The Cornwall Council, R (on the application of) v The Secretary of State for Housing, Communities and Local Government

A below-threshold public contract with cross-border interest remains subject to Treaty principles of non-discrimination, equal treatment and transparency. The authority must advertise unless a strictly construed derogation is proved. A technical-reasons derogation requires proof that one supplier is genuinely and absolutely necessary, with no reasonable alternative; funding deadlines and preference for a contractor already working on a related project may not suffice. An error in treating a contract as above threshold is immaterial where the decision independently applies the correct below-threshold analysis. A tender condition requiring a bidder using sub-consultants to identify a local SME may be indirectly discriminatory, even without proof of actual deterrence. Judicial review also requires procedural rigour when new grounds are advanced.

Cornwall Council sought judicial review of the Secretary of State’s decision to claw back £2,121,431.66 from European Regional Development Fund payments. The sums related to a direct award for the Chiverton Bridge works and a competitive framework procurement requiring certain tenderers to identify a Cornish SME sub-consultant.

The Council challenged the alleged threshold error, the rejection of technical and exclusive-rights justifications, the treatment of cross-border interest, and the finding that the local-subcontractor requirement was discriminatory. It also sought to add a late ground arguing that EU law no longer applied after Exit day. The court had to determine the amendment application and the lawfulness of the clawback decision.

Outcome

Permission to amend to add Ground 8 was refused. The claim for judicial review was dismissed on all grounds.

1. The additional ground required permission under the Civil Procedure Rules 1998 and Practice Direction 54A. The Council had not made a formal, prompt application supported by draft grounds and evidence. Raising the ground in a skeleton argument during the substantive hearing caused procedural prejudice. The approach in R (AB) v Chief Constable of Hampshire Constabulary [2019] EWHC 3461 (Admin) supported the need for procedural rigour.
2. In any event, the proposed ground was unarguable. Article 138 of the Withdrawal Agreement, given domestic effect by the European Union (Withdrawal) Act 2018, continued applicable Union law, including procurement and financial-correction rules, for the ERDF programme until closure. The 2019 Regulations concerned retained EU law and did not disapply relevant separation agreement law.
3. The Secretary of State had made an error in treating the CJP procurement as above threshold. Applying the materiality principle in Simplex GE (Holdings) Ltd v Secretary of State for the Environment [2017] PTSR 1041 and Singh v Secretary of State for the Home Department [2017] EWCA Civ 362, the error did not invalidate the decision because the decision independently addressed the correct below-threshold position.
4. The Secretary of State had considered the Council’s materials. The reasons were adequate under the context-sensitive approach in South Buckinghamshire District Council v Porter (No. 2) [2004] UKHL 33. They explained why the funding deadline and CJP’s involvement in the A30 Project did not establish a genuine technical necessity, and why the unsupported exclusive-rights assertion did not suffice.
5. The Council had proceeded on the basis that Treaty principles applied and had not raised or evidenced any absence of cross-border interest. The Secretary of State was not required to raise that issue unilaterally. The local SME requirement was indirectly discriminatory because UK-based bidders were better placed to identify and negotiate with Cornish sub-consultants. The Public Services (Social Value) Act 2012 could not override equal treatment and non-discrimination.

This was a first-instance judicial review. Permission was granted by Jefford J on grounds 1–5 and 7, and refused on ground 6, by order dated 28 January 2026.