R Maria Stella Nash v Barnet London Borough Council Capita Plc, EC Harris LLP, Capita Symonds (Interested Parties)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Underhill |
| Judgment Date | 29 April 2013 |
| Neutral Citation | [2013] EWHC 1067 (Admin) |
| Docket Number | Case No: C0/219/2013 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 29 April 2013 |
[2013] EWHC 1067 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Underhill
Case No: C0/219/2013
and
Mr Nigel Giffin QC and Mr David Gollancz (instructed by Steel & Shamash) for the Claimant
Ms Monica Carss-Frisk QC and Mr Iain Steele (instructed by Trowers & Hamlins LLP) for the Defendant
Hearing dates: 19, 20 & 21 March 2013
INTRODUCTION
The Claimant is a resident of the London Borough of Barnet. By these proceedings, which were commenced on 10 January 2013, she seeks to challenge the lawfulness of one decision and one "impending decision" by the Council to outsource 1 to private—sector organisations a high proportion of its functions and services. The decisions in question are:
(1) a decision made by the Council's Cabinet on 6 December 2012 to award a contract to Capita Plc, the First Interested Party, to provide a "New Support and Customer Service Organisation" ("the NSCSO contract"); and
(2) a decision which would, but for these proceedings, have been taken by the Cabinet on 31 January 2013 to award a contract to either Capita Symonds Ltd or EC Harris LLP, the Second and Third Interested Parties, to provide development and regulatory services ("the DRS contract").
No step has been taken to implement the first decision pending the outcome of these proceedings. Although the Council has deferred the second decision I will in the interests of simplicity refer to it as an actual decision.
The functions and services which the Council proposes to outsource are wide-ranging: I give more details below. The proposals have been controversial locally and have also attracted some publicity at national level. Opponents such as the Claimant are concerned that if they are implemented they will lead to a serious deterioration in the Council's services, partly (though not only) because they believe that private-sector organisations cannot evince the public service ethos which is so important in the delivery of the Council's service. It is not, however, for the Court to decide whether those fears are justified. The decisions can only be challenged on the basis that the Council has not acted in accordance with its legal obligations. As to that, the Claimant advances three grounds of challenge. Again, I give more details below, but in headline terms they are as follows:
(1) Consultation: It is said that the Council did not comply with statutory and other consultation obligations relating to the decisions.
(2) Public Sector Equality Duty: The Council is said to have failed in reaching the decisions to have due regard to the considerations specified in section 149 of the Equality Act 2010.
(3) Fiduciary Duty: It is said that if the Council enters into the proposed contracts it will be in breach of its "fiduciary duty" to council tax payers.
(A fourth ground, based on an alleged breach of the Public Contracts Regulations 2006, is
not now pursued.)On 21 January 2013 Ms Elisabeth Laing QC, sitting as a deputy High Court Judge, directed an urgent rolled-up hearing, and the matter has come before me on that basis. The Claimant has been represented by Mr Nigel Giffin QC, leading Mr David Gollancz, and the Council has been represented by Ms Monica Carss-Frisk QC, leading Mr Iain Steele. The Interested Parties have not participated. The submissions of both teams of counsel, both oral and in writing, have been of very high quality.
The nature of the evidence before me can be summarised, in broad outline, as follows:
(1) Two witness statements were originally lodged in support of the claim, from the Claimant and from Mr Gerald Shamash of her solicitors, Steel & Shamash. The Claimant is seriously disabled. Her statement describes the extent of her dependence on Council services and her fears about the adverse impact of the proposed outsourcing. She describes herself as a local activist and says that neither she nor any of the various organisations of which she is a member or with whom she has contact has been consulted about the proposals. Mr Shamash deals with matters of law and background outside the scope of the Claimant's statement.
