The Claimants won a judicial review challenge against the Council’s decision to reduce funding for SEN provision by £5m overall for the next year. The reduction was held to be irrational as the Council had failed to consult adequately, contrary to the inherent duty of enquiry under s149 of the Equality Act 2010. Failure to specifically consult also breached the duty under the Children and Families Act 2014 (s27) to have regard to the need to promote children’s welfare, and s11 of the Children’s Act 2004 to keep sufficiency of education provision under review. It further breached the common law duty of fairness.
The defendant Council argued that there was no duty to consult at the stage before the budget decision was made, but that consultation on its impact could be made at a later stage prior to the monies being specifically allocated. The Claimants successfully argued that the critical stage for consultation was prior to the big financial decisions being made, as at the later stage it would be a fait accompli.
It is not the law that a Council cannot make the decision to cut funding, especially considering significant central cuts to local authority budgets, but in doing so, it must take due regard, through effective consultation and consideration of the impact, before a final decision is made.
The judgment states that it is the nature, extent and impact of the specific decisions to be taken by the Council in the budget setting exercise which are determinative of whether a duty arises or whether it only arises at a later stage [para 89]. Where there is a ‘significant, sufficiently focused and rigid decision’ (as with to cut or not to cut) to be made and where meaningful consultation is possible, the Public Sector Equality Duty must be engaged [para 103].
The court found that the defendant Council had adequate time and sufficiently well-formed proposals, to consult well prior to setting the budget [para 94].
The fact that the Council were noticeably aware of having the worst rates of school exclusions in the country and a widening gap in outcomes and had publicised a desire to improve the situation in their corporate strategy, indicated that the specific budget cuts could only have moreof an adverse impact on these children. This therefore necessitated a proper consultation and assessment.
The decision in KE v Bristol City Council highlights the statutory duty of Councils to consult effectively before taking big budget cutting decisions. It underpins the intention of the Equality Act to ensure real influence from those protected under the Act can be generated. This is at the crucial stage of budget setting, not merely how to spend once those reduced budgets have been set. It also highlights other possible causes of action under the Children and Families Act 2014 and Children’s Act 2004 in challenging SEN cuts.
Councils will need to heed the court’s advice to consult in a specific and focused way to ensure they have shown due regard. Management of problematic areas in corporate strategies must be backed up by solid impact assessments to show authenticity and integrity of proposals.
In the wider context the ruling reinforces that public sector equality duties are an essential preliminary to public bodies’ decision making, even when the potential need for cuts is not of their own making or otherwise culpable.
It is not that the Council did not consult at all – it was aware of the need to cut the budget, and consulted with special schools.
Useful citations from the judgment:
“Para 89 – It is the nature, extent and impact of the specific decisions to be taken by the Council in the budget setting exercise (in fact an exercise in setting the council tax rate) which are determinative of whether a duty arises or whether it only arises at a later stage.”
“103. Given my findings that this was a significant, sufficiently focused and rigid decision to engage the duties to which I have referred, and also that meaningful consultation was possible, the next question is whether as a result the duties identified were breached by a failure to consult or otherwise.
“105. In my view this is a case where the Defendant was under a duty to acquire further information, including through consultation, in order to comply with the PSED, yet did not do so.
Members were referred to the duty in brief terms at sections 20 and 21 of the report before them, but duty requires substance, and not form, in its consideration.
Also, general regard to issues of equality is not the same as having specific regard by way of conscious approach to the statutory criteria. Here the members were engaged in policy choices in respect of which regard to the PSED was particularly important. Due regard to the specified needs may have led to a decision that it was not appropriate to reduce funding at all.”
…Or (our comment) to consider spending reserves, as in the earlier West Berkshire case (R (DAT) v West Berkshire Council  EWHC 1876) involving cuts to disabled children’s services.
“106. The Defendant has not identified any other source of information, beyond a general appreciation that there would be some impact, which was before members when the budget was approved and which would have informed them of the potential equality implications of this significant reduction in funding for SEND services. In these circumstances, …the worrying fact that the rate of pupil exclusion is the highest in the country and there is a widening attainment gap, the PSED duty required the members to have further information as to adequately understand the likely impact of the proposals, including through consultation.Without such information they could not and did not pay the required ‘due regard’ to the specified needs including the need to advance equality of opportunity. So in short as there was no consultation and inadequate inquiry there was a failure to comply with the PSED.”
“125. As a cross-check when standing back and asking a simple, broad brush and impressionistic test; was this fair? – the decision not to consult this group when funding was to be cut by such a significant sum with inevitable impact upon the provision of frontline services, was unfair. More nuanced analysis in light of binding authority as to the duty to consult does not change the answer. Accordingly I find that the Defendant was also in breach of the common law duty to consult.”