1. MR
JUSTICE COLLINS: Queensmead school, whose governing body are the
applicants for judicial review, is a grant-maintained school in South Ruislip
in the London Borough of Hillingdon. It has been grant-maintained since 1991.
It receives its funding, in common with all grant-maintained schools, through a
body called the Funding Agency for Schools, which was constituted by s.3 of the
Education Act, 1993. The level of funding is determined in accordance with the
provisions of Part 3 of the Education (Grant-maintained and Grant-maintained
Special Schools)(Finance) Regulations 1996.
2. There
are in Hillingdon 12 grant-maintained and 3 maintained schools. The maintained
schools are referred to as L.E.A. schools. Because of this ratio, the funding
arrangements for Hillingdon and the other 22 authorities specified in
Regulation 37(2) of the 1996 Regulations involve an allocation of a maintenance
grant for all the secondary schools centrally determined by the Funding Agency
for Schools under a Common Funding Formula (CFF). Since April 1994, Hillingdon
has adopted a policy that the funding level for the 3 L.E.A. schools should be
that applicable to the grant-maintained schools. The allocation derives from a
formula which depends primarily on the number of registered pupils, weighted
according to age to reflect the greater needs of pupils at various stages of
their progress through the school. From this comes the expression Age-Weighted
Pupil Unit (A.W.P.U.), which denotes the basic sum which the school is to
receive in respect of each pupil. Added into the equation is a sum to cater
for any special educational needs of pupils who do not require to have
statements of their needs within Part III of the Education Act, 1993.
3. Hillingdon
uses a formula for funding its own L.E.A. schools which is set out in the Local
Management of School Scheme (L.M.S.) relating to the delegation of funding to
the governors of L.E.A. schools. The L.M.S. has to be approved by the
Secretary of State each year pursuant to section 34 of the Education Reform Act
1988. The special needs where there is no statement are catered for in a
somewhat rough and ready manner through a reading test and an inventory
prepared by the school which is supposed to identify five stages, the fifth
being that at which a statement is provided, the first four reflecting the
extra work needed in determining and catering for the needs of the pupils
before stage 5 is reached.
4. In
the case of ‘statemented’ pupils, grant-maintained schools received
an extra allocation by virtue of Regulation 42 of the 1996 Regulations.
Regulation 42(4) so far as material reads:-
5. This
means that Queensmead should receive an amount in respect of the
‘statemented’ pupils which is calculated in accordance with
Hillingdon’s L.M.S. scheme in the same way as is applicable to the L.E.A.
schools. This sum is calculated by according to each type of special needs a
cash value. The total is then passed to the school in the form of a delegated
sum and is included in the school’s AMG. It is not earmarked. It is
supposed to be sufficient to enable the school to meet the special needs of the
‘statemented’ pupils but, provided the school meets the needs, it
does not have to spend the sum in any particular way. That sum will, pursuant
to the 1996 Regulations, be recouped by the Funding Agency for Schools from the
Authority. It is important to remember that the governors of the school have a
complete discretion to deal with the AMG, which includes the amounts for
statemented pupils, as they see fit, provided only that they use it for the
purposes of the school: see 1993 Act s.81(3).
6. Up
to and including the financial year 1993/94, Hillingdon calculated the amounts
for ‘statemented’ pupils by approaching each school and identifying
the needs of each pupil at that school. This was considered a somewhat
laborious and time consuming exercise. Accordingly, it was decided to change
to a formulaic approach at the same time as delegating the funding. In a
report to the Education Committee dated 1st March 1994, the proposed changes
(which were agreed) were explained thus:-
7. The
amount received by the school pursuant to the new formula was much the same as
it had been receiving and was sufficient to enable it to meet the needs of its
‘statemented’ pupils. Because of the need for overall cuts in the
council’s expenditure in order to enable it to meet its budget, it was
decided that the formula should be varied for 1996/97. The result of that has
been a cut of 62% in the amount provided to Queensmead. Instead of
£77,250, which the 1995/96 formula was to have given the school for the 22
‘statemented’ pupils anticipated for the relevant year, the school
received only £30,068. That cut is said to have been unlawful because it
produced a sum which is insufficient to enable the school to meet its
obligations to provide for the statemented needs. The L.E.A. says that it is a
proper application of a formula, itself reasonable and based on Ministerial
guidance in a circular, and so the school must make up any shortfall from its
general funds.
8. Before
turning to the factual background in more detail, I should set out the relevant
statutory provisions which are concerned with children with special educational
needs. These are contained in Part III of the Education Act 1993. Section
156(1) defines special educational needs as ‘a learning difficulty which
calls for special educational provision’. ‘Learning
difficulty’ is defined in s.156(2) as, so far as material, a
significantly greater difficulty in learning than the majority of similarly
aged children or a disability which prevents or hinders the child in question
for making use of educational facilities of a kind generally provided for
children of his age in schools within the area of the local education
authority. Finally, s.156(4) defines ‘ special education
provision.’ It reads:-
9. Section
157 requires the Secretary of State to issue a code of practice to give
practical guidance and requires L.E.A.s and school governors to have regard to
it. The code is to be approved by Parliament following consultation with
interested persons (s.158).
10. A
L.E.A. must keep its arrangements for special educational provision under
review and consult to the extent that it thinks necessary for the purpose of
co-ordinating such provisions with inter alios school governors (s.159), and
children with special educational needs should, if possible and provided
parents do not wish otherwise, be educated in a main stream school (s.160).
S.161 is important. So far as material, it reads:-
11. Where
L.E.A.s delegate funding (as Hillingdon does), L.M.S. schemes must include
conditions requiring governing bodies to ensure that all the provision
specified in a statement is made. The extra funds identified by Regulation
42(4) of the 1996 Regulations are given to enable the school to make the
provision specified in the statement.
