Background

In two recent judicial reviews brought against the same local authority - R (Rahman) v Birmingham City Council and R(W) v Birmingham City Council - the Administrative Court has considered the application of the public sector equality duties against the background of substantial cuts in public expenditure.

The public sector equality duties that applied at the time of the decisions being challenged (the PSED) were those set out at section 76A of the Sex Discrimination Act 1975, section 71 of the Race Relations Act 1976, and section 49A of the Disability Discrimination Act 1995.

The effect of these provisions taken together was that a public authority must give due regard to the need:

  • to eliminate unlawful discrimination and harassment in the fields of race, sex and disability
  • to promote equality of opportunity between those with one of these characteristics (the protected characteristics) and others
  • to promote good race relations
  • to take steps to take account of disabilities even where that involves treating disabled persons more favourably than other people
  • to promote positive attitudes to disabled people and to encourage them to participate in public life.

The cases raise important questions of the extent to which public authorities can be challenged in public law when - making tough decisions to restrict services in response to the pressing need to cut their spending - they do so in a way that necessarily has an adverse effect on disabled persons or others with protected characteristics.

In this analysis we will consider the background to each case, the effect of the judgments, and the implications for future decision making by local authorities and other public bodies.

The Rahman case

The Rahman case concerned the provision of Legal Entitlement Advice Services in Birmingham.

There were five claimants, each of whom was - due to their ethnic origin or disability (coupled with other factors such as age, ill-health and poor language skills) - heavily reliant on services provided by one of three advice centres funded by the council.

As one aspect of a process of change, driven partly by the need to achieve spending cuts and partly by a wider process of service rationalisation, each of the centres was notified of the council's intention to withdraw its funding.

Significantly, the intention was to terminate the existing funding agreements some months before a process of commissioning new advice services could take place. There was evidence that, although each of the centres would in principle be eligible to apply for the new commissioning contracts, the funding gap would in practice put them in a position in which they could not do so, as they would be unable to pay and therefore retain their staff in the meantime.

The challenge was brought on the basis that the council, when making its decision to withdraw the funding for these centres, had failed to satisfy the PSED - principally the duties with regard to race and disability.

In fact, the decision was taken twice by Cabinet - the first time, in November 2010; the second in March 2011. The second decision followed an initial threat of judicial review, and was made on the basis of legal advice that the original decision be retaken. On this second occasion the members of Cabinet had in front of them an Equality Impact Needs Assessment (EINA) which had been prepared prior to the first meeting but not included in their background papers.

Mr Justice Blake held that both decisions had been unlawful.

First, in relation to the November decision, the PSED was not in the minds of Cabinet members who took the decision and there was no evidence that they were aware of it. Second, in relation to the March decision, the EINA suffered from 'substantial defects', but it was in any event not enough to have regard to the EINA, since this was not the same as having due regard to the PSED. In addition, there had been inadequate consultation on the proposals.

The 'W' case

The 'W' case concerned the question of eligibility for adult social care in Birmingham.

The background to the case is found in the law on adult social care which a report recently issued by the Law Commission - Adult Social Care - rightly described as 'complex', 'outdated', 'uncertain' and 'unclear'. Within this unhelpful legal framework, government guidelines provide that the need for care should be assessed as falling into one of four bands of increasing severity - low, moderate, substantial, and critical.

Local authorities have some discretion as to where to set the threshold of eligibility for assistance to be provided by them. Historically, Birmingham, in common with many other local authorities, recognised as eligible those whose needs are assessed as falling within the substantial and critical bands. As part of its attempt to address the need to achieve spending cuts, it developed proposals that would change the eligibility threshold so that only those whose needs were assessed as critical would automatically be entitled to have those needs met by the council.

As in Rahman, these proposals were closely associated with a range of transformational changes being implemented by the council's Adults and Communities Directorate. They had been subject to a full consultation exercise. And there was an EINA, which was available to be seen by members of the Cabinet when they made their decision.

The change in policy (together with the wider budget) was approved by a meeting of the full council on 1 March and subject to further formal decision by the council on 14 March.

Crucially, from the perspective of the Court, in November 2010 the Council's Assistant Director of Equalities and Human Resources had written a report considering the impact of the change in the eligibility threshold for adult social care. He described some of the adverse effects of the proposed change on those with substantial needs, but indicated that his analysis was "necessarily high level and generalised at present, although it should be possible to refine and focus this in due course as required". The Court found that the refinement and focus did not take place.

