England and Wales High Court (Administrative Court) Decisions

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

		Royal Courts of Justice Strand London WC2A 2LL
		6 July 2016

MR JUSTICE HOLMAN:

Introduction

1. This claim in judicial review is the sequel to an earlier judicial review between the same parties and in relation to the same essential subject matter. In that case, judgment was given on 17 May 2012 under neutral citation number [2012] EWHC 1460 (Admin). On that occasion, Mitting J made an order as follows:

"3B. The defendant's decision of 22 November 2010, insofar as it relates to the claimant, is quashed.

4A. The court directs that the decision be reconsidered but only to give effect to the Secretary of State's obligations under section 149 Equality Act 2010. It is further directed that the Secretary of State need not consider any other issue save to the extent that he is required to do so by law."

From that, it can be seen that the original decision was made as long ago as November 2010, now over five and a half years ago.

2. The Secretary of State (by his Minister of State for Schools, the Right Honourable David Laws MP) did reconsider and made a fresh decision communicated by a letter dated 25 July 2013, itself now three years ago. The claimant county council ("Essex") claim that that decision, too, is unlawful and should be quashed, and the matter reconsidered yet again.
3. This dispute has thus become something of a carousel which, to my mind, does no credit to the field of administrative law, nor to the relationship of cooperation which should exist between the national and local arms of the government of this country. Underlyingly, the dispute relates purely to money, now said to be about £13 million. The subject matter is historical and a fact specific "one-off" which raises no recurring issue of principle or policy.
4. I asked whether in this long saga there had been any attempts at mediation or a negotiated solution, and I was told that there had been none. The outcome of this claim must be binary. The decision must either stand or be quashed. Since there is, until delivery of this judgment (and the outcome of any appeal which might follow), considerable litigation risk for both parties, a wise litigant would long ago have compromised somewhere in the middle. I regret that these parties have not even at least explored the possibility of doing so. Although I am only an intermittent judge of the Administrative Court, I wish to stress that there is no reason at all why mediation or other forms of ADR should not have a significant role in the field of judicial review, at any rate in cases which do not raise important questions of law, principle or policy. The power of talk should be at its strongest between arms of government.
5. I should say in fairness to the parties that the long period since July 2013 is not so much the responsibility of them as of the legal system. The wheels of justice can still grind very slowly. The present claim was first issued on 25 October 2013. A judge refused permission to apply for judicial review on paper on 5 December 2013. Essex renewed their application to an oral hearing at which another judge again refused permission on 6 June 2014. Essex then renewed their application to the Court of Appeal. Their renewed application was heard by Sir Stanley Burnton sitting as a judge of that court on 14 October 2015 (viz two years after the claim was issued and some 16 months after the decision of the judge at the oral reconsideration hearing). Sir Stanley Burnton granted permission on all grounds, and the substantive hearing was finally fixed for 28 June 2016, namely last week. But although the long delay is not the responsibility of the parties, it afforded to them a prolonged opportunity to negotiate. They did not take it. Both sides appear to have dug in.

The background context

6. I propose to summarise the factual context relatively shortly. Any reader who requires a more detailed account can find it in the publicly available judgment of Mitting J. In November 2007, the then government announced a new grant scheme known as the Sure Start Early Years Children Grant ("the EYC scheme") to run for a three year period from April 2008 to March 2011. The grants were offered to all 152 local authorities in England pursuant to discretionary powers under section 14 of the Education Act 2002. The essential purpose was, in very broad summary, to improve the quality and availability of, and access to, early years learning for children (including babies) below the age of compulsory full time education. The grants comprised both revenue and capital elements. This case concerns the capital element.
7. By paragraph 54 of a Memorandum of Grant dated 14 February 2008, the department stated that:

"54. We will be able to offer carry-forward of unspent capital [my emphasis] both from 2007-08 into 2008-09 and from 2008-09 and 2009-10 into each of the following years ..."

As Mr Jonathan Swift QC stresses on behalf of the Secretary of State, that passage is no more than a statement in principle as to the future. It says, "We will be able to offer ...". It does not itself represent an offer and could not bind the Secretary of State.

