Cuts plan blow after legal ruling

The Government's spending cuts were dealt a blow today after six councils won their High Court challenge over Michael Gove's decision to scrap school building projects in different parts of the country.

The Education Secretary was told he must reconsider his decision to axe the £55 billion Building Schools for the Future (BSF) scheme in each of the six authorities after Mr Justice Holman ruled that Mr Gove had unlawfully failed to consult them before imposing the cuts.

In five of the cases the failure was "so unfair as to amount to an abuse of power", the judge said.

The judgment leaves it doubtful that other local authorities will be able to seek a judicial review of BSF on similar grounds, after Mr Justice Holman said it was his view that it was "far too late" for them to apply. In this case, the judge said, "fortune has favoured the brave".

But today's decision could leave the door open for those affected by other central or local government spending cuts to apply for a judicial review because they believe they have not been consulted.

The victorious authorities involved in today's case include Waltham Forest Council, Luton Borough Council, Nottingham City Council, Sandwell Council, Kent County Council and Newham Council.

Sandwell Council leader Darren Cooper said: "At the very least, we have been vindicated for bringing the action. Now we have to wait to see whether the Government accepts it was too hasty in scrapping the scheme."

Waltham Forest Council leader Chris Robbins said: "The Government now has to go back and reconsider how the devastating decision to cancel BSF projects in Waltham Forest was made. It is a victory for common sense and fair play."

A spokesman for the Department for Education said: "We are delighted that the judge did not call into question the decision to end the wasteful and bureaucratic Building Schools for the Future programme.

"On the substantive points he concluded that it was a rational decision and that the authorities involved had no expectation of being allowed to proceed with their projects."

Mr Gove will now look again at his decision with regard to these authorities with an open mind, taking representations from them, the spokesman added.

BSF was among the first education schemes in England to be cut back by Mr Gove last July.

More than 700 building projects across England were cancelled as a result of the decision, provoking uproar from councils, unions and Labour politicians, who warned it would have a catastrophic effect on pupils.

Handing down his judgment, Mr Justice Holman said: "However pressing the economic problems, there was no overriding public interest which precluded consultation or justifies the lack of any consultation."

Mr Gove's decision-making process was also unlawful "because of his failure to discharge relevant statutory equality duties under the Sex Discrimination Act, Race Relations Act and Disability Discrimination Act."

In his ruling, the judge said the Education Secretary must now reconsider his decision.

The judge rejected charges that Mr Gove had acted irrationally in his decision-making.

"However, I do consider and hold that, unlawfully and without justification, he failed to consult with any of these claimants as to the effect on their individual projects of his possible decision options.

"Partly as a result, but also as a discrete matter, he unlawfully failed to give due regard to the equality impacts of his proposed decision."

The judge said he must now give each council "a reasonable opportunity" to make representations and then reconsider his decision "with an open mind", insofar as it affected each of the six councils.

He must also pay due regard "to any representations they may make, and rigorously discharging his equality duties".

The judge added that other local authorities would no doubt read his judgment "and may consider that they are in the same, or a sufficiently similar, factual position to claim the same relief.

"The decision is now, however, over seven months ago, and in my view any other authorities would now be far too late to apply for judicial review.

"I do not mean to trivialise so important an issue, but it may be said that fortune has favoured the brave."

The judge also stressed that, provided Mr Gove discharged his duty to consult fairly and take into account equality considerations, "the final decision on any given school or project still rests with him".

"He may save all, some, a few, or none. No one should gain false hope from this decision."

The judge observed that "the whole case must have cost Treasury solicitors tens of thousands of pounds".

Under BSF, every secondary school in England was due to be rebuilt or refurbished over a 15-20-year period at an estimated cost of £55 billion.

Mr Gove said the programme had been beset by "massive overspends, tragic delays, botched construction projects and needless bureaucracy".

He also described it as "a dysfunctional process" before making the cuts.

At a four-day hearing last month, lawyers for the six councils argued that the axing of building, rebuilding and refurbishing projects at 58 schools, at a total cost of nearly £1 billion, was arbitrary and legally flawed and failed to take account of the merits of individual schemes.

They accused the Education Secretary of failing to consult properly, not giving adequate reasons before stopping projects and breaching legitimate expectations that projects would be funded.

Lawyers for the Education Secretary argued that his decisions were not made lightly and were not open to legal challenge.

They stated the coalition had inherited "the largest budget deficit in peacetime history", and spending cuts had to be made "quickly and significantly".

Substantial cuts "inescapably" had to be made to bring BSF spending down to manageable levels, and there was no obvious or reasonable alternative.

A set of general principles was applied to decide which projects were cancelled, but Mr Gove did not consider it "practicable or appropriate" for him to arbitrate between the merits and claims of a large number of different authorities, or an even larger number of individual schools.

Luton argued that it should receive funding totalling £48 million for its stopped projects; Nottingham £36 million; Waltham Forest £258 million; Newham £230 million; Kent £255 million and Sandwell £128 million.

Shadow education secretary Andy Burnham said: "This ruling is a victory for all the communities and children betrayed by Michael Gove.

"They deserve no less than a full apology from him today and a commitment to act quickly on the court's finding.

"The ruling calls into question every school building scheme cut by Michael Gove and is a damning verdict on his competence as a minister. He must tell us today how much public money he has spent trying to defend his botched and unfair decisions."

Chris Keates, general secretary of the NASUWT teaching union, said: "The councils involved are to be congratulated for making a stand on this issue.

"The coalition Government has shown time and again a reckless disregard for due process and consultation.

"Teachers, pupils, parents, and local councils were all sidelined. Since May 12, programmes, grants and organisations have been thoughtlessly abolished with little, if any, regard for the consequences.

"BSF was a classic example of this, and it's now come back to bite the Secretary of State."

GMB National Officer Sharon Holder said "There was a huge outcry when Michael Gove pulled the plug on plans to improve secondary schools and now he has had his comeuppance. The learning environment is crucial to better educational outcomes and Gove failed to recognise this.

"It's another shambles from the minister for gaffes, already widely criticised for his academy and free school policies. No doubt all the other councils and individual schools who had their promised new schools snatched away will now seek to have them reinstated."

Ty Goddard, director of the British Council for School Environments (BCSE), said: "We understand why the Government had to intervene in BSF, which was rightly ambitious in its ideals but wasteful and unnecessarily expensive in practice.

"We also understand why these local authorities decided to take a legal route when they were told their school building programmes had been cancelled. Many teachers, parents and children were bitterly disappointed to be told their new dream school remained just that.

"The key now is to find a system and approach that meets the national challenge we face, and we hope that the forthcoming James Review will do just that. Much of the school estate is beyond its design life, and pupil numbers are growing."