Queen Mary University of London v Higher Education Funding Council for England

Whether compliance with grant conditions is a precedent fact is determined by the statutory scheme and its context. Where a public funding body administers a broad scheme involving conditions of varied and potentially evaluative content, the body normally determines compliance, subject to ordinary judicial review principles. “Open competition” requires a genuine opportunity for credible candidates to compete. Funding restricted to a small, defined group of institutions does not satisfy that criterion. Where a repayment decision is made by an unauthorised official, the court should quash the decision and remit it to the authorised decision-maker, particularly where that decision-maker has a discretion over the amount to be recovered.

Queen Mary University of London challenged HEFCE’s decision to recover £852,000 of research support grant funding. HEFCE considered that charitable research income reported by Queen Mary had not been awarded through “open competition”, as required by its funding criteria. The claim raised issues concerning precedent fact, the meaning of open competition, procedural fairness, authority to make the repayment decision, the relevant discretion, and whether relief should be withheld despite an error of law.

The funding had been awarded by a charity whose eligible recipients were limited to Queen Mary, another higher education institution and an NHS trust. The dispute came before the Administrative Court as a first-instance judicial review claim.

1. Precedent fact. The court declined to determine for itself whether Queen Mary had complied with the funding conditions. The statutory scheme permitted HEFCE to impose a wide range of conditions, some of which could involve evaluative or academic judgments. It would be anomalous for compliance to be determined as a precedent fact after payment when HEFCE’s refusal to make payment before the event would be reviewable only on ordinary public law grounds. The cases concerning precedent fact, including R v Home Secretary ex p. Khawaja and R v Monopolies and Mergers Commission ex p. South Yorkshire Transport Ltd, did not require a different approach.
2. Open competition. The phrase was intended to prevent public funding from augmenting charitable funds that were not genuinely available to other institutions. A process cannot be an open competition if bodies with the necessary skills and resources are excluded from competing. The Foundation’s restriction of eligibility to three specified organisations meant that its grants did not satisfy the criterion. HEFCE was therefore entitled to reach that conclusion on ordinary judicial review principles.
3. Fairness. The exchanges between the parties did not demonstrate a closed mind or procedural unfairness. HEFCE had sought further information and had changed its position concerning other charities.
4. Authority. Under Further and Higher Education Act 1992, section 62 and Schedule 1 paragraph 10, the relevant repayment decision had to be made under HEFCE’s scheme of delegation by the chief officer. Officials could undertake investigative and preparatory work, but the authorised decision-maker had to make the decision itself. The Chief Executive’s Group had not approved a repayment decision concerning Queen Mary; its recorded decision concerned institutions that had agreed the audit findings.
5. Discretion and relief. The repayment condition allowed HEFCE to recover all or part of an overpayment. Since the authorised decision-maker had not exercised that discretion, the court could not treat the outcome as inevitable and withhold relief. The decision was quashed and remitted to the Chief Executive for reconsideration.

First-instance judicial review claim. No prior decision is stated in the judgment.