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
		18/03/2015

Mr Justice Warby :

1. The claimant, St Mary Magdalene Academy (the Academy), is a Church of England state funded mainstream secondary school in Islington, North London. It wishes to enter into an exchange arrangement by which up to 10 Chinese students aged 16 to 18 would be admitted into its sixth form to spend up to a year studying an International Baccalaureate Diploma course. To achieve this aim it would be necessary for the Academy to become a "Tier 4 sponsor" under the Immigration Rules, and in that capacity to issue the students with valid Confirmations of Acceptance for Studies (CAS). The Academy therefore applied on 4 July 2013 to the defendant Secretary of State, via the UK Border Agency (UKBA), for a Tier 4 sponsor licence.
2. By a letter of 26 July 2013 the defendant rejected the Academy's application and returned the fee, stating that "In line with the published guidance, we have rejected your application for the following reason/s: As stated in the Tier 4 sponsor guidance at paragraph 12, State schools, including those with sixth forms, cannot admit students who come to the UK under Tier 4. If we receive an application for a Tier 4 sponsor licence from a state school, we will reject it and return the fee."
3. In this judicial review the Academy challenges that decision on two grounds:

i) the guidance relied on is unlawful because it impermissibly introduces restrictions on migration which go beyond those contained in the Immigration Rules, without having been approved by Parliament pursuant to s 3(2) of the Immigration Act 1971; alternatively

ii) the defendant has applied the guidance in a rigid manner, without consideration of the circumstances of the Academy's particular application, or their impact on the policy considerations underpinning the guidance, in such a way as unlawfully to fetter her discretion.

4. The first ground calls for examination of whether paragraph 12 of the Tier 4 sponsor guidance amounts to a rule within the meaning of s 3(2) of the 1971 Act. The scope and application of that subsection have been considered by the Supreme Court in R (Alvi) v Secretary of State for the Home Department (Joint Council for the Welfare of Immigrants intervening) [2012] UKSC 33, [2012] 1 WLR 2208 ("Alvi") and again in R (New London College Ltd) v Secretary of State for the Home Department (Migrants Rights Network & another intervening) [2013] UKSC 51, [2013] 1 WLR 2358 ("New London College"). The claimant's principal submission is that the guidance falls within s 3(2) as interpreted in Alvi: it lays down requirements which, if not satisfied by the migrant, will lead to their application for leave to enter being refused. The defendant submits that paragraph 12 is, like the guidance considered in New London College, wholly concerned with the position of the sponsor, and for that reason falls outside the ambit of s 3(2).
5. The alternative ground engages familiar principles. The Academy submits that there is no indication of any consideration by the defendant of the particular circumstances of its case; the guidance (if that is all it is) has been unlawfully treated as "a blanket policy admitting of no possibility of exceptions" (R (Lumba) v Secretary of State for the Home Department (Justice and another intervening) [2012] 2 AC 245, [20]). The defendant relies on the principle that policy must be applied consistently, and maintains that nothing was put before her at the time of the decision or in the Academy's protocol letter that could have justified a departure from the guidance. The defendant also suggests, as I understand the argument, that the matters that the Academy has now put forward would not alter the decision.

The Academy in its legal context

6. The Academy is a school for students aged 4-18, which is not maintained by a local authority. For that reason it is in law an "independent school" within the meaning of s 463 of the Education Act 1996, the statute which provides the framework for schools generally. Academies are however not independent of the state, nor are they fee-paying institutions. Their costs are met by the Secretary of State for Education, and they are not permitted to charge fees. For these reasons they are sometimes referred to as "state funded independent schools". In everyday language they can fairly be described as "state schools", though that is not a legal term of art.
7. The status of Academy was established by s 482 of the Education Act 1996, and it is under that statute that the claimant was created, but the relevant provisions were repealed and replaced by those of the Academies Act 2010 which is the current governing statute. Section 1 of the 2010 Act sets out the framework. It provides, so far as relevant, as follows:-

"(1)     The Secretary of State may enter into Academy arrangements with any person ("the other party").

(2)     "Academy arrangements" are arrangements that take the form of—

(a)     an Academy agreement, or

…

(3)     An Academy agreement is an agreement between the Secretary of State and the other party under which—

(a)     the other party gives the undertakings in subsection (5), and

(b)     the Secretary of State agrees to make payments to the other party in consideration of those undertakings.

…

(5)     The undertakings are—

(a)     to establish and maintain an educational institution in England which meets the requirements of any of the following—

(i)     section 1A (Academy schools);

(ii)    section 1B (16 to 19 Academies);

(iii)   section 1C (alternative provision Academies);

(b)    to carry on, or provide for the carrying on, of the institution.

…

(9)     Academy arrangements must include terms imposed for the purpose of securing that no charge is made in respect of—

(a)     admission to, or attendance at, the institution, or

(b)    (subject to any exceptions specified in the terms) education provided at the institution.

(10)    An educational institution to which Academy arrangements relate is to be known as an Academy."

8. An Academy agreement within s 1(2) is commonly referred to as a "funding agreement". The provisions of s 1(9) reflect a general prohibition in education law on state-funded schools charging for education.
9. The claimant Academy is an "Academy school" within the meaning of s 1A of the 2010 Act, which provides that:

"(1)     An educational institution meets the requirements of this section if—

(a)     it is an independent school,

(b)     it has a curriculum satisfying the requirements of section 78 of EA 2002 (balanced and broadly based curriculum),

(c)     it provides education for pupils of different abilities,

(d)     it provides education for pupils who are wholly or mainly drawn from the area in which it is situated, and

(e)     it is not an alternative provision Academy (see section 1C).

…

(3) An Academy which meets the requirements of this section is to be known as an Academy school."

10. The Academy was established on 21 March 2005, by the Diocese of London (Board for Schools) ("LDBS"), as a company limited by guarantee. Clause 3 of its Memorandum of Association provides that its objects are to "advance for the public benefit education in the United Kingdom … in accordance with the principles and practices of the Church of England", in particular by establishing and carrying on a Church of England school "offering a broad curriculum with a strong emphasis on, but in no way limited to, Humanities and Citizenship". To that end, the Academy has the power "to provide educational facilities to students of all ages and the wider community for the public benefit" and, by clause 4(j), "to provide educational facilities and services to children of all ages and the wider community for the public benefit". The Academy was registered as a charity on 6 May 2005, its activities being recorded by the Charity Commission as the "provision of education for pupils of all abilities between the ages of 4 to 18 with an emphasis on a Christian ethos which supports the specialism of humanities and global citizenship".
11. On 28 April 2006, the Academy entered into a Funding Agreement with the Secretary of State for Education pursuant to s 482 of the 1996 Act, which was executed as a Deed. By clause 7, in consideration of the Academy undertaking to establish and maintain, and to carry on or provide for the carrying on, of an independent school with certain specified characteristics, the Secretary of State agreed to make payments to the Academy in accordance with the Agreement. The specified characteristics were as laid down in s 482(2) of the 1996 Act: that the school "(a) has a broad curriculum with an emphasis on a particular subject area, or particular subject areas, specified in the agreement, and (b) provides education for pupils of different abilities and who are wholly or mainly drawn from the area in which the school is situated." These requirements are now reflected in s 1A(1) of the 2010 Act. Clause 9 of the Funding Agreement specifies conditions of grant, which include a requirement that there should be no charge in respect of admission to the school, and that it will charge pupils only where the law allows maintained schools to do so. Clause 31 deems various provisions of the 1996 Act to apply to the Academy, including provisions which prohibit the charging of fees.
12. By clause 41 the Funding Agreement provided for a contribution of £36.332m by the Secretary of State to the capital expenditure of £38.332m which was agreed to be necessary to establish the Academy. Clause 50 provides for the Secretary of State to pay a General Annual Grant ("GAG") to cover the normal running costs of the Academy. The GAG includes "Formula funding", that is, funding comparable to the level that would be provided by a local authority to a maintained school with the same characteristics, taking account of the number of pupils. The Agreement provides that the basis for the pupil count for this purpose is the Governing Body's estimate in November for numbers on the roll the following September. In simple terms, therefore, the greater the estimated numbers the larger the GAG will be. The GAG is administered on behalf of the Secretary of State by the Education Funding Agency ("EFA"), an executive agency of the Department for Education ("DfE").
13. Arrangements for the admission of pupils, and for making changes to such arrangements, are provided for by clause 16 and Annexes 2 and 3 of the Agreement. Annex 2 paragraph 2 requires compliance with all relevant provisions of the statutory codes of practice, and the law, as they apply to maintained schools. These include the School Admissions Code, issued by the Secretary of State under s 84 of the School Standards and Framework Act 1998. Annex 2 paragraph 2 also provides for the Academy to have regard to advice on admissions from the LDBS. By paragraph 6 the Academy is to consider all applications for places. Paragraph 11 governs arrangements for admission to post 16 provision. It states that "It is anticipated that Post 16 provision is likely to be made from September 2012. The nature of this provision, and the criteria for admission, will be determined in accordance with the statutory timescales following consultation with the LSC, the LEA, other providers of 14-19 education and other relevant partners." Paragraphs 26 to 29 require changes to admission arrangements to be agreed by the Secretary of State and provide that the Secretary of State can approve, modify or reject proposals for changes made by the Academy following consultation.
14. The School Admissions Code for 2014, which is said to reflect the position as it was at all material times, contains a summary of "How Admissions Work", which sets out certain obligations of fairness. It states at para 8(d) that "If a school is undersubscribed, any parent that applies must be offered a place."

Immigration control and education

15. Migration to the UK is governed by the Immigration Act 1971 and Rules made under the Act. Section 1(2) of the Act provides that those without a right of abode in the UK may live, work and settle here by permission and subject to such regulation and control of their entry into, stay in and departure from the UK as imposed by the Act. Section 3(2) provides for the making of rules to regulate entry, stay, and departure:

"(2) The Secretary of State shall from time to time (and as soon as may be) lay before Parliament statements of the rules, or of any changes in the rules, laid down by him as to the practice to be followed in the administration of this Act for regulating the entry into and stay in the United Kingdom of persons required by this Act to have leave to enter, including any rules as to the period for which leave is to be given and the conditions to be attached in different circumstances; and section 1(4) above shall not be taken to require uniform provision to be made by the rules as regards admission of persons for a purpose or in a capacity specified in section 1(4) (and in particular, for this as well as other purposes of this Act, account may be taken of citizenship or nationality)."

16. The subsection provides for the proposed rules to be subject to the "negative resolution" procedure, by which either House of Parliament may within 40 days of the date of laying pass a resolution disapproving the Secretary of State's statement. Failing such a resolution the rules take effect, with what has been called the "tacit approval" of Parliament. Section 1(4) of the Act provides that:

"the rules laid down by the Secretary of State as to the practices to be followed in the administration of this Act for regulating the entry into and stay in the United Kingdom of persons not having the right of abode shall include provision for admitting (in such cases and subject to such restrictions as may be provided by the rules, …) … persons coming … for purposes of study."

17. The rules, once approved, have an unusual legal status. They are not primary or subordinate legislation but detailed statements by a Minister of the Crown as to how the Crown proposes to exercise its executive power to control immigration. But they create legal rights which may form the basis of an appeal against an immigration decision, which can be brought on the grounds that the decision was not in accordance with the rules: MO (Nigeria) v Secretary of State for the Home Department [2009] 1 WLR 1230, [6] (Lord Hoffmann).
18. The entry into the United Kingdom of non-EEA nationals wishing to work or study here is currently governed by a points-based system ("PBS"), contained in Part 6A of the Immigration Rules. The points-based system has a number of tiers. Tiers 1 and 2 are concerned with workers. Applications to study fall under Tier 4. Before the PBS was introduced in November 2008, applications to study were subject to Rule 57 of the Immigration Rules which provided as follows:

"Students

Requirements for leave to enter as a student

57. The requirements to be met by a person seeking leave to enter the United Kingdom as a student are that he:

(i) has been accepted for a course of study, or a period of research, which is to be provided by or undertaken at an organisation which is included on the Register of Education and Training Providers, and is at either;

(a) a publicly funded institution of further or higher education which maintains satisfactory records of enrolment and attendance of students and supplies these to the Border and Immigration Agency when requested; or

(b) a bona fide private education institution; or

(c) an independent fee paying school outside the maintained sector which maintains satisfactory records of enrolment and attendance of students and supplies these to the Border and Immigration Agency when requested; and

(ii) is able and intends to follow either:

(a) a recognised full-time degree course or postgraduate studies at a publicly funded institution of further or higher education; or

(b) a period of study and/or research in excess of 6 months at a publicly funded institution of higher education where this forms part of an overseas degree course; or

(c) a weekday full-time course involving attendance at a single institution for a minimum of 15 hours organised daytime study per week of a single subject, or directly related subjects; or

(d) a full-time course of study at an independent fee paying school; and

(iii) if under the age of 16 years is enrolled at an independent fee paying school on a full time course of studies which meets the requirements of the Education Act 1944…"

19. The sections of Part 6A of the Immigration Rules that are relevant to the present case are those which apply to Tier 4 (General) Students, a route for migrants aged 16 or over who wish to study in the UK, and Tier 4 (Child) Students, a route for children at least 4 years old and under 18 who wish to be educated here. The structure of the two sections is similar. Migrants are required to have a valid entry clearance, and to obtain this they have to meet specified requirements. The first requirement is that the migrant does not fall for refusal under the "general grounds for refusal", which concern matters of character and the like. The second requirement is to have a minimum of 30 points under specified paragraphs of Appendix A to the Rules. For Tier 4 (Child) Students, Rule 245ZZA(b) requires a minimum of 30 points under paragraphs 121 to 126 of Appendix A. Paragraph 121 of Appendix A states that an applicant for entry clearance as a Tier 4 (Child) Student "must score 30 points for attributes." Table 17 shows that the only way to obtain those 30 points is by means of a CAS. Paragraph 124 provides as follows:

"124. A Confirmation of Acceptance for Studies will be considered to be valid only if:

(a) where the applicant is under 16, it was issued by an independent, fee paying school,

(b) it was issued no more than 6 months before the application is made,

(c) the application … is made no more than 3 months before the start date of the course of study ….

(d) the Sponsor has not withdrawn the offer …

(e) it was issued by an institution with a Tier 4 (Child) Student Sponsor Licence,

(f) the institution must still hold a licence…,

(fa) the applicant must not previously have applied for entry clearance … using the same [CAS] reference number ….,

(g) it contains such information as is specified as mandatory in these immigration rules."

Paragraph 124(a) reflects provision that had previously been made in Rule 57(iii), but paragraph 124 contains no other limit on the character of the educational institutions which can issue a valid CAS.

20. Other limits of that kind do appear in the defendant's document "Tier 4 of the Points Based System – Policy Guidance" ("the Guidance"). The version before me is dated October 2013, but it is agreed that the relevant provisions were identical at the material time. The Guidance is described on its cover as being for, "educational providers" including those "who want to join the Sponsor Register under Tier 4 …" The introductory text tells the reader that the document explains how to apply for a sponsor licence, what the Home Office expects from licence holders, the processes that must be followed when sponsoring a student, and the duties and responsibilities that must be complied with by licensed sponsors. Under the heading "What is Tier 4 and who is it for?" the Guidance explains at paragraph 10 that students who want to study full time in the UK "must be sponsored by an education provider that has a sponsor licence." Paragraph 10 explains that education providers can apply for a licence in two categories:

"a. Tier 4 (General) student. This is for anyone who comes to the UK for their post 16 education.

b. Tier 4 (Child) student. This is for children between the ages of 4 to 17 (inclusive) who come to the UK for their education. Children aged between 4 and 15 (inclusive) may only be educated at independent, fee-paying schools.

c. If the student is over the age of 16 and under the age of 18, then they can apply under either the Tier 4(General) or the Tier 4 (Child) category."

21. Paragraph 10(b) broadly reflects the content of paragraph 124(a) of Appendix A to the Immigration Rules. Paragraph 12 of the Guidance also reflects this restriction, but goes beyond it. It contains the provision which is challenged as unlawful. It states, with emphasis added:

"State schools, including those with sixth forms, cannot admit students who come to the UK under Tier 4. If we receive an application for a Tier 4 sponsor licence from a state school, we will reject it and return the fee." "

The Academy's proposals and the defendant's response

22. The Academy opened in September 2007. The school governors have agreed a short statement of aims: "[the Academy] is a Christian community of learning. We aim to nurture young people to become high achievers and to discover their vocation in the global society." The Academy's website identifies its specialism as "Humanities and global citizenship" and sets out ways in which it hopes to achieve its aims. These include participation by students in "live" contact with other countries in each year of their education, which is achieved through the Academy's links with schools in places such as Senegal, China, Mexico and Finland.
23. In line with this specialism, the Academy's Sixth Form offers the International Baccalaureate Diploma ("IB"), a two-year educational programme aimed at students aged 16-19, which is accepted by many universities worldwide. The Academy has students from all over the EEA, and children from countries outside the EEA, by virtue of diplomatic service exemptions. Around 20% of Sixth Form students are from overseas. The Sixth Form has outstanding academic results placing it 5^th in the list of top 100 comprehensive Sixth Forms in England.
24. The Academy teaches Chinese Language and Culture, a compulsory subject for the Academy's Year 7 and Year 8 students, and Mandarin, an option at GCSE and IB level. The school has developed links with two schools in China, and operates short-stay educational exchanges with both. The decision was taken to apply for a Tier 4 Sponsor Licence to allow a maximum of ten Chinese Sixth Form students, aged 16-18, per year, into the Sixth Form. The proposal is for the Chinese students to take a one year course at the Academy representing approximately half of the IB programme. Mr Hollingum, the Academy's Principal, says the Academy's Chinese partners are keen for their students to study on the IB programme, seeing advantages to their students from experience abroad. He says, "On the flip side, the Chinese are very hard-working and we consider it will be of real benefit to our students for them to mix with Chinese students for a year and to see how hard the Chinese students work." More general benefits for the Academy's students are envisaged, including a widening of personal horizons, and supporting a greater understanding and tolerance of other cultures.
25. The defendant's July 2013 rejection of the Academy's application for a Tier 4 sponsor licence led to a letter of claim dated 4 October 2013, asserting that the decision was unlawful for each of the reasons summarised in paragraph 3 above. The response of 18 October 2013 maintained that the decision was "correct and is in line [with] the sponsor guidance". It made reference to New London College and asserted that "the sponsor guidance is not required to be contained within the immigration rules." Nothing was said about any policy factors underlying the Guidance. The claim form was issued on 25 October 2013. Mr Hollingum's first statement was dated the previous day. In its final paragraph he stated that "The addition of ten places a year across a range of thirty-six course has a zero marginal cost for the Academy."
26. The defendant's summary grounds of resistance explained that the policy of refusing to grant Tier 4 sponsors licences to state funded schools is based on two things: first, that UK taxpayers should not be funding the education of children from outside the EEA; and secondly, that school places in the UK are in demand and should not go to children from outside the EEA. Mr Hollingum responds in a further statement that neither of those things applies in the Academy's case. He explains that the Academy's plan for its Sixth Form, which has been accepted by the local authority and agreed by the Secretary of State for Education, is to have a maximum of 250 students. The school currently has 140 Sixth Form students. It expects to have 200 by September 2017. It is therefore undersubscribed. Mr Hollingum states that the school doubts that it will ever reach 240 Sixth Form students. As the Academy is unlikely to meet its maximum admission number, he says, the admission of the 10 Chinese students would not prevent any UK child from taking up a place. Mr Hollingum had already dealt with the question of cost in his first statement but in his second statement says, further, that the governors will continue to offer the current courses regardless of the numbers in the Sixth Form, and that the addition of 10 places a year therefore has "zero marginal cost to the Academy". In response to a point taken by the defendant about the calculation of the GAG, Mr Hollingum points out in his third witness statement that the Academy is not contractually bound to rely, and makes clear that it will not rely on the Chinese exchange students when making its estimate of Sixth Form pupil numbers for the purpose of the GAG calculation.
27. Mr Hollingum adds that the Academy's plans for the exchange programme have been made known to the Department for Education and discussed with departmental staff. An email following a meeting in July 2014 shows that this is so, and reveals no indication that the Department has objected or sought to block the Academy's plans, by the exercise the powers available to the Secretary of State under the Funding Agreement or otherwise. However, the defendant relies on a witness statement filed shortly before the hearing, from Ms Lesley Jones, Deputy Director of School Organisation and Admissions Division at the DfE. This, besides referring to the statutory framework for Academies that I have outlined above, explains the Department's policy in respect of educational exchanges.
28. It is pointed out that the Immigration Rules allow a child to come to the UK and attend a state-funded school for up to six months. Ms Jones states that the DfE does not consider that educational exchanges for periods longer than this should be permitted, and that its policy is that state-funded schools are not permitted to be Tier 4 sponsors. She explains the rationale for this policy. State-funded schools primarily exist to provide education for children who require a local school place. Since education in state-funded schools is free of charge, schools should provide their places to residents of the UK who, by and large, contribute through taxation to the funding of the system, and not to children from outside the EEA whose families, by and large, have not done so. Further, "the ethos of fairness that underpins the School Admissions Code means that it is difficult for a school to comply with the Code and prioritise pupils from outside the local area when there is strong local demand for the available places." For these reasons the Government is "of the view that such pupils may apply to attend fee-paying schools but not to enter the country to attend state-funded schools."

The first ground: an unlawful restriction on migration?

29. A considerable part of the defendant's argument is, like the evidence of Ms Jones, devoted to exposition and explanation of what is described in Mr Barnes' skeleton argument as "The statutory and policy basis for paragraph 12 of the Guidance". In summary, the defendant's position is that: (a) state funded schools are funded by the public purse, and are not able to charge fees for education; (b) in the circumstances, the funds provided to state funded schools, and in particular Academies, are to fund the education of children from their local areas, and not that of children from outside the EEA; and, (c) this is reflected in the Immigration Rules, which do not make courses available to applicants for leave to enter, where the cost will be funded by the public purse. In support of that position, the defendant cites the funding arrangements for Academies, and for this Academy in particular; the general prohibition on the charging of fees by state-funded schools, and the particular prohibitions in the case of this Academy; policy on admissions to state-funded schools from outside their local area; and the content of Rule 57(iii) of the former rules.
30. Some of the points relied on appear to me to be misplaced. Thus, though it is true that clause 7(b) of the Academy's Funding Agreement requires it to draw its pupils "wholly or mainly … from the area in which the school is situated", it cannot be said that this principle would be violated by the admission of 10 pupils from elsewhere, amounting to some 7.5% of the Sixth Form. Nor is there anything in the fairness requirements of the School Admissions Code that conflicts with what the Academy proposes. Indeed, the obligation to admit all if undersubscribed may be said to point in the opposite direction. DfE Guidance on "Schools admissions: applications from overseas children", referred to by Ms Jones, states that children from outside the EEA are not entitled to a state education; but this is non-statutory guidance which the Funding Agreement does not require the Academy to take into account, and may do no more than reflect the impugned Guidance of the defendant. Another document referred to by Ms Jones, "Funding Guidance for young people 2014 to 2015", published by the EFA in June 2014, records that the EFA's Treasury settlement is "intended to fund education and training for young people resident within England …" so that "institutions are not expected to recruit entire groups of students from outside their local area and permission to enrol such groups of students must be sought from the funding body." This Guidance relates, however, to funding under s 14 of the Education Act 2002 (power of the Secretary of State to give financial assistance for purposes relates to education or children etc). That is not the source of the Academy's funding from the Secretary of State, and Mr Hollingum's evidence is that the Academy is not seeking funds under that section (or any additional funds).
31. Despite these points, it is tolerably clear that there is and has for some time been a consistent policy that, subject to limited exceptions inapplicable to this case, state-funded schools will not be permitted to provide education to children from outside the EEA free of charge. That, however, is not the point at issue. The claim does not raise a challenge to the defendant's right (or that of the DfE) to adopt a policy of not permitting students from outside the EEA to study in state-funded schools or, to put it another way, not permitting state-funded schools to provide educational facilities to students from outside the EEA. The Academy's point is, rather, that this policy cannot lawfully be implemented via paragraph 12 of the Guidance, because that provision represents a rule of a kind that is required by statute to be submitted for Parliamentary approval, but has not been so submitted. Specifically, it is contended for the Academy that the first sentence of paragraph 12 is a rule which serves illegitimately to "shift the line" for applicants compared with the position set out in paragraph 124(a) of Appendix A to the Rules, and approved by Parliament.

Principles

32. Parliament provided by s 3(2) of the Immigration Act 1971 that it should have oversight of, and an opportunity to disapprove, any "rules, laid down by [the Secretary of State] as to the practice to be followed in the administration of this Act for regulating the entry into and stay in the United Kingdom of persons required by this Act to have leave to enter…" This, as Lord Hope observed in Alvi at [54], left questions as to where the line is to be drawn with regard to the content of the rules to the Secretary of State to determine as matters of policy. "What Parliament was insisting on was that she should lay her cards on the table so that the rules that she proposed to apply, and any changes that were made to them, would be open to scrutiny".
33. As Lord Hope said in the same paragraph, it makes good sense to separate rules from guidance and codes of practice, but the cases have revealed that the balance between what ought to be in the rules and what can properly be dealt with by referring to extraneous materials has not always been struck in the right place. One reason for this is that although there is a difference in the general sense conveyed by "rules" on the one hand and "guidance" on the other, there is no clear dividing line between the two: see Lord Walker at [114]. The task confronting the court in Alvi was to identify what amounts to a "rule" for the purposes of s 3(2) of the 1971 Act.
34. Alvi was concerned with the system then applying to Tier 2 (General) Migrants, the route for workers in skilled occupations. The claimant's application for leave to remain as an assistant physiotherapist failed because he could not obtain the number of points required. That was because he could not satisfy a requirement specified in a document which had not been laid before Parliament, that the job in question must be skilled at or above NVQ 3 or SVQ 3 level. That was because another document which had not been laid before Parliament determined that the role of assistant physiotherapist was not skilled at that level. The main issue was whether this requirement and this criterion represented "rules" within the meaning of s 3(2).
35. Alvi is authority for the proposition that a rule within the meaning of s 3(2) is, to quote Lord Dyson, "any requirement which a migrant must satisfy as a condition of being given leave to enter or remain in the UK" ([94]) or "provisions which set out criteria which are or might be determinative of an application for leave to enter or remain" ([97]). The other members of the Supreme Court agreed with Lord Dyson, Lord Wilson pointing out that there is no distinction between these two formulations. On this approach the requirement and criterion which Mr Alvi failed to satisfy were rules within s 3(2). As they lacked Parliamentary approval the defendant's decision to refuse leave to remain was quashed.
36. In New London College the Supreme Court emphasised that what Alvi decided was that s 3(2) extends only to requirements which "if not satisfied by the migrant, will lead to an application for leave to enter or remain being refused": see [24] (Lord Sumption, with whom Lords Clarke, Reed and Hope agreed). New London College was concerned with the Tier 4 (General) system and, specifically, with the Tier 4 Sponsor Guidance relating to Tier 4 (General) sponsors, as it stood in 2010. This laid down what Lord Sumption described at [17] as "mandatory requirements governing (i) the criteria for the award of a sponsor's licence, (ii) the obligations of those to whom a licence has been awarded, (iii) the criteria to be applied by a licensed sponsor in issuing a CAS, and (iv) the procedure and criteria for suspending, downgrading or withdrawing a sponsor's licence." The two claimants, one of which had had an existing licence withdrawn, the other having been denied a licence pursuant to these requirements, asserted that they were "rules" within s 3(2) and hence invalid for lack of Parliamentary approval. The Court dismissed this contention, holding that the requirements were "not rules calling for compliance by the migrant as a condition of his obtaining leave to enter or remain. The Sponsor Guidance is wholly concerned with the position of the sponsor … As far as the migrant is concerned, the only relevant rule is that to obtain leave to enter or remain he must have received a CAS from a licensed sponsor": [24].
37. Lord Sumption illustrated the point in the same paragraph, by hypothesising an appeal by a migrant under s 84(1) of the Nationality, Immigration and Asylum Act 2002 on the statutory ground that his application to enter or remain was refused as "not in accordance with immigration rules":

"If the issue on a hypothetical appeal under section 84(1) was whether the migrant had a CAS from a licensed sponsor, that would fall within the proper scope of the appeal, because the requirement to have a CAS from a licensed sponsor was laid down by the Rules. But if the issue was whether the course-provider ought to have been licensed, it would plainly not fall within the proper scope of the appeal, for that was not a requirement falling to be satisfied by the migrant and could have formed no part of the ground of refusal."

38. Mr Wolfe QC submits on behalf of the Academy that the first sentence of paragraph 12 of the Guidance contains a requirement which needs to be satisfied by an applicant as a condition of obtaining leave to enter, and hence is a rule within the meaning given to the term in Alvi. He makes the undeniable point that the true character of a provision is not determined by the nature of the document in which it appears. "Whether or not material in an extraneous document is a rule, or a change in the rules, will have to be determined on the facts of each case": Alvi [64]. Whilst conceding that in form paragraph 12 directs attention to the institution, Mr Wolfe makes the point that "in public law the emphasis should be on substance rather than form": R (Burkett) v Hammersmith and Fulham London Borough Council [2002] 1 WLR 1593 [31] (Lord Steyn). Paragraph 12 has "tangible effects" on potential applicants for entry clearance, he submits, as it prescribes the type of school that an individual in a given age cohort may attend. Its effect is that no student from outside the EEA can obtain entry to study at any state-funded school.
39. Mr Wolfe submits that the defendant has laid some of her cards on the table by means of paragraph 124(a) of Appendix A, but kept something back and put it in paragraph 12 of the Guidance. The character of paragraphs 124(a) and 12 is the same – they both regulate entry in the same way - but the content is different. Thus, the defendant has used the Guidance illegitimately to modify the boundaries which she has proposed, and Parliament has approved, in the Rules, for the type of school an applicant may attend. New London College did not address this aspect of the Guidance and is distinguishable, submits Mr Wolfe, because the guidance with which it was concerned related essentially to matters of "quality control". Parliament had not entered into the territory of categorizing the nature of the body which could possess a Tier 4 sponsor licence.
40. I agree that the question of whether a provision is a rule for present purposes requires that attention is paid to the substance of the provision. The nature of the document in which it appears does not provide an answer, or even help in reaching an answer. A provision that amounts to a rule may appear in Guidance. But the correct characterisation cannot be arrived at, either, by applying a broad test of whether the provision has an effect on an applicant for leave to enter or remain. By that test, quality control requirements such as those under consideration in New London College, that eliminate some institutions as insufficiently trustworthy to be licensed sponsors, would amount to rules requiring Parliamentary approval. Such requirements serve to limit the pool of licensed sponsors and thus the range of institutions from which an applicant can obtain a valid CAS. To that extent they have an indirect impact on an applicant. But as New London College demonstrates, it does not follow that that they impose requirements or set criteria that fall within s 3(2) of the 1971 Act.
41. In my judgment, as a matter of substance as well as in form the first sentence of paragraph 12 of the Guidance is, like the Guidance under consideration in New London College, wholly concerned with the position of the sponsor. It is an exclusionary rule (in the ordinary sense of the word), concerned with the entitlement of a particular category of institution to obtain a sponsor's licence, and to admit students from outside the EEA. It reflects a policy as to who may be admitted to a state-funded school, rather than a policy as to who may be admitted to the UK to study. Individuals such as the Chinese exchange students envisaged in this case are not thereby prevented from entering the country. They are required to obtain a valid CAS. That can only be issued by a licensed sponsor. But a fee-paying institution can be a sponsor (and whether it actually charges the student is a matter between them).
42. The essential character of this provision is not altered, either, by the fact that in substance the same provision appeared in the Immigration Rules that existed before the PBS, or the fact that a similar but more limited exclusion appears in paragraph 124(a) of Appendix A. The split of the exclusionary provisions relating to "state schools" between the Rules and the Guidance is admittedly odd. The explanation given by Mr Barnes, on instructions, is that publicly funded colleges providing 6^th form education can charge and thus should not, in the defendant's view, be excluded from the licensing system. However that may be, the focus on substance which Mr Wolfe rightly advocates leads to the conclusion that the mere fact that a provision such as paragraph 124(a) appears in the Rules does not mandate the conclusion that it, or other provision on the same topic, amounts to a rule within the meaning of s 3(2). Adopting Lord Sumption's approach, no ground of appeal would be available to a Chinese student refused leave to enter because of the application of the rule under challenge. A contention that the Academy should have been licensed and thus enabled to issue a valid CAS would fall outside the scope of the rights of appeal.
43. It is submitted by Mr Wolfe that even if the specific guidance in paragraph 12 does not amount to a rule as such within the meaning of s 3(2) it is unlawful because it is inconsistent with the Immigration Rules. He relies on what Lord Sumption said in New London College at [29]:

"If the Secretary of State is entitled (as she plainly is) to prescribe and lay before Parliament rules for the grant of leave to enter or remain in the United Kingdom which depend upon the migrant having a suitable sponsor, then she must be also be entitled to take administrative measures for identifying sponsors who are and remain suitable, even if these measures do not themselves fall within section 3(2) of the Act. This right is not of course unlimited. The Secretary of State cannot adopt measures for identifying suitable sponsors which are inconsistent with the Act or the Immigration Rules."

44. I do not accept the premise of Mr Wolfe's argument, which is that inherent in paragraph 124(a) is the proposition that over 16s will be entitled to obtain a valid CAS from a non-fee paying school. On a proper analysis, paragraph 12 is complementary or additional to, rather than at odds with paragraph 124(a).

The second ground: unlawful fettering of discretion?

45. Having concluded that the Guidance is just that, and not a rule, I must address the Academy's complaints that the defendant has nonetheless acted unlawfully. In his skeleton argument Mr Wolfe submitted that the pursuit by the defendant of the underlying policy objectives identified in her Grounds of Resistance would be unlawful, as it would represent the use of powers conferred for the purpose of immigration control, for a different purpose: Padfield [1968] AC 997, 1030B-D (Lord Reid). By the time of the hearing the evidential position had moved on, and Mr Wolfe did not press the point in oral argument. He did not query the validity of the policy aspirations relied on, but devoted his attention to the complaint stated in the claim form, that the defendant applied her policy rigidly and without any flexibility; and to the twin propositions (a) that the Academy's evidence shows that the policy objectives that have now been disclosed are not engaged on the facts of this case, and (b) that the defendant has failed to engage with the facts.
46. The well-established principle that a policy should not be so rigid in its formulation or its application as to amount to a fetter on the discretion of decision-makers has been explained in various ways. In R v Secretary of State ex p Venables [1998] AC 407 at 496G-497C Lord Browne-Wilkinson put it thus:

"When Parliament confers a discretionary power exercisable from time to time over a period, such power must be exercised on each occasion in the light of the circumstances at that time. In consequence, the person on whom the power is conferred cannot fetter the future exercise of his discretion by committing himself now as to the way in which he will exercise his power in the future. He cannot exercise the power nunc pro tunc. By the same token, the person on whom the power has been conferred cannot fetter the way he will use that power by ruling out of consideration on the future exercise of that power factors which may then be relevant to such exercise.

"These considerations do not preclude the person on whom the power is conferred from developing and applying a policy as to the approach which he will adopt in the generality of cases: see Rex v. Port of London Authority, Ex parte Kynoch Ltd  [1919] 1 K.B. 176; British Oxygen Co. Ltd. v. Board of Trade [1971] A.C. 610. But the position is different if the policy adopted is such as to preclude the person on whom the power is conferred from departing from the policy or from taking into account circumstances which are relevant to the particular case in relation to which the discretion is being exercised. If such an inflexible and invariable policy is adopted, both the policy and the decisions taken pursuant to it will be unlawful: see generally de Smith, Woolf and Jowell, Judicial Review of Administrative Action, 5th ed. (1995), pp. 506 et seq., paras. 11–004 et seq."

47. A more recent and pithy statement is that of Sedley LJ in Pankina v Secretary of State for the Home Department [2010] EWCA Civ 719 [28]:

"A policy is precisely not a rule: it is required by law to be applied without rigidity, and to be used and adapted in the interests of fairness and good sense."

48. It is clear enough on the face of the Home Office letter of 23 July 2013, rejecting the Academy's application, that no consideration was given to the individual circumstances of the case at that time. Nor was this done in response to the letter of claim in October of the same year. It is not suggested on behalf of the defendant that there was any consideration of the Academy's particular circumstances. Mr Barnes' primary submission is that the defendant's decision was lawfully made on the material then before her. There was nothing about the Academy's application that was exceptional or otherwise such as to require or justify a departure from a lawful policy. Nor did the letter of claim provide any information of that kind even though the Academy had, as explained in the letter, taken advice from Mr Wolfe by that time. There was no sensible basis for departing from the policy. Secondly, it is submitted by Mr Barnes that the defendant was "entitled to conclude" that the policy objectives she has identified outweighed any benefits the Academy's students might gain from the presence amongst them of Chinese exchange students.
49. These points are, as Mr Wolfe has pointed out, unfairly made when the defendant had not at the relevant time disclosed the policy objectives underlying the relevant Guidance. The Academy had been given no opportunity to address the reasons which are now put forward to justify the decision. Those reasons emerged in the Summary Grounds of Resistance, but could have been put forward sooner. I do not accept Mr Barnes' submission that the Academy must, without its having been spelled out, have had some understanding of the policy framework, or his contention that the Academy could and should have articulated why they considered they deserved special treatment. Further, Mr Barnes' reliance on the defendant's discretion faces the difficulty that there is no evidence that the defendant did engage in the process of reasoning relied on. The letters of July and October 2013 contain no trace of it.
50. Now that the defendant has explained her policy thinking, the Academy has now provided what Mr Barnes characterised as a "vast amount of material" via Mr Hollingum's three witness statements and their exhibits. There has however been no fresh decision by the defendant. Hence Mr Wolfe's complaint that no discretionary opportunity has been afforded to the Academy even now. Mr Barnes' fall-back position is to submit that even now the Academy has put forward no basis on which the defendant could reach a different decision. There is still nothing special about the Academy's application; there is no reason to believe visits of up to six months would not suffice; and the proposition that 10 additional students could be educated for no extra cost is said to be "unsustainable". One point made in the defendant's skeleton argument was that the GAG would increase by reference to the extra 10 students, but that had been met by Mr Hollingum by the time of the hearing. Mr Barnes then sought in argument to identify other direct and indirect costs that would be incurred, such as insurance arrangements. He criticised the Academy's evidence as lacking the back up of any accounting analysis.
51. This is dangerous ground. It is clear law that the court should only refuse relief that would otherwise be granted "if the decision would inevitably have been the same and the court must not unconsciously stray from its proper province of reviewing the propriety of the decision-making into the forbidden territory of evaluating the substantial merits of the decision": R (Smith) v North Eastern Derbyshire Primary Care Trust [2006] EWCA Civ 1291, [2006] 1 WLR 3315 [10] (May LJ). "Views expressed in statements made in the course of litigation about how a decision-maker might have acted [or, I would add, would act] are rarely, if ever, of assistance in deciding whether a decision might have been different if the decision-maker had considered the issue properly": Pemberton International Ltd v London Borough of Lambeth [2014] EWHC 1998 (Admin) [72] (Lewis J). Here, Mr Barnes' submissions about cost were only that; the defendant has adduced no evidence on these points, although the assertion that the marginal cost of admitting the Chinese students would be zero has been in play ever since Mr Hollingum's first statement, dated 24 October 2013. In my view Mr Wolfe is justified in his submission that it is not good enough for the defendant to adopt this approach and Mr Barnes does not, on the evidence in this claim, come close to establishing that the decision would inevitably be the same if she took into account what is now said on behalf of the Academy.
52. In my judgment the defendant has failed to address the application of her policy to the particular circumstances of the Academy's case with the flexibility, fairness and good sense that the law requires of her, and I uphold the second ground of challenge.

Conclusions

53. I dismiss the first ground of challenge. In my judgment paragraph 12 of the Guidance is lawful. It does not require Parliamentary approval. However, I uphold the second ground of challenge. The defendant has in this instance applied her policy rigidly and without regard to the facts of the individual case. What decision she would have reached or would reach upon consideration of all the relevant factors is not for me to decide, except to say that it has not been established that the decision would inevitably be the same. The decision is a matter for the Secretary of State, and involves a discretion, but she is obliged to consider and exercise that discretion with reference to the facts of this case and their inter-relationship with her policy aims. I will make such orders as are appropriate to give effect to that conclusion after hearing Counsel.