Return of the Cuts, Lessons from the Cuts Cases

Successive waves of public sector spending cuts imposed by UK central government since 2010 have generated a series of judicial reviews – the ‘cuts cases’. Many of these are challenges to the difficult choices that local authorities have had to make in reducing the provision of public services to stay within their shrinking budgets.

The cases are interesting not because they present a coherent narrative – they do not, although they certainly exhibit persistent themes – but because they test the boundaries of territory into which the courts have traditionally been reluctant to tread; namely whether to quash, on public law grounds, decisions which are driven by the need to allocate scarce resources between competing demands. As such, they tell us something about the considerable capabilities, but also the ongoing limits, of modern judicial review.

On 25 November 2015, the Chancellor of the Exchequer, George Osborne, revealed the next wave of public sector ‘austerity’ at more or less the same time as a number of earlier cuts cases were receiving judgment. Both offer us some useful pointers to the future.


Osborne’s Autumn Statement generated less adverse commentary about public sector cuts than would have been anticipated from its advance publicity.

This was mainly because the Autumn Statement turned out to be rather less austere than expected. The rabbit in the Chancellor’s hat was a revised five-year forecast by the UK’s Office for Budget Responsibility (OBR) identifying a previously unpredicted £27 billion of cash in the national accounts. This would result, said the OBR, from increases in tax revenues and reductions in government borrowing costs. Although yet to be realised, Osborne promptly proceeded to commit this ‘windfall’ in future spending.

This was both fortunate and convenient for the government, coming as it did in the wake of the Paris attacks when there was a pressing desire to announce more money for defence, policing and the intelligence services. However, as in all financial statements since 2010, neither the largesse nor the pain was equally shared around. Once the protected departments (notably Health and the schools part of Education) were taken into account, there were still announcements of substantial cuts to most other departmental budgets.

Local Government

Nowhere is this fiscal inequality more keenly felt than by local authorities.

The government has frequently spoken of its commitment to ‘localism’, while Osborne personally claims to champion the cause of devolution. The reality, however, is revealed by following the money and not the rhetoric. Osborne’s £27 billion forecasting windfall was almost all committed to projects of direct interest and advantage to central government. Local authorities, as in the last Parliament, found themselves at the foot of the queue for further resources.

The Autumn Statement left local government facing a substantial reduction in its central grant funding, to be only uncertainly (and unevenly) compensated through the proposed 100% retention of business rates and a limited ability to raise more in council tax.  The overall package will deliver a five-year settlement for councils that is scarcely better than flat in terms of nominal cash revenues, against a backdrop of additional responsibilities and increasing demands on essential services.

According to the (Tory) Chairman of the Local Government Association, Lord Porter, this means that:

‘Even if councils stopped filling in potholes, maintaining parks, closed all children’s centres, libraries, museums, leisure centres and turned off every street light they will not have saved enough money to plug the financial black hole they face by 2020.’ (source: LGA)

The Prime Minister himself – in a letter to the leader of his own council in Oxfordshire which attracted a detailed, critical and very public response – complained about the impact of the cuts on non-mandatory services. In the Autumn Statement, however, his government further ratcheted up the fiscal pressure that makes them, and therefore more cuts cases, inevitable.

The effect of these developments is to make this a useful time to look at the lessons from two of the recent group of cuts cases.

Tilley v Vale of Glamorgan Council

Tilley v Vale of Glamorgan Council is the latest in a number of cuts cases which relate to libraries. For cash-strapped local authorities, spending on library services has proved a key target area in which to make savings.

In Tilley, the Council had decided that it needed to find some £500,000 of savings from its library budget, mostly by reducing staffing costs. Short of outright closures, the options available to it were to reduce opening hours or to move to community-led or community-supported libraries (i.e. to rely on local volunteers to run, or at least provide support staff for, libraries in their communities).

