Brenda Hughes, R (on the application of) v Kirklees Council [2026] EWCA Civ 308

[2026] EWCA Civ 308Case No CA-2025-003212
IN THE COURT OF APPEAL (CIVIL DIVISION)
[2025] EWHC 3136 (Admin)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
ADMINISTRATIVE COURT
Upper Tribunal Judge Ward, sitting as a deputy High Court Judge
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 17/03/2026
Before
LORD JUSTICE ZACAROLILADY JUSTICE MAYLORD JUSTICE DOVE
Between
BRENDA HUGHESAppellantKIRKLEES COUNCILRespondent
Peter Mant KC and Tom Tabori (instructed by Irwin Mitchell LLP) for AppellantPeter Oldham KC and Jack Anderson (instructed by Ward Hadaway LLP) for RespondentHearing Hearing date: 5 March 2026
Approved JudgmentThis judgment was handed down remotely at 10.00am on 17 March 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

Introduction

[1]By a decision dated 11 February 2025 (the “Decision”), Kirklees Council (the “Council”) acting by its Cabinet (the “Cabinet”) approved the sale of two specialist dementia care homes, Castle Grange and Claremont House (the “Homes”). These are the only two care homes in the Council’s area that remain in its ownership. There are 57 other care homes in Kirklees, all of which are in private ownership. Of those, 44 are registered to provide care for persons with dementia, and 23 of those are paid a premium because they offer specialist dementia care.[2]The claimant, Brenda Hughes, is a resident of Castle Grange. She is in her early 90s and suffers from advanced dementia. Her relatives, and the relatives of most of the other residents of the Homes, strongly object to the proposed sales. They have serious concerns for the wellbeing of the residents. The Homes are loss making. The relatives are concerned that private owners would be forced to reduce staffing levels in order to reduce the financial losses or, failing that, they would be forced to close the Homes, to the serious detriment of the residents. Concerns have also been expressed over the impact of the sales on the quality of service and on staff, and therefore continuity of service for the residents.[3]The Decision was based on financial considerations and was part of a wider strategy of focussing the Council’s direct care delivery in other parts of the care market, where the independent sector does not provide a solution in the way that it does for residential care. If the Homes are transferred into private ownership, the Council would continue to be responsible for paying for the residents in the Homes (save for those who are wholly self-funding, of which there are currently only seven), but the cost to the Council of doing so would be considerably less. Precisely how much less is one of the issues raised by this appeal. There can be no doubt, however, that substantial savings would be made.[4]The Cabinet reached the Decision, and earlier decisions relating to the same project, on the basis of reports from Council officers, with supporting materials. I describe these in more detail below.[5]The claimant (together with another resident who has since sadly died) sought permission to bring a claim for judicial review of the Decision. Upper Tribunal Judge Ward, sitting as a deputy judge of the High Court, refused permission, setting out his reasons in a reserved judgment dated 9 December 2025.[6]The appeal has been expedited in circumstances where the Council has agreed terms for the sale of the Homes, and the sale risks being lost if the judicial review challenge is not resolved. Until shortly before the hearing of the appeal, the longstop date imposed by the purchaser was 17 March 2026. That has now, however, been extended to 17 June 2026.[7]Various grounds were advanced before the judge, of which the following two grounds remain relevant on appeal (permission having been given by Lewison LJ on 9 February 2026).[8]The first of these relates to the fact the Council did not explore an alternative, unformulated proposal that it would continue to run the Homes itself. This was said to be irrational in circumstances where, in an officers’ report to the Cabinet dated 10 December 2024, it was recognised that some savings could potentially be made in running the Homes. The judge rejected that contention, and the claimant appeals on the basis that he was wrong to do so.[9]The second of the grounds that remains relevant on appeal relates to the fact that, in calculating the difference between the cost of continuing to run the Homes in Council ownership and the cost of providing alternative provision for the residents in the independent sector, the Council used a figure for the per-unit weekly cost of the latter that was two financial years out of date, which overstated the potential savings by a factor of about 40%. The claimant contends that the Council acted irrationally in basing its decision on that outdated figure. The judge agreed with the claimant. He nevertheless refused permission on this ground because he concluded (applying the test in s.31(2A) and (3C) of the Senior Courts Act 1981) that it was highly likely that the outcome would not have been substantially different. The appellant contends that he was wrong to do so. The respondent, by a respondent’s notice, seeks to uphold the judge’s order on this point by a different route: namely that he was wrong to conclude in the first place that the Council acted irrationally in relying on the outdated figure of the cost of alternative provision.