The challenge was brought on the basis that the Council, when making its decision to change the eligibility threshold, had failed to satisfy the PSED - principally the duty with regard to disability.

Mr Justice Walker held that the decision of the Council had been unlawful.

First, the Council had failed to have due regard to the needs of disabled persons who would be affected by the change. It was aware in November, at a high level, of the impact that its proposals might have, and it indicated then that further and more detailed analysis could take place. But there was no such analysis, and the final EINA was insufficient. In particular, there was no proper assessment of alternative proposals or of actions that could be taken to mitigate the effect of the policy. Its actions after November were inconsistent with the PSED. Second, Cabinet members did not have their attention adequately drawn to the PSED and even had "members appreciated the need to ask the right questions, they would not have had the wherewithal to answer it [sic]". Third, there were corresponding failures in the consultation process leading to the decision.

The judgments

To understand the judgments, it should be stressed that in neither Rahman nor 'W' did the Court view itself as making new law. There has been extensive consideration of the PSED by the Court of Appeal over recent years - in a range of cases including in particular BAPIO [2007] and Baker [2008] - and neither Mr Justice Blake nor Mr Justice Walker purported to do more than apply the law as set out in those earlier authorities.

In 'W', the effect of the existing law on the application of the PSED was reduced to a series of propositions that were agreed between the parties and adopted by the Court. It is useful to set out a number of these as a summary of the legal framework within which the challenges were brought -

  • Having 'due regard' to the protected characteristics means having specific regard by way of conscious approach to the specified needs.
  • 'Due regard' requires an analysis of all relevant material to be carried out with the specific statutory considerations in mind.
  • General awareness of the PSED does not amount to the necessary 'due regard', which requires a 'substantial and rigorous' open-minded approach.
  • In a case in which the decision may affect large numbers of vulnerable people, many of whom have one or more of the protected characteristics, the 'due regard' necessary is very high.
  • If a risk of adverse impact is identified, consideration must be given to measures to avoid that impact before fixing on a particular solution.
  • The duty is non-delegable and is owed by primary decision-makers.
  • Decision-makers must be properly informed of the nature and extent of the duty at the time at which relevant decisions are taken.
  • In particular, decision-makers need rigorous and accurate advice and analysis from officers; not merely statements of what officers think the decision-makers want to hear.

The main interest of both cases is that they apply the law in circumstances in which judicial review has traditionally stepped back - to explicit resource allocation decisions made by democratically accountable bodies. We comment on the wider implications of this below.

However, it is possible to derive some useful indications from the judgments in Rahman and 'W' which demonstrate how the courts apply the law in practice, and therefore what public authorities might be expected to do in order to ensure their future compliance with the PSED.

Five propositions in particular can be drawn from the two cases -

  1. Consultation will almost always be required to satisfy the PSED. Without it, it is difficult to see that a public authority can have the necessary information before it to have due regard to the relevant issues. In particular, if a decision will directly affect people with protected characteristics, they should expect to be consulted.

Where consultation takes place, it must comply with the general requirements of public law as to its adequacy. It is notable that in both cases the court found a breach of the duty to engage in fair consultation as a subsidiary reason for declaring the decision to be unlawful.

  1. Decision-makers must have the PSED in mind at the time when they make their decision. It is not enough that officers have considered the statutory test, that the decision-makers have a vague awareness of it, or that the impact of a decision is 'inherently obvious'. The PSED cannot be delegated, and consideration by officers is not the same as consideration by those making the decision. Therefore the specific requirements of the PSED must be known to and addressed by the decision-makers.
  2. Evidence of active consideration of the PSED should be recorded in order to establish that it took place. In both cases the Court noted that there was no evidence that the relevant decision-makers had given due regard to the issues, and in neither was the judge willing to assume from silence their compliance with the law. Both judgments strongly indicate that the presumption will work in the opposite direction, with an absence of evidence being taken as an indication that the relevant matters were not considered.
  3. Impact assessments, though undoubtedly helpful and one (non-mandatory) way of ensuring compliance with the PSED, are not the same as compliance with the PSED. It will not be sufficient that a decision-maker has considered an impact assessment by itself.

