London Borough of Hillingdon, R (on the application of) v Secretary of State for Education & Skills

A legitimate expectation requires a public authority’s promise or practice to be clear, unambiguous and devoid of relevant qualification. A grant fixed for one financial year, expressly due to expire at year-end and based on provisional estimates, does not ordinarily create an expectation that the same funding formula will continue. A statutory power to pay discretionary grant may lawfully be exercised retrospectively where the enabling provision permits that course. A change to a grant threshold or rate does not necessarily thwart a stated policy where the policy remains directed to authorities most affected, even if the class receiving assistance becomes wider.

The claimant local authority provided after-care services to former unaccompanied asylum-seeking children under the Children Act 1989, as amended by the Children (Leaving Care) Act 2000. Following the earlier Hillingdon judgment, the Secretary of State introduced annual grants under section 31 of the Local Government Act 2003.

Hillingdon challenged the 2005–06 grant arrangements, which reduced the weekly rate and altered the qualifying threshold. It argued that the previous year’s funding formula had created a legitimate expectation of continuity and that the new arrangements thwarted the declared policy of assisting authorities most affected by the Hillingdon judgment. The central issue was whether either contention was legally sustainable.

1. The application was dismissed. The two grounds of challenge stood or fell together because both concerned the timing and effect of changes to the grant arrangements.
2. The doctrine of legitimate expectation requires a promise or adopted practice representing how a public authority proposes to act. The representation must be clear, unambiguous and devoid of relevant qualification. A public authority may depart from a legitimate expectation only where legally required to do so or where departure is an objectively proportionate means of achieving a legitimate public aim.
3. The 2004–05 grant did not create an expectation that its funding formula would continue. The Minister’s letter was exploratory and expressly referred to confirmation in a forthcoming circular. The circular stated figures for 2004–05 only, was to be cancelled on 31 March 2005, and described the weekly rate as based on the Department’s best estimates. Subsequent consultation, the Form 2 survey and communications about the future grant made clear that the formula was under review.
4. Section 31 of the Local Government Act 2003 permitted the Secretary of State to determine the amount and conditions of the grant, including retrospectively. The grant was intended to assist with additional costs, not to meet their entirety.
5. The policy challenge also failed. The declared policy remained to assist authorities most affected by the Hillingdon judgment. Reducing the threshold and weekly rate did not, by itself, depart from that policy; it widened the class of authorities regarded as most affected.