The Administrative Court’s ruling that West Berkshire should not reduce the funding for short break support underlines the need for legal literacy. Elected members, as well as their lawyers and social services officers, need to be aware of the law on such fundamentally important questions as budget setting and how to cope with continuing austerity in the sector.
West Berkshire had done a very full consultation exercise and was not criticsed on that point. It was how the members were advised to consider the options for coping with the results of the consultation that lay at the heart of the case.
The judge’s decision was based on the omission to clarify for members faced with the decision the full meaning of the public sector equality duty or the full extent of the statutory duties in relevant legislation (the Children Act and regulations and the guidance from government, regarding best value and sufficiency).
Reserves
Even though a second decision by the members, to re-affirm the first decision, once permission for judicial review had been obtained, was based on much better information about the legal framework, it did not flag up the possibility, or the pros and cons, of spending some of the council’s general reserves to put the first decision right. The second decision was also legally flawed, by virtue of its having been factually pre-determined – the council’s constitution precluded its rescission within a certain timeframe.
The judge said that there was “an exceptional public interest in ensuring that when local authorities cut spending in a way which affects vulnerable children, they are seen to observe the relevant legal provisions, particularly where, as here, the amounts at stake are, in relation to the budget as whole, not large, and where there was flexibility in the money available, to accommodate a smaller cut.”
The Council had faced an exceptionally difficult financial position late last year – it had needed to make savings of £36m over the last six years. The Council had anticipated a 25% cut in revenue support grant from the government but the provisional settlement for the next four years was worse than that. The Council was to receive 44% less money from the Government in 2016-17, the third largest cut for any English unitary authority – this council was one of the worst affected by the new formula that has been brought in.
The Care Act 2014 had obliged the Council to expand its eligibility criteria for adult social care (it had been at Critical under Fair Access to Care Services), so it had been one of the few that had been obliged explicitly to loosen its criteria to match the government’s view that the Care Act threshold should work along equivalent lines to the old ‘substantial’. Its provisional figure for savings which needed to be made went up from £10.8 to £19m as a result of those unexpected changes by Government.
A large amount of factual information was provided to members about the impact of the proposed cuts but it was still alleged that because of the missing legal information the Council could not establish it had paid due regard to all the factors in the Equality Act.
While members were given the text of section 149 Equality Act, they were directed, in four places in the documents, to a summary which did not accurately encapsulate, for the purposes of the decision about short breaks, the effect of section 149.
Equality
Had the report only included the text of section 149(1), it might not have made West Berkshire councillors’ lives easy, but the judge said she could then have been satisfied that they had at least considered the right question. The ‘summary’ way of presenting the equality issues unavoidably suggested that the approach was equivalent to, or a substitute for, the statutory considerations, and it was not good enough because it included some, but not all, relevant matters.
There was no trace in the materials given to members of any reference to the express language, or to the substance, of regulations 3 and 4 of the 2011 Breaks for Carers of Disabled Children Regulations, or of section 27(2) of the 2014 Children and Families Act (which requires councils to consider the extent to which that provision is sufficient to meet the social care needs of the young people concerned). There was no reference, either, to the duty imposed by section 11 of the 2004 Children Act to make arrangements for ensuring that the functions of the bodies to which that Act applies are discharged having regard to the need to safeguard and promote the welfare of children, or to the best value guidance, to which the Council was required to have regard.
That guidance is aimed specifically at, and ‘sets out clear expectations for’ councils ‘considering changing funding to local voluntary or community groups’.
Paragraph 7 says that ‘Authorities should seek to avoid passing on disproportionate reductions – by not passing on larger reductions to the voluntary and community sector and small businesses as a whole than they take on’.
Had the preparation been done properly, it would have been open to the Council to conclude that, important as the impact considerations were, it was necessary to do less for disabled children, than the Council would otherwise wish to; but members had to be satisfied that the proposed cut was proportionate, and that no other measures, such as increasing fees or reducing other budgets, could be used.
That was why, even though by the time of the second decision, when members were properly equipped, to take into account the legal factors about duties to children relevant to a lawful decision, the later decision was still quashed. The members were still not in a position fully to reconsider the proposed cut because they could not, under the Council’s constitution, rescind that decision.
Litigation
The General Reserve Fund in West Berkshire is ‘expected to cover any of the following risks, should they arise …’ and the list included ‘risks in relation to litigation’. The claimant’s barrister contended that the risk of being required to reconsider these decisions because of legal challenge is just such a risk, and the Council could properly have now drawn on its reserves to meet that risk, and its consequences.
Most interestingly, for those who are fed up with being told that there is simply no more money, the judge said that she was not satisfied by the terms of the new reports prepared for the later decision…
….“that the Council was invited to consider the use of reserves, or, if it did, why it decided not to use them, since apart from the allusion to ‘difficulty’, the report does not explain whether or not it would be proper to draw on the reserves, and does not tell members what the ‘difficulty’ is; whether it is insuperable, or could be overcome. The Council has the reserves. The risk of losing this case, and of being required to reconsider the decision is arguably a risk the reserves are held to meet. I have heard no argument from the Council that it is not.”
It must be obvious from this report that knowing the legal framework under which day to day work is done is an essential skill or attribute for senior management and lawyers working in local government and for voluntary sector provider management – for without it, the prospects of having an influence on cuts that could actually make a difference is much weakened. That means in this context, the Care Act, the Care Act Guidance (especially on commissioning, in chapter 4) and Regulations and what are known as public law principles, for adults’ services decision-making.
The Best Value guidance – applying as much to the need for proportionality in proposed cuts to voluntary sector adults’ services providers, as it did to children’s sector providers here – must be essential reading for any future consultation exercise, for providers all around the country, regarding adult social care budget setting.
The best bit, for me, though, is judicial reiteration of the principle that the Reserves fund is not sacrosanct. Indeed, one of the reasons for Reserves, is management of risk, and that includes legal risk.
And applying this at a service user or advocates’ level, anyone feeling the need to challenge an apparently inadequate personal budget should say this to the Panel in question:
“Reserves surely do need to be formally considered as available for use in resolving this dispute, because I have a good strong case on illegality, which I shall gladly set out for your Monitoring Officer’s consideration, and potential legal challenge. Please give me your reasons in writing why you will not consider the use of reserves, or if you will at least consider it, what your council’s reasons are for your ultimate decision.”
Lessons from this case
- Council members should be fully informed about the public sector equality duty and statutory duties in relevant legislation on best value and sufficiency, in particular about s149 of the Equality Act on short breaks.
- Specific legislation relevant to short breaks is in regulations 3 and 4 of the 2011 Breaks for Carers of Disabled Children Regulations, s27(2) of the 2014 Children and Families Act and s11 of the 2004 Children Act.
- Local authorities should be flexible in their use of money where the amounts involved are small in relation to the budget as a whole.
- Under West Berkshire Council’s constitution it could not rescind its orginal decision to reduce funding within a certain timeframe so even when members were fully informed the court ruled against them at the second hearing.
- Best Value guidance on adult social care budget setting must be essential reading for any consultation exercise for all providers.
- Reserve funds are not sacrosanct and can be used to manage risk, including legal risk.
