England and Wales High Court (Queen's Bench Division) Decisions

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

		Manchester Civil Justice Centre Manchester
		04/10/2013

The Hon Mr Justice Turner :

Introduction

1. On 27 February 2013, the defendant decided to stop paying subsidies to twenty nurseries in Sheffield. The claimants, four mothers, now challenge this decision by way of judicial review.

Background

2. The nurseries in question, although independent of local government, have over recent years been in regular receipt of financial assistance from the defendant. The sums provided to each nursery vary considerably as do the range of services they each provide. The decision to stop paying these subsidies is likely to impact on the nurseries in different ways. Some will manage to carry on. Others may well have to close. They serve relatively deprived areas and so the scope for raising revenue from fees charged to parents is necessarily limited.
3. The claimants criticise the means by which the defendant reached its decision in the following respects:

i) Breach of the common law duty to hold a fair consultation;

ii) Breach of the public sector equality duty;

iii) Breach of the Best Value duty and statutory guidance;

iv) Breach of the duties imposed by the Childcare Act 2006; and

v) Irrationality.

History

4. Independent nurseries in the Sheffield area have been supported by the defendant in a number of ways over recent years. In particular, nurseries offering childcare to three to four year olds are at present entitled to be paid to provide fifteen hours provision per child per week under the Free Early Learning ("FEL") initiative. This money is required to be ring fenced for this purpose. The cost of providing any additional hours must be topped up from other sources. The FEL initiative has been extended to some 2 year olds and the defendant has taken the lead in bringing forward a scheme to broaden the categories of children of this age in respect of whom the scheme will provide funding. On a national basis, from September 2013 the relevant criteria will be extended to apply to all two years olds who are looked after by the state, and who are assessed as being vulnerable or who live in households which meet the eligibility criteria for free school meals. From September 2014, councils will, in addition, be required to secure additional places for more low income families and two year olds with special educational needs or disabilities. As a result, the number of two year olds who will be entitled to an FEL place is predicted by the defendant to rise to around forty per cent of two year olds in Sheffield. It is the defendant's case that the extension of FEL provision will, at least, mitigate the impact of the decision to stop the subsidies.
5. Additionally, the defendant, in some cases, provides help to some nurseries in the form of rent free accommodation and business support.
6. Historically, the childcare subsidy funding of the twenty nurseries was paid in addition to the FEL monies. These subsidies owed their origins to the Neighbourhood Nursery Grants introduced by government some years ago to encourage high quality provision in areas of deprivation. The Sure Start initiative and Children's Centre funding provided the monies from which these grants were funded.
7. Government policy has changed considerably since the childcare subsidy grants were first introduced. Whereas previously central Government funding was available for allocation to childcare grant funding, Government funding for early years childcare is now primarily directed toward the provision of FEL. Consequently, the sums available for discretionary spending have been reduced. The defendant is not permitted to use all or any part of its FEL budget in order to maintain grant funding.
8. There can be no doubt that the defendant, in common with all other local authorities, has been operating under severe and increasing financial constraints over the last few years and there is considerable pressure in all areas to strive to make savings. However, this does not, of course, mean that the decisions taken to implement such savings are to be given any greater leeway with respect to the application of the principles of public law scrutiny.

The January 2011 proposal

9. In January 2011, the Council consulted the nurseries on a proposal to phase out the childcare subsidy grants from October 2011 with a view to discontinuing them completely from the beginning of the financial year commencing 2012. A start was be made by cutting the existing levels of grant by 25%. At a meeting on 11 January 2011, the proposals were canvassed with interested parties, including members of the Community Childcare Forum (CCF), an affiliation of community nurseries. Four of the affected nurseries were nurseries attended by the Claimants' children and all were members of the CCF.
10. It comes as no surprise to learn that the nurseries objected strongly to the proposals. The defendant's officers present at the meeting agreed to report their concerns back to the defendant and to investigate alternatives. On 24 January 2011, Sally Pearse, of Tinsley Green Nursery and the CCF, wrote to the Executive Director of the Children, Young People and Families ("CYPF") Department urging the need for a modified proposal.
11. On 18 February 2011, a "Task and Finish Group" of childcare providers, including Ms Pearse, drew up a "Proposal for Childcare" briefing note which addressed the proposal discussed at the meeting of 11 January 2011. The briefing note objected to the immediate cut of 25% in the childcare subsidy grants and in its place proposed a cut of 10%. The note went on to concede:

"The group acknowledges the need for changes to the funding allocation for childcare as part of Early Years prevention services. The drive for change comes from both central government and recognition that historically the method of allocation has not been equitable."

