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
		09/05/2013

Mr James Goudie QC :

INTRODUCTION

1. This is a case concerned with childcare at non-domestic premises, specifically with the care of under fives at the Claimant's premises in Milton Road, Cambridge, in February 2011, and the regulation by Ofsted of the Claimant as the provider of that childcare.

THE PARTIES AND THE STATUTORY FRAMEWORK

2. The Claimant company operates the Cambridge Day Nursery ("CDN"). It is an Early Years Foundation Stage ("EYFS") provider.
3. Part 3 of the Childcare Act 2006 ("CA 2006") relates to regulation of provision of childcare in England. Chapter 2 of Part 3 (Sections 33-51 inclusive) is concerned with regulation of Early Years Provision. CDN is registered by Ofsted pursuant to Section 34.
4. Sections 39-44 of CA 2006 set out requirements to be met by Early Years Providers. Further provision is made in Regulations made pursuant to CA 2006, notably the Early Years Foundation Stage (Welfare Requirements) Regulations 2007, SI 2007/1771, as amended ("the Welfare Requirements Regulations"). An Early Years Provider, such as CDN, must comply with the "welfare requirements" specified in the Welfare Requirements Regulations. The welfare requirements have been revised with effect from September 2012, but that is immaterial for present purposes.
5. In addition to the statutory provisions, there is both statutory and non-statutory accompanying Guidance, to the former of which Early Years Providers must have regard.
6. Ofsted is the Office for Standards in Education, Children's Services and Skills. The services it inspects and regulates include early years and childcare. It is concerned with the need to safeguard and indeed promote the welfare of children and their rights: Section 117(2)(a) of the Education and Inspections Act 2006 ("E&IA 2006"). It can inspect at any time that it considers appropriate: Section 49 of CA 2006. It publishes Compliance Guidance.
7. Ofsted's function is to establish whether a registered provider is meeting the welfare requirements, and, if they find a failing in that respect, to consider what action, if any, to take. A complaint made to it may, as in this case, trigger an inspection, but it is not as such adjudicating upon a complaint.
8. When Ofsted considers that there has been a failure to meet the welfare requirements, then it operates an escalating tariff of statutory and non-statutory actions. It does so in accordance with the overriding principle of seeking to ensure the welfare and protection of children. Its enforcement powers include serving a statutory welfare requirements notice. Breach of such a notice is a criminal offence. Ofsted did not do that in this case, or exercise any of its draconian powers.
9. Lesser action is a common regulatory tool. That is what this case is primarily about. It is described as non-statutory action. That simply means that it is not one of the specific actions expressly mandated or authorised by statute, but is something more light touch done pursuant to any statutory body's general and subsidiary powers.
10. At the material time, Ofsted Inspectors wrote an Outcome Summary. Where Ofsted had to take action to ensure that the provider complied with its legal requirements, the Outcome Summary was published on Ofsted's website, for the benefit of parents, to enable them to make informed choices.

THE FACTS

11. On 11 February 2011 Ofsted made an unannounced visit to CDN's premises for half to three quarters of an hour. This was in consequence of a telephone complaint made to Ofsted on 9 February 2011 by the parent of a child about the supervision of children on 3 February 2011. On the same day as the inspection, 11 February 2011, but after the visit, Ofsted received an e-mail from the parent who had made the complaint about the situation on 3 February 2011.
12. The consequence of the 11 February 2011 visit was that on 17 February 2011 Ofsted issued to CDN a Notice to Improve. A Notice to Improve is a non-statutory notice, not a notice pursuant to Regulation 9 of the Welfare Requirement Regulations, failure to comply with which would be a criminal offence under Regulation 11. The Notice to Improve asked CDN to ensure that children are supervised at all times, with staffing arrangements organised to meet the individual needs of all children. CDN challenges Ofsted's decision to issue the Notice to Improve. CDN further challenges Ofsted's decision to publish its finding on its website (for a period of 5 years).
13. The finding by Ofsted upon which the Notice to Improve was based was that on 3 February 2011 there was a period of about five minutes when at least eight pre-school children in one of the nursery rooms were left with only one member of staff. Another child was very upset at the time. The concentration by the member of staff on comforting and calming that child meant that during this short period there was no member of staff to see to the individual needs of the other children. A commotion ensued. This rapidly attracted the attention of other members of staff who were elsewhere in the building. On their arrival in the room they were able to deal with the situation. There is now no serious dispute as to any of the foregoing. Ofsted's position is that the eight or so children were inadequately supervised.
14. CDN raised a complaint under Ofsted's complaints procedure. This was rejected in a letter from Ofsted on 14 April 2011. On 16 May 2011 these proceedings were commenced.
15. On 14 June 2011 Ofsted altered the way in which the substance of its decision was expressed from non-compliance with correct staff ratios, applicable to the nursery as a whole on the day, and which had been complied with, to inappropriate staff deployment, applicable to the particular room at the particular time; to move the focus to the individual needs of children not being adequately met; and to describe the action required as being to ensure that effective systems were in place to meet the needs of all children. CDN also challenges the 14 June 2011 decision.