8. In 2010 there was a general election and a change of government. The new government decided that considerable reductions in public expenditure were required. The Secretary of State decided (and Essex do not within this claim criticise or challenge that decision) that savings or reductions must be made from the EYC scheme as well as from many other calls upon his department. He decided in relation to the EYC scheme that local authorities should now only be permitted to carry forward capital funding where that funding was already "committed". "Committed" was identified as meaning that before a cut off date of 7 July 2010 (extended in the case of Essex to 29 July 2010), a binding building contract had been entered into by a local authority for new build nurseries and similar EYC provision, or a binding contract had been entered into, for instance, to purchase an existing building for EYC provision. That policy and decision was, as I understand it, applied uniformly and consistently to all local authorities.
9. However, uniquely, Essex had devised a different system or mechanism for the delivery of provision under the EYC scheme. Instead of contracting directly with builders to build, or contracting directly to purchase, Essex had decided to disburse the grant funds to "providers" such as schools or nurseries who would then in turn contract to build or purchase appropriate capital assets. The essential dispute which arose, and still persists, between the department and Essex is as to whether funds which had already been promised to providers before the cut off date should be regarded as "committed", or only those funds in reliance upon which the provider had in turn already entered into a binding contract before that date to build or purchase.
10. This issue of course engaged the question of how far Essex were themselves contractually bound to providers by the cut off date. Mitting J reviewed the respective positions of Essex and the department as to that issue in paragraphs 15 to 26 of his judgment. The contracts between Essex and their providers contained a clause as follows:

"9. This contract may be terminated only by the council on giving reasonable written notice to the school [viz the provider] ..."

Each contract also contained in clause 14 a force majeure clause that:

"14. For so as long as such circumstances prevail, no party shall be liable for any failure or delay in the performance of its obligations and/or duties under this contract to the extent that such failure or delay is caused by circumstances beyond that party's reasonable control."

11. The stance of Essex was that even though by the cut off date a provider may not have entered into a binding contract with a third party such as a builder, Essex had nevertheless entered into binding contracts with their providers so that they, Essex, were already "committed" within the policy decision of the Secretary of State. The opinion of the department's legal adviser was quoted by Mitting J at paragraph 25 of his judgment, from which I more briefly excerpt the following:

"... the termination clause [viz clause 9] does appear to allow Essex to withdraw from the contract without penalty however, so that they can mitigate any losses incurred if they do not receive the funding to enable them to proceed. In addition, clause 14 provides that [as above] ... which arguably a withdrawal of the department's funding would be."

Mitting J continued at paragraph 26 that:

"For what it is worth, I agree with the legal adviser's advice ..."

Mitting J continued, importantly:

"In any event, that is what the officials of the department understood the position to be: that Essex could withdraw from the contracts with providers where they, the providers, had not become contractually bound to contractors, without penalty, or at least significant penalty, or adverse financial consequences."

12. That is important because the definitive construction and effect of the contracts between Essex and the providers, and of those clauses, has never been determined and now never will be determined by any court. The rationality of the decision making by the Secretary of State necessarily reflected the advice he received from his legal adviser, with which indeed, "for what it is worth," Mitting J agreed.
13. By his original or first decision made on 22 November 2010, the Secretary of State agreed to Essex carrying forward £11.4 million into the year 2010-11. Essex contended that the carry-forward into that year should be an additional £10.7 million. Essex commenced their first claim for judicial review on three grounds: (1), lack of consultation; (2), irrationality in the choice of criteria; and (3), failure to fulfil statutory duties under the equality legislation. Mitting J rejected the challenges under grounds 1 and 2 which he concluded were "unarguable". As to ground 2, the rationality challenge, he said at paragraphs 37 and 38:

"... The Secretary of State was entitled to choose to achieve cuts in funding by making those cuts which imposed the least burden on the public purse, including on the purse of local authorities ...

38. Once Essex produced copies of its contracts with primary schools and nurseries [viz the providers] and the department had obtained proper legal advice about the effect of these contracts, it was apparent to officials ... that cancellation of the projects before the primary schools and nurseries had become contractually committed to builders could be achieved at no, or no great, cost. Given the nature of the exercise that the Secretary of State was undertaking, the urgent saving of public funds where possible, a criterion identified to achieve that purpose cannot possibly be described as irrational ..."