12. The
other relevant statutory provisions are some of those contained in Chapter III
of the Education Reform Act 1988 in connection with financing. L.E.A.s must
prepare a scheme for their maintained and voluntary schools to determine each
school’s share of the overall budget in each financial year (s.33) and
must, before preparing such a scheme (which will not come into force until
approved by the Secretary of State), consult with, among others, the governing
body of every grant-maintained school in the area (s.34(4)(b)). Schemes can be
revised (s.35(1)), but where the L.E.A. proposes to make a ‘significant
variation’ it must first consult all those whom it had to consult before
preparing a scheme (s.35(3)). Significant variations are dealt with by
s.35(4), which reads:-
13. The
Secretary of State has made an order, namely the Education (Significant
Variation of Schemes for Financing Schools) Order 1993. Paragraph 3, so far as
material, reads:-
14. Each
L.E.A. must devise its own formula, which should be as simple and as
predictable in its impact as possible so that all affected can understand how
it operates and include it as a key factor in their planning for future years
(Paragraph 102). It must also include “variations in the additional
costs of making provision for pupils with special educational needs (including
pupils with SEN but without statements)” (Paragraph 102(d)). Paragraph
109 deals with statemented pupils in mainstream schools. It reads:-
15. The
changes in the L.M.S. scheme which were approved by the Education Committee on
1st March 1994 were the subject of consultation and were agreed to by the
Secretary of State The formula adopted for the calculation of the amount of
money to be allocated for statemented pupils was based upon guidance given in a
Circular 11/90 entitled ‘Staffing for Pupils with Special Educational
Needs’. It is necessary to set out Paragraphs 5 and 6 of the Circular,
which read:-
16. Paragraph
25 reiterates that there can be no blueprint for ideal staffing arrangements
since much will depend upon the particular circumstances of the institution.
Annex A to the Circular sets out a possible model for calculating the staffing
needed. The most relevant concern in the case of Queensmead is that in
connection with what are described in paragraph 1(v) of Annex A as ‘other
learning difficulties.’
18. The
learning difficulties of many of these pupils may be attributed to slow
cognitive development, compounded in some cases by sensory impairment or
physical disability. Traditionally they have often attended schools for those
with moderate learning difficulties, though increasingly they receive special
help in ordinary schools. This band however, also includes pupils who, against
a background of otherwise normal development, experience learning difficulties
specific o one area of the curriculum.”
20. The
relevant part of the Table shows that for ‘other learning
difficulties’ the time needed will involve 0.1 teacher and 0.05 SSA (i.e.
1 teacher for every 10 statemented pupils and 1 SSA for every 20).
21. Annex
B goes on to discuss factors relevant to different types of institutions.
Paragraphs 9 and 10 deal with staffing for statemented pupils in mainstream
schools. They read:-
22. It
is clear that the model is not and is not intended to be applied rigidly and
that it is peculiarly difficult to assess the staffing needs required in any
given school. This points to the desirability of consulting with the school to
ensure that any formula (if that is the approach decided upon) is appropriate
to provide for the statemented children.
23. In
November 1995, Hillingdon put out a consultation document to consider possible
variations to its L.M.S. scheme. Section F dealt with statemented pupils and
read:-
24. There
was no indication that there was to be any change in the manner in which the
sums were to be calculated so that Queensmead ‘s governors would
reasonably have believed that they were to receive for 1996/7 funds for their
22 statemented pupils calculated in the same way as they had been for 1995/6.
This would have resulted in a provision of £77,250.
25. On
6th December 1995 a response to the consultation paper was made on behalf of
the secondary schools. It expressed support for the existing arrangements of
statemented pupils and recognised the fairness of removing the only element of
double funding identified in respect of the particular pupils with sensory
impairment or specific learning difficulties who were being assisted by
specialist teachers provided by the L.E.A. outside the schools they were
attending. Accordingly, Mr Tully, the Education Finance Manager, in his report
on the responses to the consultation, noted:-
26. On
15th February 1996 Mrs Andrews, the Director of Education Services, wrote to
all head teachers a letter headed Provisional School Formula Budgets 1996/97.
The penultimate paragraph read:-
27. On
7th March 1996, the authority was faced with the need to implement savings of
at least £2m for 1996/97. Since 12 of the 15 secondary schools in its
area were grant-maintained, the authority was unable to make any cuts in their
overall budgets since these were determined by the CFF allocation formula. The
L.M.S. scheme had determined that L.E.A. schools should not be funded any
differently so that they were not disadvantaged. Thus, any cuts could only be
achieved by reducing the sums allocated for statemented pupils.
28. The
savings required of the Education Committee had to amount to some £1.5
million. On 11th March 1996, Mr Duggan, Queensmead’s headmaster, was
informed in his capacity as chairman of the Hillingdon Association of
Headteachers of proposed cuts in secondary schools’ budgets for
statemented pupils of £500,000. He was understandably appalled, since he
recognised that his school was facing a cut of about 60%. As he has pointed
out in his affidavit in these proceedings, almost all the money received was
spent by Queensmead on the extra teachers and SSAs required to provide for the
statemented needs of the pupils concerned. Any sums left over were spent on
equipment. In November 1994, an OFSTED inspection team had reported most
favourably on the school’s provision for statemented pupils. It followed
that any cuts would mean that the extra tuition needed for the children could
not be provided and their statemented needs could not be met from the sums
provided by the L.E.A. for those purposes.
29. Mr
Tully justified the cuts in his report to the Education Committee, which was
due to consider the matter on 18th March 1996, as follows:-
30. This
will be done by reducing the statemented pupil rates for all primary and
secondary pupils by the average age-weighted pupil value for each age-band, ie:
Year 1, Years 2 -6, Year 7 and Years 8 - 13. The effect in secondary schools
would be a reduction of £0.560m (or 1.6% of their total L.M.S./GM budget,
including funding for special needs). In primary schools the effect would be a
reduction of £0.23m. Pupils’ special needs would continue to be
met, through a combination of the additional resources given to schools for
individual pupils with statements and the schools’ use of their own
delegated or grant maintained budgets.”
31. The
Education Committee approved the cuts on 18th March 1996, and on 21st March Mrs
Andrews wrote to all headteachers explaining what had happened. There had been
an overall 8.2% increase in amounts coming under the CFF and this was used to
try to justify the cuts for statemented pupils. In his affidavit, Mr Tully
deposes that the net increase for Queensmead would still be 7%, which was more
than inflation levels and so it could afford to meet the shortfall from its
overall funds. This justification cannot bear close analysis, as Mr Moriarity,
Q.C. rightly accepted. The 8.2% increase was given to meet costs other than
those arising in respect of statemented pupils and reflected the fact that in
the year 1995/6 the schools had received no significant increase. It is the
sort of argument that may sound reasonable but is in truth devoid of any merit.