THE PROCEEDINGS

16. After the proceedings were commenced there was an internal review. It was the outcome of that which resulted in the 14 June 2011 decision. By then there was the first witness statement on behalf of CDN as well as the Ofsted Inspector's contemporaneous notes.
17. On 5 December 2011 Michael Caplan QC, sitting as a Deputy High Court Judge, granted the Claimant permission to apply for judicial review. He did so on the following basis. First, that there is an arguable case concerning the extent of the investigation that was carried out before the finding was made. Second, that there is an arguable case that a copy of the complaint should have been given to the Claimant's Manager, Rachel Watson, at the visit on 11 February 2011. Third, there is an issue whether the Registers of Children and Staff, showing appropriate ratios were relevant. Fourth, there is an issue as to the correct interpretation of Appendix 2 to the Statutory Framework concerning the ratio of staff to children in an EYFS setting.
18. This is a reference to the "Statutory Framework for the Early Years Foundation Stage" issued by the Department for Education and Skills in 2008, Section 3 of which relates to the welfare requirements, and Appendix 2 of which is concerned with specific legal requirements for ratios of adults to children.
19. Mr Caplan QC extended the Order of Silber J on 16 May 2011 restraining publication.

THE GROUNDS

20. There were seven grounds upon which CDN submitted in its Amended Grounds that the decision of 17 February 2011 was unlawful.
21. The first ground is a Wednesbury ground that Ofsted failed to take a relevant matter into account. That matter is the registers of children and staff for the day in question. Their relevance is that they would show that appropriate staff: children ratios were in place. Ofsted's response is that this complaint is irrelevant, because Ofsted acknowledged in its 14 June 2011 decision that CDN was compliant with the requirement as to staff ratios on the day of the incident, and is incorrect, because Ofsted did in fact take into account the children and staff ratios in reaching its decisions.
22. The second ground is that Ofsted misinterpreted Appendix 2 to the Statutory Framework. CDN submits that it does not require the physical presence of staff in accordance with the ratio in a room with children at all times, regardless of the situation on the ground. Ofsted's response is that this complaint is irrelevant for the same reason.
23. The third ground is that Ofsted treated the statutory guidance concerning the supervision of children as though it were mandatory. Ofsted's response is that their decision, as revised, identified a failure to comply with the mandatory welfare requirement that providers must have effective systems to ensure that the individual needs of all children are met.
24. The fourth ground is that Ofsted's investigative process was fundamentally flawed in two particular respects. The first respect is that the Ofsted Inspector, Lorraine Sunter, who has over 25 years' experience in childcare, failed to give Rachel Watson a copy of the complaint or to afford her an opportunity to ask members of staff to give their version of events or investigate matters herself. The second respect in which Ofsted's investigative process is alleged to have been fundamentally flawed is that the investigation was inadequate and unfair. It is alleged that the meeting was too short and that the Inspector had prejudged matters.
25. Ofsted's response is that it was not their role to adjudicate upon the complaint; that fairness did not require that they provide CDN with a copy of the parent's e-mail; that the Inspector communicated the gist of the oral complaint to Rachel Watson during the visit on 11 February 2011; that this enabled Rachel Watson to give a full and clear account; that, given that account, fairness did not require affording Rachel Watson an opportunity to speak to other members of staff; that overall the process was fair; and that by the end of the visit the Inspector was able to come to and express a view.
26. The fifth ground of challenge is that Ofsted failed to follow its own published guidance, namely "Concerns and Complaints about childcare providers", which states that action will not be taken unless Ofsted have strong evidence or have reasonable cause to believe children are at risk of harm. Ofsted's response is that it did have strong evidence, namely the account provided by Rachel Watson during the Inspector's visit.
27. The sixth ground is that the decision failed to give any reasons. Ofsted's response is that it did give reasons, in its letters on 17 February, 14 April and 14 June 2011, a lengthy letter, and that those reasons were sufficient.
28. The seventh ground is that the decision was disproportionate, an abuse of power, and incompatible with CDN's ECHR Article 1, Protocol 1 rights, i.e. the value and goodwill of its business. Ofsted's response is that, given CDN's failure to comply with the welfare requirements set out in the EYFS Framework, it was not appropriate to take no action, or merely make recommendations; that an improvement notice was the least action that it could take consistent with seeking to ensure the welfare of children; and that the publication was appropriate in the interests of parents and carers.
29. Generally, Ofsted responds that the only error in their 17 February 2011 decision was corrected by its decision of 14 June 2011.