14. As to the third ground of challenge, however, there was no reference in any of the contemporaneous documents to any consideration, whether by the Secretary of State or by his officials, of the statutory equality duties upon the Secretary of State. Mitting J concluded that he did not accept that the Secretary of State, either personally or by his officials, fully discharged those duties upon them. The decision was "... flawed but flawed in that respect and for that reason only."
15. There was some quite considerable argument after the judgment as to what the consequences should be and what form the resulting order should take. Mitting J then ruled at paragraph 85:

"... given that I have decided ... that the other challenges to this decision have failed and that in all other respects [viz other than full discharge of the statutory equality duties] the decision was lawful, I see no good reason for putting the Secretary of State to the expense and trouble of re-deciding those issues in the light of whatever the claimant may wish to submit to him about them. I will quash the decision and I will order that it be retaken, but only to give effect to the Secretary of State's obligation under, now, the 2010 Equality Act. I will state expressly in the order that he need not reopen or reconsider any other issue, save to the extent that consideration of his duties under the 2010 Act requires him to do so."

16. Following the hearing, counsel apparently could not agree the form of order correctly to give effect to the above ruling. A draft was submitted to the judge with an alternative wording A and B in paragraph 4. Mitting J appears personally to have selected the alternative wording A, which I have already quoted in paragraph 1 above but will now for convenience repeat:

"The court directs that the decision be reconsidered but only to give effect to the Secretary of State's obligations under section 149 Equality Act 2010. It is further directed that the Secretary of State need not consider any other issue save to the extent that he is required to do so by law."

17. Mr Jonathan Swift QC refers to section 31(5) of the Senior Courts Act 1981. That section provides, so far as is material, as follows:

"(5) If, on an application for judicial review, the High Court quashes the decision ... it may in addition-

(a) remit the matter to the ... authority which made the decision, with a direction to reconsider the matter and reach a decision in accordance with the findings of the High Court ..."

Mr Swift submits that, by the language of the order read with the ruling, Mitting J was plainly exercising that power and directing the Secretary of State that he need only carry out a limited reconsideration.

18. Mr Andrew Sharland, who appears on behalf of Essex, submits that once a decision is quashed it is quashed, and the Secretary of State in effect had to start again from scratch; and he submits that the words "save to the extent that he is required to do so by law" meant that all the public law duties with regard to consultation, consistency and rationality were engaged.
19. The Secretary of State does in fact assert that he did consider the whole matter de novo or from scratch, so this is not an issue which I actually need to resolve. It is preferable, therefore, that I do not do so, since there seems to be little authority on the scope and effect of an order along the lines of that in paragraph 4, and I should not venture into that vacuum when it is not necessary to do so. It is certainly common ground between Mr Sharland and Mr Swift, and I agree, that, given that the Secretary of State was reconsidering this matter in July 2013, he needed to take into account all relevant facts and circumstances which were known to him by that date. He could not, as it were, put himself back to November 2010, blank out any relevant subsequent facts or developments, and merely decide what he would have decided in November 2010 but adding in proper consideration of his statutory equality duties.

The consultation after the decision of Mitting J

20. There was correspondence between the parties in June and July 2012 in which it was agreed that Essex could make further representations. By a letter dated 12 July 2012, the Treasury Solicitor wrote on behalf of the Secretary of State that:

"... the council is invited to make representations which the Secretary of State will [emphasis in the original letter] take into account when reconsidering whether and, if so, how much carry-forward the council should have been permitted in 2010/11. The council should not regard itself as being limited in any way with regard to those representations. The council should include any matters that it considers the Secretary of State should take into account ..."

21. Essex thus submitted a document dated 31 July 2012 headed, "Re carry-forward for 2010/2011. Essex County Council's submissions to the Secretary of State". The document extends to 30 pages and is signed by Ms Shirley Jarlett, assistant county solicitor. The document is, if I may say so, very thorough, detailed and impressive. I will for convenience call it the July 2012 submissions. I can only summarise its thrust and effect.
22. First, the July 2012 submissions address the approach which the Secretary of State should take on his reconsideration. It suggested that although an approach based on existing commitments as at the cut off date may have been appropriate in 2010, it was "neither sensible nor lawful ... now". In the first judicial review, the Secretary of State had said in his summary and detailed grounds of resistance that:

"Such a commitment [viz by the cut off date in July 2010] provided a reliable indication that the associated work would be completed by 31 March 2011, in accordance with the Memorandum of Grant."

23. Ms Jarlett argued that it was no longer necessary to adopt that "predictive" approach. The Secretary of State now knew as a fact what projects were completed by 31 March 2010:

"The council submits that it would be irrational to utilise a criterion which was adopted to predict which projects would be completed by 31 March 2011 when the Secretary of State now knows the actual factual decision ..."

24. Ms Jarlett further argued that by the time the reconsideration was decided, all projects would be completed and that "it cannot sensibly be suggested that such projects were not 'completed'". Essex had in fact decided that they would go ahead with all of their projects. They did not abort any of them, and have funded them out of other funds of Essex to the extent that the carry-forward has not been received from the department. Ms Jarlett then submitted that the carry-forward should extend to all projects which had been completed by 31 March 2011 (which she listed) and others which were not so completed because of delays due to the funding freeze, but which had since been completed (also listed).
25. Ms Jarlett's secondary, or fallback, submission turned on "exceptions". In his first decision, the Secretary of State had made five what he had termed exceptions. These related to certain projects for which a tender had been issued prior to the cut off date, or there were other similar reasons, even although the providers had not actually been contractually committed to the building works. Ms Jarlett submitted that consistency required the same "exceptions" to be applied to a number of other projects as well, and she listed and described those other or additional projects. In relation to each additional exception, Ms Jarlett submitted that:

"The council is of the view that the Secretary of State had been informed of these matters prior to his November 2010 decision and if he had applied his exceptions consistently, he would have made exceptions for the above schools. Regardless of this, he is clearly aware of this prior to his reconsideration and thus should apply this exception consistently."

26. Ms Jarlett submitted:

"Summary on exceptions

If the exceptions made previously by the Secretary of State are applied consistently, as the council submits they should be, the Secretary of State would have permitted the carry-forward of the full amount that the council stated should be carried forward. The council submit that now that the Secretary of State has an opportunity to consider such matters, he is bound to conclude that the council is entitled to the full amount of carry-forward."

27. Ms Jarlett's "tertiary" submission was simply that:

"... the council ... should be permitted to carry forward the amount that relates to projects that were completed by the 31 March 2011 deadline."

Put in that bald way, of course, the position that pertained to any such project as at the July 2010 cut off date became irrelevant, although in relation to all other local authorities it had been decisive.

28. Ms Jarlett then turned to the equality impact of funding or not funding the various projects. Her evidence was detailed. Its focus is clearly upon the impact upon disabled children; upon especially deprived children; upon the capacity of the parents of such children, whom Ms Jarlett describes as predominantly women, to return to work; and upon the staff, who are predominantly female.

The decision of 25 July 2013

29. There has been produced within these proceedings the detailed submission dated 6 June 2013 made by officials to the Minister. This included an equality impact assessment; a purported summary and analysis at annex B of the individual projects, the evidence of Essex upon them and the recommendations of the officials; and a draft decision letter to communicate the decision to Essex if the Minister agreed with the recommendations. The actual decision letter of the Minister is effectively in the same terms. The essence of the decision was "to confirm the original decision of November 2010" save for agreeing in addition to pay £10,000 towards abortive costs in relation to the Dizzy Ducks nursery. This very minor exception is at the uttermost margins of this case and I ignore it (neither counsel having dwelt upon it during their oral submissions).
30. The Minister stated that:

"The department reviewed the original criteria and concluded that the same criteria should be applied as were applied to all other authorities at the time of the original decision, and which were not criticised by the court, ie the criterion applied was whether or not the funding had been 'contractually committed' by the cut off date ..."

The Minister stated that each individual project had been considered against the original criterion, and a "provisional decision" made. That provisional decision was then reconsidered on all the evidence, including the new equality impact assessment. Adopting that approach, the original decision was confirmed. The Minister acknowledged that the decisions taken would potentially have an adverse impact on groups with particular protected characteristics, but he listed steps which had been taken to mitigate that, and expressed that:

"Any remaining adverse impact was justified by the overriding need to ensure that the department contributed to the Coalition Government's efforts to reduce the structural deficit."

31. The Minister made the further point that as Essex had in fact decided to go ahead with all of their projects:

"... there was in fact no adverse impact on any people with protected characteristics as a result of the original decision because in fact all the projects went ahead as planned."

Although the Minister does not make the point, he might have added that there could be no adverse impact as a result of his new 2013 decision, all the projects having been completed long before and none having been cancelled.

The challenge

32. Mr Andrew Sharland submits that the new decision is unlawful for the following four reasons: (1), it adopts an unlawful and irrational approach to the criteria to be decided when deciding how much funding to the council will be cut; (2), it adopts an unlawful and unfair approach to the making of exceptions; (3), it is inadequately reasoned; and (4), it does not comply with the Secretary of State's duty under section 149 of the Equality Act 2010.

(1). Rationality of the approach

33. Mr Sharland first submits that the decision was unlawful because the Secretary of State adopted an irrational approach to the criteria to be applied. He complains that the July 2012 submissions of Essex were not placed as a document before the Minister or included as part of the submissions to him. He submits that language in the decision letter itself, which states that the department "reviewed" the original criteria, indicates that this was not a genuine reconsideration but rather a review, and that the Secretary of State "confused his role as the primary decision maker with that of a court on review". He submits that there was a fundamental difference in the circumstances of the 2010 and 2013 decisions. At the time of the first, projects had not been completed and therefore it may have been rational to focus on what was "committed"; but by 2013, all projects had been completed and so the Minister could and should have focussed on known facts, viz the actually completed projects, rather than predictions.
34. Although most attractively and cogently argued by Mr Sharland, I completely reject this line of argument. In relation to carry-forward, the Minister was considering, both in 2010 and 2013, the making of discretionary payments which he was not bound to make. I agree with the submission of Mr Swift that the decision was a decision to allow carry-forward, but less than the maximum carry-forward. Although it can be viewed as a "cut", the decision can also be viewed as a favourable exercise of discretion in favour of Essex, although less favourable than they may have hoped. Essex did receive nearly £11.4 million in carry-forward which was, in absolute terms, actually more than any other local authority. As a proportionate reduction in the amount claimed, Essex ranked about 50th out of the 152 local authorities.
35. There was nothing irrational in the decision of the Minister on reconsideration that he should adhere to, and apply, the same criterion or approach which he had applied to all other local authorities in 2010, namely whether or not the funding was contractually committed by the cut off date. That was a consistent approach; and to have abandoned that approach and agreed to pay the whole carry-forward funding for all projects which Essex had voluntarily chosen to go ahead with after the July 2010 announcement, although not contractually committed to do so, would indeed have been very unfair to all other local authorities.
36. I do not accept that the mere use of the phrase "reviewed the original criteria" indicates that the Minister or his officials confused his role with that of a court, and I do not accept that the officials were bound to place the 2012 submissions before the Minister as a document. However the Minister arrived at his decision and conclusion as to the approach or criteria, consistency with the way the discretion had been exercised in relation to all other local authorities was, in my view, an entirely rational and lawful approach to take and to apply.

(2). Exceptions

37. Mr Sharland submits next that the Secretary of State erred in his approach to "exceptions" and that he was not consistent in the exceptions he made. Although Sir Stanley Burnton gave permission to apply on all grounds, it is clear from his judgment that this was the ground which principally concerned and weighed with him. He said:

"... there seems to be a discrepancy between the decision first time round to make an exception and some of the exceptions put forward a second time round ...

Moreover, the documents I have seen do not really address the council's case for the making of an exception in relation to the specified projects which it put forward as deserving of an exception ..."

38. Unlike Sir Stanley Burnton, I have now had the benefit of full argument on this point and the whole case. Illuminated by that argument, my own view is that this ground of challenge is, on its proper analysis, mistaken and misconceived. It is Mr Sharland's case that the Secretary of State was bound to exercise his discretion de novo and from scratch. It is the Secretary of State's case, and Mr Swift's case on his behalf, that the Secretary of State did do so. He was not, therefore, bound in any way to make any reasoned exceptions the second time round, and he did not in fact do so, save in relation to the fringe case of Dizzy Ducks.
39. The Secretary of State did not in 2013 make a reasoned exception even of any of the five exceptions which he had made in 2010. He merely chose in favour of Essex not to make a decision less favourable to Essex than the 2010 decision. This appears very clearly from annex B to the submissions of the officials to the Secretary of State, which lists in tabular form each project, and records the original decision, the evidence in summary of Essex, and the provisional decision based on new information supplied by Essex. The five projects which were originally the subject of exceptions appear as the last five projects on that list, now at bundle 2, page 548. The adjacent columns read respectively "funded", "not applicable" [viz the evidence of Essex], and "fund". It was effectively taken as read that those projects should remain funded, not as reasoned exceptions to the essential criterion of whether there was a contractual commitment by the cut off date, but simply because the Secretary of State was not now going to resile from what he had previously agreed to pay. The same presentation is repeated in relation to those five projects in annex C, which deals with the equality impact (see bundle 2, page 552).
40. Further, within the first judicial review the Secretary of State had already made quite clear that the factual basis upon which he had made the five exceptions in 2010 was not that a tender document had been be sent out or issued before the cut off date, but that a tender had been received back or returned before that date. This appears very clearly from paragraph 39 of the second witness statement, dated 30 April 2012, of Ms Frances Carter, who was head of the Grants Management Team in the department, now at bundle 2, pages 39 to 40. Essex were contending then that the same further additional exceptions should have been made as they now contend for, and Ms Carter clearly explained why they had not been. There was in fact no inconsistency in 2011.
41. Whilst there is some force in Mr Sharland's complaint that the July 2012 submissions of Essex in relation to exceptions was not properly or fairly summarised to the Minister, I agree with Mr Swift that it makes no difference. There was a complete answer to that part of the case of Essex, namely that the relevant date was not the date of issue of any tender but the date of return of any tender, and accordingly there was no inconsistency. Further, since the Minister did not choose to make any reasoned exceptions in 2013, the whole argument of Essex on exceptions was immaterial.

(3). Reasons

42. Mr Sharland submits that the 2013 decision is inadequately or insufficiently reasoned. He relies upon the very well known passage in the judgment of Lord Brown of Eaton-under-Heywood in South Buckinghamshire DC v Porter (No 2) [2004] UKHL 33 at paragraph 36. Lord Brown said:

"The reasons for a decision must be intelligible and they must be adequate. They must enable the reader to understand why the matter was decided as it was and what conclusions were reached on the 'principal important controversial issues', disclosing how any issue of law or fact was resolved. Reasons can be briefly stated, the degree of particularity required depending entirely on the nature of the issues falling for decision. The reasoning must not give rise to a substantial doubt as to whether the decision maker erred in law, for example by misunderstanding some relevant policy or some other important matter or by failing to reach a rational decision on relevant grounds. But such adverse inference will not readily be drawn. The reasons need refer only to the main issues in the dispute, not to every material consideration ... Decision letters must be read in a straightforward manner, recognising that they are addressed to parties well aware of the issues involved and the arguments advanced. A reasons challenge will only succeed if the party aggrieved can satisfy the court that he has genuinely been substantially prejudiced by the failure to provide an adequately reasoned decision."

43. In paragraph 67 of his skeleton argument, Mr Sharland puts the essence of this ground of challenge as follows. The reasons fail to explain to the informed reader why the matter was decided as it was and what conclusions the Secretary of State reached on the principal controversial issues, being what criterion to apply and whether to make exceptions when applying this criterion. Mr Sharland refers additionally to the treatment of equality duties, to which I will refer under ground 4 below.
44. Mr Sharland submits that the Secretary of State fails to explain why he rejected the council's submissions on the appropriate criterion, and failed to explain why he did not apply his approach to exceptions consistently. The decision letter in this case could of course have been longer and fuller, but it is not a judgment, and in my view it does make the essential reasons perfectly clear to the informed reader, namely that the same criterion should be applied to Essex as was applied to all other local authorities. Although the word is not used, the obvious reason for that is consistency. The criteria suggested by Ms Jarlett in the July 2012 submissions would not involve consistency but would involve more favourable treatment of Essex because they had chosen voluntarily to proceed with all their projects despite the 2010 announcement and cut off date.
45. It is true that the decision letter did not expressly address the arguments of Ms Jarlett and Essex as to exceptions. It did not need to. The informed reader, including Essex, would know the basis upon which exceptions had earlier been made. That had been explained by Ms Carter, namely whether tenders had been received back before the cut off date. In any event, it is clear from the letter, read with the submission to the Minister, that on the reconsideration, no reasoned exceptions were being made except in relation to Dizzy Ducks.
46. I agree also with the submission of Mr Swift that, even if the reasons lack adequacy in any respect, Essex cannot show, as the judgment of Lord Brown requires, that they were substantially prejudiced by that lack of adequacy.

