Juttla & Ors, R (on the application of) v Hertfordshire Valleys CCG & Ors

The court quashed the defendant Clinical Commissioning Group's resolution of 16 November 2017 to withdraw its £600,000 annual funding of Nascot Lawn on the sole ground that the decision was reached on an incorrect legal basis by failing to comply with the formal consultation duty in regulation 23 of the Local Authority (Public Health, Health and Wellbeing Boards and Health Scrutiny) Regulations 2013. The judge held that the services at Nascot Lawn plainly amounted to "health services" within sections 3 and 3A of the National Health Service Act 2006, triggering the regulation 23 consultation obligations to Hertfordshire County Council.

All other grounds of challenge were dismissed: there was no irrationality in respect of individual needs assessments (Coughlan applied), the defendant had satisfied its public involvement obligations under section 14Z2 and its constitution and the NHS Constitution, the Equality Impact Assessment addressed the Public Sector Equality Duty in section 149 of the Equality Act 2010, the arrangements complied with the limited duty in section 11 of the Children Act 2004, and Article 8 ECHR was not engaged (or, if engaged, any interference was within the wide margin of appreciation given resource allocation).

Background and parties: The claimants were three children (by litigation friends) who used overnight respite health care at Nascot Lawn, a facility for children with complex medical needs. The defendant was Hertfordshire Valleys Clinical Commissioning Group (CCG), the principal funder of Nascot Lawn. The CCG resolved on 16 November 2017 to withdraw its funding of approximately £600,000 per annum, a step which would likely lead to closure. The local authority, Hertfordshire County Council (HCC), and other NHS bodies were interested parties.

Nature of the claim and relief sought: The claimants sought judicial review of the CCG's decision to withdraw funding. Relief sought included quashing the decision and related public law remedies on multiple grounds: (A) legal error about whether the service constituted a health service engaging regulation 23; (B) failure to assess individual needs; (C) failure to consult/public involvement; (D) breach of the Public Sector Equality Duty (Equality Act 2010, s.149); (E) breach of section 11 Children Act 2004; and (F) breach of Article 8 ECHR together with Article 3 UNCRC.

Issues framed by the court:

• Whether funding of Nascot Lawn amounted to commissioning of a health service under sections 3 and 3A of the NHS Act 2006 and therefore constituted a "substantial variation" requiring formal regulation 23 consultation with the local authority;
• whether the CCG had lawfully gathered sufficient evidence and assessments of affected children and complied with its public involvement and consultation obligations (statutory and under its constitution and the NHS Constitution);
• whether the CCG complied with the Public Sector Equality Duty (s.149 Equality Act 2010), the duty under section 11 Children Act 2004, and the Convention rights raised (Article 8 ECHR and best interests under the UNCRC).

Court's reasoning and conclusions: The court concluded that the services at Nascot Lawn were health services (applying R (T & Ors) v London Borough of Haringey and considering the medical nature and nursing provision). As a result, the proposed withdrawal of funding amounted to a substantial variation engaging regulation 23 duties. The CCG had not carried out the formal regulation 23 consultation with HCC and therefore the 16 November 2017 decision was made on an incorrect legal basis and was quashed. The consequence is that the CCG must now carry out the regulation 23 process, including formal consultation with HCC, with scope for collaborative dialogue and, if unresolved, referral to the Secretary of State who may make a merits-based decision under regulation 26.

On the remaining grounds the court found that (i) there was no general duty to carry out individual assessments before a closure decision (Coughlan), and sufficient material and impact assessments were available; (ii) the CCG had met its public involvement obligations under s.14Z2, its constitution and the NHS Constitution; (iii) the Equality Impact Assessment was adequate and complied with the Public Sector Equality Duty; (iv) the arrangements complied with the limited "have regard" duty in s.11 Children Act 2004; and (v) Article 8 ECHR was not engaged by the reduction of the commissioned care (and even if engaged, any interference was justified within the margin of appreciation in resource allocation).

Procedural note: The court quashed the decision only on ground A and dismissed grounds B–F. The judge nevertheless gave substantive reasons on the dismissed grounds to address serious criticism in the pleadings.

The court set aside (quashed) the defendant CCG's resolution of 16 November 2017 to withdraw funding for Nascot Lawn because the CCG had been under a regulatory duty to consult Hertfordshire County Council under regulation 23 of the 2013 Health Scrutiny Regulations: the services at Nascot Lawn were health services within sections 3 and 3A of the National Health Service Act 2006 and the regulation 23 process had not been followed. The remaining grounds (failure to assess individual needs, failure of public involvement, breach of the Public Sector Equality Duty, breach of section 11 Children Act 2004, and Article 8/UNCRC arguments) were dismissed for the reasons given: no irrationality, adequate public involvement and EIA, and Article 8 not engaged or justified given resource-allocation margin of appreciation. The consequence is that the CCG must now comply with regulation 23 consultation obligations, leading to collaborative dialogue or possible referral to the Secretary of State.