Summary of conclusions

[10]For the reasons which appear below, I would dismiss this appeal. At the outset, I stress two important points.[11]First, on a judicial review challenge, the question for the Administrative Court is not as to the merits of the decision made by a public body. Whether the sale of the Homes is the right one, or the best in the circumstances, or whether a different decision might have been better, is emphatically a question to be resolved by the democratically elected members of the Council and not for the court. Local authorities have limited resources, and it is for them, not a court, to determine how best to use them.[12]The role of the court is limited to inquiring whether the Decision was a lawful one in a public law sense. Here, the claimant challenged the Decision on the basis that it was irrational. The question for the court in such a case was succinctly encapsulated by Carr J (as she then was) sitting in the Divisional Court with Leggatt LJ (as he then was) in R (Law Society) v Lord Chancellor [2018] EWHC 2094 (Admin); [2019] 1 WLR 1649, at §98. As she there explained, there are two aspects. The first is whether the decision is outside the range of reasonable decisions open to the decision-maker. The second is whether the process by which the decision was reached is flawed, because significant reliance was placed on an irrelevant consideration, or there was no evidence to support an important step in the reasoning, or the reasoning involved a serious logical or methodological error. That might include a factual error, where the mistake was to a fact which was uncontentious, objectively verifiable and played a material part in the decision-maker’s reasoning.[13]Second, there is a high threshold for an irrationality challenge, where the decision involves predictions as to the extent and likelihood of costs savings, and is made on the basis of reports of those with day to day experience of managing the Council’s finances, and where it involves judgments as to the appropriate use of Council funds: see, for example, R (Centro) v Secretary of State for Transport [2007] EWHC 2729 (Admin), per Beatson J at §36; R (TTT) v Michaela Community Schools Trust [2024] EWHC 843 (Admin), per Linden J at §161 (citing Lord Bingham in R (SB) v Governors of Denbigh High School [2007] 1 AC 100, at §34, cautioning a court, lacking the experience, background and detailed knowledge of a school head teacher, staff and governors, from overruling their judgment).[14]In order to understand the grounds of appeal, and my response to them, it is necessary to set out the background to the Decision in some detail.