THE FURTHER GROUNDS

30. The revised decision of 14 June 2011 was challenged on six further grounds. The first further ground is that it was perverse or disproportionate to make an adverse finding based on a 5 minute incident. This is a point upon which Ms Hewson for CDN has laid great emphasis in her oral submissions. Ofsted's response is that the nature and duration of the incident were sufficiently serious to warrant action being taken, viewed in the light of Ofsted's experience and expertise.
31. The second further ground is that Ofsted failed to take into account the fact that CDN was meeting children's individual needs by celebrating the Chinese New Year. Ofsted's response is that they were aware of that, but that it did not justify failure to comply with the welfare requirements.
32. The third further ground is that Ofsted's action was not an action. Ofsted's response is that it was.
33. The fourth further ground is that Ofsted failed to carry out any reasonable investigation. Ofsted's response is that it did, and that given Rachel Watson's full and clear account during the Inspector's visit it was unnecessary to speak to other members of staff. Moreover, all the information subsequently gathered by Rachel Watson from other members of staff, and forwarded to Ofsted, was duly considered.
34. The fifth further ground is that Ofsted failed to give CDN an opportunity to provide a proper response. Ofsted repeats what it said with respect to the original grounds.
35. The sixth further ground is that non-statutory action was ultra vires. Ofsted's response is that action not being specifically provided for in legislation does not make it ultra vires; that a Notice to Improve is within Ofsted's broad ancillary power in paragraph 13 of Schedule 11 to E&IA 2006 to do anything which it considers necessary or expedient for the purposes of, or in connection with, its functions, i.e. its duties and powers; and that publishing information is authorized by Section 84 of CA 2006 and Regulations thereunder.

THE ISSUES

36. In its Skeleton Argument and oral submissions CDN has narrowed the scope of its challenge. With respect to CDN's contentions which are no longer actively pursued, suffice it to say that I accept Ofsted's responses.
37. CDN's challenge as ultimately presented essentially boils down to three complaints: first, that Ofsted's decision to issue a Notice to Improve was "absurd", "perverse", "bizarre", "unrealistic", "completely over the top" ("the Issue of Substance"); second that the action that Ofsted required CDN to take by its revised Notice to Improve "makes no sense" ("the Communication Issue"); and, third, that, even if the Notice to Improve was justified, publication on Ofsted's website of a summary of the action taken against CDN would be unnecessary and disproportionate ("the Publication Issue").

THE ISSUE OF SUBSTANCE

38. The challenge to Ofsted's decision to issue a Notice to Improve is a Wednesbury reasonableness challenge. In my judgment, it fails.
39. Ofsted has important responsibilities. These include to monitor and enforce compliance with the legal requirements imposed on childcare providers in the interests of children.
40. These requirements include the welfare requirements. In determining whether a provider has failed to comply with these requirements, and, if so, what regulatory action, if any, to take, Ofsted draws on its experience and expertise and exercises its expert judgment.
41. In the present case Ofsted has consistently judged that the incident that undoubtedly occurred on 3 February 2011, albeit of a brief duration, evinced a failure by CDN to comply with the welfare requirements. The question is whether the period of time during which there was only a single member of staff to cope with a number of very young children was a significant period. When one of the children became upset, the single staff member had to comfort that child. This left no one to see to the needs of the other children
42. In my judgment, Ofsted was entitled to conclude that the period, albeit short, was nonetheless significant, rather than minimal, and that the incident indicated a lack of effective staff deployment on this occasion. It takes a much shorter period than 5 minutes for a young child to suffer a major accident. The children were left vulnerable.
43. Having lawfully found that there was a failure to comply with the welfare requirements, Ofsted then had to decide whether to do nothing, or to take one of the actions specified in its escalating tariff of non-statutory and statutory action. In my judgment, the decision to issue a Notice to Improve was a proportionate and reasonable one in all the circumstances.
44. It was based on the recommendation of an experienced Inspector. In her judgment, concurred in by others within Ofsted, the incident warranted such action, in particular because it presented a risk to child safety and left children vulnerable.
45. It must be borne in mind that a Notice to Improve is a relatively modest form of regulatory action. It consists of a letter setting out what Ofsted wants the provider to do and by when. Failure to comply with a Notice to Improve is not an offence and does not, of itself, carry any other sanctions. It does not have any direct impact on a provider's continuing entitlement to provide childcare services.
46. Moreover, the decision to issue a Notice to Improve was in accordance with Ofsted's published Compliance Guidance. Having regard to the seriousness of Ofsted's concerns, and the overriding need to ensure the welfare of children, a Notice to Improve was the least Ofsted could reasonably do.
47. The Claimant's attempt to criticise Ofsted's decision by reference to the short duration of the incident and the assertion that it had "no adverse consequences to anybody" is misconceived. In Lorraine Sunter's expert judgment the incident was clearly still sufficiently serious to warrant Ofsted's action, notwithstanding its duration; and there is nothing in the statutory framework, or Ofsted's published guidance, to suggest that Ofsted can take action only where a child has suffered "adverse consequences". Indeed a regulatory approach under which Ofsted could intervene only after such consequences had occurred would be irresponsible and a dereliction of duty.
48. Ofsted's primary responsibility is to ensure that providers comply with their legal requirements and thereby protect the welfare of children. It would not be nearly good enough were Ofsted to take remedial action only once the safety and welfare of children had already suffered. CDN's reliance on the lack in the event of serious adverse consequences displays a fundamental fallacy in their approach. In summary, the incident was more than a nut, and the Notice to Improve was less than a sledgehammer.

THE COMMUNICATION ISSUE

49. CDN complains that the action set by Ofsted in its revised decision on 14 June 2011 "makes no sense". I reject this complaint.
50. The action set by Ofsted in its revised decision required CDN to "ensure effective systems are in place to meet the individual needs of all children". This duly reflected the wording of the welfare requirement that CDN had failed to comply with.
51. Where Ofsted finds that a provider has failed to comply with one of the welfare requirements it is appropriate to specify by reference to the relevant statutory welfare requirement the action that Ofsted requires the provider to take to address Ofsted's concerns. This, however, may not suffice in all cases.
52. In this case I am satisfied that CDN knew perfectly well what it had to do in order to address the concerns of Ofsted of which it was aware. It was conspicuously apparent that Ofsted's central concern was that, during the incident on 3 February 2011, one member of staff had been left alone with a group of children and that, when that staff member went to comfort an additional child, this left no one to see to the individual needs of the remaining children. This clearly indicated that staff members were not being deployed effectively at the time of the incident. Moreover, Ofsted made its concerns clear to CDN both during the inspection and subsequently.
53. Also, CDN had procedures in place at the time of the incident which, had they been followed, may have enabled it to avoid the incident. The importance of those procedures was reinforced to their staff following the incident. CDN apparently understood the sort of steps it could take to avoid a recurrence of the incident that gave rise to Ofsted's concerns.
54. Moreover, CDN had available to it detailed published guidance which explained the welfare requirements in more detail. Among other things the guidance explained how providers could maintain effective staff deployment in the case of staff absences. In addition it could, if it wished, have sought further guidance.
55. Finally, CDN in fact complied with the action set by Ofsted in its revised decision. It did so by October 2011.