12. The local elections of 5 May 2011 ushered in a Labour majority on Sheffield City Council. The re-constituted council was, in part, sympathetic to the position of the nurseries and decided not to discontinue the childcare subsidy grants before April 2013 and to reduce the initial cut from 25% to 10%.

A new review

13. After the election, Jackie Drayton, who had experience in the child care sector, became the new CYPF lead member. She initiated a review of Early Years Services in Sheffield in an effort to improve, modernise and streamline early years services. The consultation process, described as a "Call for Views", started off with a launch event on 23 June 2011 in Sheffield Town Hall. The process was focussed on seven broad areas called "Big Issues" one of which was "childcare (sustainability)".
14. On 1 July 2011, a number of representatives of community nurseries and the CCF attended the meeting. They inevitably took the view that the defendant should continue to provide additional funding for childcare in disadvantaged areas. On 8 July 2011, "focus group" sessions were held which were attended by representatives of grant subsidised nurseries and members of the CCF on the issues of "Best Value" and "Equality".
15. On 17 October 2011, the defendant published a detailed "Report on the 'Call for Views'" together with a shorter report in summary form. After this, the review moved into an "Invitation to Comment" phase, the purpose of which is self-explanatory. As part of this process, interested parties were given the opportunity to register their views online until 9 December 2011.
16. Further meetings in October and November 2011 provided a platform upon which interested parties could discuss and comment upon the proposals. On 8 November 2011, the Early Years Review Childcare Focus Group (now called 'Innovative Childcare') held a meeting attended by members of the CCF. On 25 November 2011, an "Invitation to Comment Plenary Sessions" meeting took place which also involved the CCF.
17. On 21 March 2012, the findings of the Early Years Review were presented to Cabinet. Paragraph 5 of the summary to the report is euphemistically entitled "Actions to Achieve Financial Implications." It is a mass graveyard of plain English of which paragraph 5.7 gives but a glimpse:

"Childcare subsidy arrangements reviewed from the current historical based "operating costs gap" provision to funding in line with required places with increased transparency requirements. Those with specific needs will be targeted to receive this additional support on an evidence based approach".

Roughly translated, this may be taken to mean that grants to nurseries will be cut and more money will be spent directly on children with proven needs.

18. On 29 August 2012, the defendant wrote to the nurseries indicating that no final decision had been made but warning that it could not commit to funding beyond 31 March 2013.
19. In October 2012 the defendant sent out letters to the nurseries referring to this shift in emphasis but falling short of predicting that all subsidies would come to a prompt end. Representatives of the nurseries were also invited to an event on 4 December 2012 to discuss the implications of the review. On 12 December 2012, Council officers presented Cabinet with detailed proposals for the redesign of the Early Years Service for approval in principle.

Towards a decision

20. Also circulated amongst the members of Cabinet was a briefing paper "Response to the Redesign of Early Years Services" prepared by "a cross-section of organizations and experts....in response to the consultation paper." The paper sought to persuade members of Cabinet to "shelve these proposals while alternatives are considered". In addition, parents and nurseries had obtained 1,554 signatures to a petition opposing the proposed cuts in grants and this, too, was presented to Cabinet. The meeting was attended by representatives of nurseries, parents and others opposed to the proposals. They raised questions and ventilated their opinions. They were told that their views would be taken into account as part of the consultation process.
21. Nevertheless, Cabinet approved, in principle, the proposal that the grants should be stopped. Further representations were made by interested parties at a full cabinet meeting of 23 January 2013 at which they complained of flawed consultation and raised criticisms of the substantive proposal itself.
22. Meanwhile, the "in principle" decision was called in to scrutiny and debated by the scrutiny committee on 24 January 2013. The interested parties once more prepared a briefing paper for consideration setting out their concerns in some detail.
23. At a further full Council meeting on 23 January 2013 more public questions were asked concerning the grant cuts and a petition with about 10,000 signatures was presented. It was resolved that "…all concerns that have been raised throughout this process and this Council meeting about the early years proposals will feed into the consultation which will inform the Cabinet report and recommendations later this month…"