The background to the Decision

[15]The Decision was not made in a vacuum, but was the culmination of a process which had been ongoing for some time. Although the Council had explored the possibility of selling the Homes some seven years previously, the current process commenced with a report dated 26 September 2023 which recommended that the Council consult on a proposal to close the Homes.[16]During the 18 months which followed, there were numerous reports to Cabinet and decisions taken by Cabinet as the proposals evolved. Mr Mant KC, who appeared for the claimant, rightly accepted that at each meeting the Cabinet is taken to have knowledge of the matters reported to it, and resolved upon, at previous meetings, whether or not earlier reports were specifically referred to again. In fact, the report presented to the Cabinet meeting on 11 February 2025 included reference (and embedded links) to each of the critical prior reports.[17]The report of 11 February 2025, and the recommendations made in it, cannot be read therefore in isolation, but must be viewed in the context of what came before. The following is a summary of the relevant aspects of that context.[18]The September 2023 report highlighted the chronic underfunding of local authorities in general and the Council, and adult social care, in particular. It noted that the need to produce a balanced budget in the following year required the Council to look at options. The report referred to the fact that in some areas of social care the Council was a significant provider of services, typically where there were fewer alternative providers, whereas in other areas – in particular residential and nursing care homes – the vast majority of provision was provided by the private sector. The report sought approval for the Council to withdraw from the long stay residential care market and focus on other areas where there were fewer providers and fewer options for people.[19]Under section 8 of the report, which summarised the recommendations, it was said:
“it is important we concentrate our service offer on those services that we as a council believe are essential for us to provide, bearing in mind the choice available by other providers”
. It was noted that even if the Homes were full, maintaining them would still cost the Council “significantly more” than it would cost to provide funding for residents in the independent sector.[20]As a result of the feedback during that consultation process, the proposal was modified and the report dated 12 March 2024 sought approval to explore potential opportunities to transfer the Homes to an independent sector provider. This report repeated much of the same background as in the September 2023 report. In the section headed “context”, for example, it repeated the strategic aim of the Council to support people to remain in their own homes and as independent for as long as possible and, in the challenging financial context, to review in-house service provision and consider future options.[21]This report included an estimate of the comparison between the cost to the Council of maintaining the Homes and the cost of funding independent providers. For the purposes of comparison, it took the per-unit weekly cost of funding independent providers to be £852.69. This was not intended to be a precise number, because there is no standard rate paid for “dementia” care. The Council sometimes pays a higher rate for certain patients depending on their needs and complexities. It was an estimate, intended to be reflective of the average paid to independent providers caring for dementia patients.[22]On the assumption (which was recognised to be unrealistic) that the Homes were 100% occupied, the report identified a saving of approximately £680,000 per year for each of the Homes if they were transferred into private ownership. On more realistic assumptions as to occupancy, the saving was greater. It is important to note, when these figures are compared with the savings mentioned in later reports, that the cost of maintaining the Homes included both direct costs and indirect costs/overheads, whereas the later reports excluded the latter.[23]One of the grounds of challenge below was that the figure of £852.69 as the per-unit weekly cost of external provision was an inappropriate proxy for the cost of purchasing care for the residents of the Homes. That was rejected by the judge, and there is no appeal from that conclusion. It was not suggested that it was otherwise wrong to use that figure for the purposes of illustrating the cost savings as at the time of the March 2024 report.[24]The report noted, at §2.16.5, that even if the homes operated at 100% occupancy, it would still remain value for money for the Council to secure alternative placements in the independent sector. Under the heading “Reasons for recommendation” (at §6.2), it recorded that the funding challenges for the Council and for adult social care had not changed since September 2023. It was further noted that there had been considerable opposition to the proposal to close the Homes, but that if a sale of the Homes could be achieved, that would mitigate the key concerns raised by respondents, as the existing residents would be able to stay in their current home and be cared for by staff who currently provided their care.[25]Following the further consultation, the Cabinet determined at a meeting on 10 December 2024 to pursue the transfer of the Homes as a going concern. The report of the same date, “given the financial challenges in relation to revenue and capital budgets”, provided three options:(1) Do nothing and retain the operation of the Homes;(2) transfer the Homes to a third party bidder as going concerns;(3) close the Homes.[26]The report recommended the second option, because: while concerns had been raised through the consultation, they did not represent substantial or significant reasons why the Homes should be retained as directly operated facilities; the Homes represented a comparative loss of more than £0.8 million per annum of direct costs and may well require further capital investments in the near future, which meant that the sale continued to make this “an attractive option financially”; and the sale would allow the Council to focus resource on specialist activity where there are market gaps or where only the Council could play a market facilitating role.[27]The December 2024 report contained a similar comparison between the cost of maintaining the Homes and the cost of funding provision of care via the independent sector in support of the conclusion that the sale would present an ability to save revenue costs of more than £0.8 million each year. It presented comparisons on the assumption that the Homes were at 100% occupancy and on the more realistic assumption of 90% occupancy. It used the same figure for the per-unit weekly cost of independent provision of £852.69. It noted (see §3.2.7) that the information used to inform the analysis was based on 2024/25 values, and that actual values for 2025/2026 may vary though it was unlikely that they would materially change.[28]The report noted that, should it not be possible to sell the Homes, alternatives were closure or continued operation of the Homes. As to the latter, it said:
“there is the potential to make some savings by staffing changes and by increasing fees for self-funding residents, although the cost disadvantage the Council faces versus the private sector on staffing is likely to make operating such facilities on a cost neutral basis almost impossible.”
[29]Following the December 2024 meeting of the Cabinet, the Council’s Scrutiny Committee called the matter in, over concerns of a lack of transparency over the financial rationalisation for privatisation. The particular concerns were that the reported savings estimates within the Cabinet reports had fluctuated without clear explanation, the financial reports lacked robust modelling or historic data, and public data indicated overspending on agency staff which suggested poor management rather than systemic inefficiency. The first of these concerns was explained in responses to the scrutiny committee by reference to the different methods of calculating savings between the earlier and later reports which (as noted above) turned on the inclusion or exclusion of indirect costs and overheads. The third concern was explained both by reference to there being a mistaken assumption about the extent of payment for agency staff and by the fact that use of agency staff is an inevitable requirement in running the Homes. The second concern was addressed by the provision of a detailed five-year analysis of costs and income for each of the Homes.[30]The February 2025 Report continued to recommend the sale of the Homes, and provided the following summary reasons:
“• The detailed financial analysis reaffirms the financial business case and wider benefits of the sale of Castle Grange and Claremont House as going concerns. • The savings have been modelled on the prudent budgeted cost for each care home based on high level occupancy and full staffing levels. The Council can only save in budget terms what is already stated in the budget. • The running costs have been higher, and the real terms benefit would therefore be higher with the following additional factors included: avoidance of the overspend against budget, avoided obligations of capital investment, as well as the benefit of the potential capital receipt to the Council. • The previous consultation (between 10/10/24 to 21/11/24) provided no substantial or significant reasons why the homes should be retained as directly operated facilities. • Whilst the Best and Final Offers process with potential providers has been paused pending Cabinet decision, the process has secured competitive bids from four potential operators. • This decision aligns with the council's strategic objectives to ensure financial sustainability while maintaining high-quality care for all residents in Kirklees. It meets the council's strategic objective of shaping the Kirklees' care market for the long term, which Adult Social care has the legal duty to do.”
[31]Under the section of the report headed “Budgeted Savings”, it provided an illustration of the anticipated savings of £0.867 million in direct, budgeted costs, based on 90% occupancy of each site and employing the same figure of £852.69 per-unit weekly cost of provision via the independent sector. The report further noted that there would likely be additional savings in terms of avoiding overspend against budget, given that the Homes had historically operated at a level of overspend against budget (as indicated in the “variances - direct cost” and “variances - net” tabs of the detailed financial report (at appendix 3 to the report)). It also pointed out that the Homes required significant capital investment, estimating a figure of £1.4 million over five years, and referred to the possibility of generating a capital receipt on the sale of the Homes.