32. Mrs
Andrews explained that the thinking behind the proposals was that they aimed to
reduce the differential between the funding provided for statemented pupils and
the funds allocated for other pupils with special needs and in the longer term
to provide more preventative support at the early stages and so reduce the
number of pupils needing statements. The latter aim was sensible but only
related to the cuts to primary schools. The former was unjustified if it meant
that pupils with statements were not going to receive enough to provide for
their statemented needs. The justification for the reduction was set out in
the letter in these terms:-
33. “3.
The cash values attached to the various bands of special needs statements, as
defined in the L.M.S. formula, have been generous when compared to those given
in some other L.E.A.s. This is probably because our cash values have included
an element of double funding, arising from our use of the staffing ratios
recommended in DFEE Circular 11/90, “Staffing for Pupils with Special
Educational Needs”, as the basis for the cash values.
34. The
letter concluded with a promise to consult on any changes which might need to
be made in the future ‘particularly regarding the comparative allocation
of funds for the various bands of statemented special needs.’
35. The
headmaster wrote to parents deploring the cuts and asserting that the L.E.A.
was responsible for funding the special educational provisions. In addition,
the school referred the Authority’s action to the Secretary of State
because it was believed that there had been discrimination in favour of L.E.A.
schools. That has not been pursued before me. Following the instruction of
solicitors by the school, Mrs Andrews wrote on 1st May 1996 repeating the
argument about the generous 8.2% funding and seeking to explain the supposed
double funding thus:-
36. “Element
of Double Funding: The use of the term double-funding has caused some
confusion amongst schools and it may be helpful if I explain the change to the
funding level in a different way. Local authorities adopt different mechanisms
for funding schools for statemented pupils, including providing cash
entitlements to “top-up” their main budget. The levels of funding
which individual L.E.A.s determine is at the discretion of the local education
authority. In Hillingdon, the Education Committee has exercised its discretion
to reduce schools’ entitlement to these cash additions. Whether it is
described as a removal of double funding or a reduction in the specific funding
for statemented pupils does not change this fact.”
37. Following
a meeting with Mr Duggan and other headteachers on 20th May 1996, Mrs Andrews
wrote a letter confirming that it was the L.E.A.’s responsibility to
provide additional resources for pupils with statements of special educational
needs and recognising that the cuts had resulted in pupils with moderate
learning difficulties at Year 8 and above receiving funding which was too low.
Finally, on 14th August 1996 the Department decided that there was “no
clear evidence that Hillingdon L.E.A. is failing in a statutory duty or acting
unreasonably in arranging provision for statemented pupils” It believed
that overall it was likely that the grant-maintained schools would have
sufficient resources to meet the needs of statemented pupils.
38. In
his affidavit, Mr Tully explained that it had been pointed out to him in
December 1995 that direct application of the model in Annex A of Circular 11/90
to statemented children resulted in provision for class and subject teachers
being made twice in relation to such children. I imagine that if he had
received the information earlier it would have featured in the consultation
exercise commenced in November 1995. I am bound to say that I am surprised
that he did not in any event draw the attention of the schools to the situation
since it must have been known by the authority that budget savings might be
needed and in any event the L.E.A. should not have been paying more than was
necessary. The failure to provide any advance warning of the proposed cuts or
seek representations is explained on the basis that these were last minute
decisions resulting from the savings required by the Council in the budget
meeting on 7th March 1996.
39. Budgetary
constraints and lack of funds can play no part in the assessment of a
child’s special educational needs. This seems to me to follow from the
decision of the Court of Appeal in
R
v Gloucestershire CC ex p. Barry
[1996] 4 All E.R. 421 at p 442a. Financial constraints can be considered in
deciding how those needs are to be met, provided always that they are met. It
cannot be said that a need exists but it would be too expensive to provide for
it. The requirement is to meet the needs, but the provision made may be the
minimum necessary to meet them. The L.E.A. has a duty, which is non-delegable,
to arrange that the special educational provision specified in a statement is
made for the child: 1993 Act s.168(5)(a)(i). The way in which the provision is
made may be the most economical so long as it is made. The governors of the
school in their turn have a duty to use their best endeavours to secure that
the special educational provision is made: 1993 Act s.161(1)(a).
40. The
duty of the L.E.A. to arrange that the provision is made will often be
discharged by providing funds to cover the minimum necessary. In some cases,
the L.E.A. will itself make the necessary provision. It may also agree with
the school or anyone else that the provisions will be met by them. Thus in
R
v Oxfordshire CC ex p. P
[1996] ELR 153 Laws, J decided that it was perfectly lawful for the L.E.A. to
agree with a school that the school should make some of the provision out of
its overall budget. But Laws, J , equally correctly in my view, indicated that
if the school were suddenly to turn round and say it was no longer prepared to
apply any of its budget to the cost of making part of the provision, the
L.E.A. would immediately have to meet the full cost: see p.159G.
41. In
my judgment, the L.E.A. can only carry out its duty to arrange that the
necessary provision is made by providing the required funding, unless it can
either enter into an agreement with the school that the school will make the
necessary provision and pay for it or for any part of it or make it itself or
arrange for a third party to make it. It need not fund to any greater extent
than is sufficient to enable the school to make the minimum necessary
provision. Since the duty is owed to each individual child, it will normally
be necessary and will certainly be desirable to discuss with the school how the
provision can best be made and funded for each child.
42. Where
there is discussion with the school, no problem should arise in deciding what
funds are needed. If agreement cannot be reached, the L.E.A. will have to
decide how much is needed to make the relevant provision and its decision can
only be challenged by the school (assuming no procedural impropriety) if
irrational. Thus if the L.E.A. makes a reasonable provision, the school will
have to decide how to deal with the needs and, if it decides more must be spent
than is provided by the L.E.A., it will have to find the balance.
43. The
problem in this case arises largely because there has been no discussion with
the school but the L.E.A. (as it is entitled to do) has decided to adopt a
formulaic approach. The general principles of course apply: if the formula
produces a sufficient sum, the school cannot complain. But if the formula does
not in fact produce a sum sufficient to meet the special educational provisions
set out in the statements, the L.E.A. must give more. It cannot require the
school to make up the balance. It is for the L.E.A. to decide what is
sufficient but it must take all relevant matters into consideration and, as it
seems to me, unless it discusses the matter with the school, it is likely to
fail to have regard to the actual needs of all the relevant pupils and, where a
change is being made, to whether the formula is indeed sufficient to enable the
school to provide for the needs. In addition, it is essential that the formula
is properly applied so that sufficient sums are provided.