The decision

24. On the morning of 27 February 2013, the scrutiny committee met and considered further public questions and petitions. That afternoon, the Cabinet met and also entertained detailed public questions and debate over a period of about two hours on the Early Years Service proposals. A Consultation Report was attached to the Cabinet Report which had been prepared for this meeting. It conveniently sets out the constituent parts of the consultation process:

"How the consultation was promoted / publicised

Information published on the Early Years area of the Council website: www.sheffield.gov.uk/earlyyearsreview

10,000 leaflets and posters sent to all areas of the City via providers / schools/ partners / children's centres / mosques / other information points

Individual letters to parents whose children attend settings that may be affected

Consultation information was also circulated by a variety of methods to:

483 members of the Parents' Assembly (including the strands of BME and SCC (Sheffield City Council) Parents' Assemblies) as well as to the Sheffield Parent Carer Forum (parents and carers of children with additional needs)

Community Assembly managers, MAST managers and other professional contacts

Meetings / Events

An event for providers on 4 December 2012 in advance of the Cabinet paper being published.

72 consultation events, including 2 full day drop-in sessions in each of the 36 children's centres with officers available to answer questions and language support provided.

A drop-in consultation event for parents / carers was held in the in Town Hall, 10am-6pm on 11 January 2013 (primarily for parents working in the City centre who may not be able to attend the events in children's centres).

An additional consultation event for BME parents at a community nursery (provided on request).

Individual meetings with 20 providers who are affected directly by the proposals. (These meetings have also helped to inform the Equality Impact Assessments.)

A drop-in event at the Town Hall for all providers.

Consultation meetings with Primary School Heads and Governors, Children's Centre Advisory Boards and the Children's Centre Board which includes health colleague representatives.

A meeting with current contractors who are directly affected by the proposals."

25. The defendant's "parental engagement team" gathered all of the responses from the consultation and, together with Early Years officers, analysed the information and distilled this information and included it in the consultation report which was attached to the Cabinet paper.
26. At the conclusion of the meeting it was resolved: "to cease childcare subsidy grants to 20 providers in the Private, Voluntary and Independent and Statutory sector on 31 March 2013."
27. It was further resolved: "That the local authority will offer to continue to work with the 20 providers, on an individual basis, over a three month period to give them support to develop their business plans for their organisation to help them become sustainable. These plans should include financial forecasts, management costs, staffing structures and ways to develop flexible and accessible services to children and families and assist in seeking other forms of income."
28. I now turn to consider each of the claimants' grounds of challenge to this decision in turn.

Ground one – Flawed consultation

29. There is no dispute about the legal principles to be applied. In R v North and East Devon HA ex parte Coughlan [2001] QB 213 the Court of Appeal held at para 108 that any consultation with respect to the decision of a public body must:

i) be undertaken at a formative stage;

ii) include sufficient reasons for the particular proposals to allow those consulted to give intelligent consideration and response;

iii) give sufficient time for an adequate response;

iv) must be conscientiously taken into account when the decision is taken.

30. I am satisfied that the consultation process relevant to the decision under review in this case was undertaken at a formative stage. This is an issue which is bound to be fact sensitive but the important point is that when the process starts the ultimate decision should still be fully capable of being moulded and influenced by the response. A consultation which starts with the presentation of a fait accompli is no sort of consultation at all.
31. However, as Davies L.J. pointed out in R (Bailey and others) v London Borough of Brent [2011] EWHC 2572 (Admin) at para 104:

"There cannot necessarily be easy identification of particular formative "stages" in every decision making process…"

The Court of Appeal in that case was specifically considering the application of section 149 of the Equality Act 2010 but this observation applies equally to the common law duty to consult.