The first ground of appeal: failure to consider an alternative proposal

[32]This ground of appeal focuses on the reference in the December 2024 report to the potential to make “some savings” (see §‎28 above). The complaint is that, having identified that there was a potential to implement cost saving measures, it was irrational for the Council not to explore the nature and extent of those measures, in the context of considering the alternative proposal of maintaining the Homes in public ownership.[33]Mr Mant relied on three general propositions, as underpinning both grounds of appeal: the decision to sell the Homes turned on the extent of the savings that were likely to be achieved against budget; the Cabinet, as the democratically elected decision-maker, had to weigh the savings against the disbenefits of sale; and without accurate information about the cost of alternative provision, the Cabinet could not properly discharge that burden. In support of the first of these propositions he referred to the fact that the judge had held that the primary reason for the Decision was the comparison in budgeted costs, and the fact that in its skeleton argument below, the Council stated that it had not proceeded “on the basis as though any costs savings must fully close the gap.” That, he submitted, focussed attention on the extent to which savings would be made by selling the Homes.[34]The first ground of appeal is essentially a complaint that the Council failed to obtain information (as to potential savings that could be made in continuing to run the Homes in-house) that was relevant in order to enable it correctly to answer the question before it, the question being whether to sell the Homes as opposed to maintain them in Council ownership.[35]It is well established that it is for the decision-maker to decide what inquiries it should make, and that this decision can itself only be challenged on public law grounds. The principle derives from Secretary of State for Education and Science v Tameside MBC [1977] AC 1014, per Lord Diplock at p.1065B:
“The question for the court is, did the Secretary of State ask himself the right question and take reasonable steps to acquaint himself with the relevant information to enable him to answer it correctly”
. The Tameside duty was summarised by the Court of Appeal in R (Plantagenet Alliance Ltd) v Secretary of State of

