R (Supportways Community Services Ltd) v Hampshire County Council
| Jurisdiction | England & Wales |
| Judge | Lord Justice Neuberger,Lord Justice Wilson,Lord Justice Mummery |
| Judgment Date | 08 August 2006 |
| Neutral Citation | [2006] EWCA Civ 1035,[2006] EWCA Civ 1170 |
| Docket Number | Case No: C1/2005/2867 |
| Court | Court of Appeal (Civil Division) |
| Date | 08 August 2006 |
[2006] EWCA Civ 1035
Lord Justice Mummery
Lord Justice Neuberger and
Lord Justice Wilson
Case No: C1/2005/2867
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION, ADMINISTRATIVE COURT
The Honourable Mr Justice Mitting
CO/1505/2005
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Timothy Straker QC and Ms Gillian Carrington (instructed by Hampshire County Council Legal Services) for the Appellant
Mr Stephen Knafler (instructed by Messrs Sternberg Reed Taylor & Gill) for the Respondent
This is an appeal brought by Hampshire County Council ("the Council") against a decision of Mitting J, ordering it to conduct a review of the services provided by the respondent, Supportways Community Services Ltd ("the Company") purportedly pursuant to a contract between them which took effect on 1 st April 2003 ("the Agreement") . All references hereafter to clauses are to clauses of that contract.
The relevant background and facts
The Supporting People Scheme ("the Scheme") is the successor to the Transitional Housing Benefit Scheme, and it came into force on 1 st April 2003. In very general terms, the purpose of the Scheme was to transfer the primary responsibility for the provision of many support, or welfare, services from central government to local government. The Scheme broadly works as follows. A local authority (such as the Council) enters into a contract (such as the Agreement) with a service provider (such as the Company) for the provision of housing related support services to specified individuals, on the basis that the service provider is paid by the local authority, which is in turn put in funds for this purpose by means of a grant accorded by central government.
Section 93(1) of the Local Government Act 2000 ("the 2000 Act") provides that the Secretary of State (at all relevant times, for present purposes, the Deputy Prime Minister) may pay grants to local authorities towards the expenditure which they incur in contributing towards the provision of welfare services. Section 93(3) to (7) deals, in broad terms, with the amount of, the conditions of, and information to be supplied in connection with, such grants. Sub-section (8) of section 93 of the 2000 Act ("section 93") requires local authorities to "have regard to any guidance" issued by the Secretary of State in connection with "the administration and application" of such grants. Sub-section (9) requires local authorities to "comply with any directions" given by the Secretary of State in the same connection.
As foreshadowed by section 93(8) , guidance was given in a document entitled "Supporting People Grants (England) Guidance 2003", which only applies to the Council to a limited extent because it is an "Excellent Authority". Paragraph 71 of this Guidance ("the 2003 Guidance") , which applies to Excellent Authorities, provides that a local authority should carry out periodic "service reviews" which are to be "rigorous and disciplined" and should "take into account the nature, level, cost and quality of services". Despite indications to the contrary, there is no other stipulation in the 2003 Guidance as to the manner or content of the stipulated service reviews. As the Judge said, it appears that paragraph 71 of the 2003 Guidance is "entirely circular", and that a local authority "can set its own rules and change them as it sees fit". However, as he went on to hold, the effect of this is that the 2003 Guidance provides that a local authority should adhere to the rules which it sets.
The Council duly published its rules in two documents, issued in June 2003 and in December 2003 ("the published rules") . The contents of the published rules need not be explained, in the light of a contingent concession made by Mr Timothy Straker QC (who appears with Ms Gillian Carrington for the Council) and the view we have formed on his primary ground of appeal. However, it should be mentioned that, although the latter document made some alterations to the rules in the former document, it did not remove the provision it contained for what the Judge called a "review of the review" by the Council.
