The High Court has given its verdict in the case of six councils against the Secretary of State for Education regarding the Government's decision last year to stop Building Schools for the Future (BSF) projects.
Luton Borough Council, Nottingham City Council, Sandwell Council, Kent County Council and the London Borough Councils of Newham and Waltham Forest all had projects stopped or cancelled by the Secretary of State on 5 July 2010. They sought a judicial review on the grounds that stopping these projects was based on an "arbitrary and irrational" method and the process leading up to the decision was "unlawful".
On the 5 July 2010 all projects which had already received Final Business Case approval and those that had received Outline Business Case approval before 1 January 2010 were told that they would go ahead as planned. Projects that had not received Outline Business Case before 1 January 2010 were stopped.
Five of the six councils (Sandwell being the exception) received Outline Business Case approval, but did not receive Final Business Case approval before 5 July 2010. The judge, Mr Justice Holman, concluded that the decision to stop the projects where Outline Business Case approval had been given, without any consultation with the five councils was "unfair as to amount to an abuse of power" and that the decision making process was "unlawful".
96. In my view, the way in which the Secretary of State abruptly stopped the projects in relation to which OBC [Outline Business Case] approval had already been given, without any prior consultation with the five claimants, must be characterised as being so unfair as to amount to an abuse of power. However pressing the economic problems, there was no "overriding public interest" which precluded any consultation or justifies the lack of any consultation; and insofar as it affects the five claimants the decision making process was unlawful.
The judge did not question the rationality behind the decision to stop the projects and said that the decision was not open to legal challenge on the ground of irrationality.
121. In the result, I do not further examine or question the broad rationality of the Secretary of State's decision. I am not persuaded that he decided and acted in breach of any substantive legitimate expectation of any of these claimants.
The judge also went on to say that Outline Business Case approval does not create "a substantive legitimate expectation that any given project would definitely proceed". However, he did say that by failing to consult with the councils about the likely impact of stopping their projects and by failing to give due regard to the equality impacts of the decision, the Secretary of State acted unlawfully and without justification.
122. However I do consider and hold that, unlawfully and without justification, he failed to consult with any of these claimants as to the effect on their individual projects of his possible decision options. Partly as a result, but also as a discrete matter, he unlawfully failed to give due regard to the equality impacts of his proposed decision.
The judge concluded that the Secretary of State must reconsider his decision to end the project in these council regions.
122. He must now, after giving each of them a reasonable opportunity to make representations, reconsider his decision insofar as it affects the claimants and each of the projects in relation to which they have claimed, with an open mind, paying due regard to any representations they may make, and rigorously discharging his equality duties.
126. ...the Secretary of State must, I stress must, reconsider the position of each of the claimants with an open mind and paying due regard to whatever representations they may respectively make.
However, the decision about whether to save any of these projects still rests with the Secretary of State.
126. But provided he discharges that duty and his equality duties, the final decision on any given school or project still rests with him. He may save all, some, a few, or none. No one should gain false hope from this decision.
The judge also made it clear that this judgment should not pave the way for other councils to challenge the decision to stop their BSF projects.
A Department for Education spokesperson said:
We are delighted that the judge did not call into question the decision to end the wasteful and bureaucratic Building Schools for the Future programme. On the substantive points he concluded that it was a rational decision and that the authorities involved had no expectation of being allowed to proceed with their projects.
Commenting of the decision, Andy Burnham, Shadow Secretary of State for Education said:
The ruling calls into question every school building scheme cut by Michael Gove and is a damning verdict on his competence as a minister. He must tell us today how much public money he has spent trying to defend his botched and unfair decisions.
Sandwell Council Leader Cllr Darren Cooper said:
At the very least we have been vindicated for bringing the action. Now we have to wait to see whether the Government accepts it was too hasty in scrapping the scheme. We have just got to wait with fingers crossed.
Waltham Forest Council's Leader, Cllr Chris Robbins, said:
The government now has to go back and reconsider how the devastating decision to cancel BSF projects in Waltham Forest was made. It is a victory for common sense and fair play. They must now make a decision on our funding based on the real evidence about the difficulties our schools face.
You can read the full decision here and the Government's response to the judicial review here.