THE PUBLICATION ISSUE

56. Ofsted's normal practice where it issues a Notice to Improve is to place a summary of the decision on its website. In my judgment, that is a lawful practice, when the Notice to Improve is itself justified.
57. In this case, publication has been stayed pending determination of these proceedings. If that stay is lifted, the following summary will appear on Ofsted's website:-

"On 9 February 2011, we received a complaint that raised concerns about the supervision of children at the nursery. We needed to investigate this concern to see whether the setting was meeting the Early Years Foundation Stage welfare requirements. (In particular, these include a requirement that states that providers must have effective systems to ensure that the individual needs of all children are met.)

We do not investigate to prove or disprove a complaint but we look into the information we receive to see if the childcare provider is meeting all legal requirements. We carried out an unannounced visit to the premises and found that there had been a period of time when children in one of the nursery rooms were left with only one member of staff and not all children's needs were being adequately met.

Following our investigation, we issued a notice to improve that asked the provider to:

ensure effective systems are in place to meet the individual needs of all children.

We carried out a further visit to the premises and found that the provider had put systems in place to ensure that staff were effectively deployed to meet the individual needs of children.

The provider remains registered with Ofsted"

58. I do not consider that any legitimate objection can be made to that publication. It is neither unnecessary nor disproportionate.
59. On the contrary, Parliament has empowered Ofsted to publish information of this nature for the purpose of assisting parents in choosing a childcare provider. Ofsted's policy is to publish a summary of its decision only where Ofsted, or the provider, has had to take action to ensure compliance with the provider's legal requirements. The policy has been carefully developed over a number of years. It has been revised several times in the light of Ofsted's experience in this area and in response to various representations made on behalf of parents and childcare providers. In my judgment, its policy represents a reasonable and proportionate use of the powers conferred on it by Parliament. It strikes a fair balance between the interests of parents and the interests of providers.
60. The publication policy is an important means of helping to ensure that parents and prospective parents can make fully informed choices about the care that they choose for their child. If Ofsted did not publish this information, it could be difficult for parents to obtain relevant information about a provider's compliance with its legal requirements. The published summaries remain on Ofsted's website for five years so as to provide parents with a reasonably full picture of the provider's recent compliance history. By publishing only where Ofsted, or the provider, has had to take action to secure compliance with the provider's legal requirements, Ofsted ensures that providers do not suffer a potential detriment as a result of vexatious or frivolous complaints. Further, once a provider has satisfactorily completed the required action, Ofsted updates the published information to reflect this, thereby giving appropriate credit to the provider and ensuring that the picture given to parents is fair and complete.
61. CDN complains that Ofsted's approach "could well deter members of the public from using the Claimant's nursery". The Claimant has, however, adduced no evidence to indicate that publication has in fact had this effect in the past, whether in relation to CDN itself or other providers. Ofsted's website currently contains details of a number of actions that have been raised against CDN in recent years. There is no evidence that these publications have had any adverse impact on CDN's business. On the contrary, CDN requested a variation of its registration conditions in 2011 to allow for an increase in the number of children attending.
62. Be that, however, as it may, in my judgment in any event parents should be entitled to make fully informed decisions about the childcare provision that they choose for their children. To withhold information from them about a provider's non-compliance with its legal requirements would be to disregard their interests in favour of the commercial concerns of the provider. That would be wrong.

CONCLUSION

63. I find CDN's challenge to be without merit. I dismiss it.