44. The
reduction was justified on the basis of double funding. During the course of
the hearing, the L.E.A. made clear how it believed this had arisen. It said
that the model in Annex A of 11/90 was appropriate for special schools (viz:
schools specially organised to make special educational provision for pupils
with special educational needs and approved by the Secretary of State: 1993
Act s.182(1)) and had not been adapted in its application to mainstream schools
such as Queensmead. The A.W.P.U. was paid for all including statemented
pupils, and the amounts derived from the model were paid in addition. Thus, it
is said, the school already receives sums for the statemented pupils and the
A.W.P.U. element should be subtracted. Attention is drawn to Paragraphs 9 and
10 of Annex B
45. One
of the major objectives of the 1993 Act is to ensure that statemented pupils
should, if possible, be educated in mainstream schools in order t o obtain the
benefit of the national curriculum and contact with ordinary pupils and the
school’s facilities. The A.W.P.U. element in the funding provides the
normal teaching for the pupil in question: the additional amount is for his or
her extra teaching or SSA provision. The model in Annex A is concerned with
the extra amount of tuition and attention needed. At Queensmead, it was spent
on the salaries of extra teachers and SSAs who would not have been employed but
for the needs of the statemented pupils. While some adjustments may be proper
to cater for the particular circumstances of a mainstream school, it is in my
view wrong to subtract the whole of the A.W.P.U.. That is bound to lead to an
underfund and it is no surprise that that is precisely what happened to
Queensmead.
46. Even
if the L.E.A. was correct to apply the formula as it did, it is clear on the
evidence that the sums do not provide sufficient to meet the needs. Each side
relies on the delegation of funding to the governors and the lack of any
requirement for them to use sums in any particular manner to support their
cases. The L.E.A. says it has provided enough following the formula correctly.
The school must then use it as it sees fit and if the school chooses to spend
more it must make up the difference. The applicants say that there is no power
in the L.E.A. to require them to use their funds in any particular way or for
any particular purpose and so the requirement to fund the difference is
unlawful. In my judgment, one returns to the duty upon the L.E.A. to arrange
for the needs to be met in accordance with the statement. As I have already
said, if the formula does not produce enough money for that to be done, the
L.E.A. must make up the balance and cannot require the school to use its funds
for that purpose.
47. In
those circumstances, the reduction of the funds was unlawful and the decision
of the Education Committee cannot stand. This means that the alternative
ground relied on by the applicants that there has been a failure to consult,
either in breach of a statutory requirement or of a legitimate expectation,
need not arise. However, the matter has been argued and I ought to deal with
it albeit I shall do so briefly.
48. It
seems to me that it will usually be impossible to decide on the appropriate
sums to meet the special educational needs of statemented pupils without
consulting the schools in question. Section 159 of the 193 Act points in that
direction. Where there are significant changes proposed to funding levels it
is difficult to envisage circumstances where the L.E.A. could properly comply
with its duty under s.168(5)(a) of the 1993 Act without consulting the schools
to be affected. This is not so much because of the requirements of fairness
but because of the need to have regard to all material considerations in
reaching its decision.
49. It
is submitted by the applicants that there is a requirement of consultation in
particular under Paragraphs 3(v) and (xiv)(e) of the 1993 Order to which I have
already referred. The L.E.A. was reducing the amounts provided by the formula
by applying as it believed a correct interpretation of the formula. This did
not involve the addition of any provision within the meaning of Paragraph 3(v).
In one sense, any reduction of funds will impose a restriction on the
governors’ powers to manage their school’s budget share. But it
seems to me that Paragraph 3(xiv) is looking at their power to manage rather
than their ability to pay for particular matters. Otherwise, any reduction in
funding will require consultation and I do not think this is what the Order
requires.
50. But
that does not conclude the matter. A statutory requirement merely guarantees
that there must be consultation in particular circumstances. It does not
preclude the implication of a need to consult in other situations if fairness
so requires. In my view fairness does, subject to one proviso, require that a
school must be notified and be allowed to make representations where the only
reasonable view must be that the reduction in money is likely to have a
significant effect on its overall budget. Consultation in that sense is
required. The need to act quickly because, for example, of an unexpected
requirement to reduce the L.E.A.’s budget may tend to make consultation
impossible. That is said to be the case here. I disagree. Mr Tully says he
knew in December of the supposed error in the application of 11/90. It seems
to me that it should then have been appreciated that a reduction of funding
might be called for and the school asked to make representations. I do not
think it necessary to think in terms of legitimate expectation. It is
sufficient to say that, quite apart from the need for consultation to enable
the L.E.A. to comply with its statutory duty under s.168(5)(a)(i) of the 1993
Act, fairness dictated such a need because of the significant reduction in
the school’s budget which would result.
51. I
shall hear counsel on the appropriate relief in the light
of
my conclusions. You have had copies, I think, of the Judgment.
53. MR
JUSTICE COLLINS: For the reasons given there I have decide that the decision
cannot be upheld. Now, what is the appropriate relief?
54. MR
HARRIS: Before we deal with relief, can I, with respect, invite your
Lordship's attention to the bottom paragraph at page 22 in case some
elaboration of one sentence is appropriate. Your Lordship sees the first
sentence reads, "Where there is discussion with the school, no problem should
arise in deciding what funds are needed. If agreement cannot be reached, the
LEA will have to decide how much is needed to make the relevant provision and
its decision can only be challenged if irrational." My Lord, assuming that
there is procedural propriety that, with respect, must be correct vis-a-vis the
school, but of course it is possible that a parent may be able to challenge in
the individual case through the Special Needs Tribunal, and whether your
Lordship feels it is appropriate to say something like, "Its decision, if
procedurally correct, can only be challenged by the school if irrational", just
to be as specific as possible.
55. MR
JUSTICE COLLINS: I am grateful, Mr Harris. I confess that I was thinking
obviously in terms of the school. I was not thinking in terms of the parents
and you are right, there may be the possibility always of a parent taking
whatever action is appropriate. I think if I add "and its decision can only be
challenged by the school".