During 2014, the Council consulted on the future of some of its libraries, including the one used by Ms Tilley and her children. After the consultation, on 9 March 2015, the Council’s Cabinet made a decision which the judge, Laing J, interpreted to mean that this library would close unless an expression of interest in running or supporting it was received from the local community. This decision, and the consultation preceding it, was the one under challenge in the case. It gave rise to three points worth highlighting.

The Importance of the Officer’s Report

One persistent line of attack for claimants in the cuts cases has been based on the public sector equality duty at section 149 of the Equality Act 2010. It is well-established that this will be breached if the duty itself, or relevant issues relating to it, are not drawn to the attention of the decision-makers.

In Tilley, the Cabinet had in fact been provided for the area of each library with equality impact assessments (EIAs) which explained the nature of the duty and analysed how it applied in the relevant area, concluding that the proposed decision would have adverse equalities impacts. However, Laing J found that the officer’s report to which these EIAs had been appended contained ‘no analysis, let alone a rigorous analysis‘ [54] of the public sector equality duty as it applied to the facts of the case.

She then considered the relationship between the officer’s report and the EIAs in these terms –

I bear in mind that there is a full and accurate exposition of section 149 in the EIAs. [However]…Members were given no help or direction either in the report or at the meeting about why they should look at the specific EIAs, or what they would find there. One function of an officer’s report is clearly to present the issues and the evidence to members in a way that enables them to reach an informed and lawful decision. In the case of a decision such as this, the function of appendices to a report is to provide supporting information for reference purposes. Members should not be expected to research appendices for material which is significant to the decision and which should, instead, be drawn to their attention in the text of the report.[55]

Put bluntly, it is not enough to drop a copy of an EIA, however good it may be, onto councillors’ desks and think that the job has been done. If the EIA is provided as an appendix to a report, it will be treated as being reference material only unless the report itself engages with the content of the EIA and explains what councillors should look for in it.

This approach needs to be read together with the judgment of the Court of Appeal in Hunt v North Somerset. Hunt is almost a mirror image of Tilley. In Hunt, the officer’s report had set out a summary of the EIA, but did not expressly say that the EIA must also be read. The Court of Appeal thought this would mean that councillors would stop at the summary and not read the full EIA itself. So the only safe course of action is for the officer’s report both to engage in some detail with the EIA, and also to indicate clearly that the full EIA has to be read. Either the absence of a summary, or the suggestion of sole reliance on one, has the potential to be fatal.

Although these points are framed specifically in relation to the public sector equality duty, and the fulfilment of that duty is a particularly important one, it is hard to see why in principle the same logic should not apply to any public body making a decision involving key issues to which it is required by law to have regard. It puts a high emphasis on the quality and content of a staff report written to inform a decision-making committee.

Consulting on Alternatives

The Supreme Court in R (Moseley) v London Borough of Haringey caused a brief flurry of interest in the idea that a failure to consult on ‘alternative’ proposals – i.e. the ones that are considered but discarded by an authority before its consultation is published – might itself be a ground of review. This was not in line with previous case law, and was thought to herald a new approach.

In fact, Moseley (itself a cuts case) was a poor and confusing piece of work, and in the year that has passed since the Supreme Court’s judgment the lower courts have consistently sought to marginalise it by limiting it to its narrow facts. This process continued in Tilley, where one of the arguments for the claimant was that in the Council’s consultation on community-led libraries it had failed to present the alternative option of a reduced hours service.

Laing J had little time for this argument. As to the Supreme Court, she considered that Moseley gives limited help on the question when there will be an obligation to consult on alternatives’ [64] – something of an indictment when that was precisely what the case was about. As to the facts of Tilley –

…the Council had decided that it wanted, subject to consultation, to make the savings it had calculated would flow from the community library proposal. That meant that reducing hours instead of introducing community libraries was not, on the facts, a realistic alternative…This was therefore a very different case on its facts from Moseley. [67]

It is difficult to imagine, in the light of this and similar cases, that Moseley-style arguments about consulting on alternatives are going to have much traction other than in a very restricted category of cases.