32. It is also important to put the issue of consultation into context. There will be many cases in which it will not be possible precisely to time the beginning (or even the end) of the consultation process. For example, it is by no means unusual for particular proposals to have been preceded by earlier different but related proposals upon which there has already been some level of pertinent consultation. The existence of the prior period of consultation does not, of course, obviate the need to consult further but it may have an important influence on the timing, content and duration of the process of consultation which follows.
33. This case provides an illustration of the importance of context. The issue of the future of subsidies to nurseries was the subject of dialogue and debate in January 2011. This continued as part of the subsequent Early Years Review. By December 2012, interested parties had been involved in the exchange of views and information for about two years. Even if a mechanistic approach were taken which focussed entirely on the phase of the process beginning December 2012 I consider that the matter was then still at a formative stage. The final form of the policy towards these subsidies was yet to be determined.
34. The documentation shows that over the relevant period, the defendant gave detailed reasons for the proposed curtailments of the grants. The Nurseries and other interested parties did not agree with these reasons but they were, at least, fully equipped to engage with them.
35. The time reasonably to be allowed for a response to a consultation process is, again, a highly fact sensitive issue. Once more, context is important. Where, as here, the issue upon which consultation is to take place is one in which interested parties have already been recently engaged the time reasonably required for any formal consultation period may well be shorter than in circumstances where the proposal is without precursors.
36. I am entirely satisfied that the defendant conscientiously took into account the views of those who contributed to the consultation process. The fact that the discount of 25% was reduced to 10% and the phasing out of the subsidies was postponed in 2011 is evidence that the defendant was not historically deaf to the representations it received. No doubt there will be many who are convinced that the result was a foregone conclusion but as Davies L.J. observed in Bailey at para 194:

"In the field of important decisions by local authorities of a kind such as the present, nevertheless, experience teaches one that there may be many local residents who will, rightly or wrongly, assume that an announced proposal has in truth already been decided on; and that subsequent consultation or impact assessments or reports will be moulded so as to endorse a predetermined result."

37. I do not accept that the defendant is open to legitimate criticism for failing to broaden the scope of the consultation. It was reasonable to engage primarily with the nurseries on the issue of grants. The nurseries were most directly affected by the proposals and, in any event, were in a good position to advocate the benefits of the services which they provided to those who used them. In any event, the summary of the consultation procedures set out in the consultation paper presented to Cabinet demonstrates a thorough and conscientious process the involvement of parents in which was both proportionate and timely.
38. Complaint is made that a questionnaire promulgated by the defendant on the proposals was inaptly phrased. The first question was:

"Do you agree that we should focus available resources on the most vulnerable children and stop the subsidy allocated to a small number of childcare providers in the city?"

I agree that this question could have been improved upon. It gave the impression that focusing on the needs of the most vulnerable children and subsidising the nurseries was inevitably a mutually exclusive choice. Also, the tone of the question was somewhat tendentious. Nevertheless, the questionnaire should not be scrutinized in a vacuum. The contents of the briefing notes and the Consultation document make it clear that the consultees were entirely familiar with the issues and options.

39. Neither am I satisfied that the fact that the nurseries are referred to as "businesses" in some of the defendant's documentation is an indication that consultees may have been misled into thinking that these were profit making organisations. The use of the word "business" in this context did not carry this implication and, in any event, the consultees were fully aware of the nature of the undertakings of the various providers of nursery facilities who were in receipt of the grants.
40. Taken as a whole, the consultation process in this case was fully compliant with the common law standards referred to in Coughlan and the challenge on this ground must fail.

Ground two - Public Sector Equality Duty

41. Section 149 of the Equality Act 2010 provides:

"Public sector equality dutyE+W+SThis section has no associated Explanatory Notes

(1)A public authority must, in the exercise of its functions, have due regard to the need to—

(a)eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under this Act;

(b)advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it;

(c)foster good relations between persons who share a relevant protected characteristic and persons who do not share it.

(2)A person who is not a public authority but who exercises public functions must, in the exercise of those functions, have due regard to the matters mentioned in subsection (1).

(3)Having due regard to the need to advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it involves having due regard, in particular, to the need to—

(a)remove or minimise disadvantages suffered by persons who share a relevant protected characteristic that are connected to that characteristic;

(b)take steps to meet the needs of persons who share a relevant protected characteristic that are different from the needs of persons who do not share it;

(c)encourage persons who share a relevant protected characteristic to participate in public life or in any other activity in which participation by such persons is disproportionately low.

(4)The steps involved in meeting the needs of disabled persons that are different from the needs of persons who are not disabled include, in particular, steps to take account of disabled persons' disabilities.

