London Borough of Hillingdon v Secretary of State for Education and Skills [2007] EWHC 514

A local authority has a duty to provide after-care services to any person who has been ‘looked after’ subject to the provisions of the Children (Leaving Care) Act 2000.  It is obliged to provide these services until the child attains the age of 21 or beyond if in full-time education.   Since R (Behre) v Hillingdon (2003) [known as ‘the Hillingdon judgment’], this duty has applied also to former unaccompanied asylum seeking children (UASCs) The issue in this case concerned the decision by the Secretary of State to limit the funding assistance, by way of a grant, available from the DfES in respect of each UASC eligible for leaving care support in a local authority’s area. In the previous year local authorities were provided with £140 for each UASC eligible for leaving care support, although the first 44 cases in any area did not attract funding. The stated intention being that this formula would assist those local authorities most affected by the Hillingdon judgment.   In the financial year 2005-06 the amount per eligible person was decreased to £100 but would be made payable for all eligible persons after the first 25 cases.  The claimants, the London Borough of Hillingdon, sought judicial review of this decision on the basis that it was unlawful, in that Hillingdon had a legitimate expectation that the grant for this financial year would provide a comparable level of support which had been made available in the previous year.  It also challenged the Secretary of State’s apparent change of policy, contending that this new arrangement no longer provided funding assistance to those local authorities most affected by the Hillingdon judgment.

The doctrine of legitimate expectation provides that where a public authority has made a promise or adopted a practice that represents how it proposes to act in a given area, fairness requires that the promise or practice should be honoured unless there is a good reason for not doing so.  The promise or practice of the public authority must be “clear unambiguous and devoid of relevant qualification.”  Bibi v Newham LBC.  The public authority may only refuse to fulfil that expectation where it has a legal duty to do so, or where the departure constitutes an objectively proportionate means to achieve a legitimate aim.  Nadarajah v Secretary of State for the Home Department. 

Hillingdon is one of the gateway authorities for UASCs, being in close proximity to Heathrow airport and has to look after significantly more UASCs than any other local authority.  Following the Hillingdon judgment, Hillingdon faced an unexpected increase in its financial obligations towards UASCs leaving care.  The DfES decided to provide financial assistance under s31 of the Local Government Act 2003, which enables a Minister to pay a grant to a local authority towards expenditure incurred or to be incurred by it.  The Minister wrote to Hillingdon about a possible way forward and to explore the idea of providing £140 per week for each former UASC over a qualifying threshold of 44 former UASCs, for the financial year 2004/05.   Local Authority Circular (LAC) 6 of 2004 was sent to Hillingdon which supported the Secretary of State’s letter.  The LAC set out the arrangements for funding the local authorities most affected by the Hillingdon judgment but stated that it was valid only until March 2005.  It was followed by LAC 21 of 2004 which gave further instructions of how the grant would administered.  In December 2004 a meeting took place between the DfES and representatives from local authorities to discuss whether the rate of £140 per former UASC should be reduced so that it was related to the level of costs actually being incurred by local authorities so that the grant could be spread across a larger number of local authorities.  The rationale for making such a change was that local authorities were able in a number of cases to recover housing costs from housing benefit or the NASS.  Hillingdon set out in a letter to the DfES, its opposition to the proposed removal of accommodation costs from the grant payable to local authorities and pointed out the departure from the conditions set out in LAC 6/2004.  In January 2005 the Secretary of State sought views from local authorities for allocating the grant for the following year in order to “fully inform ministers of the options available in making their decisions.”  Hillingdon did not make any specific representations at the time but it was later accepted by the court that those involved accepted that £140 figure was under review.  In March 2005 Hillingdon set its budget for the following financial year.  At this time there had been no announcement by the Secretary of State with regard to the funding formula for the UASC leaving care grant 2005/06.  Hillingdon assumed that the funding formula would in all respects be the same as that adopted for the 2004/05 grant.  In January 2006 the Secretary of State published her decision followed shortly afterwards by LAC 1/2006 which reduced the eligibility from 44 to 25 UASC care leavers and reduced the payment from £140 to £100 per care leaver over the threshold of 25.  The LAC suggested other sources of funding which local authorities might use to make up the shortfall.  The Secretary of State was unable to grant Hillingdon’s request for additional funding and clarified that the grant provided was only intended to help towards the costs of supporting additional UASC care leavers, rather than meet the full costs.

Hillingdon claimed that these changes amounted to a “dramatic shift of funding away from those authorities which are genuinely affected by the judgment to those which are less affected.”  It also claimed that the Secretary of State’s conduct had amounted to an implicit promise or an adopted practice that the funding formula adopted in the 2004/05 leaving care grant would not be altered to the detriment of the most affected authorities like Hillingdon.  This was significant departure which was not announced or published before the commencement of the financial year 2005/06 and which Hillingdon could not have taken into account when setting its budget for the year.  It argued that once the time for setting the budget had passed it was not open to the Secretary of State to ”move the goal posts” with regard to funding formula in respect of the that financial year to the detriment of Hillingdon.  Essentially, Hillingdon’s case was concerned with the timing of this change rather than with Secretary of State’s right to decide to make such a change.

The Secretary of State submitted that she had never agreed that the leaving care grant would remain at the rate of £140 per week and that the decision to pay the grant in that amount for 2004/05 could not be characterised as an adopted practice or course of conduct.  Also, it should have been clear to Hillingdon that the Secretary of State was likely to review the amount in future years.  Hillingdon could have had no legitimate expectation that the UASC leaving care grant would continue to be paid at the rate of £140 per week in future years and in accordance with the funding formula of 2004/05.  The court agreed. It held that the UASC leaving care grant was a discretionary payment and it was perfectly lawful for the Secretary of State to decide on the conditions and amount of the grant after the expenditure had been incurred by the local authority.  Nor did the Secretary of State’s letter amount to a clear and unambiguous promise to maintain the funding formula of 2004/05 the following year.  LAC 6 of 2004 did no more than set out the relevant figures for the 2004/05 care leavers grant.  It made no statement whatsoever as to what was to happen in future years.  The Secretary of State’s enquiry seeking local authorities’ views for future funding should have alerted Hillingdon not to make any assumptions over future funding formulae and it could have no proper basis for believing that the 2004/05 formula would remain unchanged by reference to any promise, express or implied, or adopted practice on the part of the Secretary of State that was capable of giving rise to a legitimate expectation on which Hillingdon relied.

Application dismissed.

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