In February 2010 the defendant Secretary of State decided that the city councils of Exeter and Norwich should become unitary authorities instead of being district councils within the local government two-tier system. Draft Orders effecting those changes were laid before both houses and subsequently passed. On 24 March 2010, the final Orders were made by the Minister and they came into force on 25 March 2010, beginning the transitional arrangements for the new authorities to be fully operational in 2011.
The Claimant county councils sought to challenge the Secretary of State’s original decision by judicial review on the basis that the decision was radically different from that upon which the statutory consultation had been carried out, and from that which Ministers had always said would underlie their decisions. As a result, they argued, the consultation was unfair and did not comply with the requirements of the Local Government and Public Involvement in Health Act 2007. Under provisions in this Act the Secretary of state can invite proposals for unitary councils in England but any proposals must have regards to government guidance. Such guidance was issued detailing the criteria which must be proven before an authority can become eligible for consideration to be a unitary authority. Both Exeter and Norwich city councils responded to the invitation by proposing that they become unitary authorities. The secretary of state is also empowered by the 2007 Act to ask the Boundary Committee of the Electoral Commission for advice on the proposals and did so. It recommended that the proposals by Exeter and Norwich should not be implemented, because it was not satisfied they could meet the affordability criteria or whether Norwich would meet the value for money criterion. It did however suggest an alternative proposal for unitary councils for the whole of Norfolk and all parts of Devon that were then two-tier which the Secretary of State rejected.
The Secretary of State sought to defend the challenge and explained the decision to depart from the guidance and allow the city councils to become unitary authorities despite neither demonstrating that they could comply with the criteria on the basis that “where we judge that a proposal does not meet all the five criteria, our presumption has been not to implement it unless there are compelling reasons to the contrary.” The compelling reasons being the economic downturn and the recent government ‘total place approach’ initiative suggested, in her view, that the changes would be in the best interest of those living in these areas.
Applying R (on the application of Capenhurst) v Leicester City Council (2004) the Court confirmed that wide discretion would be afforded those conducting consultations in respect of the information published about any proposal, provided that sufficient information was given to enable an intelligible response. This would require that a consultee know what the proposal was in the necessary detail, and also the factors likely to be of substantial importance to the decision, or the basis upon which the decision was likely to be taken. If, as in this case, the decision-maker did set out the crucial criteria and precisely how he would use them in his decision-making, it would affect what topics were addressed and how by consultees. If the criteria were expressly stated, any departure from this would not be fair and lawful unless there was further consultation enabling representations to be made on that changed basis. However the Court did warn that even a flawed consultation exercise would not always be so procedurally unfair as to be unlawful, R (on the application of Greenpeace Ltd) v Secretary of State for Trade and Industry (2007) considered. In this case, the Secretary of State had consulted on a clear basis and had throughout the consultation period made clear that failure to meet all the stated criteria would guarantee that a proposal would not be taken forward. Therefore the Court commented that “on the face of it the Secretary of State simply made a mockery of the consultation process.” A different approach was adopted from the one that the Secretary of State had always said she would adopt, and which had been the basis of the consultations by government and the boundary committee. The new approach was adopted without any warning, so there was no opportunity or reason for consultees to address it. The Court recognised that the factors which the Secretary of State took into account were legally relevant and, having identified these, he could not then ignore them within his decision making; it also confirmed that the view he reached was not irrational, but concluded that his handling of the consultation was so unfair that his decisions were unlawful.
Quashing the Orders the Judge did comment that this would not prevent them being put forward for approval after what need be only a short period of consultation.