London Borough of Hackney & Anor, R (on the application of) v Secretary of State for Housing Communities and Local Government

This judicial review concerned directions under section 4A of the Local Government Act 1986 requiring two London boroughs to restrict the frequency of their free newssheets to no more than quarterly, in accordance with the Code of Practice on Local Authority Publicity 2011. The court held that the Secretary of State had adopted the correct legal approach to the exercise of his discretion under s.4A and was entitled to proceed on the basis that the Code’s frequency requirement is the relevant starting point.

The court rejected the claimants’ argument that the Secretary of State was obliged in every case to establish, by borough-specific empirical evidence, that more frequent publication caused unfair competition to local newspapers before issuing a direction. The Secretary of State’s decision was held to be rational: he considered representations, addressed relevant equality impacts under section 149 of the Equality Act 2010 and reasonably concluded that enforcement of the Code was justified.

The court dismissed procedural challenges based on an asserted promise of a post-implementation review and the Tameside duty of inquiry, finding that no legal obligation required postponement of enforcement pending such reviews. The court also found no unlawful State aid contrary to Article 107(1) TFEU and no disproportionate interference with Article 10 ECHR or related common-law rights of residents.

This case brought judicial review challenges by the London Boroughs of Hackney and Waltham Forest (and an individual resident in Hackney) to directions issued by the Secretary of State under section 4A of the Local Government Act 1986 requiring their free newssheets to be published no more frequently than quarterly in accordance with the Code of Practice on Local Authority Publicity 2011. The councils had for many years published fortnightly newssheets distributed free to households; the Code's frequency requirement was intended to avoid unfair competition with independent local newspapers.

Procedural posture and relief sought:

• The claims were brought at first instance in the Administrative Court seeking judicial review of the directions, challenging lawfulness on grounds of misdirection in law, procedural unfairness, irrationality/Wednesbury unreasonableness and failure to comply with the public sector equality duty, abuse of power, Tameside duty and unlawful State aid.

Issues framed by the court:

• What legal approach must the Secretary of State adopt when exercising his discretion under s.4A? Must he assess borough-specific empirical evidence of unfair competition before issuing directions?
• Was the decision to enforce the Code rational and, where relevant, proportionate in relation to Article 10 rights?
• Was due process followed, including any legitimate expectation arising from a promised post-implementation review?
• Did the Secretary of State comply with the Public Sector Equality Duty in section 149 of the Equality Act 2010?
• Did issuing the directions amount to unlawful State aid under Article 107(1) TFEU?

Court’s reasoning and conclusions:

• The court concluded Parliament intended the Code to be enforceable and that sections 4A and 4B vested broadly drawn enforcement powers in the Secretary of State. He was therefore entitled to treat the Code’s frequency rule as the appropriate starting point and to enforce it unless there were special, persuasive reasons to the contrary.
• The Secretary of State was not required to prove borough-specific unfair competition; Parliament had already addressed the policy balance. The Secretary of State was obliged to consider representations and relevant facts, which he did, and his ultimate decision was within the range of rational outcomes. In the socio-economic policy context a wide margin of appreciation applied.
• Allegations that the Secretary of State should have delayed enforcement pending a post-implementation review or the Cairncross review were rejected. There was no legal obligation to await such reviews and the power to enforce post-dated the Explanatory Memorandum that had envisaged a review.
• The Public Sector Equality Duty had been addressed by an Equality Statement and subsequent consideration of the councils’ representations; the Secretary of State identified possible adverse impacts on older and disabled residents but reasonably concluded that mitigation measures were available and that he had given due regard to equality considerations.
• On State aid, there was no evidence that the enforcement measure would affect trade between Member States, so Article 107(1) did not apply.

Result: The claims for judicial review were dismissed for failing to show illegality, irrationality or procedural unfairness.

The claims are dismissed. The court held that the Secretary of State lawfully exercised his discretion under section 4A of the Local Government Act 1986, adopting a permissible approach that gave weight to the Code’s frequency requirement; his decisions were rational, complied with the Public Sector Equality Duty in substance, did not breach the Tameside duty nor amount to unlawful State aid, and did not constitute a disproportionate interference with Article 10 rights.