The Company was established in 2001 to provide housing-related support services, and it duly provided such services to a number of people in return for payment from central government. In anticipation of the introduction of the Scheme, it applied to the Council for a contract to support 27 so-called "users", being people to whom it was presumably already providing services at the time under the Transitional Housing Benefits Scheme. In due course, such a contract, namely the Agreement, was entered into. It was in a form which, we were told, was promulgated by the Office of the Deputy Prime Minister. It was entitled "Full Interim Contract for Supporting People Services [Plain English Version]". It is necessary to set out some of its terms.
After identifying the parties (the Council being referred to as "us" and the Company as "you") , the Agreement briefly set out the "Background" in these terms:
"A. From 1 April 2003 changes will be made to funding for the provision of housing related support services…
B. So as to minimise the disruption to the support services which you are currently providing, it has been agreed that we will enter into this Agreement with you under which you will continue to provide support services…
C. …[T]his Agreement is therefore an interim arrangement and that as set out in the Agreement, we will carry out a review of the way in which you provide support services.
D. Depending on the outcome of that review, we may or may not ask you to provide the support services. If we do, and you agree, we will enter into a new agreement. If we don't…then this Agreement will terminate, as set out below."
Clause 1 contained a number of definitions. They included "Expiry Date", which was the anniversary after the completion of a "Support Services Review", which was itself defined as a review of the Support Services carried out pursuant to clause 11. The "Support Services" were defined as the services listed in Schedule 1, which set out the services which the Company was to provided to the 27 users. The contractual annual price payable for these services was £337,532.52 (although the Agreement appears to record a different figure) . There was also a definition of "Support Services Review Date", but it does not need to be set out.
Clause 2 can be summarised, at least for present purposes as providing that the Agreement would start on 1 April 2003 and would end on the Expiry Date as defined.
Clause 11 was in these terms:
"11.1 We will begin a Support Services Review of each of the Support Services during the three month period starting on the relevant Support Services Review Date concerned…
11.2 ….
11.3 Each Support Services Review must be carried out in accordance with any guidelines and directions issued by the Deputy Prime Minister under section 93…".
Finally, I should refer to clause 38, which was to apply when the Agreement ended. Clause 38.1 required the Company to hand over to the Council all documents supplied by the Council "for the purposes of this Agreement" or "produced or augmented by [the Company] in connection with the carrying out of [its] obligations under this Agreement". Clause 38.2 forbade the Company from retaining copies of any such documents unless authorised by the Council or required by law.
After the Agreement had been in operation for nine months, the Council initiated a review, purportedly in accordance with clause 11.1, on 1 st January 2004 ("the 2004 review") . During the course of that review, officers of the Council came to the conclusion that the cost of the services provided by the Company under the Agreement was much too high. This was put to, and rejected by, the directors of the Company. Before some further submissions were received from the Company, the 2004 review was concluded on 17 th July 2004, on the basis that the officers "considered that there was sufficient evidence" to justify their conclusion that the Company was charging substantially too much for the services it was providing. The Council offered (on two occasions) to enter into a new contract with the Company at a substantially lower price than that stipulated in the Agreement, an offer which the Company rejected.
It was accordingly the Council's view that the Agreement determined, pursuant to clause 2, on 17th July 2005, and that, primarily because of what the Council regarded as the Company's unreasonably high costs, the Agreement would not be renewed. This view was challenged by the Company, who brought the instant proceedings primarily on the ground that the 2004 review was not carried out properly, and that, if it had been, it would have resulted in an offer of a new contract to the Company on similar financial terms to those contained in the Agreement. At least for a period, while these proceedings were under way, it appears that the Company continued to provide the services to the 27 users, although it appears that there is a dispute as to the amount that it is entitled to be paid by the Council for so doing.
The course of these proceedings
These proceedings were brought in the Administrative Court on the basis that the Company was primarily seeking public law remedies. At the hearing before Mitting J on 7 th and 8 th December 2005, the Company was given permission to amend its claim. As a result, it was seeking, by way of judicial review, an...
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