The Timing of a Consultation Challenge

Timing can be a tricky business for claimants when they are contemplating a challenge to an inadequate consultation. Challenging a consultation exercise while it is still being carried out risks being regarded as premature – nothing is set in stone at that point, so surely the challenge should wait for a final decision to be made? Conversely, commencing a challenge only after the final decision runs the risk of being out of time – if the legal flaw is said to lie in the consultation process, why was issue not taken with it sooner?

In Tilley, the claimant waited until after the final decision to argue that the consultation was flawed – vitiating, therefore, the decision itself – and the Council raised the defence that this was too late.

Laing J dismissed this timing point. She started from the (surely correct) proposition that ‘The courts should avoid stepping in too quickly, and in most cases, should let the consultation take its course’ [70].

However, she adopted a curious rationale for treating Tilley as a case in which it was right to let the consultation run its course – ‘In my judgment the consultation was in this case not of itself, a decision, and did not, of itself, have any legal consequences’ [70].

This hardly seems a useful test. All consultations entail a decision (the decision to consult in a particular manner at a particular time) and many have some legal effect (in Tilley, the satisfaction of a statutory duty to consult). The question whether a given consultation constitutes a decision with legal effect therefore draws no distinction that will be helpful in the large majority of cases.

The better approach is the one proposed by Arden LJ in R (Royal Brompton & Harefield) v Joint Committee of PCTs (at [93]), which is to ask whether the consultation is capable of being ‘self-correcting’ (that is, attention can be drawn to its flaws within the consultation process itself) or ‘if there is some irretrievable flaw in the consultation process’ (the defects in the process are so fundamental that the entire consultation is undermined and incapable of self-correction). In most circumstances, only the latter should require to be challenged at the time at which they are still being undertaken.

The Judgment

In the event, the claim in Tilley failed on a more rudimentary timing basis. Before the case reached court, two expressions of interest in a community-supported library had been received by the council. Although the claim would otherwise have succeeded on the public sector equality duty ground, this meant that the cabinet decision to close the library, which was conditional on no such expressions being received, became inoperative. Since there was no longer any effective decision capable of challenge, these events had the effect of rendering the claim premature.

R (Logan) v London Borough of Havering

R (Logan) v London Borough of Havering is, like Moseley, a case about a local authority’s adoption of a scheme for council tax support.

Mr Logan suffered from multiple health problems which made him disabled. In the 2014/15 year, Havering adopted a scheme that offered those with his income and level of disability a 100% reduction in council tax. For the 2015/16 year, in order to save money, it adopted a scheme which set the basic reduction at only 85%.

This meant that Mr Logan would have had to pay some council tax for the first time, and was designed to save the council around £345,000 from the group of residents in a similar situation to him. However, it was subject to the ability for individuals in special hardship to apply for the support to be topped up to the full 100%, as Mr Logan had in fact done for the year in question.

The judgment in Logan gives rise to four points of interest.


A line of attack for claimants in many of the cuts cases has been that the effect of the cuts is to discriminate, contrary to Article 14 of the European Convention on Human Rights (ECHR), against those with protected characteristics.

Article 14 is never a freestanding ground of challenge, but in general it has not proved too difficult to show that another relevant right was engaged for the purpose of underpinning an Article 14 claim. Nor in many cases has it been hard to demonstrate that discrimination occurred, either because similar cases were treated differently, or because the policy under challenge failed to take proper account of difference (Thlimmenos discrimination). Instead, the outcome of these cases has more often turned on the question whether the undoubted discrimination could be justified.

