Hollow & Ors, R (On the Application Of) v Surrey County Council

A local authority may lawfully include prospective and unidentified savings in a flexible budget where no particular service reduction has been decided. Rationality, consultation and statutory due-regard duties must be assessed by reference to the nature and stage of the decision-making process.

The duty under section 27 of the Children and Families Act 2014 is a strategic duty, exercised from time to time at reasonable intervals. It does not require a comprehensive review and consultation whenever an authority alters SEND provision or makes a related budgetary decision.

Five children with special educational needs and disabilities sought judicial review of Surrey County Council's approval of its detailed 2018–19 service budget. They challenged an £11.694 million savings entry identifying broad “areas of focus” within the schools and SEND budget.

The claimants alleged failures to consult, comply with the public sector equality duty, safeguard and promote children's welfare, review SEND provision, consider relevant matters and make sufficient inquiries. The Council maintained that the entry identified only potential areas for future savings. No particular service reduction had been formulated or authorised, and any later proposal affecting services would undergo the legally required assessment and consultation.

The central questions were whether that flexible budgetary decision was irrational and whether it engaged any statutory or common law duty to consult.

1. The claim was dismissed. The challenged entry identified broad areas in which officers might develop different and potentially less costly methods of delivering SEND services. It neither authorised a particular service reduction nor capped expenditure. The budget remained flexible, and unachieved savings could result in an overspend carried into a later year. Including the entry was therefore a lawful and rational method of financial planning.

2. The Cabinet was entitled to consider the decision within its full institutional and procedural context. It knew about increasing demand, existing deficiencies, parental dissatisfaction, financial pressures and the possibility of both positive and negative effects. The amount entered represented the difference between anticipated expenditure and available funding; it did not demonstrate that undisclosed proposals had already been developed.

3. No common law duty to consult arose. Such a duty ordinarily depends upon a promise, an established practice or conspicuous unfairness amounting to an abuse of power. R (KE) v Bristol City Council [2018] EWHC 2103 concerned a concrete and immutable reduction in services and was factually distinguishable. Its broader suggestion that possible reductions affecting vulnerable people themselves generate a duty to consult was not consistent with settled principle and was not followed.

4. The Council sufficiently discharged section 149(1) of the Equality Act 2010. What constitutes due regard depends upon the function and the stage reached. Since no specific delivery proposal existed, the Council could lawfully assess particular equality effects later. Any asserted consultation duty inherent in the public sector equality duty was no more than the conventional duty of sufficient inquiry. It was not irrational to proceed without seeking information about impacts which could not yet be identified.

5. The Council also complied with section 11(2) of the Children Act 2004. The reach of that duty depends upon the function and circumstances. The Cabinet was reminded of the duty and understood that the eventual effects could be positive or negative. Nothing further was required at this preliminary stage.

6. Section 27 of the Children and Families Act 2014 requires strategic review of the total relevant provision and consideration of its sufficiency. The consultation obligation in subsection (3) applies compendiously to the review and sufficiency functions in subsections (1) and (2). Those functions arise from time to time at reasonable intervals. They are not triggered by every individual alteration to SEND provision or related budgetary decision. Contrary interpretations in R (DAT and BNM) v West Berkshire Council [2016] EWHC 1876 and KE were wrong and were not followed.

• High Court (Administrative Court): Permission to apply for judicial review was granted by Holman J on 23 May 2018. Walker J subsequently permitted an amended ground and fresh evidence on 20 September 2018. The substantive claim was dismissed.