reed’s judgment which contradicts or undermines Lord Wilson’s analysis of the common law. I am fortified in this conclusion by the fact that Lady Hale and Lord Clarke thought it was safe for them to agree with both judgments. Therefore, I, too, think I can safely agree with the principles set out by Lord Wilson upon which he arrived at his conclusions. (Footnote: ²³)

The following can, I believe, be distilled for the present purposes from Moseley:

I have come to the conclusion that in this case fairness did not require consultation upon arguable yet discarded alternative options. I say this for the following reasons:

All members of the Supreme Court in Moseley made it clear that the consultation document produced by Haringey was misleading. Lord Reed said:

“42.

As Lord Wilson has explained, those requirements were not met in this case. The consultation document presented the proposed reduction in council tax support as if it were the inevitable consequence of the Government's funding cuts, and thereby disguised the choice made by Haringey itself. It misleadingly implied that there were no possible alternatives to that choice. In reality, therefore, there was no consultation on the fundamental basis of the scheme.” (Footnote: ³⁷)

As a matter of logic the two questions which the Claimant asked the Court to answer are separate. Although I have answered the first question in the negative, I will consider the second question in any event, especially as the answer to it has some relevance to the first question in terms of the contextual analysis.

I have set out in the Factual Overview section of this judgment the Defendant’s approach and the extensive steps which it took to publish its proposals and to consult on them. The fact that some letters may not have been received and that there is anecdotal evidence that certain people were not aware of the proposals does not detract from the steps which they took. Nor does the evidence of Mr Lavery do so. (Footnote: ³⁸)

In any event, the Court must not lose sight of the focus of the Claimant’s Ground which is the lack of consultation on rejected alternatives – the suggestions being raising council tax and/or using reserves.

The Defendant submits that it actively encouraged the public to put forward alternative options through the use of questions asked in the consultation document, and in particular

“Part C - - your ideas

Do you have any other suggestions about how we could save money, work smarter or more efficiently?”

I accept that, had there been a duty to consult on rejected alternatives such as raising council tax and/or using reserves, this question would not have been sufficient, notwithstanding that it did generate a few responses which suggested those alternatives.

I also accept that much of the background information in Mr Duncan’s statement as to why these options were not considered realistic was not in the public domain. However, there was in the public domain the Report which contained information on the conclusions in respect of those options (Footnote: ³⁹) where the discussion explained the position in summary. It showed that these were options but were not considered viable. The Claimant says now that much of the information given by Mr Duncan was centrally important and fairness obviously required it to be provided to consultees. I disagree. Anyone reading the Report would have a sufficient overview to understand the Defendant’s position and the reasons for it.

The Claimant says that the Report was wholly inaccessible to consultees since the only way it could be found was by clicking on a link on the “Budget Background” webpage and that consultees’ attention was not drawn to the document, and no consultee looking at the Adult Social Care consultation could reasonably have been expected to access this document. (Footnote: ⁴⁰) Mr Duncan concedes (Footnote: ⁴¹) that not everyone would find it straightforward to obtain information from the Report. I accept that, had the Defendant been under a specific duty to consult on the rejected options, then the link to the Report would not have been sufficient. Nevertheless, it is of note that at the click of one link this information was publicly available for anybody who read the “Trafford Council Budget 2015/16” document, which was a short exposition of the Defendant’s position. It also explained under the heading “Where Does the Money Come From?” that the budget for 2014/15 was funded by government, council tax, other smaller sources of revenue and “a contribution from reserves”.

In addition, albeit that the Claimant can make criticisms as to the distribution/availability/timing of these sources of information there were the:

In summary my answer to question 2 is as follows:

Finally, I deal with the Defendant’s point that, in any event, relief should be refused on the basis that it is detrimental to good administration for the court to grant a remedy, as a result of this substantive hearing, before 18 February 2015 when the Defendant sets it budget. The basis of this is the Court of Appeal’s decision in R v Monopolies Commission ex parte Argyll plc. (Footnote: ⁴²)

The relief the Claimant seeks is:

In the Monopolies Commission case the Court of Appeal refused relief as a matter of discretion. They said:

“We are sitting as a public law court concerned to review an administrative decision, albeit one which has to be reached by the application of judicial or quasi-judicial principles. We have to approach our duties with a proper awareness of the needs of public administration. I cannot catalogue them all, but, in the present context, would draw attention to a few which are relevant.

Good public administration is concerned with substance rather than form…I have little doubt that the Commission, or a group of members charged with the conduct of the reference, would have reached and would now reach the same conclusion as did their experienced Chairman.

Good public administration is concerned with speed of decision, particularly in the financial field…

Good public administration requires a proper consideration of the public interest…

Good public administration requires a proper consideration of the legitimate interests of individual citizens, however rich and powerful they may be and whether they are natural or juridical persons. But in judging the relevance of an interest, however legitimate, regard has to be had to the purpose of the administrative process concerned.

Lastly, good public administration requires decisiveness and finality, unless there are compelling reasons to the contrary. The financial public has been entitled to rely upon the finality of the announced decision to set aside the reference and upon the consequence that, subject to any further reference, Guinness were back in the ring, from 20 February until at least 25 February when leave to apply for judicial review was granted, and possibly longer in the light of the learned judge's decision. This is a very long time in terms of a volatile market and account must be taken of the probability that deals have been done in reliance upon the validity of the decisions now impugned.”

The Claimant submits that the Defendant could either:

Option (b) is unrealistic. Mr Duncan says that under statute (Footnote: ⁴³) an authority has to make calculations to identify its council tax requirement for the year (section 31A). Such calculation may only be questioned by an application for judicial review (section 66). The Defendant says that the quashing order sought by the Claimant must by section 66(3) of the Act result in the Defendant having to set a new budget from the one proposed. It is this, they say, that would not be able to be done lawfully if the court granted relief. Despite Mr Wise Q.C. submitting that the Defendant could take this option, I consider that this would be far too high risk a strategy.

According to the Defendant (Footnote: ⁴⁴), granting the relief which the Claimant seeks would lead to either an inability to set a budget on 18 February 2015 or setting a budget and re-running the consultations. It seemed from the submissions on behalf of the Defendant that, though there was some uncertainty, realistically the Council would seek to set an indicative budget and re-run the consultations.

If a budget was set, the following would happen:

Although the principles in the Monopolies Commission case were in relation to a very different type of case, the overriding principle is that the court has to approach its duties “with a proper awareness of the needs of public administration.” In that regard, in the present case:

In short, though it is somewhat difficult to deal with this point in the abstract given my ruling on Ground 1, had that ruling been different I would not have been minded to refuse relief on this ground alone.

The Claim fails because the Defendant was not under a common law duty to consult on rejected options