Decision-makers must address their mind to the statutory duty, and an EINA (or equivalent document) can only be of assistance in ensuring that a decision-maker having the required 'due regard' is able to do so in an intelligent and properly informed manner. To read an impact assessment by itself does not equate to an application of the statutory duty.

Where there is an impact assessment and reliance is being placed on it, it should be placed before the decision-makers. The courts will not assume that they have read it just because it was available to them and they could have obtained it had they asked.

  1. A properly detailed analysis of the issues and supporting information is essential. The decision-makers must not only ask themselves all of the right questions, but must be in a position to answer them. An impact assessment will not be adequate if it considers the issues only at a broad level, does not draw attention to specific impacts, or fails to consider the alternative approaches that could alleviate, or at least mitigate, the impact of the decision. The materials made available to decision-makers by their officers must be sufficient for them to engage in the 'substantial and rigorous' scrutiny that is required.

Commentary

The situations of the claimants in both the Rahman and 'W' cases inevitably invite our sympathy. But it is also difficult not to have some sympathy for Birmingham City Council.

While significant public sector spending cuts had been in the offing since the Coalition took office following the 2010 General Election, the council obtained a predictive indication of its central government funding for the new financial year only shortly before the end of last year. It then had to engage in a multi-billion pound exercise in preparing a budget by March 2011. Time was exceptionally short, the cuts severe, and the issues complex. There are many different competing claims on the Budget that had to be balanced - the council is the largest local authority in Europe. And it did not have a completely free hand as to the allocation of all of its revenues, around half of which are ring fenced or already committed to non-discretionary expenditure.

Quoting Lord Neuberger in an earlier case, Mr Justice Walker accepted that in such cases "It is not the role of the court to get involved in minute scrutiny of a mass of detail". But it is difficult to avoid the conclusion that this was exactly what he did, in a judgment which runs to more than 100 pages and quotes extensively from the evidence, including (at some length) from consultation responses submitted to the council. The judgment rarely reads like the product of the Administrative Court.

Most importantly, the courts have traditionally stepped back from interfering in decisions that are made by democratically elected representatives in relation to large and complex questions of resource allocation which involve the balancing of competing needs.

It is almost a truism that judicial review is not a remedy that is suited to these types of case, and that the courts will give a large margin of discretion to public authorities in these circumstances - the courts should be "wary not to intervene" (Lord Millett in Southwark LBC v Mills [2001]) and should do so only in "clear and exceptional cases" (Lord Neuberger in R (Ahmad) v Newham LBC [2009]).

In the council's response to the challenge in 'W' it emphasised these points. The claims were, it said, "a micro challenge to a macro decision". The criticisms of the decision-making process were small and any errors insignificant in the wider context in which they were made. The council was wrestling with serious internationally-recognised problems of how to deal with the costs of an aging population, and it was entitled to some deference as to the nature of its decision.

Ultimately, however, the courts were not persuaded by this argument. Their approach may best be summarised by Mr Justice Blake in Rahman -

"I accept that there is no duty to fund these services and in a pressing financial climate difficult choices for the Defendants have to be made. However, the Defendants can only resist the challenge on this ground if they have complied with their PSED."

In other words, the requirement imposed by the PSED of conscientious consideration for the needs of those with protected characteristics takes precedence over the courts' traditional reluctance to engage with questions of resource allocation.

The Courts will continue to defer to public authorities on the substance of those difficult decisions, but only if it can be demonstrated that the decisions were made after strict compliance with the PSED.

To put this another way, there will be no flexibility around the interpretation of what is required by the PSED, nor any margin of discretion given to a public authority in its compliance with that duty, merely because the decision being made falls into territory in which the courts would otherwise be reluctant to intervene. The PSED must now be viewed as one of the principal grounds of challenge by claimants to decisions that would, before it came into force, have been difficult to impugn.

In addition, it should be noted that on 5 April 2011 - after the decisions that were being challenged in Rahman and 'W' and therefore not considered by the Court in those cases - the old public sector equality duties were replaced by a new unified duty under section 149 of the Equality Act 2010.

The new duty not only consolidates into a single provision the three separate duties which previously existed, but extends their scope to the new protected characteristics of age, gender reassignment, pregnancy and maternity, religion or belief, and sexual orientation.

It follows that, for public authorities, strict compliance with the PSED has become more onerous, and even more essential, than it has ever been.