(2) The Council lodged with its Acknowledgment of Service two witness statements from its Commercial Director, Mr Craig Cooper. One sets out at considerable length the history leading to the taking of the impugned decisions, exhibiting the relevant documentation which occupies six lever-arch files, and addressing some of the criticisms made by the Claimant and Mr Shamash. I am bound to say that I did not find this statement very helpfully structured or written. The other summarises the effect of the proposed contracts and exhibits the most recent drafts. By agreement this second statement and the exhibits have been subject to a "confidentiality ring"; and it has not in the end been necessary to refer to them for the purpose of my decision.
(3) The Council also lodged a witness statement from Ms Helen Randall, a partner of Trowers & Hamlins LLP, who has been advising it in connection with the proposed contracts and who represents it in these proceedings. She has substantial experience in the outsourcing of local authority functions and services, and her statement is essentially directed at explaining the national policy background, the outsourcing models commonly used and the role of consultation.
(4) The Claimant has lodged a further round of witness statements in response. These include second witness statements from herself and Mr Shamash, and a third from Mr Shamash dealing specifically with the confidential material in Mr Cooper's second witness statement. There are also witness statements from two other local activists, Mr John Dix and Ms Barbara Jacobson, dealing with aspects of the consultation issue.
(5) The Council has in turn lodged a second witness statement from Ms Randall and a third from Mr Cooper, responding to the Claimant's second round of evidence.
Although this evidence has been helpful in giving me a background to the issues, much of it has turned out in the end to be irrelevant to the comparatively narrow issues which I have to decide.
Another resident of Barnet, Ms Susan Sullivan, by her father and litigation friend John Sullivan, was proposing to bring similar proceedings. Those have not been proceeded with in the light of the issue of the present proceedings. However an application was made on behalf of Ms Sullivan to intervene in the present proceedings to the extent of filing evidence, pursuant to CPR 54.17, in the form of witness statements from Mr Sullivan and her solicitor. I granted that application, and the statements in question have formed part of the evidence which I have taken into account. There is an ancillary question arising out of Ms Sullivan's intended claim to which I will return at the end of this judgment.
THE DECISION-TAKING PROCESS
In this section I will set out the procedures by which the Council reached the impugned decisions, together with some other related formal steps. I will deal with the other facts, so far as necessary, in the context of the particular issues to which they are relevant.
On 6 May 2008 the Council's Cabinet resolved:
"that the Chief Executive be authorised to lead a review of the organisational form of the Council and to report back to Cabinet with options for change by December 2008".
This became known as the "Future Shape" programme.
On 3 December 2008 the Leader presented a report to Cabinet headed "Future Shape of the Council". The essential message of the report, at least so far as concerns the present proceedings, is sufficiently represented by para. 9.3, which is headed "The Role of the Council in Future". Para. 9.3.1 reads, so far as material:
"In order [to] maximise the value to citizens of Barnet's public services, the Council should focus its energy on the activities where it alone can add value. It should therefore enable other organisations to do those things that they can do as well or better than the Council. Fundamentally, the Council should conduct those activities that only the Council can. This implies a number of principles on which to base the future shape of the organisation:
1. ….
2. The future Council should be strategic rather than operational, focused on convening and working with its partners to prioritise and commission the public services that should be provided in the borough, rather than delivering services itself.
3.—6. …"
(The emphases are in the original.) The Cabinet resolved:
"that the proposal for officers to develop a detailed assessment of the overall model for public service commissioning, design and delivery be agreed."
The process of developing that assessment came to be referred to as "phase II" of Future Shape.
On 21 October 2009 the Leader submitted to Cabinet his formal report on phase II of Future Shape. One of its recommendations was the creation of a "Customer Services Organisation" consolidating all "access functions" of the Council. The report noted that:
"The background paper to this report sets out a high-level options analysis for how we might achieve the development of a customer services organisation. There are three options:
• Council remains the main delivery vehicle;
• Co-ownership model (Employees, Customers, Members are the major shareholders);
• Joint Venture/Outsourcing.
Work on deciding which option to pursue will be undertaken as part of the Future Shape implementation process."
The Cabinet accepted the recommendation to proceed with that process.
On 29 November 2010 the Cabinet considered a report from the Cabinet Member for Customer...
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