Liverpool City Council v Secretary of State for Health [2003] EWHC 1975 (Admin)

Preserved rights – grant – determination – consultation


This was an unsuccessful attempt by the local authority (LCC) to quash the Health Secretary’s Determination pursuant to s93 Local Government Act 2000 for the grant to be paid to LCC in relation to expenditure incurred by it in the financial year 2002-2003 in the provision of community care services to people with preserved rights. The total amount of the grants for England and Wales was £624,153,810. Liverpool City Council’s allocation was £8,640,683. The grounds for LCC’s claim were that the Health Secretary had failed adequately to consult before making his Determination and that his Determination was irrational.


The Court held that s93(11) LGA 2000 stipulated that consultation should be with such local authorities or representatives thereof as appeared to the Health Secretary  to be appropriate. That gave the Health Secretary considerable scope as to who was consulted, but did require him or his civil servants to address the question who was to be consulted and to form the view that they were appropriate consultees. The Health Secretary had consulted such representatives of local authorities, including the LGA and ADSS, and such local authorities as appeared to him to be appropriate. Further, it was clear that the Health Secretary had also consulted with other organisations that might reasonably be regarded as representatives of recipients of welfare services such as Help the Aged and Mencap, and providers of welfare services such as Leonard Cheshire and the Association of Residential Care there was no basis for suggesting that he was irrational in this connection. In general local authorities could not be expected to be consulted about central government spending limits. Conversely, if individual representations made by local authorities showed that the total pot was insufficient, the consultation would have little if any practical content if the department’s reaction were that the total was fixed and not subject to change.


There was no evidence and no basis for a finding, that there was any material error in the process of calculation of the pot. In these circumstances, any defect in consultation in relation to the calculation of the pot would have had no material consequence as to its calculation. No greater consultation was required. The evidence showed that the department did not seek, and did not expect, nor could rationally have expected, to determine grants that would precisely meet the additional costs to be incurred by local authorities. There were too many obvious areas in which estimation was required and there was no irrationality in the use of estimates. The decision of the Health Secretary not to provide for the reimbursement of local authorities but to pay them a specified sum by way of grant was one clearly open to him and could not be criticised as irrational.

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