COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE UPPER TRIBUNAL
(ADMINISTRATIVE APPEALS CHAMBER)
UPPER TRIBUNAL JUDGE H. LEVENSON
 UKUT 376 (AAC)
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE SULLIVAN
LORD JUSTICE PATTEN
|- and -
|KENT COUNTY COUNCIL
Clive Rawlings (instructed by Kent County Council) for the Respondent
Hearing date: 19th May 2011
Crown Copyright ©
Lord Justice Sullivan :
"In exercising or performing all their respective powers and duties under the Education Acts, the Secretary of State and local authorities shall 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."
"33. The annual cost to the authority of George's placement at [school H] would be £2,899 (the Age Weighted Pupil Unit) and there would be further transport costs of £3,315 per year."
"K. The Tribunal accepted the submissions of Mr. Rawlings as to the effect of the formulae used for the delegation of funds by the authority to [school H] and the way in which provision would be made for George at [school H] using its delegated funds. The Tribunal therefore concluded that it was not constrained by the decision of Underhill J in Coventry City Council v Special Educational Needs Tribunal and Browne  EWHC 2278;  ELR 1 to find that additional costs should be added to the Age Weighted Pupil Unit so as to produce, for the purposes of proper comparison, a significantly higher figure for the cost of placing George at [school H]. It follows that, even accepting that the cost of transporting George to and from [school F] could be nil, it would be significantly more expensive to place George at [school F]
N. George's difficulties do not make it necessary for him to receive specialised tuition and support across the curriculum, throughout the school day from teachers qualified to teach pupils with specific learning difficulties. His needs are complex and varied but the [school H] have wide experience and will be able to meet the challenges presented by George's varying abilities in different areas.
P. The Tribunal was satisfied .. that George's needs can be met at [school H]. It follows that it would not be compatible with the avoidance of unreasonable public expenditure to place George at [school F] in accordance with his grandmother's expressed preference."
"The UT erred in law in its approach to the decisions in Slough and Oxfordshire including in particular, in holding that the FtT did not need to consider the real, full or notional per capita cost of a placement (and was concerned only with the marginal cost)."
When granting permission to appeal Stanley Burnton LJ observed that this Court should address the apparent inconsistency between the two decisions in Oxfordshire and Slough.
"The problem posed by this appeal, 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."
|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|
"11. Ms Karen Steyn for the LEA submits that the SENT 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 country 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."
"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."
"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."
The LEA's appeal was allowed and the case was remitted to the Tribunal.
"12. I reject that submission. In referring to 'the LEA's annual budget', Sedley LJ plainly did not have in mind the distinction on which Mr. Auburn [who appeared for the LEA] relies between payment by the LEA directly from its own pocket and payment by the school under delegated arrangements. That distinction had not featured in the argument before the Court of Appeal. The precise route by which payment is made out of what is ultimately the LEA's budget is plainly immaterial to the purpose underlying s 9. The term 'the LEA's annual budget' was no more than a paraphrase of the reference to public expenditure in s 9: Sedley LJ's point was that the section was concerned with actual additional money paid out, no matter by whom.
13. That conclusion seems to me to be right as a matter of principle, but it is reinforced by the terms of s 49(5) of the 1998 Act. Section 49 is part of the group of sections under Chapter 4 of Part II which establish the machinery for the financing of maintained schools. Section 49(1) provides that every maintained school shall have a delegated budget. Subsection (5) reads as follows:
'Any amount made available by a local education authority to the governing body of a maintained school (whether under section 50 or otherwise)-
(a) shall remain the property of the authority until spent by the governing body or the head teacher; and
(b) when spent by the governing body or the head teacher, shall be taken to be spent by them or him as the authority's agent.'
Mr Wolfe [who appeared on behalf of Georgia] submits that those provisions show that notwithstanding the power given to the school to spend the money under the delegated arrangements, the expenditure remains ultimately that of the council. In my view that submission is well-founded."
