England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		13/02/2009

Mr Justice Forbes :

1. Introduction. These proceedings are concerned with two separate but closely related claims for judicial review occasioned by the proposed establishment in the London Borough of Camden ("the Council") of an Academy ("the Academy") sponsored by University College London ("UCL") pursuant to section 482 of the Education Act 1996.
2. The first set of proceedings ("JR1") relates to the claim brought against the Council by Gillian Chandler ("Ms Chandler") seeking to challenge the Council's decision of 21^st November 2007, described in section 3 of the Claim Form as "a decision not to hold an open competition to decide what secondary school should be built on the Adelaide Road site in Camden but instead to circumvent that process by promoting an Academy to be sponsored by UCL". UCL and the Secretary of State for Children, Schools and Families ("the Secretary of State") are both named as Interested Parties in JR1. It is to be noted that the original claimants in JR1 were Ms Deseline Djiayep and Ms Juliet Prew ("Ms Djiayep" and "Ms Prew"). However, on 17^th July 2008 Ms Chandler was substituted as claimant by order of Plender J (see below) in both sets of proceedings for judicial review.
3. On 14^th February 2008, Mitting J. refused permission to apply for judicial review in JR1, following his consideration of the papers. When doing so, he made this helpful observation:

"This claim would be arguable if the decision to establish an academy sponsored by UCL was, or is to be, made by the Defendant, but it is not. The decision whether or not to enter into an agreement with UCL to establish the academy is the Secretary of State's: section 482(1) Education Act 1996. That decision may or may not be challengeable by Judicial Review; but it is not, or will not be a decision of the Defendant. The Defendant is entitled to be consulted: section 482(3) (a); but is not, itself, the authority which conducts the consultation. Paragraph 16 of the (non-statutory guidance) creates no obligation on the Defendant to conduct a competition in circumstances in which the Secretary of State decides to exercise his powers."

4. On 29^th February 2008, the Secretary of State decided to approve UCL's formal Expression of Interest (as to which, see paragraph 48 below) and agreed to release "feasibility funding" to enable the proposal for the establishment of the Academy sponsored by UCL to be developed further, stating in a letter of even date addressed to the Council:

"During feasibility we expect that you and UCL will continue to develop the detailed vision for the Academy and its key policies, including its admission arrangements, which will be fully in accordance with the Admissions Code of Practice."

The release of feasibility funding enables UCL to undertake development work on its proposals for the Academy, as an essential first step towards entering in due course into an agreement with the Secretary of State (known as a "funding agreement") for him to fund the establishment and operation of the Academy, something that has not yet happened in the case of this proposed Academy (for the relevant statutory provisions, see below).

5. On 25^th April 2008, the second set of proceedings for judicial review ("JR2") was issued. As I have already indicated, on 17^th July 2008 Ms Chandler was also substituted as claimant in JR2, the original claimant having been Ms Prew. In JR2 Ms Chandler seeks appropriate relief by way of judicial review of the Secretary of State's decision of 29^th February 2008, described in section 3 of the Claim form as a decision "to approve the Expression of Interest submitted by the University College of London for Camden academy". The Council and UCL are both named as Interested Parties in JR2.
6. On 17^th July 2008, the applications for permission to apply for judicial review in both JR1 and JR2 were listed for oral argument before Plender J. (as a renewed application, in the case of JR1). As well as granting permission for the substitution of Ms Chandler as claimant in both sets of proceedings, Plender J granted permission to apply in respect of the first ground of challenge in JR2 ("The EU/Domestic Procurement Challenge": see below). However, it appears that there was insufficient time to deal with either the remaining grounds of challenge raised in JR2 or the renewed application for permission in JR1. So it was that the parties agreed the terms of a consent order, whereby all such outstanding matters (including any substantive hearing, where permission is granted) were to be "rolled up" with the substantive hearing of the first ground of challenge in JR2 for which Plender J. had granted permission. It is in that form that these proceedings now come before me for determination.
7. The Statutory Framework. The statutory provisions concerned with the establishment of new schools that are relevant to these proceedings are contained in the following three Acts: (i) The Education Act 1996, (ii) The School Standards and Framework Act 1998 and (iii) The Education and Inspections Act 2006.
8. The Education Act 1996: Section 482 of the Education Act 1996 ("the 1996 Act") makes provision for the establishment, maintenance and carrying on of a particular type of "independent" school in England to be known as an Academy. Section 482 was substituted by section 65(1) of the Education Act 2002 and came into force on 26^th July 2002. So far as material, section 482 provides as follows:

"482 Academies

(1) The Secretary of State may enter into an agreement with any person under which –

(a) that person undertakes to establish and maintain, and to carry on or provide for the carrying on of an independent school in England with the characteristics mentioned in subsection (2) and such other characteristics as are specified in the agreement, and

(b) the Secretary of State agrees to make payments to that person in consideration of those undertakings

(2) …

(3) Before entering into an agreement under this section, the Secretary of State must consult the following about the establishment of the school –

(a) the local education authority in whose area the school is to be situated; and

(b) If the Secretary of State thinks that a significant proportion of the pupils at the school is likely to be resident within the area of another local education authority, that authority.

(4) An agreement under this section shall make any payments by the Secretary of State dependent on the fulfilment of –

(a) conditions and requirements imposed for the purpose of securing that no charge is made in respect of admission to (or attendance at) the school or, subject to such exceptions as may be specified in the agreement, in respect of education provided at the school, and

(b) such other conditions and requirements in relation to the school as are specified in the agreement.

(5) A school to which an agreement under this section relates shall be known as an Academy.

(6) …

9. The School Standards and Framework Act 1998: Section 20 of the School Standards and Framework Act 1998 ("the 1998 Act") deals with new categories of schools maintained by local education authorities ("LEAs") and, so far as material, is in the following terms:

"20 New categories of maintained schools

(1) Schools maintained by local education authorities on or after the appointed day shall be divided into the following categories –

(a) community schools;

(b) foundation schools;

(c) voluntary schools, comprising –

(i) voluntary aided schools, and

(ii) voluntary controlled schools;

(d) community special schools; and

(e) foundation special schools.

(2) …"

For the purposes of section 20(1), the appointed day is 1^st September 1999: see SI 1998/2083, art. 2.

10. The Education and Inspections Act 2006: Part 2 and Schedule 2 of the Education and Inspections Act 2006 ("the 2006 Act") is concerned (inter alia) with the establishment of new schools and, pursuant to section 7, empowers LEAs to hold a "competition" with regard to proposals from others for the establishment of such a school ("a section 7 competition") So far as material, the relevant provisions are as follows:

"Establishment of new schools

7 Invitation for proposals for establishment of new schools

(1) A local education authority in England may publish a notice under this section inviting proposals from persons other than local education authorities for the establishment of any new school falling within subsection (2).

(2) The schools falling within this subsection are –

(a) a foundation, voluntary or foundation special school, other than one providing education suitable only to the requirements of persons above compulsory school age, or

(b) an Academy.

(3) A notice under this section must –

(a) identify a possible site for the school,

(b) state whether or not the proposed school is to be a special school,

(c) specify a date, being a date after the prescribed interval, by which proposals must be submitted,

(d) specify such other matters as may be prescribed, and

(e) be published in the prescribed manner.

(4) …

(5) After the date specified in a notice published by a local education authority under this section, the authority –

(a) must publish under this section any proposals submitted pursuant to the notice in accordance with subsection (4), and

(b) may publish under this section –

(i) proposals of their own for the establishment of a foundation school or a foundation special school, or

(ii) if section 8 permits them to do so, proposals of their own for the establishment of a community or community special school.

(6) …

(7) Schedule 2 has effect in relation to the consideration, approval and implementation of proposals under this section.

8 Proposals under section 7 relating to community or community special schools

(1) A local education authority may by virtue of subsection (5)(b)(ii) of section 7 publish proposals under that section for the establishment of a community or community special school –

(a) only if at a prescribed time prescribed conditions are met in relation to the authority, and

(b) except where further prescribed conditions are also met in relation to the authority at that time, only with the consent of the Secretary of State.

(2) …

9 Consultation and publicity in relation to notice and proposals under section 7

(1) Before publishing a notice under section 7, the local education authority must consult such persons as appear to the authority to be appropriate; and in discharging their duty under this subsection the authority must have regard to any guidance given from time to time by the Secretary of State.

(2) …

10 Publication of proposals with consent of Secretary of State

(1) A local education authority in England may with the consent of the Secretary of State publish under this section their proposals to establish (otherwise than pursuant to a notice under section 7) –

(a) a new community or community special school, or

(b) a new foundation or foundation special school …

(2) …

…

28 Restriction on establishment, alteration or discontinuance of schools

(1) Except in pursuance of proposals falling to be implemented under this Part …

(a) no maintained school may be established … ;

(b) …

…

SCHEDULE 2

Proposals for Establishment or Discontinuance of Schools in England

Section 7, 10, 11 and 15

Part 1

Introductory

Application of Schedule

1 (1) This Schedule applies to proposals published under section 7, 10, 11 or 15

(2) …

…

6 All proposals under section 7, 10 or 11 require consideration under paragraph 8.

…

8 (1) Proposals which require consideration under this paragraph, other than proposals to which paragraph 10 applies, must be considered in the first instance by the relevant authority.

(2) …

…

10 (1) The relevant authority must refer to the adjudicator, within a prescribed time –

(a) all the proposals published under section 7 in response to a notice under that section, if they consist of or include any proposals which –

(i) are made by the relevant authority, or

(ii) …"

Note: The adjudicator to whom section 7 proposals must be referred pursuant to paragraph 10(1) above is an adjudicator appointed by the Secretary of State under section 25(1) of the 1998 Act: see section 32 of the 2006 Act.

11. It is convenient to note at this stage that a central submission by Mr Wolfe on behalf of the Claimant was to the effect that the Council's decision, whether or not to exercise its discretion to hold a section 7 competition, had to comply with "elementary" principles of public law, including that the discretion must be exercised to promote the policy and objects of the 2006 Act: see Padfield ~v~ Minister of Agriculture, Fisheries and Food (1968) AC 997 ("Padfield").
12. Mr Wolfe submitted that the policy and objects of the 2006 Act were those of ensuring fairness, transparency and quality in the evaluation of competing proposals for new schools (other than in exceptional circumstances), particularly where (as here) there was local controversy in relation to the various options for a proposed new school and, even more so, where one of the competing options was one with which the LEA (i.e. in this case, the Council) was closely associated ("the 2006 Act policy and objects").
13. Mr Wolfe therefore submitted that, in the circumstances of the present case, the Council was obliged to exercise its discretion to hold a section 7 competition consistently with the foregoing 2006 Act policy and objects, but that it had unlawfully decided not to do so. Stated shortly, it was Mr Wolfe's submission that, in the present case, the Council should not have decided to exercise its discretion against holding a section 7 competition so as to get a school over which the Council would maximise its control "by the back door" and in order to avoid the possibility that the Council would not control the decision-making process: see also Ground 4 of the grounds of challenge in JR1, paragraphs 73 to 83 below, where this matter is more fully developed.
14. However, I accept the submission, made by Mr Clive Lewis QC on behalf of the Council and Mr Beloff QC on behalf of the Secretary of State, that the terms of the relevant legislation quoted above are such that it is clear that there are currently available two entirely separate and different statutory routes by means of which an academy can be established, namely (i) via a funding agreement between a sponsor and the Secretary of State under the terms of section 482 of the 1996 Act ("the section 482 procedure") or (ii) via a successful proposal for the establishment of a new school, following a section 7 competition held by the LEA pursuant to and in the exercise of its discretion under section 7 of the 2006 Act ("the section 7 procedure"). I also accept Mr Lewis' and Mr Beloff's submission that it was open to and entirely lawful for the Council to decide which of those two routes it wished to go down.
15. As Mr Beloff pointed out, it is also important to note that: (i) the discretion under section 7 of the 2006 Act is not expressed to be subject to any condition or exception that limits the LEA's discretion and, in effect, substitutes a duty to hold a section 7 competition in appropriate circumstances and (ii) Parliament has expressed no preference for either of these two separate statutory routes. I therefore accept Mr Beloff's submission that this is not a case where the 2006 Act policy and objects have been frustrated in the manner suggested by Mr Wolfe as summarised in paragraphs 12 and 13 above. In short, I agree with Mr Beloff's submission that Mr Wolfe has singularly failed to demonstrate the existence of the policy and objects upon which he relies for the purpose of this particular aspect of his argument (i.e. the 2006 Act policy and objects as summarised in paragraph 12 above).
16. Furthermore, as it seems to me, the foregoing statutory provisions also clearly establish the following basic propositions with regard to the establishment of a new school.

i) An Academy is an independent school; i.e. it is not maintained by the local education authority, but is one that is directly funded by the Secretary of State under the terms of the funding agreement (not to be confused with an "independent" fee-paying school in the private sector).

ii) An Academy can be established by following either the section 482 procedure or the section 7 procedure (the two separate "routes": see above). In contrast, a new maintained school can only be established by means of the section 7 procedure, unless the Secretary of State consents to the publication of the LEA's proposals for a new school without the need for a competition under section 7: see sections 10 and 28(1)(a) of the 2006 Act, quoted above.

iii) Although the Secretary of State is obliged by section 482(3) to consult the relevant LEA before entering into a funding agreement, the section 482 procedure does not require any other or wider form of consultation to be carried out (in particular, there is no requirement that the LEA or the sponsor or the Secretary of State carry out any form of public consultation).

iv) There is no provision in the section 482 procedure for carrying out any form of competitive process equivalent or similar to that which is required by the section 7 procedure.

17. The Factual Background. I now turn to summarise the main features of the factual background to these proceedings.
18. The Council has been considering the future of secondary education in the borough for some time. In more recent times, it has been guided and prompted in this by "Building Schools for the Future" ("BSF"), a national programme introduced by the government in February 2004 with the aim of improving educational attainment through a complete physical transformation of secondary school provision in England.
19. BSF is a 10 to 15 year programme which is to be implemented in "waves". It is the biggest national schools' investment programme in over 50 years. The government's plan is to rebuild or renew every secondary age state school in England during the 15-year lifetime of the programme at an overall cost of some £40 billion. The Council wished to be included in Wave 5 and, to that end, it published a "Readiness to Deliver Statement" ("the RDS") dated 13^th October 2006, setting out its case for inclusion in Wave 5 and its plans for improving secondary education in Camden. These included the creation of 1,200 new secondary school places in the borough: see paragraph 2.2 of the RDS and paragraphs 3 to 10 of Mr Richard Lewin's witness statement dated 3^rd October 2008 ("Mr Lewin": Assistant Director, Finance and Schools Support, in the Council's Children, Schools and Families Directorate – hereafter, the "CSF").
20. The Council's RDS was published in October 2006 and made available to the public. In paragraph 2.2, the Council indicated that it intended to build a new secondary school on the Adelaide Road site ("the proposed new school"). The Council stated that the proposed new school might be an Academy or Trust school and the position would be kept under review. Paragraph 1.2 of the RDS referred to the fact that the Council was "in active discussions with two of Camden's leading public sector higher education institutions (UCL and the Institute of Education), with a view to their building on current relationships…" It then went on to say this: "At this stage no decision has been made about the formal nature of any relationship. Further discussions will be held with the higher education institutions to consider the mutual benefits of any proposal and how relationships might develop": see paragraph 1.2 of the RDS. As it seems to me (and I accept Mr Lewis's submission to this effect), this accurately represented the position at the time the RDS was published, the background to which I now summarise in paragraphs 21 to 26 below.
21. In early 2005, UCL approached the previous (Labour) administration in Camden, indicating that they wished to be more actively involved in education in the borough. As a result, a number of meetings and discussions took place during 2005 and the early part of 2006, at which various options for UCL's involvement were discussed, including the possibility of an academy. It is clear that, in their initial stages, these meetings and discussions were essentially preliminary and exploratory in nature: see the following paragraphs of Ms Gail Tolley's witness statement dated 3^rd October 2008 ("Ms Tolley": CSF Assistant Director, Learning and School Effectiveness):

"3. Discussions with UCL were initiated by UCL in 2005. UCL were very keen to become more involved in education in the Borough. …

4. The meetings in 2005 were preliminary. UCL was already involved in working with some of Camden's secondary schools but was seeking a more structured, deeper involvement in its local community of schools. Some consideration was given to developing a partnership with a particular school and UCL offered to set out an outline vision for such a school …

5. Discussion became more focused towards the end of 2005. In September 2005, an officer in CSF prepared the slides at pp [2269 – 2272 of the Court Bundle] for an internal meeting of senior officers. The slides were not seen by UCL, but they reflect officer thinking at that stage about the options for UCL's involvement, which included the possibility of an Academy. It appears … that Moira Gibb, the Council's then Chief executive, and Raj Chada, the then leader of the Council met with Professor Grant on 22^nd November 2005, following which Professor Grant wrote to confirm UCL's interest in exploring with Camden the possibility of a partnership arrangement with UCL, in relation to a Camden school … The Leader replied on 29^th November 2005 … indicating that Camden was, in principle, interested in entering into exploratory discussions with UCL. He stressed in his letter that there are many stakeholders involved in Camden schools and that therefore Camden wished to consult with them, and particularly with Heads and Governors.

6. In the early part of 2006, the Council then facilitated a meeting between UCL and the Headteachers and Governors of Camden Secondary Schools about the enhanced contribution that UCL could make to education in Camden … This was UCL's proposal … At that time, the preference of Heads and Governors was that if there was to be any structured "partnership" with UCL, it should be a partnership with all secondary schools in Camden.

7. However, the then Labour administration did not want to take matters further before the May 2006 election. …"

22. The local government elections in May 2006 brought a change in the political complexion of the Council: the Labour administration was replaced by a partnership Liberal Democrat and Conservative administration. The manifestos of both these parties made reference in different terms to their intention to establish at least one new secondary school in Camden.
23. UCL approached the Council again after the election and requested a meeting. As a result, a meeting took place on 17^th July 2006 at which the various options for partnership between UCL and the Institute of Education ("the IoE") and Camden schools were discussed. The meeting was preliminary or exploratory in nature and, once more, the discussion included the possibility of an academy. However, UCL had not yet come to a concluded decision on that particular course of action. One significant consideration was that, under the policies applicable at the time, UCL needed £2 million of funding in order to persuade the Secretary of State to enter into a funding agreement. In paragraphs 10 and 11 of her witness statement, Ms Tolley gives the following account of this July 2006 meeting:

"10 At UCL's request a meeting was arranged on 17^th July 2006 in order for them to introduce themselves to the new administration. That meeting included Executive Members and Officers. Professor Grant and Professor Worton attended from UCL and Leisha Fullick attended from the Institute of Education. … At this meeting councillors had an opportunity to hear from UCL and the Institute on their thinking on partnership working in Camden. At that time various options were being explored. UCL and the Institute of Education wanted to form a partnership with a secondary school in Camden. UCL made it clear that they were interested in that partnership taking the form of an Academy. However, they were not set on that. It was recognised that in order for UCL to get approval from the Secretary of State as an Academy sponsor, it would be necessary for UCL to have £2 million of funding. This was the Secretary of State's policy at that time, and, indeed, remained so until 10^th July 2007.

11. UCL had previously hoped to have funding from Lehman Brothers, but they had pulled out in late June 2006 … The Institute of Education had, however, expressed an interest in putting forward funding and partnering with UCL. At the meeting on 17^th July 2006 there was a general discussion about the possibilities. Councillors outlined their own ideas for what was then thought might be two new schools in the borough, including their views on admissions policy etc. UCL set out what they thought they could offer the borough, in particular the expertise and facilities that they could offer in terms of maths and science. No decisions were taken at that meeting; it was all very preliminary. It was intended that there should be a further meeting in September 2006. In the event, this meeting (which took place on 28^th September 2006) did not involve councillors."

24. On 24^th August 2006, whilst the Council's RDS was being prepared, Ms Heather Schroeder ("Ms Schroeder": then the Director of the CSF) wrote to Professor Grant of UCL setting out the Council's views on the possible timescales for opening an Academy and inviting him to indicate whether he was prepared for UCL to be mentioned in the RDS in association with an academy bid. In its reply dated 4^th September 2006, UCL indicated that, in principle, it had no objection but that it was not in a position to name a financial supporter. Accordingly, the Council recorded in its RDS that, at that stage, no option about any new school had been ruled out and that no decision had been made about the formal nature of any relationship between UCL, IoE and the Council (see paragraph 20 above).
25. In September 2006, there was a "Council stakeholders' event" unconnected with BSF. However, in the course of conversation with one of the Council's officers at the event, Mr Tom Peryer ("Mr Peryer") of the London Diocesan Board for Schools ("LDBS") mentioned the possibility of a Church of England ("CofE") Academy for Camden. This conversation was duly reported back to the Council's CSF Management Team and to Mr Ian Patterson ("Mr Patterson": BSF Programme Director).
26. On 28^th September 2006 there were further discussions about the nature of a possible partnership between UCL/IoE and Camden's schools at a meeting attended by Professor Worton of UCL, Ms Leisha Fullick of IoE, Ms Tolley, Ms Moira Gibb ("Ms Gibb": the Council's Chief Executive) and Ms Schroeder. The Council's RDS was finalised shortly after this meeting and approved by its Executive on 11^th October 2006.
27. Following the publication of the RDS, on 12^th December 2006, Ms Tolley and Ms Sarah Conway ("Ms Conway": The Council's Head of School Improvement) met Mr Peryer of the LDBS and discussed the RDS. Mr Peryer asked about the possibility of CofE involvement and was told that the CofE would have the opportunity, in due course, to express an interest in any new school.
28. Shortly after that meeting, the Secretary of State notified the Council that its application for inclusion in "Wave 5" had been accepted. Having been accepted, the Council then had to develop its plans in accordance with government requirements and timescale in order to secure the release of government funds for the programme. In paragraph 18 of her witness statement, Ms Tolley described this period in the following terms:

"18. In the early part of 2007 my time in relation to BSF was principally taken up with meetings with Headteachers, preparing the text for the educational vision part of the Strategy for Change 1. The issues being considered were whether we needed a new school, where it should be, what work needed to be done to existing schools in the borough and place planning. The governance arrangement for any new school was not being considered (save that I did attend a workshop at DfES on 12^th January 2007 with UCL at which UCL presented their vision for an Academy to DfES). I am aware that Tom Peryer did contact Councillors again in January and February 2007, and officers were asked to arrange a meeting with Mr Peryer, which we did. A date of 27^th April 2007 was set. The date was chosen because it fitted in with our timetable of work on the BSF programme, and not in order to "put off" the Diocese of London …"

29. Between November 2006 and February 2007, the Council undertook its first phase of public consultation on its BSF proposals. This first phase of public consultation took the form of a "School Places Survey", in which parents and carers were asked to indicate their need for school places and what type of school they would like their child or children to attend: see paragraph 13 of Mr Lewin's witness statement.
30. The results of the survey were analysed in the early part of 2007. The results confirmed the need for a new school in Camden and further work was carried out during this period with regard to the possible location of the proposed new school. In paragraph 14 of his witness statement, Mr Lewin described the results of this survey in the following terms:

"14. A number of important points came out of the School Places Survey. First, that the key factors for parents in choosing a school for their children were reputation of the school, distance from home and exam results. A large proportion of parents chose one or all of these factors prioritising them above choices regarding type of school e.g. faith, community, independent, mixed or single sex. A majority of respondents said that they would prefer a Camden state secondary school with smaller numbers indicating faith or other factors. … Overall a large majority of parents said that they felt there were not enough secondary school places in Camden. They considered that a new school should be built. …"

31. Between May and July 2007 the Council carried out a second phase of public consultation on the BSF programme. The last page of the consultation document was headed "What Kind of new secondary school for Camden?" and indicated that the new school could be an Academy, a Trust School or a Community School. It is clear that the purpose of this consultation exercise was to obtain views on the characteristics that a new school might have. There was no intention to consult on whether it should be a particular type of school or that it should have a particular sponsor. At the time the consultation process commenced, nobody had finalised any proposal for an Academy or other type of school. Although UCL had provided officers with a draft vision statement for an Academy for comment in May 2007, the details of its proposal for an Academy were not finalised until after the consultation had started. In fact, it was not until 4^th July 2007 that UCL issued a public statement of intent to sponsor an Academy in Camden. Shortly afterwards, on 10^th July, the government announced that University sponsors would not be required to provide £2 million funding: see paragraph 25 of Ms Tolley's witness statement. As Ms Tolley states in paragraph 26 of her witness statement, although UCL had been keen to become more involved in education in Camden and had also been indicating for some time that it would like to apply to the Secretary of State to establish an Academy, it was only on 4^th July 2007 that UCL actually confirmed its firm intention to do so. I accept that, up until that point, although the Council was enthusiastic about UCL's ideas, it was not at all sure whether anything was likely to come of them. I also accept that the UCL bid was not concealed from the consultation process, it "simply arrived in the middle of it": see paragraph 26 of Ms Tolley's witness statement.
32. The Council subsequently made inquiries as to whether UCL would respond to a notice inviting proposals for the establishment of a new school, if the Council were to publish one under section 7 of the 2006 Act. However, UCL made it clear that it would be unwilling to do so.
33. In June 2007, a leading Liberal Democrat Councillor and the Council's Executive Member for Children, Mr John Bryant ("Councillor Bryant"), issued a briefing note headed "Building Schools For The Future – Briefing for Liberal Democrat Governors" ("Councillor Bryant's briefing note"). So far as material, Councillor Bryant's briefing note was in the following terms:

"This paper is my personal take on where we are at.

We have been consulting on BSF through a series of public meetings. The issues raised so far and the deputation received at the last full Council can be summarised as follows –

(1) A community school is needed.

This is not surprising. The values of a community school include a comprehensive intake on an admissions policy set by the Local Authority; the LA is the employer of the staff and owns the buildings; one third of the Governing Body is made up of Parent Governors; the Local Authority also has places for direct appointment of Governors. Community Schools form a family of schools that collaborate on certain aspects of curriculum delivery and they will need to do so increasingly as the 14-19 vocational education diplomas are introduced across the borough.

(2) A Church of England Academy is needed.

Colleagues will have their own take on whether they like faith schools or not. Personally I am not in favour because while we currently have a number of faith schools in the borough I don't think that it's appropriate for the Council to assist in the formation of any more. However hard they try they cannot be fully inclusive while insisting on Christian worship as the centrepiece of the daily assembly and insisting on Christian instruction as part of the curriculum.

The claim that CofE schools are successful is not always true – the last school in Special Measures in the borough was St Mary and St Pancras Primary nearby to Euston, and the "successful" Academies elsewhere in London are usually because the Diocese allowed the predecessor CofE voluntary aided schools to fail so that an Academy backed by huge dollops of Government money could rise from the ashes.

They may be popular with parents but they are not always good, even though their popularity amongst some middle class parents should impact on their standards because of the intake of pupils from such backgrounds.

…

(5) We should have a competition for the new school.

Members of both Liberal Democrat and Conservative Groups have a natural inclination towards competition but we need to be wary of what the rules are. Given the strong message for a community school from the consultation process we would also be obliged as a Council to enter any such competition. But it is not a foregone conclusion that we would win a competition, and losing it would seriously damage the reputation of the Council half way through our term of office, providing an open goal to the Labour Party to campaign on the failure of the Partnership Administration to achieve what the residents wanted. (Why else do you think that Fiona Millar and Lucy Anderson are both in favour of competition and a community school?).

Why wouldn't we win it? If the Council enters the competition the winner is judged by the Schools Adjudicator – a Government appointed individual whose task it is to increase the diversity of provision within a borough. In Camden we have no Academies at all, only community schools and aided schools. We have no Foundation schools either because none were attracted to becoming grant maintained schools ten years ago.

To win the right to set up a community school with the Adjudicator having this role to play would be an uphill task.

…

In Camden we already know we would get a strong bid for a CofE Academy and may be from other bidders too. ARK, an educational charity which favours the methods employed by American charter schools has already made tentative enquiries, and don't forget we have a successful (albeit modest) foundation across the boundary on the Brent side of Kilburn which runs a Muslim voluntary aided primary school and an independent girls secondary school. An opportunity to bid for a Muslim Academy just two miles east might be attractive to them. If ever an Adjudicator wanted to tick the box for diversity these alternatives provide a great opportunity.

…

What about UCL then?

The UCL vision for an Academy is beginning to take shape and with tweaking they can embrace our original proposals for "what kind of school" and can bring to the table some innovative ideas on curriculum delivery. They are a world-class university and compared to some of the early sponsors of Academies (creationists and used car salesmen amongst others) they are clearly more respectable. The Government under Gordon Brown will continue to promote the idea of Academies (not shirking from the 400 Academies target) and appear to want to get universities involved.

By deciding to proceed with a co-sponsored Academy with UCL at least we would not get any grief from the Government!

I think we can demonstrate that many of the values of a community school can be embraced by a co-sponsored Council/UCL academy which is what most of our consultation responses add up to.

…

In conclusion

I think there are big risks in proceeding with a competition for our new school. We would be obliged to bid for a community school and would likely lose, providing an own goal for the opposition and damaging our reputation and staff morale in the process. We would be transferring the decision-making process to a Government official. Did we really so all that work to get elected and to then bottle out of taking the biggest decision in the borough's education service for a generation.

We could end up with a school that a huge part of our community does not want and they would certainly blame us for that. We would delay the possibility of having evidence of any building taking place on Adelaide Road at the time of the next election. And we would be giving up the chance of creating a school which we would have a direct say in shaping, working with a sponsor that shares our values, and which we could demonstrate in the coming months shares those of the wider community too."

34. As the heading suggests, Councillor Bryant's briefing note was originally produced for the benefit of Liberal Democrat school governors. However, it was also circulated to Liberal Democrat councillors in order to bring them all up to date with the arguments relating to the proposed new school. As Councillor Bryant explained in paragraph 21 of his witness statement:

"… I prepared this [briefing note] in advance of a Liberal Democrat Group meeting which took place on 25^th June 2007. I produced the briefing note to explain what was then my current thinking as the Liberal Democrat educationalist. At the time I created the note the £2 million funding criterion was still an issue for UCL … The meeting was chaired by Cllr Libby Campbell, who was the elected Chair of the Group. This Group is not chaired by the Leader, nor does it give any mandate to members of the Executive. It is [a] group for policy discussion. There was a lively debate at the meeting about the education issues facing the borough at that time. Some people were in favour of a competition and some were in favour of a CofE school. By the end of the meeting, there was a narrow consensus of view in favour of supporting [a] UCL Academy and not having a competition. However, there was no sense that this was a concluded view for the Executive Members. We were well aware that UCL was yet formally to confirm its commitment to an Academy bid, that there were difficulties with funding and that we would need to consider the outcome of the consultation process and officer advice before reaching our own views on the matter."

35. Meanwhile, the LDBS/CofE was concerned that it was not being sufficiently involved in the process relating to the proposed new school: see paragraphs 19 to 22 of Ms Tolley's witness statement. Meetings were therefore arranged between councillors and officers and the LDBS/CofE. A meeting was held with the South Camden Deanery Synod on 25^th April 2007 at which Ms Tolley spoke about BSF and the vision for transforming learning. Other speakers were Ms Fiona Millar (of the Campaign For State Education – "CASE"), Mr Peryer (who outlined the way a CofE school in Camden might be run) and Councillor Mennear.
36. The meeting with Mr Peryer that had been arranged for 27^th April 2007 also took place (there had been unsuccessful attempts to advance the date of the meeting). The meeting was attended by Ms Schroeder and Mr Patterson. Mr Peryer set out some background information on other CofE academies and dealt with such matters admissions, special needs, assemblies and financial sponsorship in order that the Council had a better understanding of the CofE's approach to sponsorship of a new school: see Ms Tolley's witness statement at paragraph 22. A further meeting was held on 9^th July 2007 in order to provide the LDBS with an opportunity to set out its ideas to senior Camden councillors prior to the meeting of the Council's Executive that was due to take place on 25^th July 2007. In paragraph 28 of her witness statement, Ms Tolley gave this account of that particular meeting:

"28. On 9^th July 2007, a meeting was held between senior councillors and the London Diocesan Board for Schools. I was in attendance. The purpose of the meeting was to afford the opportunity to the Church of England to set out its ideas, having expressed a desire to develop a school in Camden. At the meeting Tom Peryer outlined the London Diocesan Board's vision for a Church of England Secondary School. Tom Peryer indicated that there would be an admissions policy focused on Camden pupils but he stressed the distinctive Church of England ethos for the school. At the end of the meeting Cllr Bryant said that he would like the Diocesan Board to provide a short written statement of its vision for a Church of England School, so that it could be further considered by the Council. Cllr Bryant asked for the vision statement to be provided by Friday, 13^th July … This was a short timescale, but the reason for this was, I believe, that Cllr Bryant was keen to [the] statement to be provided in good time before the Executive meeting set for 25^th July."

37. In response to Councillor Bryant's request, Mr Peryer wrote to Camden's Councillor Moffitt on 13^th July 2007, enclosing the LDBS' written "Expression of Interest", stating (inter alia):

"You encouraged us to put forward our proposal and thinking in a more formal way to you so that it could be circulated as appropriate to colleagues and also be put into the public domain. I am therefore attaching our Expression of Interest. This does not of course represent a final statement as we would expect to develop and modify it during the process of working up a "bid" – in the event that you hold a competition. However it will give you, and all those who read it, a clearer picture of where we stand.

Obviously we await with keen interest the announcement of your indicative decision at the end of the month. …"

38. The LDBS' Expression of Interest commenced by stating that it was the LDBS' starting point for describing the kind of school it wanted to see established in Camden. Having set out its mission, vision, principles and values, the LDBS described the main features of the proposed school (including making it clear that it would be equally happy to develop either an academy or a voluntary aided school) and, after summarising its relevant experience and "successful track-record", concluded as follows:

"We believe the case for the new Camden secondary school to be a Church of England secondary school is a very strong one for all the reasons set out in this Expression of Interest. However, we recognise that the UCL bid is also a strong one and that there may be other potential promoters for a Camden school. We also recognise the misgivings (and sometimes deep opposition to a Church school from some quarters). That is why we believe that an open competition would be the fairest and most transparent way of proceeding. We are more than willing to debate our proposals and to have them scrutinised by others; we are more than willing for others to assess the respective levels of support for particular proposals."

39. In advance of the Executive's meeting scheduled for 25^th July, Ms Schroeder issued an officers' report dated 16^th July 2007 entitled "Building Schools for the Future – Indicative Strategy for Change Part 1" ("the officers' July report"). The officers' July report described how the BSF programme applied to Camden. It noted that a priority was to build a new secondary school. In section 8, the report dealt with the route for establishing a new school. It identified the following two main options and:

i) explained that an LEA could invite proposals for a new school (referred to as a "competition" or apply to the Secretary of State for consent to publish proposals without a competition (the first option); but that

ii) if an LEA were working with a sponsor to establish a new Academy, there would not need to be a competition. This was referred to as the "preferred sponsor" route (the second option).

40. The advantages and disadvantages of both options were set out in considerable detail in the officers' July report and, at paragraph 8.9.3, the officers' summary and conclusions, so far as material, were stated as follows:

" 8.9.3 Summary and Conclusions

There are two options that Members are being asked to consider in deciding on the character of the new school – the preferred sponsor route with UCL and the competition route. As the issues set out above have shown, this is a difficult decision with many factors needing to be considered. However, weighing up the advantages and disadvantages of the two options, officers consider that the opportunities presented by the UCL offer are significant and would provide lasting benefit to the education of pupils in the borough.

UCL is one of the top performing universities in the country and is making a very special offer which it is only making to Camden. It wants to develop an academy that will secure high performance and raise aspirations for all pupils at all levels of ability. UCL has both the commitment and vision to use its considerable educational expertise to benefit the pupils of the new school. It also wants to continue to develop its existing work with the borough's other schools to contribute to the raising of standards for all students in Camden.

It has expressed its wish to work within the educational policies of the Council. In particular, it is committed to using the Council's admissions policies and procedures and other policies relating to the admission of pupils with special educational needs and those that are hard to place. It has also expressed its wish for the new school to work alongside the other schools in the borough and for it to work in support of the family of Camden schools. This is particularly important in the development of the 14-19 curriculum and UCL has indicated that it wishes to work in collaboration with the borough and the other schools to develop joint initiatives in this important area.

UCL, the Council and the DCSF have, for some time, been discussing the arrangements for a UCL sponsored academy. Over this period, the university has demonstrated its continued commitment to working with the borough to develop a shared vision for the new school.

Its proposal for an academy sits firmly within statutory guidance in that the normal route for the development of academies is through the preferred sponsor route. It is also in line with the recent announcement by the Secretary of State for Children, Schools and Families that universities are to be at the forefront of the next wave of academy sponsors. As part of this announcement, the Secretary of State set out his proposal to exempt universities from the requirement for sponsors to contribute sponsorship money to the academy programme.

The other advantages to the Council of choosing the UCL preferred sponsor route relate to certainty, control over the process and minimising the risks of delay to the programme. Under the competition route with a community school bid, the Schools Adjudicator rather than the Council would select the bidder to develop the new school. This would create considerable uncertainty in the planning for BSF because a major part of the decision making for the programme would be outside the Council's control and there would be a significant risk that the Council's bid for a community school would not win. The outcome of the competition could be a sponsor that the Council does not approve of or that would not want to work as part of the family of schools in the way that UCL has indicated that it does. Finally, the entire competition process would take up to a year to complete. This is a long time to wait to know the identity of the sponsor, particularly in developing the education vision and the estates strategy. There is also a risk that this could delay the Council's BSF programme.

…"

41. However, it was realised that more work was required in order to develop UCL's offer and to obtain specific details of its proposal. The Council also wished to obtain the views of the public as to what UCL was offering. Accordingly, the officers sought an "indicative" decision and recommended that the Council should approve UCL's offer as a "preferred option" on which there could be a third phase of BSF consultation: see paragraph 31 of Ms Tolley's witness statement.
42. In my view, it is perfectly clear from the evidence that the councillors who attended the Executive's meeting on 25^th July 2007 ("the 25^th July meeting") were very familiar with the issues that were to be considered. Mr Lewis submitted that it was also clear from all the evidence that the councillors attended the 25^th July meeting with open minds and that the meeting was a long and difficult one at which the issues were thoroughly debated. In support of that submission, Mr Lewis referred, in particular, to the relevant paragraphs in the witness statements of Councillors Moffitt, Bryant, Mennear and Marshall as well as to the transcript of the 25^th July meeting itself (see paragraph 28 of Mr Lewis' written skeleton argument for the relevant references). I agree with that submission. As it seems to me, when considered in the context of all the evidence (both the preceding and subsequent history of the matter and, in particular, the officers' July and November reports and the transcripts of the 25^th July and 21^st November meetings – as to the November references, see below), there is no reason to doubt the evidence of the councillors with regard to this aspect of the matter and I reject the submissions to the contrary effect made by Mr Wolfe on behalf of the Claimant. I will expand on this briefly expressed opinion later in this judgment when I come to consider the grounds of challenge. However, for the purposes of this judgment, it is sufficient to refer to paragraphs 26 and 27 of Councillor Bryant's witness statement, as follows:

"26. I was also in attendance at the Executive Meeting on 25^th July 2007 … As I have indicated, I was excited by the UCL vision and comprehensive in-take and at the meeting I spoke in favour of adopting UCL's proposal as the preferred option … However, it was a difficult decision, and this is reflected in what was said by all members of the Executive at the meeting, and by the time taken for the meeting, which was extended. There were a number of deputations, all of which provoked debate. At the end of the meeting the Executive approved the recommendations made in the officers' report …

27. I believe that our decision in July 2007 was made in good faith and having considered carefully all relevant, and no irrelevant, matters. I personally was guided primarily by my desire to see a good, fully inclusive new secondary school in the borough within as short a space of time as was reasonable. I was not "prejudiced" against the Church, nor motivated by political considerations beyond the desire I have already indicated above, to fulfil our manifesto commitment in the best way that we could provided that was in the best interests of the borough."

43. So it was that, at the end of the debate at the 25^th July meeting, the decision made by the Council's Executive was:

"To give an indicative approval to option (a) the proposal from University College London (UCL) for an academy for the new secondary school and subject to further discussion with UCL and with interested parties (set out in section 7 of the report)."

44. On 3^rd August 2007, the Executive's indicative decision of 25^th July was called in for consideration by the CSF Scrutiny Committee ("the Scrutiny Committee"). Although the Council could take no action on the 25^th July decision until it had been confirmed by the Scrutiny Committee, UCL progressed its own plans. UCL launched its own public consultation at the end of August/beginning of September 2007, publishing material on its own website, briefing the Press and, on 4^th September, holding the first of a number of public meetings and events: see paragraph 335 of Ms Tolley's witness statement and paragraphs 25 to 28 of Professor Worton's witness statement. In the event, the Scrutiny Committee met on 11^th September 2007, considered the Executive's 25^th July decision carefully and decided to confirm it.
45. The Council then carried out a third phase of BSF consultation during which the public were invited to give their comments on the UCL proposal (see B4, pages 2234 to 2245). This was followed by another meeting of the Council's Executive held on 21^st November 2007 and for which Ms Schroeder issued a further report dated 8^th November 2007 ("the officers' November report").
46. The officers' November report considered the entire matter again in great detail (e.g. the route for the selection of the type of school for the new secondary school is dealt with in section 9 of the report: see B4 pages 2330 to 2332). The details of the developed UCL proposal, as provided by UCL, were included as an Appendix to the report. The report also summarised (inter alia) the responses from the public consultation on the indicative proposals made in July (see B4 pages 2338 to 2349) and proposed that the Academy preferred sponsor route for the establishment of the new secondary school with UCL as the preferred sponsor be approved. The officers went on to recommend (inter alia): (i) that the Executive should note and take into account the responses to the consultation on the indicative proposals, when considering whether to approve the officers' substantive recommendation and (ii) that the Executive should approve the Academy preferred sponsor route for the establishment of the new secondary school with UCL as the preferred sponsor.
47. Again, I accept that the evidence shows that the councillors carefully considered the officers' November report, the consultation responses and the representations made by the various deputations to the meeting (see, in particular, the transcripts of the November meeting at B4 pages 2376 to 2400 and 2400A to 2400Z). For the reasons already given, I am satisfied that the councillors approached their decision-making at that meeting with open minds, albeit in circumstances where most, if not all, had already formed a provisional view or predisposition with regard to the matter in hand. In the event, the Council's Executive confirmed the indicative decision taken on 25^th July and approved the Academy preferred sponsor route for the proposed new school with UCL as the preferred sponsor: see B4 page 2405, Resolution (vii) ("the November 2007 decision"). In my view, there is no reason not to accept the following account of the November meeting given by Councillor Bryant in paragraph 34 of his witness statement:

"34. Naturally, I was also present at the meeting of the Executive on 21^st November 2007 at which the Council took the decision that is challenged in these proceedings. … Generally, although we had consulted on UCL as our preferred option, I would say that the outcome of this meeting was by no means a foregone conclusion. Debate among Councillors was heated, and matters were in particular complicated by issues as to what should happen to Frank Barnes School for the Deaf, which currently occupies part of the Adelaide Road site that the Council intends to permit UCL to use for its Academy. We carefully considered the contents of the Report, and the various deputations. At the end we decided unanimously to confirm our support for the UCL proposal."

48. Following the Council's November 2007 decision, UCL proceeded to develop a formal "Expression of Interest" submission in which it proposed a new academy for Camden sponsored by UCL. Having passed through a number of drafts, the finalised document dated 30^th January 2008 was then submitted by UCL to the Secretary of State. As I have already indicated (see paragraph 4 above), the Secretary of State duly approved UCL's Expression of Interest on 29^th February 2008.
49. The Grounds of Challenge in JR1. In JR1 the Claimant has put forward six grounds of challenge to the Council's November 2007 decision (Ground 3, which is based on legitimate expectations in respect of admissions criteria, is no longer pursued) and seeks permission to add a seventh ground. The seven grounds can be conveniently characterised as follows: (1) Flawed consultation; (2) Appearance of bias and predetermination; (4) Improper purpose; (4A) Failure to give effect to guidance; (5) Decision taken for party political gain; (6) Prejudice against the involvement of the Church of England; and (7) General public law principles. I therefore now turn to consider the parties' submissions and state my conclusions in respect of each of those grounds.
50. Ground 1, JR1 – Flawed Consultation. Mr Wolfe submitted that if consultation is undertaken (whether or not it was required), it must occur at a formative stage of the proposal before a decision has been made, be undertaken on the basis of candid disclosure of the reasons for what is contemplated and its results must be conscientiously taken into account by the decision-maker: see R ~v~ North & East Devon Health Authority ex parte Pow (1998) 1 CCLR 280 and R (Lloyd) ~v~ Dagenham London Borough Council (2001) EWCA Civ 533.
51. Mr Wolfe pointed out that, in this case, the Council engaged in a process of public consultation concerning the proposed new school during the periods May to July 2007 and September to November 2007. He contended that, during the May to July consultation, there was no mention of the UCL academy proposal and the preferred sponsor route, despite the meetings and discussions about such a proposal that had already taken place. He therefore submitted that the Council did not reveal (inter alia) the advanced stage of its extensive discussions with UCL nor the prejudices of councillors against church schools and their political bias. So far as concerns the September to November consultation, which purported to be concerned with the options for the proposed new school, he submitted that this was in practice solely concerned with details of the UCL proposal and not a conscientious and open-minded consultation that gave any real consideration to other options, let alone the option of a competition. It was Mr Wolfe's submission that by the time the Council undertook its public consultation on the UCL academy, the decision to proceed with such an academy had, in effect, already been made. It was Mr Wolfe's submission that, for those reasons, the consultation process undertaken by the Council in the period leading up to its November 2007 decision was thus flawed and the resulting decision unlawful.
52. As I have already stated (see paragraphs 14 to 16 above), it is clear from the terms of the relevant statutory provisions (see paragraphs 8 to 10 above) that the section 482 procedure is an entirely separate route for establishing a new school (i.e. an academy) from the section 7 procedure. I accept Mr Beloff's submission that it is clear from the relevant statutory provisions that Parliament has expressed no preference for either route. It is important to remember that there is no obligation on the part of the LEA to carry out any form of public consultation if it decides that the section 482 procedure is the appropriate route for the establishment of a new school in its area (although, as already stated, the Secretary of State is obliged to consult the LEA). As Mr Beloff observed, if a public authority has a choice of two routes and considers one route to be more advantageous than the other, it is entitled to choose that route and is perfectly justified in so doing: see the current edition of Wade on Administrative Law at pages 407 to 408.
53. However, as Mr Lewis acknowledged, in this case the Council did carry out a number of public consultations in deciding how to exercise its powers with regard to establishing a new school. Between November 2006 and February 2007 it consulted on the need for new places and what sort of schools parents would like their children to attend. That process of consultation immediately followed publication of the Council's RDS in October 2006. The existence of active and important discussions between the Council and UCL was clearly stated and properly summarised in the RDS (see paragraph 20 above). Between May and July 2007, the Council consulted on what kind of new secondary school should be established in Camden and, between September and November 2007, it consulted on the UCL proposal in advance of the November 2007 meeting at which it made the decision under challenge.
54. As it seems to me, there is no substance in Mr Wolfe's submission that this overall exercise in public consultation was flawed (thus rendering the November 2007 decision unlawful) because it transgressed, in the manner suggested, the relevant common law requirements relating to the process of consultation. As Mr Lewis pointed out, the May to July 2007 consultation was not about the UCL proposals, nor was there a formal proposal from UCL until the very end of the consultation period. The UCL proposal did not exist at the beginning of the consultation period, although the fact of important relevant discussions between UCL and the Council was public knowledge as the result of the publication of the RDS. I agree with Mr Lewis that the Council cannot be criticised for not consulting about such a proposal (a) when there was no obligation to do so in the first place, (b) when it was not seeking to carry out any consultation about a proposal from UCL; (c) when the UCL proposal did not exist when the consultation in question began and (d) where the fact of active relevant discussions with UCL was public knowledge in any event.
55. After the Council took its indicative decision in July 2007, it did consult specifically on UCL's proposal to establish an Academy. I accept Mr Lewis' submission that there is nothing unlawful in consulting on a preferred option: see Nichol and others ~v~ Gateshead Metropolitan Borough Council (1988) 87 LGR 435. Those who responded to that consultation could and did take up the opportunity to express their views on all aspects of the proposal. As Mr Lewis pointed out, it was in the light of that and other considerations that the Council took its view as to whether and how its Executive should exercise the powers it had. I agree with his submission that there is nothing unlawful it that – the Council was entitled to consult on a preferred option as it did.
56. For those reasons, I am satisfied that there is no substance in this first ground of challenge. I agree with Mr Lewis that, in reality, the substance of the complaint in this ground is not about a failure to consult in a lawful manner but that the outcome was predetermined or motivated by irrelevant considerations – matters which are the subject of separate grounds of challenge and dealt with below.
57. Ground 2, JR1 – Appearance of Bias and Predetermination. Mr Wolfe submitted that a decision is vitiated and cannot stand if a fair-minded and informed observer, having considered all the facts, would conclude that there is a real possibility of bias or of predetermination on the part of the decision-maker, including on the part of one or more of those councillors who form the committee that takes the decision in question: see, for example, Bovis Homes Ltd ~v~ New Forest DC and others (2002) EWHC 483 (Admin).
58. It was Mr Wolfe's submission that, in the present case, the contemporaneous documents show a real possibility of bias and/or predetermination on the part of the Council and that this was clearly evidenced by the following matters, in particular:

i) the highly partisan approach taken by the Council in its dealings with UCL (including the enthusiastic way in which each described its relationship with the other), when compared with the Council's approach to other, would-be promoters of schools such as LDBS and ARK;

ii) the misleading way in which the Council's dealings with UCL were described to LDBS by councillors;

iii) the various comments made by councillors during the process about the UCL proposal which indicated a clear bias in its favour;

iv) the repeated erroneous characterisation by councillors and the Council's officers of, for example, the options to be considered and the stance of the LDBS;

v) the objection in principle by some councillors to church involvement; and

vi) the premature narrowing of options so that only the "choice" between a UCL academy on the one hand and a competition (in which the Council would promote a community school, with the result that the competition would have to be decided by the Schools Adjudicator) on the other was considered – thus precluding, for example, a competition without a community school option and/or one that included proposals for an academy by one or more sponsors other than UCL.

59. Mr Wolfe submitted that the court should not attach any weight to the evidence of councillors and officers rejecting the allegation of bias and/or predetermination. In support of that submission Mr Wolfe referred to and relied on Porter ~v~ Magill [2002] 2 AC 357, a case in which allegations of bias were made against the District Auditor, where Schiemann LJ said this concerning the District Auditor's evidence rejecting that allegation (p.398):

"I would not regard such protestations as being of any great assistance to a court dealing with allegations of apparent bias."

60. It was therefore Mr Wolfe's submission that a fair minded and informed observer in possession of all the facts would conclude that there was indeed a real possibility of bias and/or predetermination when the Council came to its decision to adopt UCL as the preferred sponsor of an academy, rather than to hold a competition. Accordingly, Mr Wolfe submitted that the decision of November 2007 was unlawful.
61. For his part, Mr Lewis pointed out that the Court of Appeal has very recently given detailed consideration to the question of the proper approach to be taken by the courts in relation to allegations of bias/predetermination in the making of decisions of this sort in R (Lewis) ~v~ Redcar and Cleveland Borough Council [2008] 2 P & CR 21 ("Redcar and Cleveland") – a case in which there was an allegation of bias or apparent bias on the part of the local authority in making a planning decision.
62. Mr Lewis submitted that in Redcar and Cleveland the Court of Appeal had made it clear that where the court is faced, as in the present case, with the determination of a non-judicial body the "test of apparent bias relating to predetermination is an extremely difficult test to satisfy" (see the judgment of Longmore LJ at paragraph 109). Mr Lewis emphasised that the Court of Appeal had gone on to observe that the Porter ~v~ Magill test of apparent bias must be applied with caution in such situations and full regard must be had to political reality and the constitutional position of councillors: see the judgments of Pill LJ at paragraphs 61 to 71, Rix LJ at paragraphs 93 to 100 and Longmore LJ at paragraphs 106 to 109, from which it suffices to quote the following:

"64. The members of the Committee had long experience of the Coatham Common project, its merits, demerits and problems. They had received a detailed report from Council Officers and they received advice as to the timing of the meeting. They attended the meeting and heard representations. I am far from persuaded that the imminence of the local elections at the time of decision, on the evidence, demonstrated that those who voted in favour of this planning application had minds closed to the planning merits of the proposal …

…

69. Central to such a consideration, however, must be a recognition that Councillors are not in a judicial or quasi-judicial position but are elected to provide and pursue policies. Members of a Planning Committee would be entitled, and indeed expected, to have and to have expressed views on planning issues. The approach of Woolf J in Amber Valley to the position of Councillors in my judgment remains appropriate. …

…

71. It is for the court to assess whether Committee members did make the decision with closed minds or that the circumstances give rise to such a real risk of closed minds that the decision ought not in the public interest be upheld. The importance of appearances is, in my judgment, generally more limited in this context than in a judicial context. The appearance created by a member of a judicial tribunal also appearing as a NPT advocate before that tribunal (Lawal ~v~ Northern Spirit Ltd …) may make his judicial decisions unacceptable but the appearance created by a Councillor voting for a planning project he has long supported is, on analysis, to be viewed in a very different way." [per Pill LJ]

...

"106. It is clear from the authorities that the fact that members of a local planning authority are "predisposed" towards a particular outcome is not objectionable, see e.g. R ~v~ Amber Valley Council [1985] 1 WLR 298. That is because it would not be at all surprising that members of a planning authority in controversial and long-running cases will have a preliminary view as to a desirable outcome. That will be all the more so if there is an element of political controversy about any particular application, since planning authority members elected on a particular ticket would, other things being equal, be naturally predisposed to follow the party line. None of this is remotely objectionable.

107. What is objectionable, however, is "predetermination" in the sense I have already stated namely that a relevant decision-maker made up his or her mind finally at too early a stage. That is not to say that some arguments cannot be regarded by any individual member of the planning authority as closed before (perhaps well before) the day of decision, provided that such arguments have been properly considered. But it is important that the minds of members be open to any new argument at all times up to the moment of decision." [per Longmore LJ]

63. I agree with Mr Lewis' submission that it is clear from the evidence that the Camden councillors had long been familiar with the issues relating to the proposed new school. They had discussed those issues within their party groups and between themselves at public meetings and in private. I accept the submission that there is no evidence that councillors had closed their minds in relation to the indicative decision that they took on 25^th July 2007 or the approval of that decision 21^st November 2007 or (to use the words of Longmore LJ) that they did not remain open to new arguments and new developments as they arose.
64. On the contrary, as Mr Lewis pointed out, the officers' July report (which was carefully considered by all councillors) fully and accurately set out all the relevant considerations relating to the options of holding a competition or not holding a competition and of preferring the option of UCL seeking to enter into a funding agreement with the Secretary of State for UCL to establish an academy. At the 25^th July meeting councillors heard representations and received written responses, including those from CASE and from the LDBS, contending that there should be a competition. The transcript shows that there was a full and detailed discussion about the options. The indicative approval for the preferred sponsor route was followed by further public consultation and a further officers' report and meeting at which there was a full and detailed debate, as is clearly demonstrated by the transcript of the meeting. I agree with Mr Lewis' submission that there is simply no arguable basis for contending that there was either actual or apparent bias and/or predetermination in the councillors' decision-making.
65. I also agree with Mr Lewis that the factors relied on by Mr Wolfe as showing a real possibility of bias and/or predetermination (see paragraph 54 above) simply do not demonstrate any such thing, whether considered individually or in aggregate. Furthermore, I accept that the various alleged factors are not accurately portrayed, for the reasons given in the following paragraphs.
66. (i) The alleged highly partisan approach: I agree with Mr Lewis that there is no proper basis for concluding that the Council's approach was "highly partisan" in its dealings with UCL. As the evidence shows, it was UCL that approached the Council and the Council listened to and explored UCL's approach, as both were fully entitled. In addition, the Council arranged and held meetings with (inter alia) the LDBS, asked for and was provided with documents setting out LDBS's interest in time for the 25^th July meeting and duly considered those documents at that meeting. Furthermore, the Council also considered deputations and written representations from others who wished to make them, including CASE and the Holborn and St Pancras Secondary School Campaign. In my view, there is simply no evidence that justifies the characterisation of the Council's approach as "partisan" let alone "highly partisan".
67. (ii) The alleged misleading description of the Council's dealings with UCL: As it seems to me, far from describing its dealings with UCL in a misleading fashion, the Council took appropriate steps at suitable moments to ensure that an accurate account of the current position with regard to those dealings was given. Thus, the discussions with UCL and the IoE were fairly and accurately summarised in the Council's RDS, which was a publicly available document: see also the evidence of Councillors Bryant, Moffitt and Mennear at paragraphs 17, 19 and 14 respectively of their witness statements for what was said to the LDBS. Again I agree with Mr Lewis that there is simply no evidential justification for this allegation.
68. (iii) The alleged biased comments by councillors: I agree with Mr Lewis that none of the comments made by councillors during the overall process indicated improper bias as opposed to legitimate pre-disposition or the lawful adoption of a party policy. Again, as it seems to me, there is no evidence that supports this allegation.
69. (iv) The alleged erroneous characterisation of options and the LDBS's stance: Once more, as it seems to me, there is simply no evidential basis for this allegation. The options were properly identified in (inter alia) the RDS, the public consultations and the officers' July and November reports. The LDBS set out its position in its written Expression of Interest that it provided in advance of the 25^th July meeting and which was duly considered by councillors at that meeting.
70. (v) The alleged objection in principle to church involvement: As Mr Lewis observed, there was no unlawful objection in principle by Councillor Bryant and others to church involvement. On the contrary, there was a reasoned preference, on the part of some councillors (including Councillor Bryant), for an inclusive non-faith based option if one was available and it was the best option for the borough. I accept Mr Lewis' submission that this is a legitimate educational preference, not an irrelevant factor, and having such a view or opinion does not amount to bias. As is clear from Redcar and Cleveland (supra), councillors are entitled to have views and predispositions on questions of policy.
71. (vi) The alleged premature narrowing of the options: I accept Mr Lewis' submission that there was no premature narrowing of the options. At the time the officers wrote their report for the July 2007 meeting, there were "in practice, … two main options" (paragraph 8.5), i.e. a competition for a new school or a preferred sponsor with UCL as the lead sponsor. At the time the officers' July report was written, only UCL had produced a vision statement for an academy, although it was anticipated that a significant number of other sponsors would bid in a competition. In fact, the LDBS subsequently set out its vision for a CofE school (whether an academy or voluntary-aided) and urged the Council to arrange a competition. As I have already stated, the LDBS' submission was then properly considered by councillors at the 25^th July meeting.
72. In short, I agree with Mr Lewis that there was no appearance of bias or predetermination in the sense described in Redcar and Cleveland in the way the Council considered matters at the 25^th July and 21^st November 2007 meetings. In my view, the evidence shows that, throughout the entire process, the councillors conscientiously considered the best way forward for education in Camden. They came to the conclusion that the option of a competition was not the best way forward. They considered that the UCL offer would provide significant educational benefits. There was a conscientious consideration of what was best for Camden. For the reasons set out in the officers' reports, the Council decided that it preferred the option of supporting UCL's offer to seek to enter into a funding agreement with the Secretary of State under which UCL would provide an academy which would meet the need for another secondary school in Camden. I am entirely satisfied that there was no actual or apparent bias or predetermination in the Council's decision-making, nor would a fair-minded and informed observer conclude that there was a real possibility of any such bias/predetermination. For those reasons, I am satisfied that there is no substance in this ground of challenge.
73. Ground 4, JR1 – Improper Purpose. Mr Wolfe made the uncontroversial point that section 7 of the 2006 Act gives an LEA the power to hold an open competition in order to bring forward a new school in its area and that, if the LEA is contemplating setting up a maintained school, it must hold such a competition.
74. As I have already stated (see paragraph 11 above) Mr Wolfe submitted that the power to hold such a competition or not must be exercised consistently with the purpose for which it was given (i.e. to promote the policy and object of the 2006 Act): see Padfield (supra). As indicated above (see paragraph 12), it was Mr Wolfe's submission that Parliament has given LEAs the power to hold a section 7 competition in order to promote openness and fairness in the process of bringing forward new schools and to provide a framework within which different options would be considered against each other. Mr Wolfe contended that the section 7 procedure also incorporates specific safeguards to ensure that an LEA cannot simply decide to put in place a school over which it has significant control (unless the Secretary of State exempts the LEA from holding a competition under section 10 of the 2006 Act).
75. Mr Wolfe submitted that for the Council to exercise its power under section 7, as it has purported to do in this case, with the specific aim of maximising its control over both the process (by avoiding the involvement of the Schools Adjudicator) and the eventual result (by excluding promoters such as ARK and the LDBS, because their schools might be operated entirely independently of the Council) rather than UCL (who promised to work in partnership with the Council), was to exercise that power for an improper purpose.
76. Mr Wolfe contended that it was inconceivable that Parliament had conferred the discretion on LEAs to embark on the section 7 competitive process, under which alternative options would be openly and fairly considered when there was controversy, only for that discretion to be used precisely to avoid such open and fair consideration and to subvert the comparative process in order to secure the LEA's preferred option (being the option which the LEA saw as being the one over which it would have most control) "by the back door".
77. Mr Wolfe submitted that, in the present case, the Council has unashamedly sought to maximise its influence over the proposed school and the process to secure it and, rather than adopt the route that Parliament has put in place to deal with such a situation, the Council has done precisely the opposite in simply deciding to promote the option which gives it maximum control over both the process and the school. Mr Wolfe suggested that, in this way, the Council has used its decision to embark upon the preferred sponsor route so as to thwart the purpose of the 2006 Act competition framework, which clearly intended that the provision of new schools (where significant LEA influence was contemplated) ought to be determined by open competition and that, thus, LEAs should compete with other providers in a transparent fashion in order to ensure diversity and choice in education provision. Accordingly, Mr Wolfe submitted that the Council has exercised its discretion under section 7 of the 2006 Act inconsistently with the policy and objects for which it was given and, thus, has acted unlawfully.
78. For his part, Mr Lewis submitted that there is no basis for concluding that the Council has thwarted the purpose of the 2006 Act by supporting the separate and available option of UCL seeking to enter a funding agreement with the Secretary of State in order to establish an academy, rather than choosing the alternative option of holding a competition under the section 7 procedure. I agree with that submission, as foreshadowed and explained in paragraphs 12 to 16 above.
79. As I have already indicated, under the relevant statutory provisions there are two separate ways by which a new school can be established. One way is for the sponsor of an academy to enter into a funding agreement with the Secretary of State under section 482 of the 1996 Act. The second way is by an LEA exercising its discretion under section 7 of the 2006 Act to invite proposals for the establishment of a new school. Furthermore, if an LEA wishes to establish a maintained school it must invite proposals under the section 7 procedure (unless exempted under section 10) so that the proposal for a maintained school will be compared with any other proposal that emerges.
80. Mr Lewis submitted (correctly, in my view) that there is no presumption or expectation in the legislation that, where a sponsor proposes the establishment of an academy and that proposal is supported by the LEA, the academy in question cannot be established unless the LEA exercises its power to invite proposals for schools (i.e. initiate a competition) under section 7 of the 2006 Act. It was his submission that the section 482 route is entirely independent of the section 7 route and that an LEA is perfectly entitled to choose not to exercise its discretion to hold a competition under section 7 but, rather, to lend its support to a proposal for the establishment of an academy under the section 482. I entirely agree with that submission and reject Mr Wolfe's submissions to the contrary effect.
81. I therefore agree with Mr Lewis that it cannot be said that the Council's decision not to hold a section 7 competition – i.e. by choosing not to exercise its power to invite proposals under the section 7 procedure – was unlawful. Furthermore, as it seems to me, Mr Wolfe has not established that the 2006 Act policy and objects are in the terms for which he argued (see paragraphs 12 to 15 above).
82. In my view, as Mr Lewis observed, the considerations relevant to the Council's decision as to which route to choose for the establishment of the proposed new school were fully set out in the officers' July report and are considerations that are both rational and lawful. As it seems to me, given that the two separate routes for the establishment of a new school are provided for by statute, the Council was fully entitled to consider the differences between the two routes and to choose the one that it considered best for Camden. The Council considered that to hold a competition would create uncertainty and delay and would leave the Council with less control over the process and it therefore chose not to go down that route. By contrast, it had an offer of an academy sponsored by UCL, which would provide significant educational benefits, from one of the world's leading universities, which the Council decided it could support instead and it therefore chose to do so. In acting as it did, the Council made an entirely rational choice between the two options. As Mr Lewis submitted (a submission which, as it seems to me, provides the short answer to this particular ground of challenge) the Council's decision to support UCL's offer to establish an academy under the separate section 482 procedure did not involve any unlawful exercise of its discretion under section 7 of the 2006 Act, nor does it run counter to any statutory purpose.
83. For those reasons, I have come to the firm conclusion that there is nothing in this ground of challenge and that, in effect, it is unarguable.
84. Ground 4A, JR1 – Failure to give effect to Guidance. Mr Wolfe submitted that it is well established that public bodies should have regard to relevant government guidance and only depart from its terms for reasons that are clear and cogent: see Munjaz ~v~ Mersey Care NHS Trust (2006) 2 AC 148.
85. Mr Wolfe pointed out that the relevant ministerial guidance current at the time of the Council's July and November 2007 decisions was the "BSF and Academy Guidance on School Organisation from 25^th May 2007" ("the BSF Guidance"). Mr Wolfe emphasised that the title of the BSF Guidance and its opening words made it clear that it is to be applied (inter alia) to the establishment of Academies from 25^th May 2007 onwards: see paragraph 1 of the Guidance, the material terms of which are as follows:

"1. This is a brief guide outlining how school organisation legislation including the requirement for school competitions, impacts on the delivery of BSF projects and Academies. Local authorities must ensure that school organisation processes and timescales are planned into the BSF process. It is important that authorities consult the following guides when considering changes to schools …

Establishing a New Maintained Mainstream School

Closing a Maintained Mainstream School – A Guide for Local Authorities and Governing Bodies

Expanding a Maintained Mainstream School or Adding a Sixth Form

Making Changes to a Maintained Mainstream School (other than expansion)

2. The Education and Inspections Act 2006 requires local authorities to hold a competition for new secondary, primary and special schools (including brand new schools or replacement schools). This is an extension of the arrangements under the Education Act 2005, under which the competition requirements applied to new secondary schools only. This requirement does not apply to schools being built on their current site or transferring to a new one since there will be no proposals for a new school in these circumstances.

3. When the LA decide to run a school competition they must first consult on the outline specification for the school. During the consultation the LA should explain the competition process and make it clear that the Government wishes to encourage a range of providers. The LA must also inform the Department that they have commenced consultation by emailing [the Department]. The Department will appoint contractors who will raise awareness of the competition and the opportunity to submit proposals for a new school.

4. Exceptionally, the Secretary of State may consent to the publication of proposals without a competition. Where LAs and other proposers wish to establish a new school outside of a competition, they must apply to the Secretary of State for permission to publish proposals for a new school, as provided for in section 10 of the Education and Inspections Act 2006 … However, local authorities should plan on the basis that the competitions requirements will apply to all new schools.

…

Impact of changes on Academies

16. Competitions will not be required to establish an Academy where there is a consensus locally that this is the best way forward. In these circumstances the LA must work with the Department and it is for the Secretary of State alone to decide whether to enter into a funding agreement with the Academy.

…"

86. Mr Wolfe emphasised that it was not the Claimant's case that a section 7 competition is always required when a new academy is proposed. He stressed that it was accepted on behalf of the Claimant that paragraph 16 of the 2007 BSF Guidance enabled an LEA to exercise its power lawfully so as not to hold a competition if there was a consensus locally that there should be an academy. Mr Wolfe submitted that, in those circumstances, it would be lawful for the LEA simply to propose to the Secretary of State that the option of establishing an academy should be adopted. However, Mr Wolfe cautioned that this would not change the obligation falling on the Secretary of State to select the particular academy sponsor by a proper process.
87. It was Mr Wolfe's submission that, in the present case, there was clearly no consensus locally that there should be an academy. On the contrary, the evidence showed that such a proposal was very controversial. Mr Wolfe submitted that, in those circumstances, paragraph 16 of the BSF Guidance was plainly not satisfied and that, therefore, a competition was required to be held for the establishment of the proposed new school in accordance with the general principles expressed in paragraph 4 of the BSF Guidance. It was Mr Wolfe's contention that, in the event, the Council had gone ahead in the manner already described and without giving any clear or cogent reasons to explain why it was not applying the BSF Guidance (in fact, it appeared that it was totally ignorant of that particular Guidance). Stated shortly, it was Mr Wolfe's submission that the effect of the BSF Guidance is to require an LEA to exercise its discretion to hold a competition pursuant to section 7 of the 2006 Act whenever there is not a "consensus locally" for an academy, i.e. whenever there was some controversy within the local population of the area in question about whether to have an Academy. In the present case there was no such consensus and the Council should therefore have held a section 7 competition.
88. Mr Wolfe accordingly submitted that the Council acted unlawfully when making its July and November 20007 decisions because it had clearly failed to have proper regard and to give effect to the BSF Guidance in deciding not to hold a section 7 competition. He contended that it is apparent from the evidence that the Council was wholly unaware of the BSF Guidance and, to the extent the Council did have regard to other ministerial guidance, it was guidance that was no longer relevant so far as concerns academies. In that regard, Mr Wolfe referred to the evidence of Mr Lewin, who said this (see paragraph 21 of his witness statement):

"Guidance

21. Our understanding of the legal position with regard to these options was informed principally by consideration of the legislation, but also by the Guidance "Establishing a New Maintained Mainstream School", which (at paragraph 14) makes it clear that it is not necessary for there to be a competition where an Academy is to be established … We did not specifically look at the BSF and Academy Guidance on School Organisation of 25^th May 2007 … when considering whether or not to hold a competition or whether to allow UCL to go ahead with its proposal. Nor did the DfES or PfS draw our attention to the Guidance. As I have said, we were principally guided by the legislation and other Guidance to which I have referred. Our understanding was that Academies were independent schools and that it was open to the Secretary of State to enter into an agreement with a sponsor for the establishment of an Academy without the local authority being required to hold a competition under the Education and Inspections Act 2006. I do not understand that the Secretary of State considers his BSF and Academy Guidance of May 2007 was intended to say anything different and, indeed, we were in regular contact with the DfES during 2007 and they did not suggest that it was intended to do so, or that we needed to hold a competition before the Secretary of State could proceed with an Academy with UCL in the present case, if that was what the local authority considered appropriate. In any event, I understand that the Secretary of State has now amended the BSF and Academy Guidance so as to make it absolutely clear that a competition is not required where a sponsor is to establish an Academy."

89. At all material times, paragraph 14 of the ministerial guidance "Establishing a New Mainstream Maintained School" ("the NMMS Guidance"), to which Mr Lewin made reference, contained the following passage (see paragraph 85(a) and footnote 7 of Mr Beloff's written skeleton argument):

"Where a Local Authority is working with sponsors to establish a new Academy in their area, they will not have to run a competition or seek the Secretary of State's consent to publish proposals as above."

90. Mr Lewis stressed that the evidence shows that, in its relevant decision-making, the Council had been principally concerned with the terms of the legislation. He pointed out that it was the officers' view that, in principle, the legislation provided the Council with two separate options and that the Council could lawfully choose either option; i.e. either (i) to hold a competition under section 7 of the 2006 Act or (ii) to support a preferred sponsor's proposal to establish an Academy pursuant to section 482 of the 1996 Act. As I have already indicated, I am satisfied that the officers' understanding of the law is correct and, as Mr Lewis submitted, is one that is consistent with the terms of paragraph 14 of the NMMS Guidance as they were at the relevant time and the terms of the guidance to which I refer in the next paragraph.
91. Furthermore, as explained in the Secretary of State's letter of 4^th April 2008, the Secretary of State had also issued Guidance entitled "Guide for people wishing to set up a new School outside a competition", which contained the following words in the introduction:

"Under the Education and Inspections Act 2006 a local authority must hold a competition:

where it identifies a need for a brand new school

where it wishes to rationalise existing provision by closing two or more schools and replace them with a new school

where it wishes to close a failing school and reopen it as a new school.

The legislation applies to secondary and primary schools

Exceptions

A local authority does not have to hold a competition in the following cases:

where an existing school is to be rebuilt on the same site or set up on a new site

where the local authority wishes to work with a sponsor to set up an Academy

where the school is a 16 – 19 school

Exceptionally, the Secretary of State may give his consent for a local authority, or a proposer, to set up a new school outside of a competition in the light of local circumstances."

92. Mr Lewis also pointed out that the Council has had detailed dealings with the Secretary of State's Department throughout the entire process and that, at no stage, did the Department ever suggest that the preferred sponsor route, as chosen by the Council, involved any failure to comply with any relevant ministerial guidance. Given the terms of the NMMS guidance and the guidance quoted in the previous paragraph, the reason for that is not hard to understand. Quite simply, it is the Secretary of State's evidence that the BSF Guidance (in particular, paragraph 16) was never intended to have and does not have the meaning that the Claimant ascribes to it.
93. As Mr Beloff pointed out, the purpose of the BSF Guidance was not to explain how the Secretary of State intended to exercise his discretion when deciding whether or not to enter into a funding agreement with a sponsor under section 482 of the 1996 Act, nor whether to approve such a sponsor's prior Expression of Interest. It is clear from its terms that the purpose of the BSF Guidance was to give local authorities advice on how they should incorporate the school competition process under section 7 of the 2006 Act within their BSF planning. Thus the BSF Guidance maps the timescales for the various BSF procedures against the section 7 processes. As Mr Beloff observed, the key part of the BSF Guidance is the table on the fourth page. In my view, it is also clear that the Secretary of State intended, by his reference to "consensus locally", to refer to circumstances in which the LEA was happy to have an academy and there was a willing sponsor (as in the present case): see paragraph 19 of Mr Chris Drury's witness statement.
94. As it seems to me, when the original BSF Guidance is read as a whole and considered in the context of the legislative provisions of the 1996 and 2006 Acts, its meaning is indeed that attributed to it by the Secretary of State, rather than that for which the Claimant contends. Furthermore, even if the wording of the BSF Guidance was capable of bearing more than one meaning, the meaning given to it by both the Secretary of State and the Council was plainly not so aberrant as to be classified as irrational: see R ~v~ Ministry of Defence ex parte Walker [2000] 1 WLR 806, per Lord Slynn at 810D and 813A and R ~v~ Derbyshire CC ex parte Woods [1998] Env LR 277 at 290, per Brooke LJ.
95. I also agree with Mr Beloff that the effect of Mr Wolfe's submission is that the statutory discretion to hold a section 7 competition is, in effect, converted into a duty to hold such a competition if a proposed academy is in any way controversial in the general locality of the LEA. In my view, given that two entirely separate statutory options for the establishment of new schools have been provided by Parliament and that Parliament has not expressed any preference for either option (see paragraph 85 above), such an effect would not accord with the intention of Parliament and such cannot have been the Secretary of State's purpose in issuing the BSF Guidance. In this regard, it is worth noting, as Mr Beloff pointed out, that nowhere in paragraph 16 of the BSF Guidance is it stated that a competition must be held if there is no local consensus in favour of a proposed academy in the area of the LEA.
96. In the present case, it is clear that the Council agreed that the academy route was the best way forward and there was a willing sponsor. The decision not to hold a competition therefore accorded with the guidance that the Department wished to give, believes it gave and, in my view, did give. As Mr Lewis observed, it would be odd in the extreme if a decision not to exercise a statutory power were to be quashed because departmental guidance was said to require the exercise of that statutory power, even though the relevant Department did not consider that its guidance was intended to have that effect.
97. I also agree with Mr Lewis' further submission that this is, in any event, non-statutory ministerial guidance and the Council would be entitled to take a different view as to how it should or should not exercise its statutory powers, if it had good reason for doing so. Mr Lewis submitted that, in this case, the Council had good reasons for not holding a competition as set out in the officers' July and November reports and I agree with that submission.
98. Furthermore, even though the Secretary of State did not accept that the BSF Guidance had the meaning ascribed to it by the Claimant, he nevertheless decided in February 2008 to amend it so as to remove the words in paragraph 16 which the Claimant had misunderstood, in order to avoid any further confusion (however subjective) about the meaning of the BSF Guidance in the future. As Mr Lewis observed, it would be absurd to quash a decision not to hold a competition on the grounds that it does not accord with ministerial guidance when it did and where any potential ambiguity in the wording of the guidance in question has been removed.
99. For all those reasons, I am also satisfied that there is no substance in this ground of challenge and by a parity of reasoning, Ground 2 of JR2 (as to which, see below) also fails.
100. Ground 5, JR1 – Decision taken for Party Political Gain. Mr Wolfe submitted that the powers conferred on a local authority must not be exercised to promote the electoral advantage of a political party: see the speech of Lord Bingham in Porter ~v~ Magill (supra) at paragraph 19. Mr Wolfe then referred to the terms of Councillor Bryant's briefing note (see paragraphs 33 and 34 above) and maintained that Councillor Bryant had explicitly identified purely party political motives as part of the reason for pursuing the academy route.
101. It was Mr Wolfe's submission that, on any reading of his briefing note, Councillor Bryant had approached the question of whether to hold a competition by reference to party political considerations, and not simply with a view to securing the support of the electorate for what would be justifiable whatever its party political implications. Mr Wolfe pointed out that Councillor Bryant was a leading member of the Liberal Democrat Group and the Council's Executive Member for Children. Mr Wolfe suggested that Councillor Bryant was plainly providing an influential steer to his colleagues and, as his briefing note makes clear, the party political content of the briefing was not incidental, it was central to his thinking. Mr Wolfe therefore submitted that, in allowing party political considerations to influence the decision not to undertake a section 7 competition, the Council's decision-making unlawfully pursued an improper purpose and/or took immaterial considerations into account.
102. I once more agree with Mr Lewis that, on analysis, there is nothing in this particular ground of challenge. As Mr Lewis observed, the evidence plainly shows that the Council's decision was entirely based on the view that the UCL proposal offered "significant and … lasting benefit to the education of pupils in the borough", that "UCL is one of the top performing universities and is making a very special offer" only to Camden, and that this offer presented "the best chance for Camden not only to increase the number of secondary school places in the borough, but also to increase its diversity for the benefit of the whole community, improve the educational offer, gain the contribution of a world-class university to our local educational provision and work with a like-minded sponsor who has already committed itself to close partnership working within the authority's existing policy framework and with the local family of schools."
103. The preferred sponsor option also offered the Council the advantage of certainty and control over the process and avoided the risk of delay, all of which could have led to uncertainty in the planning for BSF, because a major part of the process would be outside the Council's control and a community school bid might not be successful. As Mr Lewis observed, all these matters are entirely lawful considerations.
104. I also accept Mr Lewis' submission that there is nothing unlawful in Councillor Bryant's briefing note. Read fairly and as a whole, the briefing note sets out Councillor Bryant's views on the various issues as they appeared to him at that stage, considers the UCL option and expresses his opinion (his "personal political take on where we are at") that there would be risks in proceeding with a competition.
105. In my view, Councillor Bryant's briefing note does not form any basis for concluding that either he or any of the other councillors at the meetings of 25^th July and 21^st November 2007 decided not to hold a section 7 competition because they were unlawfully motivated by party political considerations. In fact, as I have already indicated, it is clear that the Council was principally guided by its concern for what was best for the borough educationally. Having regard to all the evidence, I am entirely satisfied that the Council's decision was not taken for reasons of party political advantage. Insofar as Councillor Bryant or any of the other councillors hoped that their decision would demonstrate that they were seeking to fulfil their manifesto commitments of improving education in and securing a new school for Camden, it was not unlawful for them to do so. I agree with Mr Lewis that it is not the law that elected representatives cannot hope that their decisions will not commend themselves to the electorate. In my view, the matters upon which the Claimant relies in this ground of challenge do not go any further than the law permits. As Lord Bingham stated in Porter ~v~ Magill (supra), at paragraph 21:

"Whatever the difficulties of application which may arise in a borderline case, I do not consider the overriding principle to be in doubt. Elected politicians of course wish to act in a manner which will commend them and their party (when, as is now usual, they belong to one) to the electorate. Such an ambition is the lifeblood of democracy and a potent spur to responsible decision-making and administration. Councillors do not act improperly or unlawfully if, exercising public powers for a public purpose for which such powers were conferred, they hope that such exercise will earn the gratitude and support of the electorate and thus strengthen their electoral position. The law would indeed part company with the realities of party politics if it were to hold otherwise. But a public power is not exercised lawfully if it is exercised not for a public purpose for which the power was conferred but in order to promote the electoral advantage of a political party."

106. For the reasons given, I emphatically reject the suggestion that the Council's decision-making in this case was an exercise in promoting the electoral advantage of a political party. Accordingly, for those reasons, I have come to the firm conclusion that there is nothing in this ground of challenge.
107. Ground 6, JR1 – Prejudice against the involvement of the Church of England. It was Mr Wolfe's submission that the evidence showed that the Council's decision was unlawfully motivated by prejudice against possible church involvement in the running of the proposed new school (a predisposition/attitude that was not disclosed in either the publicly available documents or during any meetings on the issue), thus showing unlawful predetermination and an unlawful failure to consult properly on the true reasons behind the decision. Mr Wolfe submitted further that the prejudice against church involvement was manifestly an irrelevant/immaterial consideration and that the Council's decision was thus vitiated by reason of its having taken that immaterial consideration into account in its decision-making.
108. I agree with Mr Lewis that there is no arguable basis for concluding that any of the councillors were motivated by animosity or prejudice against the Church. As Mr Lewis pointed out, the Council met with representatives of the Church of England, heard their views and invited them to make representations to the Council so that they could be considered at the 25^th July meeting. They did so and, as the Leader of the Council put it in relation to the Church of England proposal (see paragraph 25 of Councillor Moffitt's witness statement):

"I simply was less attracted to their proposal because, in short, I felt that the opportunity to have a world-class university like UCL sponsoring an Academy in Camden was a unique opportunity that it was hard for the Church to match."

109. Insofar as some councillors, such as Councillor Bryant, did have a preference for educational provision that was inclusive of the whole community, rather than a faith-based school, I accept Mr Lewis' submission that it was perfectly permissible for them to have such views and preferences on educational matters. As it seems to me, such views and preferences do not indicate bias or prejudice against the Church. On the contrary, they represent a reasoned and entirely rational position on the part of each of the councillors who held them: see the witness statements of Councillors Bryant, Marshall and Mennear at paragraphs 18-22, 13 and 14-16 and 21 respectively.
110. As I have already indicated, I am entirely satisfied that the Council's decision is clearly explicable by and was firmly based upon the advantages offered by the UCL proposal and the delays and uncertainties that could occur if the Council did not support that proposal. There is no evidence of any prejudice or bias against the Church in the Council's decision making and I reject Mr Wolfe's submissions to the contrary effect. For those reasons, I am satisfied that there is no substance in this ground of challenge.
111. Ground 7, JR1 – General Public Law Principles. Mr Wolfe sought permission to add a further ground of challenge based on wider public law requirements, as set out in paragraphs 179 to 180 of his written skeleton argument, namely that public bodies ought to act consistently and deal straightforwardly and consistently with the public: see, for example, the principles expressed in cases such as R ~v~ Hertfordshire Council, ex parte Cheung, The Times 4^th April 1986, R ~v~ Ministry of Agriculture Fisheries and Food, ex parte Hamble Fisheries (1995) 2 All ER 714 at page 722 and Middlebrook Mushrooms ~v~ Agricultural Wages Board of England and Wales [2004] EWHC 1447 (Admin) at paragraph 74. It was Mr Wolfe's submission that, all the matters upon which the Claimant relies in respect of the various grounds of challenge demonstrates a clear failure on the part of the Council in relation to those requirements in its approach its decision-making in the present case.
112. As Mr Lewis observed, in reality this further proposed ground of challenge adds nothing to the other six grounds. Since I have decided that there is nothing in any of the other grounds of challenge for the reasons already given, it follows that by a parity of reasoning I am satisfied that there is nothing in this further proposed ground.
113. Conclusions on JR1. For all the foregoing reasons, I have come to the firm conclusion that there is no substance in any of the grounds of challenge in JR1. In my view, on analysis, none of the grounds are arguable. Accordingly, this renewed application for permission to apply for judicial review is refused.
114. The Grounds of Challenge in JR2. I now turn to the grounds of challenge in JR2. There are a total of 5 grounds that can be characterised as follows: (1) Failure to comply with the EU/Domestic Procurement Regime; (2) Failure to give effect to ministerial guidance; (3) Amendment of the BSF Guidance; (4) Exercise of power for improper purpose; and (5) Public Law obligations. I will consider each of these grounds in turn.
115. However, before doing so, it is convenient to refer at this early stage to the Secretary of State's overall position, which Mr Beloff summarised in the following five propositions: (i) there is nothing in the relevant legislation that requires a section 7 competition to be held where there is a proposal for the establishment of an academy; (ii) there is nothing in any of the ministerial guidance that required Camden to hold a section 7 competition in this case; (iii) the Secretary of State has been innocent of any abuse of power or lack of candour; (iv) the EU/Domestic Procurement Regime does not apply to the sponsorship of an academy; and, in any event, (v) the Claimant lacks locus for challenging the Secretary of State's decision-making either by reference to the EU/Domestic Procurement Regime or at all. For the reasons already given, I agree with Mr Beloff's first two propositions. I will deal with the remaining three when dealing with the grounds of challenge in JR2.
116. Ground 1, JR2 – Failure to comply with the EU/Domestic Procurement Regime. I turn first to set out the relevant European and Domestic legal framework.
117. (1) The EC Treaty Provisions: So far as material, Articles 43, 48, 49, 52 and 55 of the EC Treaty provide as follows:

"Chapter 2

RIGHT OF ESTABLISHMENT

Article 43

Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State.

Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 48, under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the chapter relating to capital.

…

Article 48

Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Community shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States.

Chapter 3

SERVICES

Article 49

Within the framework of the provisions set out below, restrictions on freedom to provide services within the Community shall be prohibited in respect of nationals of Member States who are established in a State of the Community other than that of the person for whom the services are intended.

The Council may, acting by a qualified majority on a proposal from the Commission, extend the provisions of the Chapter to nationals of a third country who provide services and who are established within the Community.

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Article 52

1. In order to achieve the liberalisation of a specific service, the Council shall, on a proposal from the Commission and after consulting the Economic and Social Committee and the European Parliament, issue directives acting by a qualified majority.

2. As regards the directives referred to in paragraph 1, priority shall as a general rule be given to those services which directly affect production costs or the liberalisation of which helps to promote trade in goods.

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Article 55

The provisions of Articles 45 to 48 shall apply to the matters covered by this chapter."

118. (2) The 2004 Directive. So far as material, the 2004 Directive is in the following terms:

"Directive 2004/18/EC of the European Parliament and of the Council

of 31 March 2004

on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts

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Whereas:

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(2) The award of contracts concluded in the Member States on behalf of the State, regional or local authorities and other bodies governed by public law entities, is subject to the respect of the principles of the Treaty and in particular to the principle of freedom of movement of goods, the principle of freedom of establishment and the principle of freedom to provide services and to the principles deriving therefrom, such as the principle of equal treatment, the principle of non-discrimination, the principle of mutual recognition, the principle of proportionality and the principle of transparency. However, for public contracts above a certain value, it is advisable to draw up provisions of Community coordination of national procedures for the award of such contracts which are based on these principles so as to ensure the effects of them and to guarantee the opening-up of public procurement to competition. These coordinating provisions should therefore be interpreted in accordance with both the afore-mentioned rules and principles and other rules of the Treaty.

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(29) The technical specifications drawn up by public purchasers need to allow public procurement to be opened up to competition. To this end, it must be possible to submit tenders which reflect the diversity of technical solutions. …

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(36) To ensure development of effective competition in the field of public contracts, it is necessary that contract notices drawn up by the contracting authorities of Member States be advertised throughout the Community. The information contained in these notices must enable economic operators in the Community to determine whether the proposed contracts are of interest to them. …

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(46) Contracts should be awarded on the basis of objective criteria which ensure compliance with the principles of transparency, non-discrimination and equal treatment and which guarantee that tenders are assessed in conditions of effective competition. As a result, it is appropriate to allow the application of two award criteria only: "the lowest price" and "the most economically advantageous tender".

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Title 1

Definitions and General Principles

Article 1

Definitions

1. For the purposes of this Directive, the definitions set out in paragraphs 2 to 15 shall apply.

2. (a) "Public contracts" are contracts for pecuniary interest concluded in writing between one or more economic operators and one or more contracting authorities and having as their object the execution of works, the supply of products or the provision of services within the meaning of this Directive.

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(d) "Public service contracts" are public contracts other than public works or supply contracts having as their object the provision of services referred to in Annex II.

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4. "Service concession" is a contract of the same type as a public service contract except for the fact that the consideration for the provision of services consists either solely in the right to exploit the service or in this right together with payment.

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8. The terms "contractor", supplier and "service provider" mean any natural or legal person or public entity or group of such persons and/or bodies which offers on the market, respectively, the execution of works and/or a work, product or services.

The term "economic operator" shall cover equally the concepts of contractor, supplier and service provider. It is used merely in the interest of simplification.

An economic operator who has submitted a tender shall be designated a "tenderer". One which has sought an invitation to take part in a restricted or negotiated procedure or a competitive dialogue shall be designated a "candidate".

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Article 2

Principles of awarding contracts

Contracting authorities shall treat economic operators equally and non-discriminatorily and shall act in a transparent way.

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Title II

Rules on Public Contracts

Chapter I

General provisions

Article 4

Economic operators

1. Candidates or tenderers who, under the law of the Member State in which they are established, are entitled to provide the relevant service, shall not be rejected solely on the ground that, under the law of the Member State in which the contract is awarded, they would be required to be either natural or legal persons.

However, in the case of public service and public works contracts as well as public supply contracts covering in addition services and/or siting and installation operations, legal persons may be required to indicate in the tender or the request to participate, the names and relevant professional qualifications of the staff to be responsible for the performance of the contract in question.

2. Groups of economic operators may submit tenders or put themselves forward as candidates. In order to submit a tender or a request to participate, these groups may not be required by the contracting authorities to assume a specific legal form; however, the group selected may be required to do so when it has been awarded the contract, to the extent that this change is necessary for the satisfactory performance of the contract.

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Article 17

Service concessions

Without prejudice to the application of Article 3, this Directive shall not apply to service concessions as defined in Article 1(4).

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Chapter III

Arrangements for public service contracts

Article 21

Service contracts listed in Annex II B

Contracts which have as their object services listed in Annex IIB shall be subject solely to Article 23 and Article 35(4).

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Chapter IV

Specific rules governing specifications and contract documents

Article 23

Technical specifications

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2. Technical specifications shall afford equal access for tenderers and not have the effect of creating unjustified obstacles to the opening up of public procurement to competition.

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Chapter VI

Rules on advertising and transparency

Section 1

Publication of notices

Article 35

Notices

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4. Contracting authorities which have awarded a public contract or concluded a framework agreement shall send a notice of the results of the award procedure no later than 48 days after the award of the contract or the conclusion of the framework agreement.

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Annex II

Services referred to in Article 1(2)(d)

Category 24 of Annex IIB is stated to be "Education and vocational education services" with Common Procurement Vocabulary ("CPV") numbers from 80100000-5 to 80430000-7: for CPV numbers see Regulation (EC) No 2195/2002 and Annex I of that Regulation, which (inter alia) gives CPV numbers for Primary Education Services and Secondary Education Services of 80100000-5 and 80200000-6 respectively."

119. (3) The 2006 Regulations. So far as material, the 2006 Regulations, which give domestic effect to the EU procurement regime, are in the following terms:

"2006 No 5

Public Procurement, England and Wales

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Public Contracts Regulations 2006

Part 1

General

1 Citation, commencement and extent

(1) These Regulations may be cited as the Public Contracts Regulations 2006 and come into force on 31^st January 2006.

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2. Interpretation

(1) In these Regulations –

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'public services contract" means a contract, in writing, for consideration (whatever the nature of the consideration) under which a contracting authority engages a person to provide services but does not include –

(a) a public works contract, or

(b) a public supply contract; …

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(2) Subject to paragraph (3) in these Regulations –

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(b) "a Part B services contract" is a contract under which services specified in Part B of Schedule 3 are to be provided.

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3. Contracting authorities

(1) For the purposes of these Regulations each of the following is a contracting authority –

(a) a Minister of the Crown;

(b) a government department;

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4. Economic operators

(1) In these Regulations, an "economic operator" means a contractor, a supplier or a services provider.

(2) When these Regulations apply, a contracting authority shall not treat a person who is not a national of a relevant State and established in a relevant State more favourably than one who is.

(3) A contracting authority shall (in accordance with Article 2 of the Public Sector Directive) –

(a) treat economic operators equally and in a non-discriminatory way; and

(b) act in a transparent way.

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5. Application

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(2) Whenever a contracting authority seeks offers in relation to a proposed Part B services contract … other than one excluded by virtue of regulation 6 or 8 –

(a) Parts 1, 9 and 10 apply; …

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Part 9

Applications to the Court

47. Enforcement of obligations

(1) The obligation on –

(a) a contracting authority to comply with the provisions of these Regulations … and with any enforceable Community obligation in respect of a public contract …

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is a duty owed to an economic operator.

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(6) A breach of the duty owed in accordance with paragraph (1) … is actionable by any economic operator which, in consequence, suffers, or risks suffering, loss or damage and those proceedings shall be brought in the High Court.

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Schedule 3

Categories of Services

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Part B …

Category 24 Education and vocational education services

CPV code from 80100000-5 to 80660000-8 …"

120. On behalf of the Claimant, Mr Rhodri Thompson QC submitted that the requirements for openness, fairness and consistency reflected in the EU procurement regime are entirely consistent with and a particular manifestation of the wider and well-established public law requirement that public bodies should act in a straightforward and consistent manner.
121. So far as concerns the first ground of challenge in JR2 and stated in broad terms, it is the Claimant's case that, in exercising his power to approve UCL's Expression of Interest (and thus release public funds to develop the UCL academy proposal), the Secretary of State was required to comply with Articles 43, 48, 49, 52 and/or 55 of the EC Treaty ("the EC Treaty provisions") and with the Public Contracts Regulations 2006 ("the 2006 Regulations") which implement EU Directive 2004/14/EC ("the 2004 Directive") so as to require (inter alia), by Article 2 of the Directive, that contracting authorities treat economic operators equally and non-discriminatorily and act in a transparent way.
122. It is the Claimant's case that the European procurement regime and the 2006 Regulations are applicable to the circumstances of this case because they apply to (inter alia) contracts for the supply of "Education … services" with a value of more than 211,000 Euros: see Article 1(2)(d) and Annex II of the 2004 Directive and Regulations 2(2)(b) and 8 and Schedule 3, Part B to the 2006 Regulations.
123. Mr Thompson summarised his core submissions with regard to this particular ground of challenge as follows:

i) EC law and the domestic legislation derived therefrom imposes a statutory obligation on a public body, seeking to obtain a supply of educational services from the private sector, for consideration and on a substantial scale, to act in a fair and open way;

ii) the approach of the Secretary of State in seeking the supply of educational services from UCL was neither fair nor open; and

iii) the approach of the Secretary of State was thus in breach of the statutory obligations set out in (i) above and was therefore unlawful.

124. It was Mr Thompson's submission that the scope of the dispute under this ground of challenge was really quite narrow, namely whether the Secretary of State was bound by the statutory obligations set out in paragraph 123(i) above when he sought the supply of educational services from UCL.
125. For his part, in summary, Mr Beloff submitted that: (i) the Claimant does not have the necessary standing to bring (and/or there is no jurisdiction to hear) this claim for judicial review; and, in any event, (ii) the EU/Domestic procurement regime does not apply to the sponsorship of an academy. As it seems to me, it is convenient to consider the question of the Claimant's standing first, before turning to the issue of the applicability of the procurement regime to the circumstances of this case.
126. (i) Jurisdiction and/or the Claimant's Standing. It was common ground that the Secretary of State could be a "contracting authority" for the purpose of the 2006 Regulations and that the obligation on a contracting authority to comply with the 2006 Regulations and that any enforceable Community obligation is a duty owed to an economic operator: see regulations 3(1)(a), 47(1)(a) and 4(1) respectively (supra). Furthermore, as Mr Beloff submitted (correctly, in my view) the procurement rules exist primarily to protect markets and to promote the free movement of goods and services.
127. In my view, it is a notable feature of this case that there is no witness statement from the Claimant or her predecessors explaining her or their interest in bringing these proceedings. Although, as Mr Beloff observed, the provision of education in Camden is a matter of legitimate interest for parents in the borough, it is clear that the Claimant is not an "economic operator" and has no apparent interest in markets.
128. However, it was Mr Thompson's submission that, although one clear purpose of the 2004 Directive is to protect the interests of economic operators wishing to compete for public contracts, that purpose is part of a wider objective to promote the internal market for the benefit not only of individual economic operators but for individuals within the territory of the European Community.
129. Mr Thompson therefore submitted that there was no problem with regard to either jurisdiction or the Claimant's standing in this case. He readily accepted that the Claimant is not herself an "economic operator" offering services on the market and wishing to become an academy sponsor. Nevertheless it was his submission that, as a parent of school-age children living in Camden, the Claimant is an individual with a strong interest in the identity of the person or undertaking that ultimately provides educational services for her children. Mr Thompson contended that, as such, the Claimant is perfectly entitled to rely on her position as a recipient of educational services within Camden in order to bring her challenge and that the question of whether she is herself an "economic operator" in competition with other potential sponsors of academies has, in reality, nothing to do with it.
130. Mr Thompson submitted further that there were also the following three specific reasons why the Secretary of State's arguments with regard to jurisdiction and/or the Claimant's standing should be rejected.

i) First, Mr Thompson submitted that the Secretary of State's arguments on this aspect of the matter infringe long-established principles of EC law in respect of national procedural measures, generally referred to as the principles of "equivalence" and "effectiveness", whereby the national courts must (inter alia) afford at least the same protection to rights derived from Community law as to those derived from national law. He suggested that the Claimant has brought domestic law challenges that are in substance directed to the same conclusion as the specific EU law challenge (see, in particular, Ground 5 below). Furthermore, he maintained that the Claimant is entitled to bring a challenge based on directly applicable EU law, whether or not that specific ground of challenge under EU law was one in which she has a direct personal interest: see the judgment of Jonathan Parker LJ in R (Kides) ~v~ South Cambridgeshire DC [2002] EWCA Civ 1370 at paragraphs 132 to 135, where he said this at paragraph 133:

"133. I cannot see how it can be just to debar a litigant who has a real and genuine interest in obtaining the relief which he seeks from relying, in support of his claim for that relief, on grounds (which may be good grounds) in which he has no personal interest."

ii) Second, Mr Thompson submitted that the European Court of Justice ("the ECJ") has made it clear that, as a matter of substantive EU law, individuals and companies are entitled to rely on directly applicable Treaty rights, even when those rights are not conferred upon them but upon those in whom they have a legitimate interest: see Case C-350/96 Clean Car Automobile [1998] ECR I-2521 ("Clean Car") at paragraphs 16 to 21, where it was stated (inter alia):

"16. By its first question, the national court seeks in substance to determine whether the rule of equal treatment in the context of freedom of movement for workers, enshrined in Article 48 of the Treaty … may also be relied upon by an employer in order to employ, in the Member State in which he is established, workers who are nationals of another Member State.

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19. Whilst those rights are undoubtedly enjoyed by those directly referred to – namely, workers – there is nothing in the wording of Article 48 to indicate that they may not be relied upon by others, in particular employers.

20. It must be further noted that, in order to be truly effective, the right of workers to be engaged and employed without discrimination necessarily entails as a corollary the employer's entitlement to engage them in accordance with the rules governing freedom of movement for workers."

It was Mr Thompson's submission that the Claimant clearly has a sufficient interest in the enforcement of the procurement rules in this case by reference to the EC Treaty and the 2004 Directive as to make her entitled to rely upon them, thus rendering the rules truly effective.

iii) Third, Mr Thompson submitted that the ECJ has also held that the procurement rules are sufficiently clear and precise to confer directly applicable rights on individuals: see Case c-76/97 Togel [1998] ECR I-5357 ("Togel") at paragraphs 41 to 47.

131. For his part, Mr Beloff pointed out that it is important to note that there is no evidence that any entities in other Member States are interested in the proposed academy and nor has any economic operator come forward to raise any challenge to the establishment of the proposed academy or to the Secretary of State's decision of 28^th February 2008 to approve UCL's formal Expression of Interest.
132. Mr Beloff submitted (correctly, in my view) that his arguments with regard to jurisdiction and/or the Claimant's standing do not raise any issue with regard to the principles of "equivalence" or "effectiveness". The point, shortly stated, is that the circumstances of this case are such that the EU procurement rules do not relate to the Claimant and/or she does not have a sufficient interest so as to entitle her to rely upon the rights enshrined in them for the purposes of bringing this challenge.
133. Mr Beloff emphasised that the context of the EU procurement rules is the objective of protecting markets and the freedom of movement of goods and services and that, in order to achieve that objective, the procurement rules (inter alia) impose obligations on contracting authorities and bestow rights on economic operators. I agree with those propositions which, as it seems to me, are essentially uncontroversial.
134. Mr Beloff then submitted that the entitlement of an individual such as the Claimant to rely on EU rights such as those in the EU procurement rules is not unlimited or abstract; the rights in question must be viewed in their context and must relate to the Claimant in some way. I agree with that submission, which is clearly illustrated by decision in Clean Car, a case in which the employers' entitlement to rely upon Article 48 was considered to be a corollary of the Article 48 right of workers to be engaged and employed without discrimination: see paragraph 20 of Clean Car, quoted above.
135. As it seems to me, the rights of economic operators under the EU procurement regime clearly do not necessarily entail as a corollary the right of parents of school-age children in Camden, such as the Claimant, to engage with those rules in order to make them truly effective as in Clean Car. Proper observance of the procurement rules is a matter of obvious concern to actual and would-be economic operators, but they have their own remedies under the 2006 Regulations themselves: see the observations of Richards J (as he then was) in Kathro ~v~ Rhondda Cynon Taf DC [2001] EWHC Admin 527 ("Kathro"), when he said this:

"In any event I have strong doubts about the claimants' standing to raise this issue, though I express those doubts only briefly. The correct procedure is a matter of obvious concern to tenderers or would-be tenderers but those persons have their own remedies under the regulations themselves. The claimants have not been shown to be affected in any way by the choice of tendering procedure. They have seized on the point simply as a fall-back way of trying to stop the project. I see no wider public interest to be served by allowing a challenge, and in all the circumstances the claimants should not in my view be regarded as having a sufficient interest for the purposes of the PFI challenge."

136. As I have already noted, there is no evidence from the Claimant as to what relevant circumstances exist (beyond her unchallenged position as a parent of school-age children in the borough) that might lead to the conclusion that the EU procurement rules relate to her in such a way as to entitle her to rely upon the rights enshrined in those rules in order to bring this challenge. There is nothing to show that the Claimant has been affected in any way by what has happened. There is no evidence from her detailing the way (if any) that she and her children have been or might be affected (adversely or otherwise) by the decision of the Secretary of State to approve UCL's formal Expression of Interest. I accept Mr Beloff's submission that, considered in the context of the rules in question, the fact that the Claimant lives in the borough and is the parent of school-age children is simply not enough to entitle her to bring this particular EU/Domestic challenge in reliance upon those rules. I am fortified in that conclusion by the fact that there is no such challenge by any economic operator (for whom the proper observance of the procurement regime is a matter of obvious concern) nor has any such expressed any support for or interest in this particular challenge.
137. It follows that I accept Mr Beloff's submission that the Claimant does not have any or any sufficient interest so as to give her appropriate standing to raise this particular EU challenge, whether by judicial review or otherwise and I reject Mr Thompson's submissions to the contrary effect.
138. So far as concerns the 2006 Regulations specifically, I accept Mr Beloff's submission that these have created a distinct legal regime that confers private law rights upon economic operators. It is common ground that the Claimant is not an economic operator within the terms of the 2006 Regulations. As I have already observed, no complaint has been made by any actual or would-be economic operator, which strongly suggests that there is no wider public interest involved in the circumstances of this case. I agree with Mr Beloff that a challenge under the 2006 Regulations is not a public law challenge, but one that involves a private law complaint that the Claimant is not entitled to bring.
139. I also agree with Mr Beloff that where, as here, the complaint is that the procurement regime established by the 2006 Regulations has not been complied with, that is not a complaint which can be made by way of judicial review. The rights engaged are rights that have a private law character and only the parties possessed of such rights may sue upon them (see Regulation 47(6), quoted above). As Mr Beloff pointed out, those parties are potential bidders in relation to a matter covered by the procurement regime (assuming for the sake of the present argument that the establishment of the proposed academy would be so covered) and the Claimant is not such a bidder.
140. I therefore also agree with Mr Beloff that, whether the matter is put as one of jurisdiction or of the Claimant's lack of standing, the Claimant is not entitled to raise in this court by way of an application for judicial review the challenge that she seeks to raise. As Mr Beloff observed, this is not a technical jurisdiction/standing point made in the context of an otherwise arguable public law challenge. The nature of the legal protections conferred by the procurement regime created by the 2006 Regulations is such that they can be invoked only in private law proceedings by affected economic operators and no such has come forward.
141. For all those reasons, therefore, I am satisfied that the Claimant is not entitled to rely upon this particular ground of challenge which must, accordingly, fail. However, in case I am wrong in that conclusion, I now turn to consider this first ground of challenge on its merits on the assumed basis that the Claimant does have standing and that there is jurisdiction for this challenge to be considered in proceedings for judicial review.
142. (2) Do the EU/Domestic procurement rules ("the procurement rules") apply to the circumstances of this case? As I have already indicated, this ground of challenge is founded on the proposition that the Secretary of State (the relevant contracting authority) was required to comply with the requirements of the procurement rules in exercising his power to approve the formal Expression of Interest submitted by UCL (the relevant "economic operator" within the meaning of the procurement rules). It is the Claimant's case that, in dealing with the matter as he did, the Secretary of State clearly failed to act transparently and to treat economic operators equally and non-discriminatorily. Mr Thompson therefore submitted that the manner in which the Secretary of State made his decision to approve UCL's formal Expression of Interest constituted a breach of the requirements of the procurement rules and was thus unlawful.
143. Mr Thompson submitted that, overall, the approach of the Secretary of State was not a recognisable model of accountable public decision-making. He contended that there was no good reason why the modest but important procedural safeguards imposed by EU law (and its domestic equivalent) should not apply to the supply of educational services to the Government just as they do to all other sectors to which the EC Treaty and the statutory provisions of the 2004 Directive and the 2006 Regulations apply.
144. Mr Thompson went on to express surprise that the Secretary of State was arguing to the contrary, particularly given the apparent contradiction between the Secretary of State's attitude and (i) that of the Office of Government Commerce (the body responsible for the implementation of the procurement rules within the United Kingdom); and (ii) the approach that Parliament has mandated for LEAs seeking to establish a new school on their own account, which requires an open competition to take place.
145. Mr Thompson submitted that the concept of "economic operator" derives from the definitions given in Article 1(8) of the 2004 Directive (supra) and can be stated thus: "economic operator" means "any natural or legal person or public entity or group of such persons and/or bodies which offer on the market … services."
146. It was Mr Thompson's submission that, on the natural meaning of those words, read in the context of the 2004 Directive and the 2006 Regulations, it is clear that the purpose of this definition is to catch all cases (above specified financial thresholds) where businesses operating in the private sector provide goods or services to the public sector at public expense. He submitted that the rationale is that the state is such a major acquirer of such goods and services that there is a need for specific regulation of the terms of such contracts so as to ensure fairness and transparency and thereby to promote the free movement of goods and services. Mr Thompson maintained that it would be entirely contrary to this rationale to take a narrow or technical approach to the broad expressions "economic operators" or persons offering services "on the market".
147. Against that background, it was Mr Thompson's submission that the Secretary of State was wrong in his contention that the other party to a funding agreement under section 482 of the 1996 Act is not acting as an "economic operator", whether or not as a "Sponsor" or as a "Trust". In support of that submission, Mr Thompson made the following points.

i) He submitted that section 482 does not actually refer to either the concept of a "Sponsor" or a "Trust", but refers instead to "any person" undertaking "to establish and maintain, and to carry on or provide for the carrying on of an independent school", subject to the conditions laid down in the section.

ii) Mr Thompson maintained that, as a matter of common sense, the operation of "an independent school" is, in general, the "offer" of "services" "on the market", i.e. an economic activity carried on in competition with other "independent schools", whether the costs of providing such services are borne by fees paid by parents or by funding provided by the State.

iii) It was his submission that the identities of actual and potential parties to section 482 funding agreements likewise confirm that, in practice, a range of economic operators are involved in the establishment and maintenance of the independent schools for which section 482 provides in terms.

iv) Mr Thompson submitted that, in particular, it is beyond argument that individual fee-paying independent schools (such as Marlborough College and Wellington College), universities (such as UCL) and providers of independent schools (such as the organisation "Kunskapskolan") are all "economic operators" in this sense, i.e. they are substantial commercial businesses providing educational services in competition with other similar enterprises. It was his submission that these businesses are all actual or potential competitors for the provision of educational services pursuant to section 482 agreements.

v) Mr Thompson submitted that, furthermore, there is actually a wide range of commercial businesses now involved in the supply of educational services to the Secretary of State under the academy scheme that are clearly, on any view, "economic operators", including such household names as Microsoft and Aston Villa Football Club.

vi) Mr Thompson pointed out that the terms of category 24 in Annex IIB to the 2004 Directive and category 24 in part B to Schedule 3 of the 2006 Regulations (see above) confirm that the supply of educational services clearly falls with the scope of both the Directive and the Regulations. Mr Thompson suggested that the Community legislator clearly envisaged the provision of a wide range of educational services, under contract with contracting authorities such as the Secretary of State, to be within the substantive scope of the Directive and that this was then faithfully implemented into English law by the UK legislator. Mr Thompson therefore submitted that it is clearly inherent in these provisions that providers of such educational services are "economic operators".

148. The Service Provider's offer of services: Mr Thompson submitted that it was nothing to the point that: (i) under the current model funding agreements, academies are operated on a "not for profit" basis ("the not for profit point"); and (ii) under section 482(4) of the 2006 Act itself, no charge can be made "in respect of admission to (or attendance at) the school or, subject to such exceptions as may be specified in the agreement, in respect of education provided at the school" under a section 482 agreement ("the section 482(4): no charges point").
149. As for the "not for profit" point, Mr Thompson submitted that in respect of competition law and, more relevantly, in relation to the free movement of services, it is clear that a "not for profit" economic activity will fall within the scope of the EC Treaty where it occurs on a market that is capable of competitive entry. In support of that submission, Mr Thompson referred to a number of EC cases (see paragraph 227 of the Claimant's combined written skeleton argument). However, it suffices to quote the following:

i) Paragraph 50 of Case T-155/04 Selex [2006] ECR II-4797:

"50. … According to settled case-law, the concept of an "undertaking" covers any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed and any activity consisting in offering goods and services on a given market is an economic activity …"

ii) Paragraphs 120 to 123 of Case C-222/04 Cassa di Risparmio di Firenze SpA, judgment of 10^th January 2006 ("Cassa di Risparmio"):

"120. Treatment of the banking foundation as an "undertaking" seems to be excluded in respect of an activity limited to the payment of contributions to non-profit-making organisations.

121. As the Commission observes, that activity is of an exclusively social nature and is not carried on on the market in competition with other operators. As regards that activity, a banking foundation acts as a voluntary body or charitable organisation and not as an undertaking.

122. On the other hand, where a banking foundation, acting itself in the fields of public interest and social assistance, uses the authorisation given it by the national legislature to effect the financial, commercial, real estate and asset operations necessary or opportune in order to achieve the aims prescribed for it, it is capable of offering goods or services on the market in competition with other operators, for example in fields like scientific research, education, art or health.

123. On that hypothesis, which is subject to the national court's assessment, the banking foundation must be regarded as an undertaking, in that it engages in an economic activity, notwithstanding the fact that the offer of goods or services is made without profit motive, since that offer will be in competition with that or profit-making operators."

150. So far as concerns the "section 482(4): no charges" point, Mr Thompson submitted that this is, in effect, a red herring. He emphasised that what is important is that public service contracts within the 2004 Directive (and the 2006 Regulations) in general involve payments to the "economic operator" exclusively from the contracting authority, not from the end-user, and that such is precisely the case under section 482 agreements. Mr Thompson stressed that it is one of the defining characteristics of a "public contract" that there should be "pecuniary interest" passing from the contracting authority to the private party (the economic operator) who is providing the relevant goods or services. He therefore submitted that the fact that there may be an eventual end-user or recipient of the goods or services in question who does not have to pay the economic operator for them is nothing to the point.
151. Mr Thompson then referred to the case law summarised in Case C-76/05 Schwarz, judgment of 11^th September 2007 ("Schwartz") at paragraphs 39 and 40, as follows:

"39. The Court has thus excluded from the definition of services within the meaning of Article 50 EC courses offered by certain establishments forming part of a system of public education and financed, entirely or mainly, by public funds … The Court thus held that, by establishing and maintaining such a system of public education, financed as a general rule by the public budget and not by pupils or their parents, the State did not intend to involve itself in remunerated activities, but was carrying out its task in the social, cultural and educational fields towards its population.

40. However, the Court has held that courses given by educational establishments essentially financed by private funds, notably by students and their parents, constitute services within the meaning of Article 50 EC, since the aim of those establishments is to offer a service for remuneration …"

152. It was Mr Thompson's submission that the cases summarised in Schwartz do not assist the Secretary of State's arguments (as to which, see below) because, in those cases: (1) the ECJ was drawing a distinction between (a) the supply of services by private educational institutions remunerated by the payment of fees and (b) the provision of a "system of public education … financed, entirely or mainly, by public funds"; and (2) the ECJ was not considering the supply of independently managed educational services to the State by private sector operators as a supplement to the national "system of public education."
153. Mr Thompson submitted further that it is clear from the terms of the 2006 Regulations and the 2004 Directive (in particular from the wording of Article 17 and Category 24 of Annex IIB) that: (i) the supply of educational services for which payment is not received from end-users does fall within the scope of the Directive/Regulations; and (ii) the supply of educational services for which payment is received from end-users as a "services concession contract" would fall outside the scope of the Directive/Regulations.
154. It was Mr Thompson's submission that this analysis is supported by a number of cases that relate to other Annex IIB cases, including Togel (supra), which concerned in part the supply of ambulance services by private operators, and Case C-507/03 The Commission v Ireland, judgment 13^th November 2007 ("Commission v Ireland"), which concerned the administration of social welfare payments at Irish Post Offices.
155. Mr Thompson submitted that in both Togel and Commission v Ireland, the relevant service was plainly one that would normally be regarded as forming part of the state health or social security system and not, as such, within the scope of the rules on the free movement of services so far as concerns individual consumers. Nonetheless, the ECJ had no doubt that such cases did fall potentially within the scope of the statutory procurement regime of the Directive and also within the scope of the EC Treaty: see paragraphs 25 to 27 of the judgment in Commission v Ireland, where the ECJ said this:

"25. For the services coming within the ambit of Annex IB to Directive 92/50, and subject to a subsequent evaluation as referred to in Article 43 of that directive, the Community legislature based itself on the assumption that contracts for such services are not, in the light of their specific nature, of cross-border interest such as to justify their award being subject to the conclusion of a tendering procedure intended to enable undertakings from other Member States to examine the contract notice and submit a tender. For that reason, Directive 92/50 merely imposes a requirement of publicity after the fact for that category of service.

26. It is common ground, however, that the award of public contracts is to remain subject to the fundamental rules of Community law, and in particular to the principles laid down by the Treaty on the right of establishment and the freedom to provide services …

27. In this regard, according to settled case-law, the purpose of coordinating at Community level the procedures for the award of public contracts is to eliminate barriers to the freedom to provide services and goods and therefore to protect the interests of traders established in a Member State who wish to offer goods or services to contracting authorities established in another Member State …"

156. It was Mr Thompson's submission that these clear statements of principle apply with equal force to the facts of the present case as they do to the services at issue in that case. Indeed, Mr Thompson contended that they apply with substantially greater force, given that: (i) the supply of educational services in the UK has for many years been characterised by competition between state-funded and privately funded service providers; and (ii) there is clear evidence of suppliers from other Member States entering this market with active encouragement from the Secretary of State himself.
157. "On the market": Mt Thompson submitted that on any natural reading of these words, the question would be whether the entity itself (e.g. UCL or Marlborough College) was a participant in the UK "market" for the supply of educational services in competition with other suppliers. He contended that there is nothing to support the suggestion that a section 482 agreement should be viewed in isolation from the other economic activities of the entities involved. Furthermore, he submitted that it is well established that Community law is concerned with matters of legal substance, not legal form, and that there is thus no substance in the suggestion that "academy sponsors" and "academy trusts" should be viewed as free-standing entities separate form the commercial undertakings that they represent in a section 482 agreement or the negotiations leading to such an agreement: see, for example, Case-170/83 Hydrotherm [1984] ECR 2999 at paragraph 11.
158. Mr Thompson submitted that this realistic approach is clearly reflected in the terms of the 2004 Directive and the 2006 Regulations. He maintained that Article 4(1) and (2) of the Directive make it clear that the contracting authority cannot insist on any specific legal form for an "economic operator" and, in particular, must consider joint tenders brought by a number of economic operators. He pointed out that it is only when a joint tender is finally successful that the contracting authority can insist on a particular legal from for the purposes of the contract award and, even then, only "to the extent that this change is necessary for the satisfactory performance of the contract".
159. In was Mr Thompson's submission that it is clear from these (and other) provisions of the Directive that the concept of "economic operator" applies to unsuccessful as well as to successful bidders and is independent of the legal form ultimately adopted for the performance of the contract in question. He therefore submitted that it must follow that the question of whether an economic operator offers services "on the market" is to be judged independently of the terms of the contract itself.
160. Mr Thompson contended that if the foregoing points are accepted, the Secretary of State's construction argument (as to which, see below) simply falls away. He submitted that it is self-evident, as a matter of substance, that:

i) the public schools and universities that are increasingly recognised as the natural counterparties to section 482 agreements are "economic operators" offering their educational services "on the market" for educational services, in competition with one another and with state-funded schools (including academies);

ii) other plainly commercial entities (such as Microsoft and Aston Villa FC) also fall squarely within the terms of the statutory definition, as commercial service providers offering services "on the market" for services more generally and who may also seek to be parties to section 482 agreements; and

iii) pursuant to Article 4(2) of the 2004 Directive, all these undertakings are entitled to participate in tendering exercises individually or jointly, whether or not the Secretary of State ultimately requires the other party to a section 482 agreement to be an entity with a specific legal form.

161. It was therefore Mr Thompson's overall submission that any private sector party that is engaged in the provision of services for remuneration, whether or not for profit, is an "economic operator" offering services "on the market" for the purposes of the 2006 Regulations and the 2004 Directive. He submitted that all such persons are entitled to the protection of the 2006 Regulations and the 2004 Directive where, as here, a contracting authority proposes to enter into a contract for payment above the relevant financial threshold laid down by the legislation. Mr Thompson concluded this part of his submissions by describing the Secretary of State's arguments (as to which, see below) as "entirely unconvincing" and by going on to observe that this debate as to the construction of the Directive and the Regulations is somewhat academic because, in any event, the EC Treaty provisions would apply to a substantial tender of this kind that is of potential interest to suppliers from other Member States.
162. The Secretary of State's Argument: It is the Secretary of State's case that the EU/Domestic procurement regime simply does not apply and was never intended to apply to situations like the present case.
163. Mr Beloff submitted (correctly, in my view) that the procurement rules are primarily a common market measure aimed at promoting cross-border trade and competition and that the free movement of goods and services is a key consideration underpinning the procurement regime: see the terms of the second recital to the 2004 Directive (supra) and the following observations of the ECJ concerning the aim of the predecessor Directive in La Scala ~v~ Commune di Milano [2001] ECR I-5409 ("La Scala") at paragraphs 52 and 74:

"52. It is clear from the preamble to the Directive and from the second and tenth recitals, in particular, that the Directive aims to abolish restrictions on the freedom of establishment and on the freedom to provide services in respect of public works contracts in order to open up such contracts to genuine competition. As the tenth recital states, the development of such competition entails the publication at Community level of contract notices.

…

74. … the basic aim of the Directive which, as stated in paragraph 52 above, is to open up public works contracts to competition."

164. It was therefore Mr Beloff's submission that the framers of the 2004 Directive could not have envisaged that it would be used to regulate the processes whereby a Member State establishes a state school such as an Academy as part of the State's function in providing education. In my view, there is considerable force in that submission and I agree with it.
165. Mr Beloff rightly accepted that a state school such as an academy may itself be a consumer of services and it may also engage in the public procurement of goods and services. However, it was his submission that this case is not about the process of choosing someone to build the school or to maintain it or clean it. He contended that this case concerns the setting-up of the entity that will govern the school as part of the state education system. I agree with that submission and it is one of crucial importance in this case because the process of setting up a state school is not a matter concerned with markets, free movement of goods and services and the like. I agree with Mr Beloff that it is artificial to seek to "shoehorn" the process of creating a state school into a legal regime that deals with markets, competition on markets and the running of businesses as, in my view, Mr Thompson has sought to do.
166. Mr Beloff submitted that, although the 1996 Act uses the structure of an agreement between the Secretary of State and the Sponsor/Academy Trust, in essence the process is one of direct grant – the funding agreement is the structure under which the State provides a grant of public money to fund one of the State's schools, which happens to be governed in a different way from a state school operated through an LEA. I agree and emphasise the importance of the fact that although an Academy established under the 1996 Act is labelled "independent" (to distinguish it from state schools maintained by LEAs), it is nevertheless, beyond question, a state school forming part of the state system of education. It is not a fee-paying independent school in the private sector.
167. Mr Beloff submitted that, in this context, the cases of Eurocontrol [1994] ECR I-43 ("Eurocontrol") and Diego Calli [1997] ECR I-1547 are particularly relevant, although they come from the EU case law on "undertakings" in competition law. These cases concerned the performance of "a task in the public interest which forms part of the essential functions of the state". It was held that such a task is not of an economic nature and that therefore the EC rules of competition did not apply. Thus, although route charges for air traffic control were paid and collected in Eurocontrol, the ECJ stated in paragraph 30:

"30. Taken as a whole, Eurocontrol's activities, by their nature, their aim and the rules to which they are subject, are connected with the exercise of powers relating to the control and supervision of air space which are typically those of a public authority. They are not of an economic nature justifying the application of the Treaty rules of competition."

Mr Beloff contended that the provision of state education, and the formation of schools to make such provision, are tasks of a like type and are thus not economic in nature. I agree.

168. Mr Beloff submitted that the cases upon which Mr Thompson relied (see above) do not displace the sound policy reasons for recognising that bodies conducting an essential function of the State are not engaging in economic activity. For example, Mr Beloff pointed out that the decision in Cassa di Risparmio (supra) was entirely consistent with the Secretary of State's position because it recognised that activity of an exclusively social nature not carried out in the market in competition with others is not economic activity. I agree.
169. In support of this aspect of his submissions, Mr Beloff also referred to the case of Fenin ~v~ The Commission [2003] ECR II-357, also a competition case, in which the Court of First Instance held that public bodies purchasing medical supplies for the public health service were not engaged in economic activity and the case of Poucet ~v~ Assurance Generales de France [1993] ECR I-637 which establishes that bodies managing public healthcare are not engaged in economic activity.
170. Mr Beloff also referred to and relied upon the following observation by Professor Arrowsmith in "The Law of Public and Utilities Procurement", 2^nd edition, at page 65 paragraph 2.51:

"… the competition law rules do not apply to the purchasing of goods and services for running prisons or free state schools, or when purchasing the goods and services needed for the government ministries that run the prison or education services."

171. Mr Beloff accepted that the present case is not about the competition rules, but pointed out that it is about another set of rules that also serve to protect EU markets. He submitted (correctly, in my view) that the approach adopted in the competition cases is of considerable help in informing the Court's approach to the application of the procurement rules to an activity that has nothing to do with such markets. I agree with that submission.
172. Mr Beloff also referred to and relied upon the judgment of the ECJ in the case of Belgian State ~v~ Humbrel and Edel Case 263/86 [1988] ECR 05365 at paragraphs 15 to 20, where it stated:

"15. The first paragraph of Article 60 of the EEC Treaty provides that only services "normally provided for remuneration" are to be considered "services" within the meaning of the treaty

16. Even though the concept of remuneration is not expressly defined in Articles 59 et seq. of the EEC Treaty, its legal scope may be deduced from the provisions of the second paragraph of Article 60 of the Treaty, which states that "services" include in particular activities of an industrial or commercial character and the activities of craftsmen and the professions.

17. The essential characteristic of remuneration thus lies in the fact that it constitutes consideration for the service in question, and is normally agreed upon between the provider and the recipient of the service.

18. That characteristic is, however, absent in the case of courses provided under the national education system. First of all, the State, in establishing and maintaining such a system, is not seeking to engage in gainful activity but is fulfilling its duties towards its own population in the social, cultural and educational fields. Secondly, the system in question is, as a general rule funded from the public purse and not by pupils of their parents.

19. The nature of the activity is not affected by the fact that pupils or their parents must sometimes pay teaching or enrolment fees in order to make a certain contribution to the operating expenses of the system. A fortiori, the mere fact that foreign pupils alone are required to pay a minerval can have no such effect.

20. The answer to the first branch of the second question should therefore be that courses taught in a technical institute which form part of the secondary education provided under the national education system cannot be regarded as services for the purposes of Article 59 of the EEC Treaty, properly construed."

173. As for the Claimant's separate reliance upon the EC Treaty provisions (see paragraph 161 above), Mr Beloff submitted that the Treaty does not impose formless and open-ended obligations of transparency and equal and non-discriminatory treatment in relation to every decision made by a Government department responsible for providing school education, particularly where there is no relevant market. I agree. In my view, it is important to bear in mind that the Treaty's requirements must be addressed in the context of economic activity and markets, having regard to the overriding objective of the Treaty in establishing a common market.
174. Pecuniary Interest: Mr Beloff pointed out that, in La Scala (supra), the Advocate General expressed the view (see paragraph 94) that if the provider provides something without economic benefit to itself, there is no potential for the favouritism that the rules seek to prevent. Mr Beloff submitted that, similarly, in the case of an academy, the sponsor is effectively engaged in philanthropy and receives no pecuniary benefit or its equivalent from the section 482 agreement.
175. I recognise the force of that submission. Speculation that the sponsor might obtain some enhancement of its reputation or other indirect benefit from its association with an academy is, as it seems to me, insufficient to meet the argument as to the essentially non-economic nature of the agreement in question. As Mr Beloff observed, UCL is unlikely to obtain any measurable economic benefit to its core activities of providing higher education and conducting academic scholarship from its public benefactor status as sponsor of the Camden Academy.
176. Economic Operator: It was common ground that the concept of "economic operator" is central to the procurement regime. The 2004 Directive and the 2006 Regulations are concerned with contracts made between public authorities and "economic operators". However, as Mr Beloff observed, there is little guidance on this concept to be found in the case law. I therefore agree with Mr Beloff's submission that the concept should be given meaning by reference to the market perspective. That being so, I also agree that it is difficult to see how the sponsor of an academy qualifies as an economic operator making an offering on or in a market.
177. I agree with Mr Beloff that it is of fundamental importance not to conflate an academy with a private sector fee-paying school. Although academies are independent in governance terms, they are tied to the State by public funding and are very different from private sector schools.
178. I also accept that section 482 academies do not compete in any economic sense with private fee-paying schools, which form a distinct educational sector. Whilst parents may face a choice between sending their child to a state school or a private school, the two types of school are not in competition against one another for business. The state school (such as a section 482 academy) is not in business at all. Private schools compete for business against other private schools. I agree with Mr Beloff that only private schools are in the educational "market" at all.
179. However, if I am wrong about that and a state of competition does exist between established section 482 academies and established private schools, this does not bear on the key issue in this case, which concerns not the activities of established schools, but the process of establishing a particular type of state school (i.e. a section 482 academy).
180. I agree with Mr Beloff that many of Mr Thompson's submissions concern situations in which an established school may sometimes be an economic operator or may itself be a contracting authority, but do not focus on what happens when the arrangements for the actual establishment of the school as an entity are made. It is crucial to bear in mind that these arrangements do not include the arrangements to build the school, obtain cleaners and caterers etc.
181. I also agree with Mr Beloff that an entity that becomes an academy sponsor may be an economic operator in its everyday business activities, but is not such an operator when it acts as a sponsor and helps form an Academy Trust. In that context, it is clearly "wearing a different hat". The significance of an Academy Trust (through which the sponsor acts) is that it is a distinct body that exists solely to run the academy in question. As Mr Beloff observed, this reinforces the point that the activity of running the academy is quite distinct from the sponsor's mainstream activity, whether that be commercial, educational or otherwise.
182. Mr Beloff made it clear that he did not suggest that the fact that an academy is not operated for profit is, itself, a sufficient reason for not applying the procurement rules if they would otherwise be applicable. Thus, in the case The Commission ~v~ Italy C119-06I ("Italy"), the ECJ held that the non-profit status of the Italian Red Cross did not prevent the procurement rules applying to a framework agreement concerning healthcare transport. Notably, however, in Italy the activity in question was one in respect of which there was clearly a competitive market. For reasons that I develop below, I agree with Mr Beloff that that important feature distinguishes Italy from the circumstances of the present case. There is also the distinguishing factor that the relevant activity in Italy was not a core state function; the case was concerned with the provision of transport ancillary to State healthcare. As Mr Beloff observed, an agreement to set up (say) a school bus service is one thing; an agreement to set up the governing entity of a state school creating a public body is quite a different thing altogether.
183. As Mr Beloff pointed out, the competitive market factor in Italy raises the most important factor in this part of the case and one that, as it seems to me, is fatal to this ground of challenge, i.e. the absence of any relevant market upon which economic operators offer services.
184. I agree with Mr Beloff that it makes no sense to adopt the "broad brush" suggestion that the relevant market in this case is a general market for educational services in competition with other suppliers. Such a concept is so broad as to be without clear definition. Further, to suggest that institutions such as UCL and Marlborough College are engaged in the UK market for the provision of educational services fails to recognise that what such bodies do in their core activities is entirely distinct from that they would do as sponsors of academies.
185. I accept Mr Beloff's submission that the cases on the Directive all proceed on the basis that there is a market for the particular type of activity which forms the subject of the contract in question and there is little analysis by the Courts as to what is meant by a market for the purposes of the definition of "economic operator". The crucial question in the present case therefore is whether there is anything that can realistically be described as a market for the setting up of academies.
186. I have come to the firm conclusion that there is not and I reject Mr Thompson's submissions to the contrary effect. In my view, the fact that there may be a diverse population of entities (businesses, universities, community groups, commercial enterprises of various sorts etc.) that might possibly be interested, in general terms, in engaging in a form of philanthropy by sponsoring an academy does not mean that this constitutes a "market" in any meaningful way, whether considered on a local or nationwide basis.
187. In my view Mr Beloff is correct in his observation that the very notion of a market is difficult to apply to what are, in effect, philanthropic actions. He made good the point by posing the following rhetorical questions: (i) "Must an NHS hospital comply with the procurement rules before it accepts a benefactor's agreement to build a new unit in return for giving it the name of the benefactor?" and (ii) "If a wealthy individual or corporation wishes to make an agreement with the National Gallery to lend it a collection of artworks or to fund the building of a new gallery, must there be some form of publication about this proposal and an opportunity given for others to bid for the opportunity to lend art or to pay for a new gallery?" In my judgment, the answer is an emphatic "No" in each case and, as it seems to me, the situation with a sponsor's proposal to establish an academy is no different in principle.
188. Furthermore, each academy is unique in that it addresses the educational needs of a particular community. Different academies promote different specialisations within education. I accept that tailoring the sponsor to the particular local need is an important element in the process. To use one of Mr Thompson's examples (Marlborough College) UCL and Marlborough College are not competing in a "market" for the chance to set up an academy in Camden, nor are they competing in a nationwide "market" for the chance to sponsor an academy. Even looking at those actually said to be interested in the Camden Academy (e.g. the LDBS), the mere existence of two or more bodies who might be interested in a philanthropic venture does not, of itself, create a "market" for the establishment of a section 482 academy in Camden or at all.
189. I agree with Mr Beloff that this particular ground of challenge runs into insuperable difficulty when fundamental concepts such as "market" and "economic operator" are considered. These concepts underpin the procurement rules in the EC Treaty, the 2004 Directive and the 2006 Regulations. For the reasons given above, I conclude that neither concept is satisfied in this case. It follows that I accept Mr Beloff's submission that applying those concepts correctly places the academy sponsorship process under section 482 of the 1996 Act outside the scope of those procurement rules.
190. For all those reasons, therefore, this ground of challenge also fails.
191. Ground 2, JR2 – Failure to give effect to Ministerial Guidance: Mr Wolfe submitted that, just as the Council was required to give effect to the BSF guidance, so too was the Secretary of State. It was Mr Wolfe's submission that, in the circumstances of this case, the Secretary of State had impermissibly failed to do so. Mr Wolfe submitted further that the Secretary of State could not properly rely on his purported amendment of the BSF Guidance (see below).
192. However, for the reasons already given in relation to Ground 4A of JR1 (see paragraphs 84 to 99 above), I am satisfied that there is no substance in the proposed ground.
193. Ground 3, JR2 – Amendment of the BSF Guidance: Mr Wolfe submitted that, in all the circumstances of the case, the Secretary of State's decision to amend the BSF Guidance creates an unfairness amounting to an abuse of power.
194. In my view, there is nothing in this ground of challenge and I am surprised that such a ground has been put forward. As Mr Beloff pointed out, the BSF Guidance was amended to remove words, the meaning of which was (in the light of the arguments put forward on the Claimant's behalf) apparently capable of being misunderstood,
195. In those circumstances, I entirely agree with the submission that it was plainly right and proper for the Secretary of State to take steps to remove the words in question from the BSF Guidance, not least to avoid any confusion on the part of anyone else who might read that document in its unamended form. Indeed, as Mr Beloff pointed out, the Claimant was put on notice that the amendment was being made by letter dated 19^th February 2008.
196. In my view, the evidence clearly shows that there was nothing underhand or inappropriate about the way in which the amendment was made or, indeed, about any aspect of the way in which the Secretary of State has acted in relation to the circumstances of this case. In this context, it is important to note that, in his 4^th witness statement dated 8^th November 2008 (i.e. during the course of the hearing before me), the Claimant's solicitor, Mr Richard Stein, rather belatedly said this:

"1. I make this fourth witness statement to deal with the allegations made by me in paragraph 12 of my first witness statement made on 25 April 2008. [In paragraph 12, Mr Stein expressed great concern at "the extraordinary lack of candour and sharp practice which are exposed by the pattern of events set out here and in the grounds relating to the matter of this guidance"]

…

9. My mistake was to infer 'an extraordinary lack of candour and sharp practice' as being the only possible explanation for the failure rather than contemplating the system failure here.

10. However, I now accept that I was wrong to assume that there could be no honest explanation for this extraordinary sequence of events. I further accept that it was a mistake to infer a lack of candour and sharp practice from the events set out without awaiting the evidence from the Secretary of State's witnesses. I now accept, without reservation, that the unfortunate events arose as a result of system failures within the Department."

In my opinion, those allegations should never have been made in the first place.

197. I therefore reject the suggestion that the reasons for the amendment were related to these proceedings and intended to thwart any challenge to the Secretary of State's approval of UCL's formal Expression of Interest (see paragraph 271 of the Claimant's combined skeleton argument). In my view, that suggestion is wholly unjustified for the reasons given by Mr Beloff in paragraphs 90 to 98 of his written skeleton argument which I adopt without repeating.
198. Ground 4, JR2 – Exercise of Power for Improper Purpose: Mr Wolfe submitted that, just as the Council had exercised its power under the 2006 Act inconsistently with the purpose for which it had been given that power, so too did the Secretary of State when exercising his power to approve UCL's formal Expression of Interest.
199. In my view there is nothing in this ground of challenge. For the reasons explained in relation to Ground 4 of JR1 (see paragraphs 73 to 83 above), on proper analysis of the 1996 and the 2006 Acts, the Secretary of State is not obliged always to refuse to approve an Expression of Interest (and thus always refuse to enter into a funding agreement under section 482 of the 1996 Act) whenever a proposal to establish the academy in question is "controversial".
200. Ground 5, JR2 – Public Law Obligations: Mr Wolfe submitted that Grounds of Challenge 1 to 4 of JR2 are, in substance, statutory and administrative manifestations of what are, in reality, basic principles of sound administration. It was his submission that, for the Secretary of State to have approved UCL's Expression of Interest, which had come forward through a process in which a single would-be sponsor had been identified, courted, selected and promoted through a secret and entirely untransparent process, was plainly in breach of those elementary obligations to deal straightforwardly, consistently and equally.
201. Again, I am satisfied that there is no substance in this particular ground, which adds nothing to Grounds 1 to 4, all of which fail for the reasons given. As Mr Beloff observed, the Claimant may not like the fact that Parliament has put in place a system whereby there is no obligation to hold an open competition, but that does not mean that the Secretary of State has acted in breach of any principle of consistency or equality. Nor does the absence of a legislative requirement for a competition mean that the Secretary of State's decision is, in some way, immune from scrutiny by the Courts on usual public law principles, including the obligation to act rationally.
202. Conclusion: For the reasons given above, I have come to the firm conclusion that permission should be refused on all grounds (save in relation to Ground 1 of JR2), that Ground 1 of JR2 should be dismissed and that, therefore, both claims should be dismissed. I will hear further submissions from Counsel with regard to the precise form of the Order and in relation to any ancillary matters.