The importance of effective decision making

Effective decision making is essential for the successful operation of any local authority. Any local authority that has faced a judicial review of its decisions will know how damaging the consequences of getting decision making wrong can be. In order to take a valid decision, a local authority will need to act reasonably in exercising a valid power.

The case of Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] 2 All ER 680 established that a reasonable exercise of powers will require a local authority to take account of all relevant matters, disregard irrelevant factors, not act in bad faith, and not take a decision which no reasonable local authority could take. Cases ever since have applied and developed the principles of ‘Wednesbury reasonableness’ and recent cases have illustrated issues of importance to decision-making processes.

Relevant matters

To satisfy the requirement to take account of all relevant matters, decision makers obviously need to have access to all relevant information. However, merely providing access to information is not enough. Recent cases have also emphasised the importance of evidence that decision makers have actually read and taken account of that information.

In R (Hunt) v North Somerset Council [2013] EWCA Civ 1320, although the local authority had carried out an equality impact assessment and had told members how to access it, it had not told them that they should consider it before a meeting at which the local authority took a decision to which the assessment was relevant. The Court of Appeal found that it could not conclude that members had read the equality impact assessment, and therefore found that the local authority had not discharged the public sector equality duty.

In R (Logan) v Havering London Borough Council [2015] EWHC 3193 (Admin), a challenge to a local authority’s decision to adopt a council tax reduction scheme was successful after a court found there was insufficient evidence to prove the decision makers had access to an equality impact assessment or had understood the importance of reading it before making their decision.

This year, in R (DAT and BNM) v West Berkshire Council [2016] EWHC 1876 (Admin), a local authority was successfully challenged over decisions to reduce funding because members were not given details of their statutory duties or guidance to which they must have regard when they made their first decision, and when they took their second decision they were given the impression that they needed to simply rubber stamp the previous decision.

Open-minded decisions

It is essential that a decision maker approaches a decision with an open mind, ready to take a decision on the merits. Many local authority decisions have been subject to challenge because it has been suggested they have been affected by bias or predetermination.

Section 25 of the Localism Act 2011 provides that a decision maker must not be taken to have had or appeared to have had a closed mind when approaching a decision just because they have previously indicated a view on the relevant matter. The introduction of this provision may have given local authority members some confidence about their ability to speak on matters of interest to them without necessarily being constrained in future decisions. In the cases since this provision came into force in 2012, the courts have found that the decisions in question have not been invalidated by predetermination.

However, in the case of R (TW Logistics Ltd) v Tendring District Council [2012] EWHC 1209 (Admin), Mr Justice Silber noted that even if he had any doubt about whether to accept the allegation of apparent bias or predetermination as a ground of challenge, the effect of section 25 would constitute a factor in favour of his discretion to refuse to grant the relief sought on this ground.

Therefore, while section 25 has not changed the law in respect of the effect of bias and predetermination, it seems that courts will take account of it when assessing whether there is any evidence of bias or predetermination affecting particular decisions. Nevertheless, section 25 will not prevent a decision from being quashed if there is actual evidence of predetermination. Decision makers need to make sure it is clear that they approach each decision with an open mind.

Decisions from the right persons

In a local authority with executive arrangements, some functions will be the responsibility of the executive and some will be the responsibility of the full council. Similarly, in an authority with a committee system, some will be the responsibility of committees and some the responsibility of the full council. A local authority will act unlawfully if decisions on particular functions are made by persons who are not responsible for those functions.

Particularly careful attention is needed in a course of action which involves both non-executive and executive functions, for instance decisions to adopt a budget and related decisions about individual services. This was seen in the case of R (Buck) v Doncaster Metropolitan Borough Council [2013] EWCA Civ 1190, in which an elected mayor was found to have acted lawfully in taking a decision to reduce library services even though the council set a budget which made this unnecessary. A claimant challenged this decision, but the mayor had been exercising an executive function when he took a decision about library services.

The court found that the full council had no power to interfere with the executive function of the mayor, except where the mayor proposed to exercise the function in a way that was contrary to, or not wholly in accordance with, the authority’s budget, or contrary to a plan or strategy adopted or approved by the authority.

Key decisions

Local authorities are subject to requirements in statute and in their own constitutions regarding the procedures for decision making and the availability of information on decisions and related information. They are expected to act transparently. In general, their meetings and information are expected to be open to the public but exceptions are made for circumstances in which this would not be appropriate.

For executive decisions, there are particular publicity obligations as well as additional requirements specific to key decisions. A key decision is an executive decision which is likely either to result in the relevant local authority incurring significant expenditure or making significant savings, or to be significant in terms of its effects on communities living or working in an area comprising two or more wards or electoral divisions in the local authority’s area.

Local authorities have discretion as to how they interpret the legislative requirement in the context of their local circumstances to decide whether decisions are key decisions. Similarly, local authorities themselves need to determine whether any exemptions from access to information requirements apply to their information and meetings.

If a local authority takes account of the relevant statutory requirement and acts reasonably, its decisions should be safe from challenge. R (the Friends of Finsbury Park) v Haringey London Borough Council [2016] EWHC 1454 (Admin) concerned a local authority’s decision to hire a local park to an organisation to hold a festival. The local authority considered that the decision would result in it earning income but would not result in it incurring significant expenditure or making significant savings, and therefore took the view that the decision was not a key decision. The claimant argued that these all amounted to a substantial financial impact on the budget and that therefore it was.

The court found that the local authority had been correct not to treat the decision as a key decision. The claimant also alleged the local authority had failed to make background papers available to the public but the court found it was a matter for the local authority’s proper officer to decide what constituted background papers. Therefore, these grounds of challenge failed, along with the other grounds put forward by the claimant.Local authorities need to commit time and careful attention to ensure they comply with all the requirements of decision making. This will ensure that their authorities continue to run smoothly, whereas flaws in the decision-making process will make authorities vulnerable to challenge which could lead to decisions being overturned.

Tiffany Cloynes is a partner and head of public services (England) at Geldards

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