R (Hollow) v Surrey County Council

The claimants challenged Surrey County Council's decision of 27 March 2018 to approve its 2018-19 detailed budgets, including an SSEND (schools and special educational needs and disabilities) budget line described as "areas of focus" (AOF) comprising potential savings of £11,694,000. Central legal issues were whether the Council acted irrationally or unlawfully by approving the budget without having worked-up proposals, and whether duties to consult or to have "due regard" under section 149 Equality Act 2010 (the public sector equality duty), section 11 Children Act 2004 and section 27 Children and Families Act 2014 required consultation at that budget stage.

The court held that the AOF entry in the budget represented possible areas in which savings might later be identified rather than concrete decisions to cut services, and that it was lawful for the Cabinet to include such projected savings as part of ordinary local government financial planning. Because specific proposals and impacts had not been formulated, there was nothing ascertainable that the Council irrationally failed to take into account or to consult upon at that stage. The public sector equality duty and the section 11 duty were engaged and were addressed sufficiently given the preliminary nature of the decision; section 27 of the Children and Families Act 2014 was a strategic, periodic review duty and did not require the extensive statutory consultation urged by the claimants whenever a budget line of this kind was included. The claim was dismissed.

This is a judicial review at first instance brought by five children with special educational needs and disabilities (acting by their mothers) challenging Surrey County Council's Cabinet approval on 27 March 2018 of the Council's service budgets for 2018-19, in particular an "areas of focus" SSEND budget line (£11,694,000) that formed part of wider identified savings across the SSEND budget. Permission to apply for judicial review had been granted and an amendment adding a ground under section 27 Children and Families Act 2014 was permitted.

Relief sought: declaratory relief, quashing of the SSEND budget allocation for 2018-19 and costs; the claimants emphasised they sought reconsideration of the SEN budget in light of the Court's guidance rather than quashing the Council's entire revenue budget.

Issues framed:

• Ground A: whether the decision was taken without required consultation (statutory or common law);
• Ground B: whether the decision breached the public sector equality duty (section 149 Equality Act 2010);
• Ground C: whether the decision breached section 11 Children Act 2004;
• Ground D: whether it breached section 27 Children and Families Act 2014;
• Ground E: whether the decision breached the common law duty to have regard to relevant considerations and the Tameside duty of inquiry.

Facts and procedure: The SSEND budget was part of the Council's overall Medium Term Financial Plan. Some line-item savings flowed from earlier, implemented decisions; item 7 (AOF) was a broad heading identifying potential areas for future savings. No consultation took place before the 27 March 2018 Cabinet decision. The Council's evidence established that the budgets were planning tools and not immutable commitments to particular service reductions; substantial parts of the SSEND savings were risk-rated as red or amber and the Council anticipated some savings might not be achieved and overspends could be carried forward.

Court's reasoning: The court concluded the Cabinet decision to include AOF in the budget was a lawful planning decision in line with ordinary local government accounting practice. It was not irrational to include potential savings where the method of achieving them had not been worked up; absent ascertainable, concrete proposals there was nothing material that the Council irrationally failed to consider or consult upon. The PSED and section 11 duties were engaged but satisfied in light of the preliminary stage of decision-making and the accompanying equality impact analysis which acknowledged impacts were to be determined as proposals were developed. The court held section 27 of the 2014 Act is a strategic, periodic duty to keep provision under review and to consult at appropriate intervals; it did not require the extensive consultation process contended for by the claimants whenever a budgeting exercise included potential savings. The court distinguished and declined to follow a recent decision (R (KE) v Bristol CC) relied upon by the claimants because its facts were materially different and because the approach to consultation in KE was considered incorrect on the law.

Conclusion: the court dismissed the claim; the budget entry was not a final decision to cut services and the Council would, when specific proposals were developed, follow appropriate decision-making, consultation and equality impact assessment processes.

The claim is dismissed. The court held the Cabinet's inclusion of an "areas of focus" SSEND savings heading in the 2018-19 budget was a lawful budgetary planning decision, not a concrete decision to cut services; it was not irrational for the Council to approve that budgetary entry without worked-up proposals or prior consultation. The public sector equality duty (section 149 Equality Act 2010) and the duty in section 11 Children Act 2004 were addressed sufficiently at that stage, and section 27 Children and Families Act 2014 is a strategic review duty that did not require the broad, statutory consultation the claimants sought in these circumstances.