Liverpool City Council & Anor, R (On the Application Of) v The Secretary of State For Health

A judicial review challenging central government funding for statutory deprivation of liberty safeguards must be brought promptly, particularly where it challenges an annual budgetary decision.

The authorities concerning an unacceptable risk of illegality establish a narrow principle directed to systems that are inherently procedurally unfair or lead to unlawful decision-making. They do not create a general duty to fund local authorities sufficiently to avoid difficult budgetary choices where the statutory procedure itself is accepted as fair.

The New Burdens Doctrine does not amount to an unqualified promise to reimburse local authorities where the eventual cost of an existing statutory regime exceeds earlier estimates.

Four local authorities sought judicial review of the Secretary of State for Health’s alleged failure to provide adequate funding for deprivation of liberty safeguards under the Mental Capacity Act 2005, following the expanded practical consequences of Cheshire West and Chester Council v P [2014] AC 896.

They sought declarations and mandatory relief based on an alleged unacceptable risk of illegality and breach of the New Burdens Doctrine. The claim was filed shortly before the three-month period expired following publication of the 2016/17 Local Government Finance Settlement. The issues were whether the claim was out of time, whether the funding arrangements created an unacceptable risk of unlawful non-compliance, and whether the New Burdens Doctrine generated a legitimate expectation of additional funding.

1. Delay. The grounds of challenge arose no later than 8 February 2016, when the Local Government Finance Settlement was published. Although the claim was filed within three months, judicial review claims must also be brought promptly. A challenge to an annual central-government budgetary decision, potentially affecting an entire year’s financial arrangements, required especially prompt action. The claim was therefore out of time and there was no good reason to extend time.
2. Unacceptable risk of illegality. The procedural-fairness authorities, including R (Refugee Legal Centre) v Secretary of State for the Home Department [2005] 1 WLR 219, R (Medical Justice) v Secretary of State for the Home Department [2010] EWHC 1925 (Admin), and R (On the Application of Tabbakh) v The Staffordshire and West Midlands Probation Trust [2014] EWCA Civ 827, concerned systems inherently unfair or carrying a sufficiently high risk of unlawful decision-making. They did not establish the wider proposition advanced by the claimants. That principle had no application where the claimants accepted that the DoLS procedure was fair.
3. R (Hillingdon LBC) v Lord Chancellor [2008] EWHC 2683 (Admin) concerned irrationality and anxious scrutiny in a case involving vulnerable children. It did not establish a free-standing principle that underfunding creates an unacceptable risk of illegality. In any event, the evidence did not show that any claimant was unable to meet its DoLS duties. The councils retained discretion over the allocation of substantial parts of their budgets and could not rely on lack of funds as an explanation for non-compliance.
4. New Burdens Doctrine. A legitimate expectation requires a clear, unambiguous and unqualified promise or settled practice. The Doctrine contained no promise that central government would reimburse local authorities whenever the cost of an existing statutory regime exceeded an earlier estimate. Its review provisions expressly recognised that estimates might be wrong and that there would be no automatic assumption that departments must make good underestimates. The 2014 departmental communications did not create such a promise, and the Doctrine could not be used to reopen the 2008 estimates.
5. The application was refused.

Not stated in the judgment. This was a first-instance judicial review in the Administrative Court.