The Queen on the application of Capenhurst, Kirby, King, Mistry, and Joachim v Leicester City Council [2004] EWHC 2124 (Admin)

The claimants sought judicial review to quash six decisions of the defendant local authority (LCC) to cease funding six voluntary organisations (VO’s)  The claims arose as a result of a change in political control of LCC in 2003. The policy of the new administration was to restrict funding to providing “core” services. The effect of the new policy was that the VO’s were deemed to be “non-core”. Five of the VO’s came under LCC’s education and lifelong learning department (ELL), and the sixth (Voluntary Action Leicester’s Voluntary Bureau – VAL) came under the social care and health department. Previously LCC in deciding whether to fund ELL organisations had considered not solely its statutory obligations but also its “strategic” requirements. After a review LCC informed the VO’s that it was considering the withdrawal of funding and sought their comments. The VO’s made representations as to why they believed funding should continue. LCC considered those responses but maintained its provisional decision to cease funding. The VO’s alleged that LCC’s decision-making process had been unfair and lacked transparency. Although LCC attempted to consult with the VO’s before making the decisions, it failed to do so properly since it did not explain the criteria which it would apply before making its final decision regarding funding, in particular the move away from consideration of strategic requirements.
The court decided although not obliged to, that since LCC had chosen to consult the ELL organisations, it had to consult fairly. (R v North and East Devon Health Authority ex parte Coughlan [2001] QB213, 258 [108] and R v Secretary of State ex parte Doody [1994] 1 AC 531,550)  It held that LCC had failed to consult properly with the ELL organisations.  Although VAL was made aware of the changes, LCC did not make clear the change between funding core services and it’s statutory (but not strategic services) to the VO’s.  The services provided by the ELL organisations were potentially core so that there was a real possibility that the VO’s could have altered LCC’s decisions and accordingly the decisions to discontinue funding had to be quashed.  Two of the ELL organisations were also entitled to have the decisions quashed, applying Coughlan and Doody, because LCC had failed to explain that when determining whether to continue funding it was only concerned with the number of adults enrolled on courses supplied or commissioned by the local education authority.  These courses were subsidised by the Learning Skills Council through a number of providers which delivered courses directly in their own building or by contracting with another agency to run it for them, or by directly running it from another agency’s building.  Only the actual provider was to receive the subsidy and not the organisation whose premises may have been used.  Four of the ELL organisations were entitled to have the decisions quashed because LCC failed to make clear that it was considering their financial viability as part of the decision-making process and there was a real possibility that it would have reached a different decision if the organisations had known that and been able to make representations. VAL was entitled to have the decision in its case quashed because LCC did not explain that a key test for determining what was a core service for the purpose of eligibility for funding in VAL’s area was the fair access to care services (FACS) criteria and guidance.  Proper consultation with VAL required it to appreciate that the FACS framework was being used.  If VAL had been informed about the significance of this then there was a real possibility that the outcome might have been different.  The court decided that the decision letter should be quashed. This conclusion was not affected by the fact that VAL had sought an internal review of LCC’s decision

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