The High Court has handed down a significant judgment dismissing challenges brought against the decisions of two local authorities, Devon County Council and Bristol City Council, to enter into their respective “Safety Valve Agreements” (SVAs) with the Secretary of State.
The Dedicated Schools Grant (DSG) is paid by the Secretary of State for Education (the Secretary of State) to local authorities (LAs). It is split into four “blocks”. One of these is the High Needs Block. This provides for funding for LAs to support children with SEND/EHCPs. In recent years, there have been significant financial pressures on High Needs Block spending. Many LAs now have significant DSG deficits, due to their High Needs Block overspends. The Secretary of State has sought to tackle this problem through a “Safety Valve” intervention programme, under which, at the invitation of the Secretary of State, 38 LAs have entered into SVAs with the Secretary of State. These include Devon and Bristol. Under SVAs, the LA agrees to take action to bring its DSG back into balance, and to monitoring by the Secretary of State, and the Secretary of State agrees to pay additional DSG to the LA, with a view to eliminating the deficit according to a specified timetable.
The decisions by Devon and by Bristol to enter into their respective SVAs were challenged by judicial review. In the case against Bristol, permission had been granted to argue one ground of claim only – namely that Bristol was required to consult under section 27 of the Children and Families Act 2014 (CFA 2014) before entering into the SVA. In the case against Devon, this same ground of challenge was relied upon alongside other grounds, including that Devon had: failed to comply with the PSED; acted in breach of the Tameside duty and frustrated the policy of Part 3 CFA 2014. A “rolled-up hearing” was ordered in relation to all grounds in the Devon case, with the Bristol case to be heard at the same time.
The judgment of Linden J dismissed the consultation argument under section 27 CFA 2014. It also refused permission in respect of all further grounds of challenge put forward in the Devon case. The judgment provides useful guidance on several matters, including the nature of the section 27 CFA 2014 duty on local authorities to keep education and care provision under review. In particular, it confirms that section 27 leaves to local authorities the decisions as to how to keep provision under review and whether and when to consult the relevant parties as to this question, subject only to Wednesbury irrationality standards. It will be for a local authority to decide whether an occasion requires the exercise of its powers and duties under section 27.
James Goudie KC, Oliver Jackson and Rita Dias acted for Devon. Joanne Clement KC and Peter Oldham KC acted for Bristol City Council.
The judgment has been published here.
