Ealing London Borough Council v The Audit Commission for Local Authorities & Anor

A statutory body entrusted with making findings or judgments must ordinarily apply its own mind to determinative questions. It may adopt the findings of a specialist body and use general rules, but it must remain willing to consider representations showing that the specialist conclusion should not be adopted or should not produce the proposed consequence. An automatic rule which makes one body’s decision determinative, without considering whether the circumstances justify that result, unlawfully fetters the statutory function.

Ealing challenged the Audit Commission’s decision under Local Government Act 2003, section 99, to categorise it as “weak”. Ealing’s scores would otherwise have produced a higher category, but the Audit Commission applied a rule capping the category where the Commission for Social Care Inspection had awarded a zero-star social services rating.

The central issue was whether the Audit Commission could make that downgrade automatically, without considering the reasons for the specialist rating and whether they justified the consequence.

1. Claim allowed. The Audit Commission’s automatic downgrading of Ealing was unlawful.
2. Under section 99 of the Local Government Act 2003, Parliament entrusted the Audit Commission with making findings about local authority performance and categorising authorities. The ordinary implication was that the Commission had to apply its own mind to determinative questions.
3. The principle in Lavender & Sons v Minister for Housing and Local Government [1970] 1 WLR 1231 was not confined to discretionary powers. It also applied where a body had a duty to make a judgment. A body could not adopt a policy which made another body’s conclusion automatically determine the statutory result.
4. The Audit Commission could take account of specialist expertise and adopt specialist findings where no contrary representation was made. It could also impose short time limits and require an authority to identify good reasons why the conclusion should not be adopted, or why it should not lead to the proposed categorisation.
5. North Tyneside Borough Council [1990] COD 195 was materially different because its statutory scheme required principles to be determined and approved in a manner akin to legislation. Hepworth [1998] COD 146 concerned an incentive scheme which conferred benefits, rather than an automatic disadvantage.
6. The court did not determine challenges based on unreasonableness, proportionality, natural justice, or the treatment of capacity for improvement. Relief was to be addressed after judgment.

First-instance judicial review proceedings. No earlier judgment in the same proceedings was stated.