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The latest on cuts: Lessons for authorities following R (Draper) v Lincolnshire CC

This article was first published in The Local Government Lawyer.

Mr Justice Collins has handed down judgment in the latest case borne out of government cuts. The judgment provides useful learning to local authorities in particular on how to comply with new duties in relation to expressions of interest under the Localism Act 2011, writes Leon Glenister.

The case of R (Draper) v Lincolnshire County Council [2014] EWHC 2388 (Admin) concerned the authority’s proposed £2 million cut in library funding.

It was acknowledged by the Court that criticism of the cuts themselves were a matter for the ballot box rather than the courtroom. However what Mr Draper sought to do was challenge two elements of how those cuts were implemented: firstly, a flaw in consultation, and secondly, an unlawful rejection of interest from charitable organisation Greenwich Leisure Limited (‘GLL’) under the Localism Act 2011.

Consultation

The law on consultation is relatively settled. Consultation by a local authority should occur at the stage of there being a proposal; however that proposal must be at formative stage so the authority still has an open mind (R v Brent LBC ex p Gunning [1985] 84 LGR 168).

In Draper, the authority’s consultation document had a number of boxes that responders could fill out. At the start of the document, it listed what areas could and could not be altered following consultation.

For example, it rightly said the budgetary cuts of £2m could not be altered. However, it also crucially stated the decision to cut the statutory service to 15 libraries was not alterable.

Helen Mountfield QC, representing the authority, attempted to temper the position pointing to the last question which stated “Are there other options you would like to put forward?” It was argued this showed the council had not closed its mind as to alternative proposals for saving.

Mr Justice Collins rejected these submissions. He found the consultation exercise was flawed as the central element in relation to the libraries scheme, namely to reduce the service to 15 libraries, could not be changed. In essence, consultation occurred too late, at a stage where the authority no longer had an open mind.

Rejection of GLL’s interest

Chapter 2 of the Localism Act 2011, a product of the Conservative promotion of the Big Society, places requirements on authorities to consider expressions of interest in delivering relevant services.

Lincolnshire produced an information pack. That included an Expression of Interest form organisations were able to fill out. One organisation who did fill that out was GLL who already manage libraries in the London Boroughs of Greenwich and Wandsworth.

GLL proposed taking over the library services, and stated it could retain the existing libraries and save £1.8m by reducing operating and other costs.

The authority had the option to accept, reject or modify this expression of interest under section 82 of the 2011 Act. In reality, as David Lawson for the claimants noted, what ‘accept’ really means is to "expose an expression of interest to market scrutiny" by carrying out a procurement exercise.

This was the very basis of the authority’s rejection of GLL’s proposal. It said that to accept the expression would compel the authority to carry out a procurement exercise, which could take six months with no guarantee it would lead to an comprehensive and efficient library service.

The Court found the expression of interest was not lawfully considered under the 2011 Act. The Guidance has provision for authorities to request further information. This was not done, and there was evidence that the authority simply did not see the GLL bid as the intention of the consultation.

It was noted by Collins J that the authority was not able to both claim the consultation allowed general proposals to be suggested but then reject the GLL bid as it did not fall within the scope of the consultation.

What can be learnt

The most interesting part of the decision is how local authorities deal with the relationship of expressions of interest under Chapter 2 of the 2011 Act alongside procurement legislation. In the majority of cases, accepting an expression of interest will lead to a procurement exercise.

What that procurement exercise may entail depends on the circumstances of the expression of interest. Collins J cited favourably Mr Lawson’s rejection that such an exercise would take at least six months in this case. It was suggested adjustments could be made to the nature of the procurement exercise if timing was important.

As such, the need for a procurement exercise is not necessarily a bad reason for rejecting an expression of interest. However if that is the sole reason, authorities would be well advised to take advice as to the nature, duration and extent of the required exercise to inform any decision to reject.

In any event, if an authority does receive an expression of interest, it should fully investigate its feasibility before reaching a decision to accept, reject or modify.

Turning to consultation, the need to consult can arise in a range of circumstances, from taxi reductions to road closures, or in this case, library closures.

It is important to take advice to ensure consultation does not occur either too early or too late. There is plainly no use in a consultation exercise without any idea of potential outcomes. Equally, central elements of any plan cannot be pre-determined, as occurred in this case.

With the relentless cuts in local government, it is safe to say this will not be the last cuts case raising these issues.