R (Nash) v Barnet LBC [2013] EWHC 1067 (Admin)

ISSUES: This was the legal challenge to Barnet’s scheme for comprehensive outsourcing of its functions, described in the press as “EasyCouncil”. The scheme is radical and inevitably controversial.

FACTS: The claim proceeded as an urgent rolled-up judicial review hearing, with three grounds. The first was that there was a duty to consult on the outsourcing proposals. Barnet accepted that it had not consulted specifically on that issue, but denied it was under a duty to do so. The Claimant alleged that such a duty arose through the Local Government Act 1999, s 3, which related to best value decisions. Second, breach of the public sector equality duty, as the EIA had been conducted at too late a stage, and had been based on inadequate information, such as a survey which was answered by only 16% of the service users. Third, an allegation that entry into the proposed contracts would breach the council’s fiduciary duty to its taxpayers.

HELD: Underhill LJ (sitting as a Judge of the Administrative Court) ruled that the claim had not been brought in time. Although formally presented as a challenge to decisions to award particular contracts, it was held that it was in substance a challenge to the earlier decisions to proceed with the outsourcing of functions. Any challenge should have been brought when those decisions had been made, which was in 2010 and 2011. Underhill LJ refused to extend time.

Underhill LJ then went on to consider the substantive grounds of challenge, in case the matter went further.

In relation to consultation, Underhill LJ held that there had been a breach of a statutory consultation duty. However he stated that if the claim had been brought in time he may have decided not to quash the decision despite that breach, given the advanced stage which the proposals had reached and the detriment caused by quashing at this stage.

 In relation to the public sector equality duty challenge, Underhill LJ held that the criticisms levelled at the EIA, in particular that it proceeded on the basis of inadequate information, had no bearing on the actual basis on which the Council had concluded there would be no adverse impact. This was that the outsourcing contract contained provisions which preserved existing levels of service and ensured that service users with protected characteristics would not be disadvantaged. The correctness or reasonableness of that conclusion did not depend on the survey and other information against which criticisms were made.

The allegation of breach of fiduciary duty was barely pursued, and Underhill LJ simply held that views could differ as to the amount of financial analysis appropriate to undertake before making such a decision, and that the evidence did not come close to showing reckless disregard for financial planning.

ANALYSIS: Barnet is the first local authority to embark on such a comprehensive outsourcing programme. Other local authorities have no doubt been following the case with interest to see the extent to which they may be constrained in outsourcing statutory functions in the future.

The main lesson for local authorities from this case is to ensure that they comply with the consultation obligations imposed by the Local Government Act 1999, s 3. The main lesson for those who may wish to challenge outsourcing decisions is to challenge the decision to outsource in principle, and not to wait on the decision to award particular contracts.

An appeal has been filed and is due to be heard in mid-July.

ANALYSIS OF SL: Effect of Supreme Court’s Ruling on Section 21

On the first issue dealt with, the meaning of “care and attention”, the Supreme Court has refrained from setting out a specific test. The scope of “care and attention” still remains unclear, though we do now at least know that it is not limited to care of an intimate nature. The boundaries are perhaps most blurred when dealing with people whose needs derive from poor mental health. It is difficult to reconcile the Court’s statement at para 44 that the term “care and attention” takes some colour from its association with the duty to provide residential accommodation, with the Court’s statement immediately following, that “care and attention” in s 21 is not confined to that which can only be delivered in specialist residential accommodation. If “care and attention” can include support provided in ordinary accommodation (which the Supreme Court appears to accept), then, for a person whose needs derive from mental health problems, precisely what “colour” does the duty to provide accommodation give to the meaning of “care and attention”? Does it mean that a person whose needs derive from mental health problems is only considered to fall within s 21 where his needs require some change to be made to his home environment, or something to be done to his home? If that is the correct approach, it is difficult to see how a person with mental health needs who is or could be living in the community would ever fall within s 21. It is difficult to believe that s 21 was intended to have such narrow scope.

As to the second issue decided by the Supreme Court (the care-accommodation link), the Supreme Court has it seems set out to narrow the scope of LA’s duties to accommodate on the basis of care needs. To that extent it is a more restrictive approach than probably existed previously, though some will regard it as simply an affirmation of M v Slough. We now know that there must be some nexus between the care services and the accommodation. On the other hand, however, it may suffice if the care and attention “will be effectively useless if the Claimant has no home”. These appear to be divergent statements, and it is not immediately obvious how they should be applied at the same time.

The Court recognised that the analysis of whether a need for care and attention was accommodationrelated may not be straightforward in every case. However, it went on to hold that it is a matter for the LA to decide and would not normally involve an issue of law requiring the intervention of the Court. The Court seems to expect that LAs will be granted a wide area of discretionary judgment on questions of this nature, and that legal challenges should be rare.