Liverpool City Council, Nottinghamshire County Council, LB of Richmond upon Thames and Shropshire Council v SSH

Summary

This case was brought by four local authorities challenging what they described as the Government's "ongoing failure to provide full, or even adequate, funding for local authorities in England to implement the deprivation of liberty regime".  The local authorities suggested that the financial shortfall suffered by councils across the country generally as a result of Cheshire West was somewhere between one third of a billion pounds and two thirds of a billion pounds each year and sought a mandatory order requiring the Secretary of State of Health ('SSH') to fill the gap.  The local authorities relied on the New Burdens doctrine, a recent policy invention which provides that if it is the Government's policy that authorities should do something and that this will cost them more money, the department responsible for the policy (within central government) must ensure that the necessary funding is provided.

The local authorities lost because they had not issued their claim promptly.  Central government funding decisions were made annually, and the claim had been issued 2 days short of the 3 month time limit for judicial review claims, which the court considered was not prompt enough given the prejudice to the SSH of having an annual budget decision quashed a quarter of the way through the year.

Garnham J did however go on to consider the merits of the local authorities' claims.

The local authorities argued that a public authority must ensure that there is no systemic flaw in practice which creates an unacceptable risk of illegality, and that a system would be unlawful where the funding shortfall to those implementing it creates an unacceptable risk of illegality.  Garnham J rejected the idea that there was any principle of public law that public authorities who establish a system of safeguards are under a duty to ensure that the system does not give rise to an unlawful risk of eligibility.  Since the local authorities were not saying that the government's underlying funding allocation was irrational, they could not successfully mount an argument based on the risk of illegality. And in any event, said Garnham J, the local authorities were able to prevent any illegality by just rearranging their own budgets and making cuts in other areas – the local authorities had not filed evidence suggesting that having regard to their total budgets, they would be unable to meet the requirements of the DOLS systems.

Garnham J held that the New Burdens doctrine did not assist the local authorities as it did not say in terms that additional funding would be provided if required as a result of a change in policy and so gave rise to no legitimate expectation.

Comment

This decision will no doubt be hugely disappointing to local authorities struggling to cope with the aftermath of Cheshire West, and wondering forlornly how long it will take for the Law Commission's proposals to make it to the top of the government's list of things to do (the General Election only having delayed matters further).

The suggestion that dealing with DOLS simply requires other budget cuts to be made is perhaps unrealistic, given the scale of cuts that have already taken place in recent years, unless one accepts that service provision will be reduced in order that procedural safeguards can be implemented. That would be a perverse effect of the Supreme Court's decision, which was premised on the need to support people with disabilities and to treat them equally.

It also seems odd to the authors to reject the claim on the basis of a lack of promptness since the problem is one that will inevitably arise again when the next Local Government Finance Settlement is published.  By then, the problems facing local authorities will no doubt be even worse - perhaps their evidence at that stage would show that squeezing funds from other areas of their budgets will only be able to happen if other statutory duties are missed.

The authors understand that no decision has yet been taken whether to seek permission to appeal the decision.  It will be interesting to see what impact this decision has on any challenge brought following Re JM as to the provision of representation at DOLS hearings for incapacitated people. In this regard, we note also the Government's response to the Re JM decision (i.e. extra funding for s.49 visitors) and the less than enthused response of Charles J, both available here.