The circumstances in Logan were different. The council had made significant allowance for the disabled, albeit not to the same extent as it did in the previous financial year. The judge, Blake J, was prepared to assume for the sake of argument (while doubting that it was correct, [34]) that the benefit of a council tax support scheme could constitute a possession under Article 1, Protocol 1 of the ECHR and so underpin an Article 14 discrimination claim. But he did not accept that offering only 85% rather than 100% relief from council tax constituted discrimination –

‘I do not see why it constitutes either a difference in treatment or an unlawful failure to treat people differently who are situated differently, to expect that a modest amount of council tax support will be absorbed in the subsistence budgets of the poor generally, even if the benefits forming that budget are provided because of eligibility through the disability gateway.’ [40]

Because of the difficulty of arguing that a scheme which continued to provide substantial support to the disabled was discriminatory, the claimant’s lawyers tried an alternative line of attack. They pointed out that Havering provided 100% council tax relief to those on the same income as Mr Logan if they were of pensionable age. Surely this difference in treatment between the elderly and the disabled was a form of discrimination?

That argument might have succeeded if the council had chosen a scheme which had that differential effect. But the support provided to the elderly was in fact an aspect of central government policy, written into the primary legislation and mandatory for all local authorities.

This raised the interesting question of whether Havering could be discriminating against one group simply by failing to be as generous as Parliament had been to another. Was it liable for the overall discriminatory outcome of these arrangements viewed in the round, even part of that outcome was not the result of its own discretionary decisions? The judge thought not –

‘I do not accept that the prohibition on discrimination means that there is an implicit requirement that the billing authority must always exercise its discretion to treat certain classes who are subject to the discretionary scheme, in the same way as those who are statutorily excluded from it.’ [35]

On balance this seems correct, but it is a challenging question that could easily recur in other cases.

Bright Line Rules and Discretion

In R (Tigere) v Secretary of State for Business, Innovation and Skills, the Supreme Court stopped well short of holding that bright line rules which allow no discretion to deal with difficult cases are unlawful. However, the majority of the court appeared to consider that whether a scheme offers flexibility in individual circumstances is a factor that goes to the assessment of whether any discrimination can be justified [36-37].

In Logan, Blake J considered the relevance of the final-stage discretion which allowed the council, in difficult cases such as those of Mr Logan, to top-up the council tax relief for an individual. While recognising the limitations of this discretion, he placed some weight on it when concluding that the scheme was lawful: ‘…the scheme has to be looked at as a whole. When done so, the discretion can be seen as an important part of the scheme and a further mitigating measure’ [41]. Bright line rules are sometimes important. However, allowing for room to manoeuvre in exceptional cases will often have value in ensuring that policies can be defended under legal challenge.

The Public Sector Equality Duty

Logan, like Tilley and many other cases before it, included a challenge on the ground that the public sector equality duty was not adequately considered by the decision-makers.

In this case, the council’s position was scarcely arguable. Under Havering’s constitution, a council tax reduction scheme required to be approved by the full council. The council has 54 members. The officer’s report including the EIA had been sent to the 9 members of the cabinet together with the 3 leaders of opposition parties. A further 20 members who had signed up to a mailing list had been told of its existence by email. As for the rest, while the report and EIA were available on the council’s website, they would have had to find it by looking for it themselves.

Blake J regarded this as an obvious, and fatal, procedural error –

‘In my judgment, the EIA was adequate to enable members who read it to have due regard to the PSED, but there was insufficient evidence to indicate that the decision makers had accessed the EIA attached to the officer’s report or had understood the importance of reading it in order to discharge their statutory obligation. It is not sufficient to assume that they could have done so and therefore would have done so.’ [53] (emphasis added)

When faced with a large decision-making group, every member individually needs to be given a copy of the relevant materials, and merely leaving them in a place where they are ‘available’ to diligent members is not sufficient.

The ‘Highly Likely that the Outcome would not have been Substantially Different’ Test

As part of its recent spate of attacks on judicial review, the government promoted in Parliament the clause that became section 84 of the Criminal Justice and Courts Act 2015. This introduced into section 31 of the Senior Courts Act 1981 a provision which required the courts, in cases in which a claimant had succeeded in proving the unlawfulness of a decision, to refuse any relief –

‘…if it appears to the court to be highly likely that the outcome for the applicant would not have been substantially different if the conduct complained of had not occurred.’