57. MR
JUSTICE COLLINS: "... by the school (assuming no procedural impropriety)", I
think is the expression, isn't it?
61. MR
HARRIS: May I just bring this one to your Lordship's attention? Four lines up
from the bottom of page 20 it should be 14th August.
63. MR
JUSTICE COLLINS: I am grateful. There are one or two obvious ones which I
will correct when I correct the transcript.
64. MR
HARRIS: I am unhappy to tell your Lordship that we have not reached agreement
about relief. Can I, in the first instance, apply for costs?
67. MR
JUSTICE COLLINS: The only decision that I can quash will of course be the
decision relating to your school.
68. MR
HARRIS: That is what I was going on to say, my Lord, yes, because the formula
may possibly produce sufficient funds overall in respect of other schools.
70. MR
HARRIS: My Lord, what I would invite you to say is certiorari to quash that
decision in so far as it relates to Queensmead School.
72. MS
MACPHERSON: On that point, my Lord, may I open by saying that of course the
local authority are very anxious to ensure that they introduce a system which
is consistent with the law, and where they would be worried -- and we
understood that your Lordship did indicate in the substantive hearing that
relief would be available to Queensmead and not to the rest of the schools.
75. MR
JUSTICE COLLINS: Ms MacPherson, that seems to me to be a matter for the
authority. I can only deal with Queensmead, because I only have the facts to
enable me to deal with Queensmead. For all I know in relation to the other
schools the formula adopted, for whatever reason, maybe because they do not
have many statemented pupils, will be all right. I doubt if it will, but it
may be, but they haven't taken proceedings. It would be open to the local
authority, as I see it, to reconsider the matter in the round in the light of
the judgment on the basis that they would have to consider whether they are
giving enough to the other schools. That is a matter for them though.
76. MS
MACPHERSON: My Lord, in the light of your Lordship's judgment your Lordship
came down pretty strongly against the principle which this authority had been
following, which was that the money for statemented children was not ring
fenced and could be subsidised, as it were, from the AWPU. My Lord, it has to
be remembered that this affects primary schools as well. The whole principle
of your Lordship's judgment goes to the heart of this principle and the
authority is going to have to review all these matters in respect of all those
schools.
79. MR
JUSTICE COLLINS: That is precisely why I can only deal with it in relation to
this school. The authority may have to find some more funds to deal with
Queensmead, but what they are going to have to do, for next year certainly, is
to reconsider the whole matter in the light of the judgment, assuming it
stands, and approach the funding for all schools next year with the principles
in mind. What at the moment it does not have to do is to reassess for the
other schools which have not taken judicial review proceedings, because, as I
understand the law, a decision, even though flawed, will stand in public law
terms unless it is set aside in properly constituted proceedings. Now, at the
moment any other school would be prima facie way out of time for challenge and
there would be, I would have thought, a strong argument on the basis of
detriment and prejudice -- I forget the exact terms of section 31(6) -- to say
leave should not be granted. If they
80. MS
MACPHERSON: So be it, my Lord, under that head. On the question of the exact
decision of the education committee which is to be quashed in relation to
Queensmead, I see from your judgment, my Lord, that, as to the AWPU, you say it
is wrong to subtract the whole lot, but there is room for some reduction.
81. MR
JUSTICE COLLINS: Certainly it seems to me that one has to, as I have said,
look to the individual school to see how the thing works in the individual
school. 11.90 is not written in stone, as I understand it; there is
flexibility. That is part and parcel of the directions, if you like, or the
guidance given by the Secretary of State.
82. MS
MACPHERSON: Yes, my Lord. So what would the order be, because what was
resolved, among other things, was that the measures outlined in section B of
the committee report for balancing the education review budget for 1996/7 be
endorsed, and among the items in that section B were the words, "The
reduction be done by reducing statemented pupil rates for all primary and
secondary pupils by the average age rate of pupils for each age band."
83. MR
JUSTICE COLLINS: It may be, Ms McPherson, that certiorari is not necessarily
the appropriate remedy when one is going to this sort of decision, because this
is not a decision which cannot be reconsidered as a matter of law. I mean it
is always open to the authority to reconsider the matter, isn't it? It is not
a case of being functus, as it were. So it may be that all that is necessary
is a declaration that the funding for Queensmead must be reconsidered in the
light of the judgment that I have given. Subject to Mr Harris, it may be that
that is a more appropriate form of relief. What I have to do and what the
authority has to do, more importantly, is to reconsidered the funding and
almost certainly -- well, not almost; certainly pay them more. Whether it is
84. MS
MACPHERSON: Thank you for that, my Lord, because my clients are most concerned
that on the basis of Queensmead only they would be very concerned if there was
an order that they should simply restore the AWPU.
85. MR
JUSTICE COLLINS: I cannot make that order and I do not think Mr Harris is
asking me to do that.
88. MR
HARRIS: My Lord, can I preface it by saying I did not understand your Lordship
to be suggesting that it is appropriate for the authority to reduce a part of
the AWPU; merely that it is necessary to assess the provision which is the
minimum appropriate for satisfying the special education needs, if you look at
it in the round without regard to any particular component.
89. MR
JUSTICE COLLINS: I am not saying there must be a reduction; what I am saying
is that there can be. It depends on looking at all the circumstances. On the
evidence before me at the moment the school quite clearly does allocate the
whole amount of what they are getting to the extra teachers and the extra SSAs.
It was asserted, although there wasn't any evidence directly called to that
effect, that that did not mean that all that sum was necessary to provide for
the needs of the children, and that was the difficulty I was in. I do not have
the material, I thought, to enable me to say that it cannot go below
£77,000, whatever.
90. MR
HARRIS: I understand that point, and for the next financial year it would be
open to the authority to determine the minimum necessary for the satisfaction
of
91. MR
JUSTICE COLLINS: The difficult is that I have not found that the
misunderstanding of the formula must result in the restoration of the whole of
the AWPUs. I suspect in the case of Queensmead on the evidence before me it
probably will, but can I be sure of that?
92. MR
HARRIS: My Lord, in our respectful submission, yes, for this reason: The
formula was calculated as it had been for two or three years in the past. The
local authority determined that it was inappropriate because of a specific
argument, that is that there was double funding. Your Lordship has found that
there was no double funding and the AWPU was necessary for the financing of the
normal main stream education of each of the pupils, and therefore the argument
advanced by the local authority has fallen to the ground and there is nothing
they have put forward to challenge the cost of the minimum provision which the
school has been allocating to the pupils.
93. MR
HARRIS: My Lord, that is what comes out of the formula, but the second point
which is related and has to be dealt with together is: As a result of the
approach of the authority the school has actually devoted funds to provide
special educational provision in accordance with the previous standard.
94. MR
JUSTICE COLLINS: You have a strong point if you add in the consultation point.
Without that, you have got yourself into a position where the funds were
needed, indeed have been needed, to cover the relevant cost, and therefore to
have to cut back at all without further discussion and consultation would be
very damaging and very difficult.
95. MR
HARRIS: My Lord, in fact, with respect, it is even stronger than that because
the authority never sought to challenge the amount of provision which the
school was supplying. It was merely saying, "Because of what we understand to
be a misconstruction of our own formula there has been double funding and you
have to pick up the balance of the cost to satisfy the specified need." There
has never been a challenge to the quantum of the specified need, and the
authority
96. MR
JUSTICE COLLINS: Also one has to consider the question of possible interest,
doesn't one? I mean, if they are going to battle over the amounts now, you
have been kept out of your rightful monies for nine months nearly and it will
be nearer a year, and that arguably ought to be compensated for.
97. MR
HARRIS: My Lord, that undoubtedly must be the case. Can I deal with the
balance for this year? The argument I have just advanced relates in part to
the commitment of funds by the school in the past, but it would be damaging to
an individual pupil if a pattern of educational provision were established and
then that was suddenly reduced. The appropriate time for reconsideration is
not retrospectively.
98. MR
JUSTICE COLLINS: Mr Harris, could one perhaps approach it in this way? It is
clear that the amounts provided, or were thought to be going to be provided,
were to be spent on the salaries of, I forget how many offhand -- is it three
teachers or two? It does not matter; however many teachers and however many
SSAs that were needed to deal with the children. I do not know whether the
£77,250 was more than enough to cover that.
100. MR
JUSTICE COLLINS: If it was marginally more than enough then there is a
possible argument, isn't there, that the margin, even for this year, is
negotiable, as it were?
102. MR
JUSTICE COLLINS: I know, but -- yes, I see. I am still slightly concerned as
to whether I can properly on the evidence say that figure must be the figure.
103. MR
HARRIS: My Lord, you can do so on the evidence because it was asserted to be
the figure necessary for this provision in the grounds. It was actually
accepted as factually correct in Mr Tully's affidavit.
104. MR
JUSTICE COLLINS: You are right, there has been no challenge to the figures.
You are quite right.
106. MR
JUSTICE COLLINS: Let me hear what Ms MacPherson has to say. Thank you, Mr
Harris. Ms MacPherson, I think there is some force in that, and I understand
why it was done like that, but on the material before me in relation to
Queensmead I really have nothing to challenge that this was a sum that was
properly to be spent on the necessary provisions for the children in question.
It may be, as I say, that for next year you can open it all up again, but I
think for this year there is great force in what Mr Harris says, isn't there?
107. MS
MACPHERSON: My Lord, there are two points on that. One goes to discretion and
one goes really to the essential matter of how much funding is necessary, and,
looking at that, I have in front of me, my Lord, page 22 of your Lordship's
judgment where you say twice that it is the LEA's duty to arrange the
provisions made but that that duty will often be discharged by providing funds
to cover the minimum necessary. That is in the first paragraph, and in the
second paragraph again those words "minimum necessary" are repeated three lines
from the bottom of the second paragraph. It does seem clear to me, my Lord --
and I am sure your Lordship will correct me if I am wrong -- that your Lordship
is not saying that a particular standard of provision has to be achieved.
109. MS
MACPHERSON: There was no submission made by the applicants as to the level of
provision that was at Queensmead. They just told the court what level had been
provided.
110. MR
JUSTICE COLLINS: Yes, but it went a bit further than that. The evidence
before me was that these extra teachers and SSAs were indeed necessary and were
the minimum necessary, because without them the needs could not be provided
for. So I have no evidence before me on the material other than that this was
the minimum necessary to provide the funding, as I see it.
111. MR
HARRIS: Your Lordship will remember at the very start of the case there was
some discussion whether it was part of the local authority's case that there
had been over-provision, and, as I understood it, there was an express
concession by Mr Moriarty that the amount of provision was not challenged as
being appropriate.
113. MR
HARRIS: There is an inconsistency, in our respectful submission, because, if
your Lordship is correct, he started from the proposition that I put before
your Lordship, that in the course of his submission he advanced the proposition
that your Lordship has put.
114. MR
JUSTICE COLLINS: Ms MacPherson, I hope I have got it right as to what the
position was. I did not understand Mr Moriarty to accept that that was
necessarily written in stone, as it were, as the amount which was the minimum
necessary. On the other hand, on the evidence that I have it is very difficult
to find other than that the provision of the extra teachers and the extra SSAs
are less than the minimum, because you cannot have half a teacher, can you?
117. MS
MACPHERSON: But in these matters, my Lord, surely when it comes to organising
provision in any educational establishment, whether it is for statemented
pupils or pupils with special needs or any kind of pupil, you do come down the
scale, subject of course to avoiding having undesirably large numbers in one
group, and, my Lord, it does seem to me I have no recollection whatsoever of
the applicant using the word "minimum". They at no stage said, "Well, we are
down to the bear bone."
118. MR
JUSTICE COLLINS: Because they were not thinking of it in those terms. One
talks about the minimum necessary because that is the legal requirement, but
frequently the minimum necessary will be and will have to be what is being
provided in the form of extra teaching and so on, and the two are often, one
would imagine, equated, because you cannot scale it down any lower sometimes
than whatever is necessary to provide for the extra teaching staff.
119. MS
MACPHERSON: I quite understand that, my Lord, but it seem to me that what Mr
Moriarty said was that we had never alleged that there was over-provision, and
what your Lordship is saying on page 22 is that we have a duty to provide the
minimum necessary.
120. MR
JUSTICE COLLINS: What I do not want to do is give a recipe for another
application or quarrelling about precisely how much. It seems to me that that
would be, to say the least, undesirable. You got it wrong, if my judgment is
correct; you got it quite badly wrong. The school, on the evidence before me,
was providing the amount that it thought it was going to get. If you like, it
was earmarked (I am using that not in a technical sense) for the provision of
what was necessary and what OFFSTED, having checked, accepted was necessary.
It seems to me, particularly as nine months have passed since they ought to
have got the summons to cover their expenses, that it would be undesirable, and
I of course recognise the authority has a duty to its council tax payers and a
duty not to pay more than the law requires it to pay. On the other hand, I
suspect we are going to be talking about rather small sums when we get down to
the details of what is between you and the school, and I do not think I can
direct a specific sum. I hear what Mr Harris says and I am very sympathetic to
it, but nonetheless I do not think the material before me enables me to
dictate, as it were, and declare, if you like, that it must be £77,250 and
not a penny less. What I can and do say is that it seems to me that it would
be surprising on the material before me if it was right to make it for this
year anything less than £77,250, but there must be a margin of discretion.
I would be, to say the least, disappointed if the local authority started
trying to cut it back. It certainly cannot -- and this, I think, must be the
case -- cut it back for this year, surely, beyond the teaching staff and the
SSAs. It may be able to have a margin of error, as it were, in relation to the
amounts for equipment.
121. MS
MACPHERSON: Given that your Lordship did say in your Lordship's judgment that
there was room for reduction, although total subtraction of the AWPU was not
acceptable, I must say, my Lord, those words did give me some hope, and I do
urge your Lordship to ask the authority to negotiate with Queensmead, because
if this authority is tied to a particular amount -- and your Lordship has
expressed it in quite strong terms that you expect the £77,000 to be
forthcoming unless there is good reason. I ask your Lordship not to express it
in those very clear terms.
122. MR
JUSTICE COLLINS: Yes, but there must be good reason, and at the moment you
have not put forward material before me which leads me to believe there is good
reason to reduce it below the amount. Subject to Mr Harris, I think the right
course is to declare that you must reconsider the matter in the light of the
judgment; that the amount that has been given is clearly, in the light of the
judgment, insufficient to
123. MS
MACPHERSON: I am grateful for that and thank you, but may I ask your Lordship
this: Your Lordship did mention the case of
Gloucestershire
v Barry
,
and I understand your Lordship's point that cash constraints are no excuse,
but, my Lord, that being the case, we are in a situation now where we are nine
months into the financial year, and we were capped. The state of our finances
at this moment, are they a matter to which we can have regard in our
negotiations?
124. MR
JUSTICE COLLINS: Only in so far as it is lawful. What you cannot do is to go
below what is necessary to provide for the needs, and if you haven't got the
money you have got to find it somewhere. I know it is easy to say that, but
you got it wrong in the first place and you have got to get it right. If you
can persuade the Secretary of State to stump up, good luck to you. Seriously, I
am sorry that this is a legal obligation upon you, if I am right, to provide.
You made your cuts in the wrong place. Sympathetic though one is to local
authorities in the position that you find yourselves in, and one knows they are
all in this appalling state, but so long as Parliament provides obligations
upon you they have to be met and you will have to cry to Parliament and not to
me.
125. MR
HARRIS: I have no objection to the course your Lordship proposed. Can I make
this observation, however, in case it might influence the conduct of the
negotiations? It is our very strong submission, if I can put it in private law
terms for the moment, that the authority is estopped from disputing that
£77,250 is the minimum necessary to comply with the provision under the
statements. In public law terms there is a legitimate expectation of that
amount.
128. MR
JUSTICE COLLINS: Mr Harris, I think that everything I have said suggests you
are in a relatively strong negotiating position, but I do not think I can say
that it must be that amount, because I simply am not able on the material to
deny to the authority the possibility that they might properly be able to show
when all the figures are gone into that the position is that the school does
not actually need all the £77,250.
129. MR
HARRIS: My Lord, there are two separate arguments obviously: One is whether
the £77,250 is the minimum provision necessary under the statements; and
the second is whether the LEA are entitled to challenge that as the minimum,
having regard to their conduct in the past. Your Lordship really does not have
sufficient information on either of those two issues.
130. MR
HARRIS: In relation to the second there is some information, but clearly the
argument was not specifically directed to it and it will have to be considered
in depth.
131. MR
JUSTICE COLLINS: That is why I thought it right to give liberty to apply and
reserve it to myself if there is a problem that arises, because I think there
is considerable force in what you say, that in the light of the way this
happened, particularly the last minute decision to change the formula, it could
well be said that if they are going to adopt the formulaic approach they must
stick to the same formula which was more correct than the new one, which was
clearly incorrect, and on that basis it would be right to give you the
£77,250. All I am saying is that I do not think -- and I appreciate this
is a recipe for the possibility of discussion or maybe disagreement, but I do
not think it would be right for me to direct on the material that it is that
amount and nothing else. I have gone as far as I can, I think, to indicate
what my views are at the moment and it is going to take, I am bound to say, a
pretty strong piece of evidence to persuade me that the Council is justified in
reducing it. They know that, they have heard me say that and I have reserved
it to myself deliberately because I think it is right that any dispute should
be dealt with that way rather than needing any fresh proceeding before someone
else.
132. MR
HARRIS: Your Lordship appreciates that I concede that that is the appropriate
decision to be made; I am
133. MR
JUSTICE COLLINS: Mr Harris, it may be better, if you want a declaration if you
try and agree a form of words for a declaration. If you cannot agree a form of
words then I will have to decide. I hope I will not have to decide.
134. MR
HARRIS: Can I hand up a form of words which I would have thought was
relatively neutral, because it does not actually address the reservations which
my learned friend has just expressed.
135. MR
JUSTICE COLLINS: That is fine because you know what the position is. (Same
handed). That is certainly fine. There is no problem with that, I would have
thought, Ms MacPherson, is there?
136. MS
MACPHERSON: No, my Lord, subject to only one small detail at (a). Those
instructing me have asked me to put to your Lordship that after the words "to
determine", the words "on a formula basis" should be inserted.
137. MR
JUSTICE COLLINS: No, there is no need to declare and it would not be right to
declare that it has to be on a formula basis; it can be on any basis they want.
