England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
ADMINISTRATIVE COURT (Sir Olivcr Popplewell)

		Royal Courts of Justice Strand, London, WC2A 2LL Wednesday 22nd August, 2001

THIS IS THE JUDGMENT OF THE COURT PREPARED BY SEDLEY LJ.

The problem

1. When a child of school age has special educational needs, the local education authority (LEA) is required under Part IV of the Education Act 1996 to make and maintain a statement of those needs. By s. 324(5) the LEA is then required to arrange for the making of the educational provision which has been specified as appropriate for the child, unless the parents have already done so. Any dispute between the parents and the LEA is to be resolved by a Special Educational Needs Tribunal (SENT) constituted under the same Part.
2. In discharging its functions the LEA – and therefore the SENT in its turn – is required by s.9 of the Act to

"have regard to the general principle that pupils are to be educated in accordance with the wishes of their parents, so far as that is compatible with the provision of efficient instruction and training and the avoidance of unreasonable public expenditure."

3. Perhaps predictably, the exception – the limitation of expenditure - has come to dominate the rule of parental choice.
4. The problem posed by this appeal, for which permission was given by Sir Oliver Popplewell, sitting as a deputy judge of the Administrative Court at the conclusion of his judgment in favour of the parents and the SENT on 9 May 2001, can be stated in a narrow and a broad form. Put narrowly, it is whether in making a comparison between two appropriate schools, one an independent specialist school, the other a mainstream LEA school with a specialist unit, the cost of the latter is to be taken as the global cost of LEA provision (either in total or for the school in question) divided by the relevant number of pupils, or simply the additional budgetary cost of placing the child there. In its broader form, it is whether the cost of placing a child in the state sector should be taken to be an individual fraction of the global cost of local state provision, or whether that provision is to be regarded as given and the relevant expenditure quantified as the additional amount which the placement will cost the LEA.

History

5. The events giving rise to the present case can be stated in short form. M, now in his mid-teens, has a serious hearing loss requiring specialist learning support. He was placed in School L, a mainstream LEA comprehensive school with a specialist hearing-impaired unit. He and his parents were unhappy with it, and he was moved by them to an independent special school, MH. The LEA, however, had specified School L in the statutory statement and would not change it. So the parents appealed to the SENT.
6. The SENT's decision, in essence, was that both schools were appropriate to M's needs, provided that School L was given a fair chance to integrate M; that School MH, however, offered the special benefit of a deaf peer-group; and that the annual cost differential of £2651 was outweighed by this benefit, corresponding as it did to the parents' preference. If, however, the parents were to require the LEA to provide transport, the extra cost would represent excessive public expenditure and would render School L the appropriate one.
7. The arithmetic by which this differential was arrived at was the following. The fees for a day placement at School MH were £16,800 a year. This therefore was what it would cost the LEA to place M there. The annual cost of placing M at School L would in the SENT's view be:

a. Learning support assistant (10 hours) 2,473

b. Age weighted pupil unit (AWPU) cost 2,076

c. Teacher for the deaf (5 hours) 5,500

d. Transport 4,000

£14,049

8. Unfortunately the SENT's written decision gives no reasons for its calculation. The elements have been reconstituted for us by counsel on the basis of the figures tendered in evidence by the LEA. Although the SENT, as is normal, took no part in the proceedings below, a statement of truth was put in by Ms Elizabeth May, who chaired it and who is a solicitor (the other two members will have been lay members). It purports to amplify the written reasons though, as it happens, it does not do so materially for present purposes.
9. We would add, however, that we do not consider it generally appropriate that a statutory tribunal which is required to give reasoned decisions should respond to an appeal by purporting to amplify its reasons. As Steyn LJ pointed out in R v Croydon LBC, ex parte Graham (1993) 26 HLR 286, 292, the very existence of material gaps in the reasons accompanying the decision may have rendered it unlawful. The decision of this court in Flannery v Halifax Estate Agencies Ltd [2000] 1 All ER 373 (see in particular 379 g-h) concerns applications made when seeking permission to appeal following delivery of judgment for amplification of the judge's grounds for preferring one side's testimony to the other's, and is not in point here. If reference needs to be made to the evidence for the purposes of a statutory appeal, the ordinary resort is to as much of the documentation and notes of evidence as will help to determine what material basis there was for the impugned part of the decision: see Webb v Anglian Water Authority [1981] ICR 811, South Glamorgan CC v L and M [1996] ELR 400; McManus, Education and the Courts, paragraphs 3-40 to 3-44. Fresh evidence, even on judicial review, has a restricted ambit (see R v Secretary of State for the Environment, ex parte Powis [1981] 1 WLR 584; R v Westminster City Council, ex parte Ermakov [1996] 2 All ER 302) which can be no larger on a statutory appeal. Decisions such as that of Latham J in S v SENT [1995] 1 WLR 1627, 1635, admitting evidence on the question whether there had been any admissible basis for the SENT's decision, may fall within this restricted field, especially since SENT reasons are permitted by the SENT Regulations 1994, reg. 30(2) to be in summary form; but the practice described (without doubt accurately) in McManus, op.cit., paragraph 3-45 of parties submitting evidence at will to the court hearing an appeal against a SENT decision is in our present view unacceptable. The one class of fresh information which the special nature of such appeals may call for is up-to-date evidence about the child's schooling and needs, but purely – as the present case will illustrate - in order to enable relief to take a suitable form.
10. For these reasons we would pay no attention to the evidence that was submitted to the Administrative Court by all three parties. That of the LEA sought to recanvass the facts; that of the tribunal chair sought to advance ex post facto reasons for the written decision; and that submitted by the parents sought to make out a better case for the decision than the tribunal itself had done. Since we have not heard oral submissions on this aspect of the case, what we have said above is based upon the written materials helpfully submitted by both counsel at the court's request at the conclusion of argument. It should not be taken to be a comprehensive consideration of the problem.

Submissions

11. Ms Karen Steyn for the LEA submits that the SENT has erred in law by including in the cost of placing M at School L two elements (items c and d above) which were going to be incurred by the LEA whether he was placed there or not. The teacher of the deaf was on the staff of the hearing-impaired unit and would be paid the same regardless of whether or not M joined the unit. The taxi was already being used to carry two children to the school, and to add M to its passengers would cost the LEA no more. These elements she contrasts with the two genuine on-costs, items a and b. A personal learning support assistant was going to be needed for M in order to help him to cope with the mainstream part of his schooling if he went to School L. And the AWPU, a capitation fee paid to a maintained school by the LEA for each pupil placed there, would likewise be incurred only if M went there. If she is right about this, as we think she is, her other complaint of inadequate reasons becomes otiose.
12. Mr John Friel, for M's parents, points out that there is no prescribed formula for determining unreasonable public expenditure for the purposes of s.9. As the judge held, it is a matter for the expert judgment of the SENT. Thus, says Mr Friel, SENTs can and do fractionalise the entire county or borough education budget to arrive at the cost of educating a child in the state system. This exercise may be based simply on the annual running costs; or it may equally legitimately include the amortised cost of school buildings and so forth. It is a matter for the SENT in each case.

Law

13. There is no authority directly in point. In B v Harrow LBC [2000] 1 WLR 223, however, Lord Slynn, giving the single full speech on the question whether the efficient use of resources (see paragraph 12 below) included those of a neighbouring borough, said:

"In my opinion Moses J was right to have regard to the differences between the funding arrangements made for special schools on the one hand and other schools on the other. In the latter case, funding is in part geared to the number of pupils actually attending the school; in the former it is in part geared to the number of pupils for whom it is anticipated the school will need to provide places. This means that places may be provided for which if, for example, a child leaves to go out of the borough, will not be utilised but the cost will be incurred."

14. In other words, as we understand it, if unused special school places represent a loss which can be made good by making efficient use of them, then letting the child be unnecessarily placed elsewhere is an inefficient use of such resources.