(5)Having due regard to the need to foster good relations between persons who share a relevant protected characteristic and persons who do not share it involves having due regard, in particular, to the need to—

(a)tackle prejudice, and

(b)promote understanding.

(6)Compliance with the duties in this section may involve treating some persons more favourably than others; but that is not to be taken as permitting conduct that would otherwise be prohibited by or under this Act.

(7)The relevant protected characteristics are—

age;

disability;

gender reassignment;

pregnancy and maternity;

race;

religion or belief;

sex;

sexual orientation…"

42. "Due regard" is that "which is appropriate in all the circumstances" (See R (Baker) v Secretary of State for Communities and Local Government [2008] EWCA Civ 141 para 31). As the court observed in Bailey at para 83, what is required in any given context is "fact sensitive and varies considerably from situation to situation, time to time and stage to stage."
43. In Hunt v North Somerset Council [2012] EWHC 1928 (Admin) Wyn Williams J. held at para 98:

"I summarise by saying that the duty to have due regard under section 149 can have no fixed content; what observance of the duty requires of decision-makers is fact sensitive and varies considerably from situation to situation; councils cannot be expected to speculate, or investigate the potential impact of a decision upon public service equality duties in a manner befitting a lawyer engaged in forensic analysis in court."

44. The claimants contend that the defendant failed to have due regard to the matters set out in section 149 and that, as a result, the decision making process was fatally flawed.
45. The defendant chose to pursue a formal process of Equality Impact Assessment (EIA") in conjunction with the development of its proposals. An EIA is not mandatory and, if deployed, does not preclude the taking of other additional steps to comply with the requirements of section 149.
46. A preliminary EIA report was prepared for the purposes of the Cabinet Meeting of 12 December 2012. Subsequently, very detailed EIA reports were prepared for the purposes of the Cabinet meeting of 27 February 2013.
47. Paragraph 9 of the Report prepared for the Cabinet meeting of 12 December 2012 states, under the heading "Equality of Opportunity Implications":

"The commitment to fairness, inclusion and social justice is at the heart of the Council's values. We believe that everyone must get a fair and equal chance to succeed and this starts in early years. We recognise however that some people and communities may need extra help to reach their full potential, particularly when they face multiple layers of disadvantage. In line with this commitment there has been comprehensive consideration given to the equality of opportunity implications including those on poverty in the implementation of the recommendations from the Review of Early Yeas and multi agency support (0-5) and each proposed activity has been subject to an EIA. The aggregate EIA highlights the potential implications of the change programme. However the focus of the proposed changes will be on meeting the needs of the most vulnerable children and families and so aim to reduce persistent inequalities that continue to exist. The role of the Equalities Needs Coordinator (ENCO) will be promoted across all early years provision. The EIA is attached as appendix 4"

48. The EIA prepared at this stage was inevitably provisional and acknowledged the need for a further and more detailed EIA following the formal consultation which was to be carried out in the event that the "in principle" proposals were accepted.
49. After the "in principle" decision had been reached, Council officers carried out a detailed equality analysis of every one of the twenty nursery providers who were affected by the proposals. The documentation generated was voluminous and filled the best part of a lever arch file. The equality analysis process was conducted in three stages, which are described in an "over-arching" EIA which was produced as a summary and consideration of the equality issues considered in greater detail in the twenty individual EIAs. The overarching EIA records that it is a summary of the EIAs that were carried out for each of the twenty individual providers who came under the scope of this proposal.
50. The witness statement of Councillor Drayton states:

"I had copies of and read each of the individual equality impact assessments prepared in respect of each of the 20 providers as well as the over-arching EIA that summarised them all, and which was appended to the Cabinet Report for the meeting of 27 February 2013. The individual EIAs were not copied and appended to the Cabinet Report because of the sheer extent of the documentation. Instead, the full set of EIAs and detailed records of the consultation exercise were held in the Cabinet Office for all members to read, which I believe they did."

51. The report prepared for the Cabinet meeting of 27 February 2013 states at para 7.2:

"The detailed impact assessments have highlighted a number of key concerns and mitigating factors. Cabinet members have been supplied with the EIAs which they will read fully and satisfy themselves that the legal duties can be met. They are asked to note the adverse impact on some protected groups and the actions proposed. They are then asked to balance any residual impact against the need to implement changes for the reasons set out in this report. As the Cabinet have indicated, they will consider the EIAs, the concerns have not been fully set out in this report. Key concerns include:

Possible reduction of services or transfer to new providers.