"16. Although the council's second ground of appeal is somewhat opaquely expressed, the essential point is that the tribunal failed to carry out any analysis of whether, and if so to what extent, Potters Green could have met Georgia's needs without having to incur additional expenditure. As I have already had occasion to mention in connection with ground 1, the Court of Appeal in the Oxfordshire case has held that the equation required by s 9 in a case of the present kind involves the setting of the fees of the independent school against the actual additional cash expenditure which the maintained school will have to incur if the child in question attends it. Mr Auburn referred to this as the 'marginal cost': that is a useful shorthand, although I am a little wary of using too glibly economists' technical terms, the full implications of which lawyers may not always understand.
17. Assessment of the second element that is to say the marginal cost will depend upon the individual details of the provision required and the staffing arrangements at the school in question. To a greater or lesser extent it may be possible to meet the child's needs by the use of staff who are already employed and to whom no further payment will fall to be made by reason of their making the provision in question typically, for example, where a child is part of a group under a single special teacher or helped by a single assistant. That point is well illustrated by the facts of the Oxfordshire case itself. The court there held that the tribunal had been wrong to take into account the attributed cost of 5 hours per week of specialist teaching by a teacher for the deaf, because the teacher in question 'was on the staff of the hearing-impaired unit and would be paid the same regardless of whether or not [the child] joined the unit', and of transporting the child to school, because 'the taxi was already being used to carry two children to the school, and to add [the child] to its passengers would cost the LEA no more' (see paras  and ). That was in contrast to two other items, being the so-called 'AWPU' costs (a capitation fee paid to a maintained school by the LEA for each pupil placed there), and the cost of an additional learning support assistant: both of these were 'genuine on-costs'."
The LEA's appeal was dismissed.
"9. If the true cost of a placement at the PACE Centre were £36,000, it would without doubt be necessary to remit the case for an intelligible finding as to the true cost of a placement at Arbour Vale, for this could well be critical. But if, as I have concluded for reasons to which I will come, the tribunal was entitled to take the relevant fees at the PACE Centre as £10,000 a year, it is only if the fees at Arbour Vale were indeed as low as the £4,161 which Mr. Hyams advances that the s 9 condition for overriding parental choice would be met.
10. The figure of £4,161 was advanced before the tribunal by the local education authority as the only additional expenditure which would be needed for this particular child at Arbour Vale, a maintained school in which there was a vacant place. It represented (somewhat surprisingly) the cost of additional full-time 1:1 support. For the rest, it was said, the cost was part of the provision already made at Arbour Vale."
"However, in the particular circumstances of this case, regardless of the staffing arrangements at Arbour Vale School, it is clear that the real cost of therapies, the scheme of delegated funding and the additional supplements committed by the LEA to this particular child in reality bring the full cost of a placement at this school beyond the £10,000 now being charged by the PACE Centre."
He continued in paragraphs 12 and 13:
"12. This appears to me to be a factual finding, made by a specialist tribunal with knowledge of the field, that the apportioned costs of providing for this child in a maintained school, whatever their precise amount, would inevitably exceed the £10,000 for which the PACE Centre was prepared to accept her. In my judgment this is a perfectly tenable finding unless M. Hyams is correct in his contention that admission to a maintained school with space for the child is cost-free apart from any special requirements that the child brings with her.
13. The contention is not in my judgment sustainable. Every element of a maintained school carries a cost in public funds. The recurrent exercise for tribunals is to calculate what it is, because it is ordinarily only with such a calculation that the protection of public money to which the condition in s 9 is directed becomes possible. If it were not so, a like-for-like comparison between public and private provision could never be made. But here, because of the unusual facts, it was legitimate for the tribunal to take a short cut and to find, as it did, that whatever the notional per capita cost of the maintained school was, it must exceed the £10,000 with which it fell it be compared."
Lord Justice Patten:
Lady Justice Arden: