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Mathew PurchaseOverview

The Supreme Court gives guidance on what fairness requires when consulting on a ‘preferred option’. Public bodies will now need carefully to consider giving details of rejected options and the reasons for the rejection.

The facts

On 1 April 2013, a central government scheme which granted relief from the requirement to pay council tax was replaced by local authority-run Council Tax Relief Schemes (‘CTRSs’).

The Local Government and Finance Act 1992 obliged each local authority to publish and then consult on a draft CTRS, before publishing its final CTRS.

Central government provided funding for CTRSs, but at only 90% of the previous level. The London Borough of Haringey could have made up the shortfall in funding, but decided against this. Accordingly, the consultation paper on its draft CTRS stated that this shortfall, together with a likely increase in the number of people claiming benefit, ‘means that the introduction of a [CTRS] will directly affect the assistance provided to anyone below pensionable age’ and that existing claimants will suffer a reduction in the relief available.

After the Council had issued its consultation paper, Central Government announced a plan to provide additional grants to local authorities, but only under certain conditions. Haringey decided against pursuing the grant because the conditions were such that it would still suffer a significant shortfall in funding. It did not inform consultees of this Government offer.

Ms Moseley alleged that this amounted to unlawful consultation, because consultees were not provided with sufficient information to comment on alternatives to the draft CTRS. Her claim was rejected by the Administrative Court and the Court of Appeal.


The judgments

The Supreme Court upheld the appeal, finding that the consultation had been unfair.

Lord Wilson gave the leading judgment; Lord Kerr, Lady Hale and Lord Clarke agreed with him. Lord Reed gave a concurring judgment, with which Lady Hale and Lord Clarke agreed.

The judgments do not establish any new legal principle. However, they do provide helpful guidance on the requirements of fair consultation including, in particular, the need to provide consultees with sufficient and accurate information. The general thrust of the judgments is that, while it is still generally permissible to focus consultation on a ‘preferred option’ rather than to conduct a purely open process, in many cases it will be necessary to provide considerably more information about rejected alternatives than has hitherto been understood to be the case.

The key features of the judgments are:

(1) The Supreme Court formally endorsed the ‘Sedley criteria’ for a fair consultation, namely:

– Consultation must be at a time when proposals are still at a formative stage

– The proposer must give sufficient reasons for any proposal to permit of intelligent consideration and response

– Adequate time must be given for consideration and response

– The product of consultation must be conscientiously taken into account [para 25].

(2) The degree and specificity of information which must be provided to consultees will depend on the context, including:

(i) the identity of the persons being consulted [para 26];

(ii) whether the proposal would deprive consultees of an existing benefit [para 26];

(iii) the purpose of the consultation, such as whether it is to ensure procedural fairness for individuals or to permit public participation in a democratic process [para 38]; and

(iv) whether consultees can be expected to be familiar with the decision-making process and reasons [para 39].

(3) It may be permissible to consult on the basis of a preferred option but fairness may require consultation on other, previously discarded options [para 27].

(4) Even if, as here, it is proper to consult on a preferred option (i.e. the draft CTRS), proposers must not give the impression that other options are no longer on the table [para 31]. Indeed, fairness may require passing reference to be made to other options [para 28]. Even if the other options would have been reasonably obvious to those consulted, it may be necessary to explain why those other options were rejected [para 31]. The key question is whether such reference or information is necessary in order for the consultees to express meaningful views on the proposal [para 40, 41].

(5) Proposers should nevertheless seek to avoid unduly lengthy or complex consultation documents [para 41].

 

On the facts, it is not surprising that the Supreme Court held that this consultation was unfair. The Council had given the clear impression that it was a foregone conclusion that its CTRS would result in a drop in the relief available to residents. For that reason alone, the consultation seems clearly to have been defective. However, the judgments of the Supreme Court go further: on the facts of this case, it was incumbent on the Council not only to avoid suggesting that other options were closed off, but also to provide at least some information about those other options and why they did not find favour with the Council.

The existence and extent of this obligation will depend on the facts of the particular case. However, the question appears to be whether ‘sufficient reasons’ have been provided so as to explain why the proposer has chosen the particular option being put forward. In order to do this, it may be necessary to mention alternative options which have been considered and rejected.

This may help to explain why Lord Wilson held that it was not unlawful for the Council to fail to refer to the subsequent availability of the governmental grant. It might be thought that this changed the landscape to a degree that consultees ought specifically to have been informed about it. However, the failure to do this was not unlawful because it did not add a new dimension to what the Council should have done anyway and the offer was not made until the consultation was already underway.