The recent case of R. (on the application of Grimsby Institute of Further and Higher Education) v Chief Executive of Skills Funding (Former Learning and Skills Council) [2010] EWHC 2134 (Admin) has reiterated when representations can give rise to a legitimate expectation.

Key points

  • A legitimate expectation based on a representation will only arise if the representation is clear and unambiguous or amounts to a specific undertaking to the person relying on it that a public body's past practice will continue, especially in the context of the provision of finance.
  • A legitimate expectation not based on a representation will only arise in exceptional circumstances demonstrating conspicuous unfairness on the part of the public body.

Background

Until 31 March 2009, the Learning and Skills Council ("LSC") was the public authority responsible for providing further education funding in England. Between 2005-9, the Grimsby Institute of Further and Higher Education (the "Institute") applied to the LSC for a grant towards the erection of a new building. To obtain funding, the Institute had to go through a two level capital project approval process: Approval in Principle ("AiP") followed by Approval in Detail ("AiD").

The Institute obtained AiP and then spent significant sums of money advancing its building project to the stage at which it was eligible for AiD. The Institute's AiD application was, however, ultimately rejected. This was not because the Institute's scheme lacked merit, but because the LSC had insufficient funds to grant AiD to more than a fraction of the projects it had approved for AiP (13 of 79). The Institute was simply not among the lucky few. While the LSC reimbursed part of the Institute's expenditure, granting it the maximum contribution to costs available under the LSC Handbook, the Institute was (by its own calculation) left £3,728,452 worse off. The LSC chose to apply the remaining funds at its disposal to meet the expenses incurred by other colleges also rejected for AiD which now faced insolvency as a result.

Once it became apparent that its scheme would never be approved for AiD, the Institute judicially reviewed the LSC, seeking compensation in respect of its wasted expenditure. It based its claim on two alleged legitimate expectations. First, that once AiP had been granted, the application for AiD would be dealt with according to the usual and known procedures of the LSC. Second, that the LSC would be funded and organised in a manner that enabled it to meet commitments made at the AiP stage. Non-fulfilment of these amounted to an abuse of process by the LSC.

Although the Institute formally brought its claim to challenge the LSC's decision to reject the Institute's application for AiD, the true challenge was to the decision not to reimburse the Institute in full.

Legitimate expectation in public law

In his judgment, Judge Langan, QC set out a series of propositions which in his view comprehensively reviewed the subject of legitimate expectation in public law. These included the following:

  • a legitimate expectation founded on a representation generally requires that representation to be clear and unambiguous;
  • a legitimate expectation founded on past practice requires there to have been a specific undertaking to an individual or group whereby the continuation of that practice is assured;
  • there is a legitimate expectation that a public authority will not act so unfairly that its conduct amounts to an abuse of power;
  • detrimental reliance is not required to establish a legitimate expectation;
  • the fact that maladministration has occurred is not a ground for judicial review. The question is only whether the public body has acted unlawfully; and
  • in deciding what, if any, relief should be granted, the court will take into account (a) whether the decision challenged is in the macro-political field; and/or (b) involves social or political value judgments as to priority of expenditure; and/or (c) the nature and clarity of the promise or prior practice in question.

Failure to establish legitimate expectation based either on representations or conspicuous unfairness

The Institute's legitimate expectations were said to arise from a number of representations – made principally in the LSC Handbook setting out the AiP and AiD application processes, but also by letters and statements made at meetings.

In assessing the representations allegedly giving rise to the Institute's two legitimate expectations, the judge concluded that nothing in the LSC Handbook was clear and unequivocal enough to found a legitimate expectation. The handbook did not come close to implying that, as the Institute claimed, once AiP had been obtained, the availability of funds to the LSC (and other calls upon those funds) became irrelevant in determining any subsequent application for AiD. The positive attitudes and encouraging statements of LSC staff at meetings and in letters were likewise tentative and exploratory in nature. Taken separately or together, they were too unclear and imprecise to found a legitimate expectation of the kind relied upon.

The Judge further held that the Institute had adduced insufficient evidence to found a practice-based legitimate expectation whereby applications for AiD were confined to the merits of the application (without regard for the financial position of the LSC). Further, no specific undertaking had been made to colleges that any such practice would continue.

The Institute's alternative argument that a legitimate expectation not founded on a representation had arisen also failed. To succeed, the Institute's case would have needed to be exceptional: demonstrating conspicuous unfairness on the part of the public authority.

The facts fell far short of this threshold. The maximum contribution available under the LSC Handbook guidelines had been paid to the Institute in reimbursement of its wasted expenditure, and its claim for additional reimbursement had been properly considered together with similar requests from many other colleges. The policy decision of the LSC to apply funds to colleges facing insolvency could not be stigmatised as irrational.

Commentary

On 5 July 2010, the Secretary of State for Education scrapped the previous government's Building Schools for the Future programme for improving secondary school buildings in England. The decision cancelled the revamp of over 700 schools. The Grimsby Institute case is significant in light of this policy shift because it shows how difficult it can be for those penalised by decisions made on grounds of financial constraint to challenge the public bodies responsible.

Where public bodies lack finances, legitimate expectation arguments based on representations will fail unless supported by evidence that: (i) the representations in question were clear and unambiguous; or (ii) specific undertakings were given that past practice would continue. Allegations of conspicuous unfairness can also generally expect to fail where published guidelines are adhered to and proper consideration is given by the public body to the protests of those losing out.