It does not have to be on a formula basis; it can be on a formula basis.
138. MS
MACPHERSON: The implications of that, my Lord, are that in relation, for
instance, to the FAS on SFF funding is of course regulation 42(4) would no
longer come into play if you are starting to undo the formula funding.
139. MR
JUSTICE COLLINS: I am not in the least. All I am saying is that it is
perfectly open to you, as I understand it, to go round the schools and
determine what is needed for each individual pupil and each individual school
and apply the matter accordingly. You can of course do it on a formula basis.
It may be that it is much more sensible to do it on a formula basis. All I am
questioning is that you have to do it on a formula basis, because you
manifestly do not.
140. MS
MACPHERSON: That would be the status quo of course, my Lord. That is how we
have been doing it.
141. MR
JUSTICE COLLINS: Yes, but there is nothing to stop you doing it on a formula
basis and it may be more sensible to do it that way, but equally there is
nothing to stop you going round the individual schools
142. MS
MACPHERSON: Given that 19 schools in 1994 when consulted were very keen to
have delegated statemented funds on a formula basis.
143. MR
JUSTICE COLLINS: This declaration does not stop you doing it on a formula
basis. I am not going to declare that you have got to do it on a formula basis.
144. MS
MACPHERSON: Your Lordship may wonder why I am pursuing this. It is because I
have been looking at the original formulation of the declaration which was in
terms that the financial provision should be determined, as it were, on a pupil
to pupil basis, the relief as originally sought.
145. MR
JUSTICE COLLINS: I am not saying that. As I have made it clear in my
judgment, I think, it can be perfectly lawful to do it on a formula basis,
provided that the formula does actually meet the minimum requirements of each
pupil. If it does not, if the formula does not work for a particular school
and particular pupils then you have to provide more. I may be right, I may be
wrong about that, but that is what I have decided.
146. MR
HARRIS: That was certainly our case when it was argued. If it is of any
comfort to my learned friend, it is not challenged by the school that it is
appropriate for the LEA to introduce a formula, but, as your Lordship
indicates, the formula must operate so as to enable the LEA to comply with its
statutory duty.
147. MR
JUSTICE COLLINS: That is what I have decided on the basis that the law says
this is an individual duty to the individual children. I may be wrong about
that, but that is what I have decided, and therefore I am not going to declare,
Ms MacPherson, that it has to be on a formula basis, but equally I am not going
to declare it has to be on any particular basis.
149. MR
HARRIS: Can I just mention the word "reasonably" at the end of (a) in
paragraph 3. I think that may be in excess of your Lordship's judgment.
150. MR
JUSTICE COLLINS: I think it probably is. "The minimum financial provision
which is necessary."
151. MR
HARRIS: It may be that if the declaration is to be all embracing it ought to
cover section 166 as well, because that would be one way in which the LEA could
be relieved pro tanto.
155. MR
HARRIS: My Lord, the only other representation we have to make is we are very
anxious that there should be no unnecessary slippage of time in this matter and
there is the potential for protracted negotiation here. Would your Lordship
think it appropriate to specify the earliest date that the matter can come back
before your Lordship if agreement has not been reached?
156. MR
JUSTICE COLLINS: Ms MacPherson, is there any reason why this matter should not
be settled by the end of January? I think you have to have it ready to settle
by then, otherwise you are running into difficulties for the next financial
year, aren't you?
157. MS
MACPHERSON: My Lord, I think that is right. There is an education committee
meeting on 30th January.
158. MR
JUSTICE COLLINS: If I say it must be decided by the end of the first week in
February; if I put that as the date upon which agreement must be reached and,
if it has not, then liberty to apply. In fact I am in London the whole of next
term, so there is no problem about it coming back to me. Would that be
sensible, Mr Harris, if I say by the end of the first week in February,
whatever the date is, Friday the whatever of February?
159. MR
HARRIS: Yes. Would your Lordship think it appropriate to direct that there
should be a transcript of the submissions today. I am concerned that your
Lordship's, as it were, exhortation to the authority should be a matter of
record.
160. MR
JUSTICE COLLINS: It will be transcribed, it always is, and it will be part of
the official transcript.
162. MR
JUSTICE COLLINS: No, I think the parties can get the transcript in the normal
way if they wish to have it and if you want them to have it you can make sure
that they do, but it will be transcribed.
163. MS
MACPHERSON: My Lord, one further matter, if I may. My learned friend did ask
your Lordship to make one alteration to your Lordship's judgment and I wondered
if I can draw your Lordship's attention to page 17, the second paragraph. Your
Lordship will see that the number £500,000 appears twice. The first one
should be 1.5 million.
167. MS
MACPHERSON: Yes. My Lord, while I am on my feet, may I seek leave to appeal
to the Court of Appeal? Mr Harris has already conceded on another time that
this was a matter of public interest.
168. MR
HARRIS: My Lord, it is undoubtedly a matter of public interest. The problem
is from the school's point of view that an appeal is going to be a potentially
protracted process and the funding problem will continue indefinitely. If the
LEA is prepared to provide the funding, as it were, on a without prejudice
basis it may well be that there would be greater force in the submission.
169. MS
MACPHERSON: My Lord, I am instructed that my clients would be prepared to do
that, but my clients do feel that this is a point of principle that affects a
great many authorities and one that we ought to press on with.
170. MR
JUSTICE COLLINS: I think that I am prepared to give you leave but on terms
that so long as the appeal is not heard you have to apply this judgment so far
as funding to the school is concerned. What I am getting at is that you do not
have a stay on execution, if you put it in private law terms, that you must
fund the school, although of course it will be on the basis, and the school
must appreciate it is on the basis, I suppose, that if you win the appeal there
may have to be some renegotiation somewhere.
176. MR
JUSTICE COLLINS: He said he wanted to add it for the sake of completeness. Is
that not covered by the third party anyway?
180. MR
JUSTICE COLLINS: He simply wants to add in that one way of you carrying out
your duty is by the section 166 route if you can persuade a district health
authority or a local authority. There is no harm in it.
182. MR
JUSTICE COLLINS: I am not sure if it is necessary, Mr Harris, and if your
opponent does not want it then we do not need it. The declaration is of course
a declaration in the context of this case; it is not a declaration for all the
world.