Concern about continuity of care and children with additional or special needs (SEN) or Learning Difficulties and Disabilities (LDD).

Concerns about access to childcare provision within BME communities.

Impact on the childcare workforce of potential redundancies. This is particularly significant for women and BME staff."

52. In addition to the information given in the EIAs, there was considerable public engagement with the proposals in the form of the briefing papers and the recorded comments at each of the meetings demonstrate that the Cabinet was repeatedly reminded of the potential effects of their decision on protected groups.
53. The evidence of the defendant is that the councillors are very familiar indeed with the social concerns arising within their respective constituencies. The witness statement of Councillor Drayton states:

"Members of Cabinet are well aware that they are required to have due regard to the potential equality impacts of any proposal that they consider. Our culture is as it should be one where equality considerations inform every step in the decision-making process. Equality issues feature in each stage of the broader and lengthier process of formulating proposals and taking them through to the final decision-making stage…Equality issues are considered throughout the process, before, during and after any formal assessments have been undertaken. We should and do consider the equality impact assessments which are prepared for us by Officers, but that is but one aspect of how we take equality considerations into account."

Of course, a mere generic, background level of concern is not of itself sufficient to comply with the requirements of the Act but it is not insignificant that those responsible for taking the decision in this case were not approaching their responsibilities from a position of ignorance about the social and demographic context in which they were operating. Further, Cabinet members were engaged in the process of assessing and developing proposals as part of a continuous process and the records of meetings are snapshots only of the route which they are following.

54. In Hunt the court held at para 94:

"…it would be proper to conclude that the members failed to have due regard to the public service equality duties only if it can be demonstrated that there was such an insufficiency of information before them as to make it proper to conclude that they could not have complied with their statutory duty despite their attempt to do so."

55. I am of the view that the defendant in this case fulfilled its duties under section 149. In doing so I bear in mind the observations of the Court of Appeal in Bailey in which Davis L.J. held at para 102:

"Councils cannot be expected to speculate on or to investigate or to explore such matters ad infinitum; nor can they be expected to apply, indeed they are to be discouraged from applying, the degree of forensic analysis for the purpose of an EIA and of consideration of their duties under s.149 which a QC might deploy in court. The outcome of cases such as this is ultimately, of course, fact specific... All the same, in situations where hard choices have to be made it does seem to me that to accede to the approach urged by Miss Rose in this case would, with respect, be to make effective decision making on the part of Local Authorities and other public bodies unduly and unreasonably onerous."

56. In R (Greenwich Community Law Centre) v Greenwich London Borough Council [2012] EWCA Civ 496 Elias LJ held at para 30:

"I would emphasise the need for the court to ask whether as a matter of substance there has been compliance; it is not a tick box exercise. At the same time the courts must ensure that they do not micro-manage the exercise."

57. In R (Branwood) v Rochdale MBC [2013] EWHC 1024 (Admin), Haddon-Cave J. remarked at para 60:

"In my judgment, the Claimant's argument runs counter to the direction of travel of authorities in this area: which is to discourage challenges based on minute criticisms of EQIA's, or elaborate inquisitions of possible permutations of equality… It is not the law that public authorities must set out s. 149 verbatim, collect, analyse and record each scrap of data with regard to every single protected group and then analyse each such group seriatim against every limb of s.149, looking at endless permutations and combinations. A sense of proportionality and reality is required. The basic test is simple: whether "in substance….due regard" has been had to the relevant statutory need. This straightforward test should be the touchstone, both for those seeking to fulfil the PSED duties and those seeking to challenge."

58. I agree with the thrust of the defendant's submissions that the criticisms raised by the claimants in this case do not adequately take into account the broad picture but concentrate on too fine a level of detail of analysis.
59. The claimants further contend that the support promised by the defendant in mitigation of the impact of its decision inadequately addressed the equality duty. But there is here a risk that the process of analysis is allowed to descend into an impermissible assessment of the merits of the decision and the respective weight which ought to have been given to every material consideration. As Elias L.J. pointed out in R (Moore) v Secretary of State for Business Innovation & Skills [2012] EWHC 201 (Admin):

"77 …, I do not accept…that it is for the court to determine whether appropriate weight has been given to the duty. Provided the court is satisfied that there has been a rigorous consideration of the duty, so that there is a proper appreciation of the potential impact of the decision on equality objectives and the desirability of promoting them, then as Dyson LJ in Baker (para 34) made clear, it is for the decision maker to decide how much weight should be given to the various factors informing the decision.