(4). The duty under section 149 of the Equality Act 2010

47. The public sector equality duty arises under section 149 of the Equality Act 2010. This requires a public authority in the exercise of its functions to have due regard to the need to, amongst other important matters, eliminate discrimination and advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it. The relevant protected characteristics are listed in section 149(7) and include "age".
48. The great importance of this duty, and how it must demonstrably be discharged, is spelled out in paragraph 26 of the judgment of McCombe LJ in R (Bracking) v Secretary of State for Work and Pensions [2013] EWCA Civ 1345. I do not in any way overlook or minimise the importance of everything said and quoted there by McCombe LJ, but it is not necessary for me to reproduce it into this judgment, for the challenge in the present case is in fact focussed on a narrow and specific point.
49. Unlike in the first judicial review, it cannot be said that there was no reference in any of the contemporaneous documents, including the briefing note to the Secretary of State, to the equality impact of the decision, or proposed decision, or to the statutory duties upon the Minister. Unsurprisingly, in view of the outcome of the first judicial review and the language of the order, the reconsideration by the Minister is replete with consideration of his public sector equality duty.
50. The submissions to the Minister contain detailed consideration of the equality impact, and the bulk of the decision letter is in fact directed to considering that impact. Measured in terms of sheer length, the equality impact assessment extends to some 18 pages, plus the annexes. The focus of Mr Sharland's challenge is upon what is said in paragraph 9 of that assessment under the heading "Analyses of impact on equality -- Essex" beginning on internal page 12, now bundle 2, page 535, and extending to internal page 15. Each of the protected characteristics listed under section 149(7) is addressed in turn in the order in which they are listed in the statute, with detailed consideration of the impact upon disability, maternity and pregnancy, race and sex. In relation to each of age, gender reassignment, religion or belief, and sexual orientation, the submission states "No relevant issues in this case".
51. Mr Sharland submits that whilst no relevant issues arose in relation to gender reassignment, religion or belief, and sexual orientation, it was wrong of, and a serious error by, the officials to submit to the Minister that no relevant issues arose in relation to age. The effect of section 149 is that the Minister had to have due regard to the statutory needs in relation to age. When his officials advised, and he presumably concluded, that no relevant issue arose in this case in relation to age, he thereby failed to have regard to age; alternatively, if he did have regard to it, but then considered no relevant issue arose, he failed to have the regard to it which is due.
52. Mr Sharland submits that the decision in question would be likely to have an adverse impact upon two to four year-olds who were the group that funding was aimed at supporting, as well as upon women of child-bearing age, and accordingly that the statutory needs under subparagraphs (a) to (e) of section 149(1) required expressly to be considered by the Minister in relation to the protected characteristic of age. He submits, therefore, that the equality impact assessment is fundamentally flawed, as is the Secretary of State's decision based upon it.
53. It is to be noted in this connection that nowhere in Ms Jarlett's July 2012 submissions did she flag up the protected characteristic of age. Her submissions are, rather, focussed upon disability, race, and social deprivation, but of course if the Secretary of State did indeed fail to discharge his statutory duty in this regard, he is not saved because of any failure by Essex to mention it.
54. On this head of challenge, too, I cannot accept the submission of Mr Sharland. The whole purpose of the entire EYC scheme was to improve the provision available for children of a certain age group and, indirectly, their working parents. The purpose falls very directly within fulfilling some of the statutory needs in section 149.
55. Mr Brian Logan was the team leader in the Department of Education who prepared the equality impact assessment. At paragraph 46 of his statement, dated 8 January 2016, now at bundle 2, page 429, he says:

"Since this was a national costs saving exercise, I particularly focussed on whether there was evidence that groups of people in Essex sharing these protected characteristics would have suffered a disproportionate adverse impact in comparison with the position nationally. I recorded that no relevant issues arose in relation to age, gender assignment or religion or belief, because Essex had not identified any issues as arising in relation to those particular protected characteristics, and I could not otherwise see that any particular issues arose in relation to those particular protected characteristics in Essex. That does not mean of course that I was not aware, or the Secretary of State was not aware, that the decision to reduce [the] funding nationally was a decision that primarily affected preschool children, their parents/carers, and nursery staff, and thus children and adults in particular age groups. That was obvious. However, there were no particular issues relating to age that arose in relation to Essex. Unlike other characteristics, where there could be variation depending on location and population, all schemes across the country were subject to the same disadvantages with regard to age and therefore there was nothing specific to Essex in this case."

56. The impact of reducing the funding upon children in the relevant age group and their parents/carers and nursery staff is indeed obvious, as Mr Logan says. So the words "no relevant issues in this case" obviously need to be read in a qualified way as meaning no relevant issues in relation to what decision to make specifically in regard to the amount of carry-over allowed to Essex. The reason Ms Jarlett did not flag up age is no doubt precisely because no such relevant issue did arise.
57. In my view, the equality impact assessment in this case is not defective in the way suggested by Mr Sharland. Further, the Minister did avowedly, demonstrably and conscientiously consider and discharge his duties under section 149 of the Act in his reconsideration. Accordingly, this head of challenge must also fail.

Outcome

58. All grounds of challenge having failed, I dismiss this claim for judicial review.
59. MR JUSTICE HOLMAN: Now, Mr Davidson, it was agreed I think that any consequential matters could be dealt with by way of written submissions. I can only think of two conceivable consequential matters. One is costs. If that is not capable of being agreed, and it is difficult to see how it cannot be agreed, I am prepared to receive written submissions from Essex and the Secretary of State not exceeding two sides of A4 from each side. I frankly do not see how there can be any dispute about costs.
60. Separately, there could be an application by Essex for permission to appeal. If Mr Sharland wishes to make such an application, he can make it, similarly, in two sides of A4 and I will consider it. But I have to alert you, as I would be saying to him if he was here, that when I have just given a considered judgment, I personally generally lack the intellectual capacity to conceive that actually I am wrong, so he will probably have to go to the Court of Appeal. But he is entitled to apply to me and he can do it on two sides of A4 if he wishes.
61. MR DAVIDSON: Thank you, my Lord, I will pass that on.
62. MR JUSTICE HOLMAN: And I will say that there are seven days allowed to do that after receipt of the approved transcript of the judgment. But I have to say that I am away for six weeks in August and the first two weeks of September, so if I do not get this before I go away, I will not be able to deal with it until towards the end of September.
63. MR DAVIDSON: I understand, my Lord.
64. MR JUSTICE HOLMAN: Is that all right?
65. MR DAVIDSON: Very well, my Lord. Two further matters arising. One is just to remind you, I think you have been passed a message about this already, but could you possibly ask the shorthand writer --
66. MR JUSTICE HOLMAN: My clerk has already asked this gentleman to try and get it done as rapidly as possible.
67. MR DAVIDSON: Thank you very much.
68. One small matter arising from what you have just read out. About the South Buckinghamshire case, I think -- I may have misheard -- that you said 2014. I think the correct citation is 2004.
69. MR JUSTICE HOLMAN: Sorry, if I said 2014, it was an error, because I had certainly written 2004.
70. MR DAVIDSON: I may have misheard.
71. MR JUSTICE HOLMAN: It is 2004. Indeed, in 2014 it could no longer have been the House of Lords.
72. MR DAVIDSON: Indeed.
73. MR JUSTICE HOLMAN: I will try and check that when it comes back anyway.
74. All right. Anything else at all, Mr Davidson?
75. MR DAVIDSON: No, my Lord.
76. MR JUSTICE HOLMAN: Well let us hope that Ms Carter can now slump back into her retirement and get on with it and enjoy it.
77. Thank you all very much indeed.