The inevitable consequence of the recent spending review is that funding decisions made by public bodies will be subject to immense scrutiny over the coming months. Decision makers should therefore take care to ensure that such decisions are made in accordance with public law principles. If not, any affected party could seek to challenge that decision by way of judicial review in the courts on the basis that the decision was illegal, irrational, unreasonable and/or unfair. Court proceedings must be commenced within 3 months of the date of the decision, if not sooner, although the parties are expected to set out the grounds of challenge and response in writing before contemplating court. If the court upholds the challenge, it can order that the original decision be quashed, retaken and/or declare that the public body has acted unlawfully etc. The cost and time engaged in defending challenges can be significant.

We have extensive experience in assisting public bodies in planning for and implementing funding reviews, as well as dealing with challenges to decisions following such reviews. We set out below our key tips to keep challenges to funding decisions to a minimum. These apply equally to decisions made by application, invitation or periodic review of those already in receipt of funding.

Process

  • Consider how the decision making process will operate in practice, bearing in mind timescale, resources, information/document management and criteria to be applied.
  • Check any existing policies, guidance, criteria or procedures already in place relating to the decision making process to ensure that they are clear, transparent and do not discriminate on the grounds of sex, race, disability etc. Seek advice if necessary.
  • Consider implementing a complaints procedure as an alternative route for affected parties to challenge decisions made; ensure all stages of the procedure can be dealt with promptly and exhausted within three months of the decision being made.
  • Inform all funding candidates of the existence of any policies/procedures which will apply to the process and ensure these are easily accessible or available. Promote transparency by publishing copies of the documents and the process on your website.
  • If you have a process, policy or guidance in place, ensure that you follow it and apply it consistently! Any departure from a policy or procedure could give rise to a challenge that the decision was procedurally unfair.

Consultation in large scale funding reviews

  • Where the process requires consultation with the candidate prior to a decision being taken, the consultee is entitled to know the gist of the ‘case' it has to answer if withdrawal of funding is on the cards, sufficient that they are able to understand the points being made against them and are given a reasonable opportunity to respond (usually in writing). Consider whether it is necessary to disclose any documents to the candidate to enable them to understand the case against them.
  • Candidates may resort to seeking additional information or documents through Freedom of Information Act Requests. Where there are numerous candidates, consideration should be given to the strategy to adopt in responding to FOI requests and allocation of resources to field such requests.

Making the decision

  • Where candidates are consulted, the decision maker should have regard to any documents setting out the "case" for withdrawal and any representations in response. If any "new" points arise out of the consultation exercise which the decision maker believes are relevant to their decision, these points should first be put to the consultee for their response. Any decision based on a new point not previously put to the candidate could be deemed to be unfair.
  • The decision maker should not seek to ‘cherry pick' factors to support the decision they want to make. They are under a duty to consider and weigh up all relevant factors when making their decision; conversely, they should not rely on factors which are irrelevant.
  • If the decision is being made by committee, it might be useful to invite an independent adviser to sit in and ensure that the decision makers properly apply the policy/criteria and do not consider any irrelevant factors.

Reasons and communicating the decision

  • The decision maker is not required to give reasons for making its decision, unless the policy or procedure states that it will provide reasons. Nevertheless, it is good practice to record in writing (in minute form or otherwise) the deliberations and reasons for making the decision. If the decision is later challenged as unreasonable or unfair, the minutes will provide contemporaneous evidence of the balancing exercise undertaken.
  • Where a decision maker provides reasons, they must be given in an intelligible and adequate form, such that the affected party can understand the basis of the decision.
  • Once made, decisions should be communicated to all affected parties promptly and simultaneously, within any time scales or dates previously published.