78 , The concept of "due regard" requires the court to ensure that there has been a proper and conscientious focus on the statutory criteria, but if that is done, the court cannot interfere with the decision simply because it would have given greater weight to the equality implications of the decision than did the decision maker. In short, the decision maker must be clear precisely what the equality implications are when he puts them in the balance, and he must recognise the desirability of achieving them, but ultimately it is for him to decide what weight they should be given in the light of all relevant factors. If Ms Mountfield's submissions on this point were correct, it would allow unelected judges to review on substantive merits grounds almost all aspects of public decision making."

60. Accordingly, the claimants' challenge on ground two must fail.

Ground three – Best value duty

61. The claimants further argue that the defendant acted in breach of its best value duty and that for this reason alone the decision is fatally flawed.
62. Section 3 of the Local Government Act 1999 provides:

"The general duty.E+WThis sectionnoteType=Explanatory Notes has no associated

(1) A best value authority must make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness.

(2) For the purpose of deciding how to fulfil the duty arising under subsection (1) an authority must consult—

(a) representatives of persons liable to pay any tax, precept or levy to or in respect of the authority,

(b) representatives of persons liable to pay non-domestic rates in respect of any area within which the authority carries out functions,

(c) representatives of persons who use or are likely to use services provided by the authority, and

(d) representatives of persons appearing to the authority to have an interest in any area within which the authority carries out functions.

(3) For the purposes of subsection (2) "representatives" in relation to a group of persons means persons who appear to the authority to be representative of that group.

(4) In deciding on—

(a) the persons to be consulted, and

(b) the form, content and timing of consultations,

an authority must have regard to any guidance issued by the Secretary of State."

63. With reference to the guidance issued by the Secretary of State, the claimants make two specific criticisms of the defendant:

i) It failed to consider the social value of the community nurseries;

ii) It passed on reductions to the voluntary and community sector disproportionate to that which it took upon itself.

I propose to deal with each criticism in turn.

64. The social value of the nurseries was specifically drawn to the attention of the defendant in the briefing paper of December 2012. Paragraph 6 of the Cabinet Report of 27 February 2013 expressly reminds the Cabinet of its duty to have "due regard to the Best Value principles".
65. The witness statement of Councillor Drayton records:

"One of the key issues in funding decisions in the current climate is that we have to get value for money. This is not simply a question of hard numbers. Social value is an important factor. Assessment of social value as a component of Best Value cannot simply focus on a particular setting or service without taking into account its relative value seen in a more general context. It is not simply a question of whether a provision that has received funding in the past is of quality and social value. In recent years it has been sadly necessary to cut the funding even of valuable provision and services, in order to ensure that there is funding available for other services which are considered to be critical to the community. The guiding principle is that services available to the most disadvantaged and/or vulnerable members of society must receive the highest level of protection. Within the Early Years Service, this has involved diverting funding into early intervention and prevention, with a focus on ensuring that the needs of the most vulnerable children and families are addressed before a crisis develops. The social value of this is clear. In financial terms, this approach provides good value for money because of the long term costs which are saved if there is early intervention. If we can invest in early intervention and prevention we save money from later being spent on intensive high cost services. Most importantly, we may keep children out of care and intervene positively in their young lives."

66. Against this background, I dismiss the suggestion that the defendant failed to comply with its best value duty.
67. There is no substance in the complaint that the defendant impermissibly distorted the outcome of its decision making process in a way calculated to preserve funding for itself as opposed to the nurseries. In any event the Guidance, thankfully, does not require a formulaic "pound for pound" approach. Furthermore, the services provided by the multi agency support team, upon which the claimants place the greatest comparative reliance, are of a different nature to those provided by the nurseries and are not susceptible to a like for like analysis

Ground four– Childcare Act 2006

68. The claimants contend that the decision under review was reached in breach of four of the defendant's duties under the Childcare Act 2006:

i) the duty to improve the well-being of young children in their area, and to reduce inequalities in the well-being of young children in their area (section 1);

ii) the duty to make arrangements to secure that early childhood services are provided in an integrated manner which is calculated to facilitate access to such services, and to maximise the benefit of such services to young children and their parents or prospective parents (section 3(2));

iii) the duty to take steps to identify parents or prospective parents who would otherwise be unlikely to take advantage of early childhood services, and to encourage them to make use of such services (section (3)(3)); and

iv) the duty, so far as reasonably practicable, to secure that the provision of childcare is sufficient to meet the requirements of parents who wish to train for, take up or remain in employment (section 6).

