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Point of law - Curtain falls on Ealing review, by Stephen Cirell and John Bennett

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24 June 2005

From victory to defeat in a few weeks. The London Borough of Ealing last month failed to convince the Court of Appeal that its 'weak' CPA rating was unlawful. But where does this result leave the regime?

In February, Ealing council won a judicial review against the Audit Commission over its 'weak' Comprehensive Performance Assessment rating ('The CPA's Achilles heel', Point of Law, March 18–24 2005). Last month, the Court of Appeal overturned that decision.

The facts of the case are simple. The London borough scored enough points on the Audit Commission's matrix to be categorised as a 'good' authority, but it was demoted by two grades to 'weak' because of its social care rating.

CPA rules state that councils with less than one star in social services, education and financial standing cannot be higher than 'weak' overall.

Ealing argued that the commission had unlawfully delegated its responsibilities in allowing an outside body – the Commission for Social Care Inspection – to dictate the CPA result. This was in breach of the statutory regime set out in the Local Government Act 2003 and general public law principles.

In the Administrative Court, the judge agreed that the commission had allowed the CPA result to be dictated by CSCI and quashed Ealing's weak categorisation. In effect, he held that this was because the commission had applied the rule automatically and not allowed representations by the council as to why this would be unfair.

In the Court of Appeal, a high -powered bench (comprising three lord justices of appeal, including the master of the rolls) heard further extensive arguments about the case.

The essence of the Court of Appeal's judgment seems to be that the commission must have been familiar with the CSCI matrix, and must therefore have been content with its various weightings and adopted them as its own. The commission had not, therefore, delegated its decision in any individual case to CSCI and so had not acted unlawfully.

In fact, the commission had never argued that it had adopted the CSCI weightings or its matrix. Nor did the Court of Appeal hold that the commission had done so — rather it must be 'taken' to have done so.

The lack of judicial reasoning on the important public law points of delegation is disappointing, although supporters of the CPA regime will no doubt consider this to be a convenient 'result' in a difficult case.

Dissatisfaction with the judgment in local government arises from the fact that the court did not address a number of the council's main arguments. These are:

  • the distinction drawn in the Local Government Act 2003, section 99, between the 'findings' of the commission and the separate exercise of 'categorisation' of authorities, based on those findings

  • the substantial body of evidence from published CSCI materials, stating that the chief inspector did have a final 'holistic' discretion as to the star rating to be applied in the cases of individual authorities

  • the fact that the court did not address at all the commission misconstruing its powers by adopting the rule in question to achieve consistency between CPA results and those of other inspectorates.

But the most important point of all is that support for the Court of Appeal's judgment appears to centre on its acceptance of the commission's right to take account of CSCI's views of the performance of any relevant authority in the social care function.

But this is misinformed, as the commission had already taken account of CSCI's views in the earlier stages of core service assessment and corporate assessment of its own CPA exercise. This stage of the process was followed by categorisation using the commission's own matrix.

From a legal perspective, the case does no more than restate fairly old and well established public law principles. The council lost on the facts, but the legal principle was upheld. The issue is: where does this judgment take the CPA regime?

There is no doubt that this ruling follows the modern trend for judgments to contain less detailed analysis and argument than hitherto. It is pure conjecture what the lord justices thought of many of the council's points.

Those who felt that the first court decision spelt the end of the CPA were always wide of the mark. In fact, it would have had no greater effect than to cause some unease at the commission and perhaps justify a rethink of some of the main parts of the new CPA process.

Those who now feel the regime has been vindicated are also well wide of the mark. The case has established that the CPA is part of a statutory framework that not only regulates local government but also regulates the commission.

Ealing has been heavily criticised for bringing this case, but is to be applauded for undertaking a case that will have wider benefits for both local government and the proper evolution and development of the CPA.

Stephen Cirell is head of local government and John Bennett is a consultant solicitor with Eversheds' Local Government Group. Stephen Cirell advised Ealing LBC in relation to this case, with Andrew Arden QC

PFjun2005

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