Logan appears to have been the first case in which this provision was tested in court, the council arguing that even if all council members had seen and read the EIA, it would have made no difference to their decision to adopt the scheme.

Blake J said three things about the new statutory test, all of them surely correct.

First, while the statute prevents the court from giving relief when the test is met, what it means by ‘relief’ is one of the available orders on judicial review. It does not preclude the court from giving a ‘declaratory judgment’ in which it finds the decision unlawful [58]. In the Hunt case, as I explain more fully here, precisely this type of judgment was treated by the Supreme Court as constituting a victory for the claimant (sufficient to attract a costs order in its favour) regardless of the absence of a remedial order.

Second, the court should only reach the conclusion that compliance with the law would have been highly likely not to make a substantial difference if there is evidence that this is the case. It cannot be sufficient for the decision-maker to rely on mere assertion –

‘Any other course runs the risk of reducing the importance of compliance…it would undermine the efficacy of judicial review as an instrument to ensure that the rule of law applies to decision making by public authorities, by deterring claimants from bringing a case or the court from granting permission by a declaration by a decision maker who has failed to obey the law to the effect that obedience would have made no difference.’ [55]

In effect, this means that the onus is on the public authority defendant to establish that the test is met.

Third, any evidence relied upon for this purpose should generally be contemporaneous with the decision, not later witness statement evidence by decision-makers saying what they believe they would have done had the circumstances been different –

‘In my judgment, any consideration of whether the outcome was highly likely to have been substantially the same…should normally be based on material in existence at the time of the decision and not simply post-decision speculation by an individual decision maker.’ [55]

In spite of the obvious merit of these conclusions, two High Court cases that immediately followed Logan, both of them aware of and citing the judgment of Blake J, demonstrated no consistency of approach.

In R (Hawke) v Secretary of State for Justice – which appears to have been the first case in which a public authority has successfully relied on the test – Holman J appears to have concluded (surely incorrectly) that the onus was not on the defendant to show that the test was met, but on the claimant to prove that it was not –

‘…if my judgment stands, it may be difficult for individual claimants, who cannot show that the outcome for them would have been substantially different if the conduct complained of had not occurred, to obtain [relief]…’ [64] (emphasis added)

In London Borough of Enfield v Secretary of State for Transport, Laing J appears to have followed the first and second propositions from Logan, but not necessarily the third, since she agreed that the onus was on the public authority but apparently thought that it could have been met by ex post facto evidence –

…it seems to me that a court should normally expect a witness statement or other document with a statement of truth to support a defendant’s reliance on [the test].’ [106]

Given these conflicting approaches, it is inevitable that the Court of Appeal will need in due course to provide definitive guidance on how the new statutory test is to be applied.

The Judgment

As in Tilley, while the claimant in Logan succeeded on the public sector equality duty, relief was ultimately refused. By the time the case reached judgment, it was too late – a fate suffered by the claimant in several of the cuts cases – for any effective relief to be given against Havering’s council tax reduction scheme for 2015/16 which had already largely run its course.


Both Tilley and Logan are exemplars of the kinds of issues which are routinely played out in the cuts cases, while also having important things to add to that body of case law.

It may be surprising after all of this time that local authorities are still struggling with the procedural aspects of meeting their public sector equality duty, but the issue continues to arise as a key weapon in the claimant’s arsenal. Conversely, the challenges of mounting an attack on the substantive resource allocation decisions continue to be considerable, except where Article 14 ECHR arguments can effectively be brought to bear.

One thing that is clear is that the future cuts cases are likely to be an important forum in which the effectiveness of the new Criminal Justice and Courts Act ‘substantial difference’ provisions will be put to the test.

While Whitehall continues to pursue a policy agenda which treats local government as the poor relation of the UK body politic, there is no sign that it will be possible to draw a line under that body of case law anytime soon.