Corby Borough Council, R (on the application of) v Secretary of State for Communities and Local Government

A public authority which promulgates a grant scheme must implement it according to its published terms until it gives notice of a lawful change. Where a scheme promises rewards for actual growth, an undisclosed administrative method cannot exclude qualifying growth merely because the method is convenient or avoids complexity. A policy stated to be fair, intelligible and transparent may generate a substantive legitimate expectation. Administrative burden and the risk of inconsistent awards may be relevant considerations, but they do not excuse departure from the scheme without cogent evidence of an overriding public interest. A statutory discretion to determine the amount and manner of a grant does not preserve freedom to disregard the terms of a scheme once promulgated.

Two local authorities challenged nil incentive payments under the Local Authority Business Growth Incentives scheme. They contended that the Secretary of State had excluded actual increases in rateable value arising from redevelopments, expansions and changes from partial to full occupation of existing properties.

The published scheme measured business growth by actual changes in rateable values, subject to adjustment for successful appeals and empty or partly empty property relief. The Secretary of State’s method used only four valuation change codes and excluded changes recorded under code 20. The central issue was whether that method lawfully fell within the scheme and whether administrative difficulty justified its use.

1. Claims allowed. The grant determinations were quashed. The Secretary of State was ordered to reconsider them in accordance with the judgment.
2. The scheme, as promulgated, was sufficiently wide to include actual rateable-value growth achieved during the relevant calendar year. The only identified qualifications were that values were calculated gross of appeals and net of empty and partly empty property reliefs. The scheme’s stated requirements of fairness, intelligibility and transparency reinforced that construction.
3. The Secretary of State had failed to implement the published policy. Reliance on figures supplied by the Valuation Office Agency did not make the Agency’s calculations the legal determination, nor did it authorise the exclusion of growth merely because the relevant data appeared under code 20. The Minister remained responsible for determining the grant according to the scheme.
4. The exclusion of qualifying growth defeated the claimants’ substantive legitimate expectation. The administrative burden of disentangling code 20 data was not established by evidence. Considerations that an amended scheme would be more complex and costly to administer were not irrelevant, as recognised in Esfandiari v Secretary of State for Work and Pensions [2006] EWCA Civ 282, but they did not amount to an overriding public interest sufficient to justify the departure.
5. Section 31 of the Local Government Act 2003 gave the Secretary of State discretion to determine the amount and manner of payment. It did not permit him, having promulgated the scheme, to disregard its terms until a change of policy had been notified.
6. The claims were in time. The determinations gave no reasons, and the Secretary of State had invited authorities to raise queries and promised investigation. In any event, the court would have extended time in the circumstances.