Back to school for Education Secretary
On 11 February 2011 the High Court handed down judgment in the Building Schools for the Future judicial review. This was a challenge to the controversial decision of Michael Gove, Secretary of State for Education, to cancel funding for the Building Schools for the Future scheme.
Bevan Brittan LLP acted for Sandwell MBC, one of the six local authorities that challenged the decision. The councils succeeded in their claim and costs were awarded against the Secretary of State.
In this article we look at what the judgment means for the councils affected and for public bodies in the future making difficult decisions about spending.
The national Building Schools for the Future (BSF) programme was launched in 2003 and aimed over a 15 year period to rebuild or refurbish every secondary school in England. Before coming to power the Conservative Party, and Mr Gove in particular, criticised the project as being unnecessarily bureaucratic and wasteful. In the week after its formation, the new Coalition Government announced the need to deliver £6bn in savings in 2010-2011 and to stop immediately any funding approvals made since the beginning of the year which were either not affordable or not consistent with the new Government’s priorities. It was widely understood that the BSF programme would, in some way, be affected by the cuts.
On 5 July 2010 Mr Gove made a statement on education funding to the House of Commons and announced that, other than those BSF school projects specifically listed as being “saved”, any future capital commitments would have to wait until the conclusion of the Government’s review of capital expenditure, effectively ending the BSF programme. Mr Gove did say that he would take into account contractual commitments already entered into. In the ensuing debate there appeared to be some confusion over which schools were and were not affected and this confusion was not eradicated by the list of schools which was placed in the House of Commons library that day. Errors were contained on the list: most notably Sandwell’s schools were all listed as unaffected whereas in fact the funding for all nine of Sandwell’s schools had been stopped.
As the days went by the level of confusion did not dissipate. At first there was no reference to what would happen to councils which had schools to be delivered in a repeat wave of investment, there was only reference to schemes which had reached financial close and those which had not. It slowly emerged that for councils with repeat waves of funding, the repeat waves would not be allowed to continue if they had not got “Outline Business Case” approval before 1 January 2010. The stopped schools for all of the councils challenging this decision were in a repeat wave of funding, and none of those councils had reached Outline Business Case approval stage by 1 January 2010.
This case is important because it underlines that public bodies making difficult decisions about cuts have to consider the impact of those cuts on those who will be affected by them. Contrary to what some commentators have said (including Michael Howard on the Radio 4 Today programme on the first morning of the trial), the courts are reluctant to interfere with discretionary decisions other than where there has been manifest error. Courts recognise that they do not have access to the full background which should equip those decision-makers to take the decision. Equally, however, the courts protect the rights of those who might be affected by the decision by ensuring that decision makers reach their decisions in a manner which is lawful.
None of the claimants was saying that Mr Gove did not have the power or authority to make the cuts in question. It was recognised that savings had to be made and a balancing exercise had to be carried out. The claimants were all deprived boroughs with schools in various stages of dilapidation. The proposed cuts would have had a disproportionate effect on already disadvantaged pupils. Further, the authorities had incurred significant liabilities and costs in setting up LEPs to deliver projects. If the funding was stopped, that expenditure would be wasted. It would have been possible for Mr Gove to have run a short consultation period during which these different factors could have been weighed up, and perhaps ways of delivering the projects on a cheaper basis could have been explored rather than stopping them altogether.
The Secretary of State’s decisions to cut funding for the claimants’ schools was quashed. He must now take his decision again, with an open mind, and this time he must consult with the claimant authorities and have due regard to equalities impact.This article also appears in our local authority newsletter Authority View Spring 11.