Guildhall College, R (on the application of) v Secretary of State for Business Innovation and Skills

The power to designate courses for publicly funded student support carries an implied power to suspend payments and withdraw designation. That power is not confined to the end of an academic year and does not require proof of abuse. It must nevertheless be exercised for a proper purpose, on relevant material, and rationally.

Procedural fairness is context-dependent. Where there is an urgent risk that public funds are being paid for unauthorised purposes, immediate suspension without prior notice may be fair. Subsequent disclosure of the concerns and a genuine opportunity to respond may satisfy fairness.

Course designation is not necessarily a possession under Article 1 of Protocol 1. Any entitlement to payment may be derivative of students’ eligibility and remains subject to the statutory scheme.

Guildhall College challenged the suspension of student-support payments and the withdrawal of designation of its HND Business and HND Computing and Systems Development courses. The decisions followed concerns that students registered on designated courses were studying other, undesignated subjects, that course start dates had been misstated, and that a third-party recruiter had assisted with applications.

The College argued that the Secretary of State lacked power to withdraw designation during the academic year, acted irrationally, breached procedural fairness, and interfered disproportionately with possessions protected by Article 1 of Protocol 1. The court considered the scope of the statutory power, the fairness of the decision-making process, rationality, and the Convention claim.

1. Disposition. The claim for judicial review was dismissed. The College was ordered to pay £11,500 on account of the defendant’s costs within 28 days.
2. Statutory power. The power to designate courses under regulation 6(9) of the Education (Student Support) Regulations 2009 included an implied power to withdraw designation. The implication was incidental to the statutory purpose of directing public funds only to authorised recipients and purposes. The power was not limited to the end of an academic year and did not depend on proof of abuse. It remained subject to ordinary public law controls, including proper purpose, relevant considerations, rationality and the Wednesbury standard.
3. Application of the power. There were reasonable grounds for believing that public money was being claimed for students who were studying courses other than the designated HND Business course. The Secretary of State was therefore entitled to withdraw designation. The explanation that students would study Business for one year and then self-fund or transfer elsewhere was implausible.
4. Procedural fairness. Fairness was context-dependent. The information available at the time of the payment suspension created an urgent risk to public funds and justified immediate action without prior notice. The letter explaining the concerns and the meeting on 2 October placed the College squarely on notice of the issues and gave it an opportunity to respond. The continuing exchange of information was an iterative process, not merely an investigation. The College’s additional information confirmed rather than dispelled the concerns.
5. Convention claim. Designation was not a possession for Article 1 of Protocol 1. Any right to payment was derivative of eligible students’ entitlement and conditional upon their enrolment on designated courses. In any event, the suspension and withdrawal were lawful and proportionate responses to the suspected diversion of public funds.