69. I propose to examine each section in turn.
70. Section 1 of the 2006 Act is described as a "general duty" and cannot be approached in the context of the position of an individual or individuals. It is necessary to look at the population of those affected as a whole. In this case, it was perfectly open to the defendant to conclude that the decision to prioritise intervention over subsidy would have the overall effect of improving the well-being of young children and to reduce inequalities in the well-being of young children in the Sheffield area. It is not for the court to substitute its own views for that of the democratically elected local authority.
71. Much the same can be said of section 3(2). I do not see how it can be contended that redistributing resources away from nursery subsidies and towards individual cases of need cannot, at least arguably, result in a better integrated provision of early childhood services and a maximisation of the benefit to be derived by young children and their parents. Whether it actually does or not is a matter upon which the defendant is in a far better position than this court to judge.
72. Within the factual parameters of this case it is difficult to see how section 3(3) could be any more than peripherally relevant if at all. This sub-section too applies to all those children and parents affected by the actions of the decision maker and cannot be applied to a limited class in isolation. The withdrawal of funding from twenty nurseries does not on the face of it constitute a general failure to identify parents or prospective parents who would otherwise be unlikely to take advantage of early childhood services. There is simply no evidence in support of this contention and it is misconceived as a matter of law.
73. The duty under section 6 is more obviously pertinent to the issues arising in this case but it is subject to the constraints of reasonable practicability. This issue was clearly and directly considered by the defendant. In the Cabinet reports both of 12 December 2012 and 27 February 2013, specific and accurate reference is made to the section 6 duty and its content. The requirements of section 6 are also set out in the overarching EIA. There is simply no legitimate basis in this case upon which this court can substitute its own view as to what is or is not reasonably practicable for that reached by the defendant.
74. Within this context, the claimants allege that the defendant was unduly protective of its multi agency support team ("MAST") service. This is a criticism which was strongly ventilated during the consultation. There was a feeling amongst the consultees that the defendant was thus favouring the provision of funding to its own in-house services. It is understandable that those aggrieved by a proposal which threatens their own interests and which they genuinely believe to be wholly wrong should be sensitive to the possibility that there lies behind it a darker motive but in the circumstances of this case there is no objective evidence to support such a conclusion.

Ground five - Irrationality

75. The final challenge to the legality of the defendant's decision is based on the premise that it failed to ask and answer the right questions.
76. I do not accept the validity of this ground. The process of assessment was thorough and conscientious. The defendant was fully equipped to embark on the exercise of decision making with all the information which it had accumulated and with which it had been presented over the period leading up to the Cabinet meeting of 27 February 2013. The defendant was fully aware of why the grants had been paid to the nurseries and the potential consequences in the event that the grants were terminated.
77. I am in no doubt that the claimants genuinely believe that the defendant's decision was irrational in the sense that they consider that the balance of argument was firmly weighted in favour of the retention of the grants, at least for some further period, and they cannot understand why this did not happen. It is not, however, for this court to attempt to re-balance the arguments and form its own conclusion on their respective merits.

Conclusion

78. The twenty nurseries affected by this decision which provide valuable facilities to the families which they serve are to be commended on the contribution they have made and continue to make to their local communities. I hope that, despite the termination of the subsidies, they are all able to survive and flourish but I must recognise that some may not. In an ideal world, it would not be necessary to make hard choices about the distribution of funds between competing but thoroughly meritorious causes but, particularly in the present economic climate, sacrifices even of highly socially desirable initiatives are sometimes unavoidable. Councils are democratically elected to make decisions and some of these are bound to be contentious and unpopular. Ultimately, however, the decision in this case, controversial as it undoubtedly was, complied with the standards imposed by public law and must remain undisturbed.