R (Devon County Council and another) v Secretary of State for Communities and Local Government

Background

On 24 March 2010, following affirmative resolutions in both Houses of Parliament, Orders were made by the Secretary of State for Communities and Local Government to create unitary authorities for Exeter and Norwich.

Devon and Norfolk County Councils challenged the Secretary of State's decisions to lay the Orders before Parliament, contending that the statutory consultations undertaken prior to the decisions being made were unfair and did not comply with the requirements of the Local Government and Public Involvement in Health Act 2007 (the Act).

The court agreed, and quashed not only the Secretary of State's initial decision but also the Orders themselves, even though they had been passed by a positive vote of the members of both Houses of Parliament.

Had the court not quashed the decisions, the new Coalition Government intended to use primary legislation to stop local government restructuring in Exeter and Norwich.

The decision

The Act makes provision for the Secretary of State to propose changes to the structure of local government. In particular, it allows the Secretary of State to invite a two tier authority to become a unitary authority. The Secretary of State made such invitations to a number of authorities, including Exeter and Norwich City Councils, in October 2006.

Section 7(3) of the Act provides that the Secretary of State may only implement a proposal for a unitary authority if he has consulted "every authority affected by the proposal" and "such other persons as he considers appropriate".

Consequently, consultation on the unitary authority proposals involving Devon and Norfolk County Councils took place between 2007 and 2009. During the consultation, various statements by and communications from the Secretary of State and his Department indicated that a proposal would not be taken forward unless five specific criteria set out in guidance issued by the Secretary of State were met. These criteria included requirements that the proposals be affordable and that they must deliver value for money and equity on public services.

Throughout the process there were concerns that the Exeter and Norwich proposals would not meet the affordability criterion, and in his decision to progress these proposals by laying Orders before Parliament, the Secretary of State acknowledged that neither was likely to do so. In addition there was an acknowledgement that the Norwich proposal was also unlikely to meet the value for money criterion.

Nevertheless, the Secretary of State stated that the proposals could be accepted as there was only a presumption that proposals which did not meet the five criteria would be rejected. He put forward two reasons for overriding that presumption: the change in government priorities since 2006 (including the need for economic growth) and changing policy on public service delivery.

In quashing the Secretary of State's decisions, Ouseley J acknowledged that the five criteria were not statutorily binding but highlighted the numerous times before and during the statutory consultation that the Secretary of State had made clear that failure to meet the criteria would prevent a proposal being taken forwards. The stated reliance on the five criteria had informed the consultation responses provided by the County Councils, and in the court's opinion the ultimate failure to adhere strictly to them rendered the consultation so unfair as to be unlawful.

Commentary

The judgment adds to an ever expanding body of case law that highlights the importance of appropriate and fair consultation in public decision making. Our alert on R (on the application of Hillingdon BC v Secretary of State for Transport covered the last significant addition to the canon.

While the judgment does not substantively alter the law on the duty to consult, it brings into focus for public decision makers at all levels the need to take duties to consult seriously and ensure that consultation processes are robust and fair. Information given to consultees must not only include details of the proposal, but also the factors likely to be of substantial importance to the decision, or the basis upon which the decision is likely to be taken.

Ouseley J acknowledged that while a change of approach by the decision maker might lead to a flawed consultation exercise, a flawed consultation exercise is not always so procedurally unfair as to be unlawful. Also, that a balance must be struck between the obligation to consult and the need for decisions to be taken.

Moreover, he recognised that "the question of whether the two Cities should or should not be unitary authorities is a political one at heart and involves issues which it is not for the court to rule on" and that the Orders had been "approved by Parliament after debate, which included the merits of the Orders and the processes whereby the decisions were made, and that that is part of the statutory process". He noted that "It may well be that the courts should be slower to hold that the prior process was so unfair as to be unlawful in those circumstances."

That the court was prepared to quash the Secretary of State's decisions, despite having regard to these considerations, is indicative of the importance in public law of adequate consultation as an essential element of fairness in decision making by public authorities.

Moreover, the judgment reminds us that although primary legislation is immune from being struck down by the courts, no such restriction applies to judges faced with secondary legislation - even where, as in this case, the Orders which were quashed had the democratic legitimacy of being supported by an affirmative resolution in both Houses of Parliament.

As the Coalition Government engages in sweeping programmes of reform which will inevitably involve a series of major consultation exercises, the importance of adequate consultation looks set only to increase.

Public law principles of fairness in consultation are sure to play a significant role in any legal challenges brought to the decisions being made by the new administration.