Conclusions

15. It seems to us that Mr Friel's argument cannot be right, at least in the open-ended form in which he advances it. It is of course true that unreasonable public expenditure is not a term of legal art. But neither is it, in its present context, a protean concept capable of producing opposite outcomes on the same facts and figures depending on the individual tribunal's choice of accountancy method. In our judgment the chief object of the last part of s.9 is to prevent parental choice placing an undue or disproportionate burden on the education budget. When one considers that a single placement in the independent sector may well cost a ring-fenced education budget more than a teacher's salary, one can readily see why.
16. In cases like the present, the parental preference for an independent school over an available state school, while perfectly reasonable, may have difficult cost implications for the LEA. In that event it is for the LEA, or on appeal the SENT, to decide whether those cost implications make the expenditure on the independent school unreasonable. This means striking a balance between (a) the educational advantages of the placement preferred by the parents and (b) the extra cost of it to the LEA as against what it will cost the LEA to place the child in the maintained school. In cases where the state system simply cannot provide for the child's needs, there will be no choice: the LEA must pay the cost. In cases where the choice is between two independent schools, it is accepted on all hands that the second criterion is simply the respective annual fees, whatever the comparative capital costs or other sources of income of the two establishments: for example, the one with lower fees may have private or charitable funding, but this will have no bearing on the quantum of public expenditure involved in a placement there. In cases where the choice is between two maintained schools, by Schedule 27, paragraph 3, the Act substitutes a test of suitability to the particular child, efficiency in education (for example because of possible disruption) and efficient use of resources. The latter will intelligibly include comparative on-costs, such as transport and personal support, but in most cases it is unlikely to be helped by apportioning the LEA's accounts or balance sheet. This approach, it seems to us, chimes with the final sentence of the passage cited in paragraph 10 above from Lord Slynn's speech in B v Harrow LBC.
17. If so, there is no intelligible reason why a comparison of public expenditure as between an appropriate independent school and an appropriate maintained school should be at large. Mr Friel, indeed, defends the quantification of the cost of School MH, the independent school, as the bare annual fee – that is to say, the cost to the LEA's annual budget of placing M there. In our judgment exactly the same is true of the cost of placing M in the hearing-impaired unit of School L: the question is what additional burden it will place on the LEA's annual budget. That means, generally speaking, that the existing costs of providing School L and of staffing it and its hearing-impaired unit do not come into account.
18. This is not to say that there may not be particular cases in which some other method of comparison needs to be used in order to meet s.9. But as a matter of purposive construction of the section, it seems to us that what Parliament has called for in the ordinary run of cases is a consideration of the burden which the respective placements will throw on the annual education budget when matched against their educational advantages and drawbacks for the child in question. Costs which either the private provider or the LEA would be incurring with or without the proposed placement are accordingly not in general relevant. This being so, it is not necessary to say anything about the accountancy problems which would bedevil any endeavour to quantify the per capita cost of providing for a child's education in the state sector.
19. It follows, in our judgment, that Ms Steyn is right in her submission that, absent any factors justifying a special approach, the SENT was wrong to treat items c and d, totalling £9,500 a year, as necessarily part of the cost of placing M in School L. We do not know, however, because the SENT has not told us in its reasons, whether it accepts the LEA's case that the teacher of the deaf in the hearing-impaired unit would be present and paid in full whether M was placed there or not. This is a finding which should have been made, since the point had been argued, whichever way the decision was going to go. The same is true of the taxi occupancy, although here there seems not to be a dispute between the parties.
20. This is one reason why, despite the fact that we know that the SENT's decision in favour of School MH would have been reversed if the cost differential had been greater by an amount which it calculated (for reasons which are unclear) at only £144, we would remit the appeal to the SENT for further hearing rather than allow it without more. The other reason is that the LEA recognises that M has now completed his first GCSE year at School MH pursuant to the challenged SENT decision. Sensibly, it wishes to consider whether it should risk disturbing his schooling there by renewing its case before the SENT, notwithstanding this court's decision in its favour.
21. We would therefore allow this appeal to the extent of remitting the case to the SENT for reconsideration in the light of the judgment of this court. Any such reconsideration, if it is to happen at all, must be accorded the greatest possible expedition in view of the imminence of the new school year. The President of the Special Educational Needs Tribunals should be invited to make arrangements accordingly if, having considered the case as a matter of urgency, Oxfordshire County Council decides to press for a fresh decision.
ORDER:
22. Appeal allowed.
23. Respondents to pay 90 per cent of the appellant's costs her and below. The costs below to be assessed. The total costs of the appeal assessed at £4,206.
24. Leave to appeal to the House of Lords refused.
(Order does not form part of approved Judgment)