R Nash v Barnet London Borough Council
| Jurisdiction | England & Wales |
| Judge | Lord Justice Davis,Lady Justice Gloster,Master of the Rolls |
| Judgment Date | 02 August 2013 |
| Neutral Citation | [2013] EWCA Civ 1004 |
| Docket Number | Case No: C1/2013/1205 |
| Court | Court of Appeal (Civil Division) |
| Date | 02 August 2013 |
[2013] EWCA Civ 1004
The Master of the Rolls
Lord Justice Davis
and
Lady Justice Gloster
Case No: C1/2013/1205
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
MR JUSTICE UNDERHILL
CO/219/2013
Royal Courts of Justice
Strand, London, WC2A 2LL
Nigel Giffin Q.C. and David Gollancz (instructed by Steel & Shamash Solicitors) for the Appellant.
Dinah Rose Q.C. and Iain Steele (instructed by Trowers & Hamlins LLP) for the Respondent.
Introduction
The claimant, Mrs Nash, is very aggrieved at the decision of Barnet London Borough Council ("the Council") to outsource to the private sector a significant number of the services provided by the Council. She was not and is not alone in her views. She issued judicial review proceedings on 10 th January 2013. Her application for permission was considered at an oral hearing extending over three days by Underhill LJ (as he has since become). By a reserved judgment dated 29 April 2013 ( [2013] EWHC 1067 (Admin)) he refused permission to apply for judicial review. He did so essentially on the ground that the challenge had been brought well out of time.
Mrs Nash now seeks to appeal against that decision. There is and has been, for reasons which will become apparent, some degree of urgency about the matter. The matter was listed before this Court as a "rolled up" hearing (that is, as an application for permission to appeal with appeal to follow if permission is granted).
Mrs Nash was represented before us by Mr Nigel Giffin QC with Mr David Gollancz. The Council was represented before us by Miss Dinah Rose QC with Mr Iain Steele. The arguments presented to us, both written and oral, were of very high standard.
A Respondent's Notice has been put in by the Council seeking to uphold the judge's decision on further or alternative grounds, if (contrary to the Council's primary contention) the challenge to the judge's decision on delay is reversed.
It should be made clear at the outset that the function of this court is not (any more than was the function of Underhill LJ) to adjudicate on the merits, or lack of them, of the decision to outsource. The legal challenge here necessarily has had to be, and has been, as to the process by which the decision to outsource was made.
Background facts
For a number of years the Council had been mulling over its future organisation and direction — what became known as its "future shape". A review to this end was initiated in 2008. An initial report by the Chief Executive was submitted to and considered by the Cabinet of the Council on 3 December 2008. The recommendation in essence was that the role of the Council for the future was that it should "conduct those activities that only the Council can". In addition, emphasis was placed, among other things, on the need for the Council to ensure that local public services provided value for money.
There was further debate by the Cabinet on the future shape of the Council at a meeting on 6 July 2009, and a further interim report was submitted. On 21 October 2009 this was again considered by the Cabinet. It was clear by now that the proposals being advanced would be radical. There was extensive discussion of issues potentially arising, including (among others) equality and diversity issues and use of resources. The appended Future Shape Final Report included reference to the need for public engagement. Among other things it was stated:
"The scope of the potential changes covered by the Future Shape Programme will require an extensive set of consultation and engagement activities. Clearly the nature and extent of consultation required will change depending on the proposals being considered, the group which will be affected by any proposals and the statutory requirements that may need to be taken into account."
One of the proposals considered at that meeting was that there be established a Customer Services Organisation. The three options identified for achieving its development were (1) the Council remaining the "main delivery vehicle"; (2) a co-ownership model and (3) Joint Venture/Outsourcing. It was agreed that the decision on which option to pursue in this regard would be undertaken as part of the implementation of the Future Shape Programme.
Matters continued to be debated and considered in the following months. In particular, at a Cabinet meeting on 29 November 2010 a report entitled "One Barnet Programme Framework" was considered and approved. A funding strategy was also approved. In addition, there was considered and approved a report entitled "Development and Regulatory Services Project: Initiation of Procurement". It was by that report recommended that with regard to a significant number of specified functions a "partnership with the private sector be sought". After debate the Cabinet resolved that the Commercial Director be authorised:
"…to commence the procurement process to identify a strategic partner for the delivery of the Development and Regulatory Services Project."
This procurement process came within the ambit of the Public Contracts Regulations 2006 ("the 2006 Regulations") which I will summarise in the relevant respects below. A notice in the Official Journal of the European Union with regard to a proposed Development and Regulatory Services ("DRS") contract was duly published on 19 March 2011.
At this time the Council was also still considering proposals relating to the "Customer Services Organisation and New Support Organisation" (the wording was subsequently changed and may be styled "NSCSO"). On 2 March 2011 the Cabinet Resources Committee considered a detailed report on this by way of what was described as an "options appraisal". The aim, as presaged in 2009, was (in the language used) to "bring together customer-facing staff from across the Council" and also to address the "back office" functions of the Council. The three options previously noted were fully evaluated. The recommendation was that the Director of Commercial Services be authorised to produce a business case for (among other things) "the procurement of a private sector partner/s" to provide a number of identified services and to initiate that procurement. The services in question were Customer Services, Estates, Finance, Human Resources, Information Services, Procurement, Revenue and Benefits. The minutes of that meeting also record a number of public questions and the Council's answers to them. A number of such questions were from, among others, Mr John Dix and were knowledgeable and penetrating. They raised queries as to the "outsourcing scheme" (as it was described) and among other things asked if the Council were "not prepared to consider an in-house option under any circumstances?"
The recommendation of this report was accepted. In consequence, as the judge found, such proposed procurement of a private sector partner again required publication in the Official Journal of the European Union: which was effected on 21 June 2011.
On 29 June 2011, the Cabinet Resources Committee considered the detailed business case for the NSCSO project. The report was summarised as outlining "the business case for the outsourcing of support and customer services and seeks authority from the Committee to approve the business case for the procurement of a strategic provider". The business case was approved, with a view to the Council beginning the "competitive dialogue" process in accordance with the 2006 Regulations. It was also resolved that authority to award a contract remained with the Cabinet Resources Committee; and that due regard be given to statutory equality duties and the outcome of the equality impact assessments, referred to in the report.
In the words of the judge, the "applicable public procurement procedures ran their course". The competitive dialogue procedure was adopted. Significant sums were invested in progressing the procurement projects. There was extensive consideration at various stages by the Council. A shortlist of tenderers was recommended, at stage 2 of the competitive dialogue, on 14 December 2011 (DRS project) and 28 February 2012 (NSCSO project). An evaluation in accordance with the criteria was ultimately in favour of Capita plc as the preferred bidder with regard to the NSCSO project.
On 6 December 2012 a report was presented to the Cabinet with regard to the NSCSO project. It annexed a full Business Case and Equalities Impact Assessment. It recommended acceptance of Capita's final tender. The Cabinet was specifically reminded of its entitlement to discontinue the procurement process (albeit that was not recommended). A number of public questions, from Mr Dix and others, were raised and answered. The Cabinet, after consideration, resolved to accept Capita's final tender as the preferred bid and approved the appointment of a recommended reserve bidder. It delegated "contract completion and signature…finalisation and execution" to the appropriate officer.
In the meantime, the DRS project had not completed the procurement process. The competitive dialogue stage had identified as the shortlisted bidders Capita Symonds Ltd and EC Harris LLP. But no decision in that regard had been made at the time these proceedings were commenced on 10 January 2013, albeit such a decision had been due to be made by the end of that month. Understandably the matter has since been essentially on hold in the light of this litigation.
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