Guildhall College Ltd, R (On the Application Of) v Secretary of State for Business Innovation And Skills & Anor

The Secretary of State has an implied power to withdraw a course designation where there are reasonable grounds to believe that public money is being paid for non-designated courses. The power is not confined to the end of an academic year or to cases where abuse is proved, but remains subject to ordinary public-law controls.

Procedural fairness is context-sensitive. Urgent suspension may occur without prior notice where necessary to protect public funds, provided the affected institution is promptly informed and given an opportunity to respond. A separate investigative stage and proposed decision are not invariably required.

A course designation is not a possession under Article 1 of the First Protocol where it creates no funding entitlement and is not a marketable asset.

Guildhall College appealed against Cranston J’s refusal to quash decisions suspending student-loan payments and withdrawing the designations of its HND Business and Computing courses. The decisions followed concerns that students registered on designated courses were intending to study non-designated subjects, that course start dates had been inaccurately recorded, and that a third party had assisted with applications.

The High Court decision was reported at [2013] EWHC 3257 (Admin). The appeal concerned the Secretary of State’s statutory power, procedural fairness, Wednesbury unreasonableness, and whether course designation was a possession protected by Article 1 of the First Protocol.

Appeal dismissed. Lord Justice Christopher Clarke delivered the judgment, with Lord Justices Fulford and Jackson agreeing.

1. Statutory power. The Teaching and Higher Education Act 1998 and the Education (Student Support) Regulations 2009 had the twofold purpose of funding designated courses and preventing public money being paid for non-designated courses. Regulation 6(9) therefore carried an implied power to withdraw designation where there were reasonable grounds to believe that the funding scheme was being abused. Withdrawal was not limited to the end of an academic year or to cases where abuse had been proved.
2. Fairness. Fairness depended on the statutory and factual context. The immediate suspension of payments was justified by the apparent inaccurate start dates, the substantial sums already paid, and concerns about third-party applications. The suspension was accompanied by an explanation and an invitation to discuss the concerns. For the later withdrawal, those concerns had been put squarely to the College at the meeting on 2 October 2012, and the College had an opportunity to respond. Fairness did not require a discrete investigative stage followed by a proposed decision in these circumstances. [1994] 1 AC 531 was applied, and [2011] EWCA Civ 1336 was distinguished.
3. Rationality. Having regard to the sums involved and the absence of a satisfactory explanation, it could not be said that no reasonable Minister could have made the decisions. The difference between the meeting note and the later departmental submission did not alter that conclusion.
4. Article 1 of the First Protocol. A designation was not a possession. It gave the College no right to receive funds, did not prevent it providing courses, and was neither transferable nor shown to be a marketable asset. The relevant Strasbourg and domestic authorities concerning goodwill, marketability and future income supported that conclusion. The decisions were therefore not an interference with a possession. If they had been, they would nevertheless have been lawful and proportionate, since ordinary public-law controls supplied a sufficiently certain legal framework and the decisions pursued the legitimate aim of preventing unauthorised public funding.

1. Court of Appeal (Civil Division): dismissed the appeal.
2. High Court, Administrative Court: Cranston J declined to quash the suspension of payments and withdrawal of course designations in [2013] EWHC 3257 (Admin).