Justice [2014] EWHC 1662 (Admin) at §100, as follows:

“1. The obligation upon the decision-maker is only to take such steps to inform himself as are reasonable. 2. Subject to a Wednesbury challenge, it is for the public body, and not the court to decide upon the manner and intensity of inquiry to be undertaken (R (Khatun) v Newham LBC [2005] QB 37 at paragraph [35], per Laws LJ). 3. The court should not intervene merely because it considers that further inquiries would have been sensible or desirable. It should intervene only if no reasonable authority could have been satisfied on the basis of the inquiries made that it possessed the information necessary for its decision (per Neill LJ in R (Bayani) v. Kensington and Chelsea Royal LBC (1990) 22 HLR 406). 4. The court should establish what material was before the authority and should only strike down a decision by the authority not to make further inquiries if no reasonable council possessed of that material could suppose that the inquiries they had made were sufficient (per Schiemann J in R (Costello) v Nottingham City Council (1989) 21 HLR 301; cited with approval by Laws LJ in (R (Khatun) v Newham LBC (supra) at paragraph [35]). 5. The principle that the decision-maker must call his own attention to considerations relevant to his decision, a duty which in practice may require him to consult outside bodies with a particular knowledge or involvement in the case, does not spring from a duty of procedural fairness to the applicant, but from the Secretary of State’s duty so to inform himself as to arrive at a rational conclusion (per Laws LJ in (R (London Borough of Southwark) v Secretary of State for Education (supra) at page 323D). 6. The wider the discretion conferred on the Secretary of State, the more important it must be that he has all relevant material to enable him properly to exercise it (R (Venables) v Secretary of State for the Home Department [1998] AC 407 at 466G).”
[36]Before the judge, the claimant contended that the Council had breached the Tameside duty in failing to model the non-sale options for remedying the overspend in the Homes. The judge rejected that complaint, and there is no appeal from his finding in this regard. He did so in the following terms (at §82):
“The Council’s officers having acknowledged in the October 2024 report that there was “some” scope for change, could have provided outline figures for savings (as regards the possibility of increasing charges, that was done to an extent). However, it is consistent with the decision-taking structure of local government that officers must up to a point be able to sift out material which they consider to be not realistically viable before presenting proposals to members. Save for the out-of-date figure used, the Council was entitled to consider that the enquiries it made were sufficient for the decision in fact taken.”
[37]It seems to me that the first ground of appeal is an attempt to re-package the breach of the Tameside duty as an independent irrationality ground. Having accepted the judge’s conclusion on the Tameside duty point, I do not think it is permissible to sidestep his conclusion in this way.[38]The claimant contends that the judge was wrong to take account of the fact (see §82, referring back to §59, of the judgment) that no alternative proposal was put forward. That, however, was not part of his reasoning in rejecting the Tameside duty point. It was said to be relevant even if (contrary to his view) the Council had been required as a matter of law to have made further enquiries about the financial consequences of alternative options.[39]In any event, the judge was in my view entitled to reach the conclusion that the Council acted rationally in not exploring the option of making savings and continuing to run the Homes. The comment about potential savings in the December 2024 report identified two possible areas: staff changes and increasing fees for self-funding residents.[40]As to the first of these, the only possibility that was contemplated in the various officers’ reports was limiting the use of agency staff. That was a matter that was explored in answers to the Scrutiny Panel. It was there pointed out that care homes are often required to use agency staff to respond to a number of operational needs, including due to the time it takes to recruit permanent staff in the event that someone leaves. It was also pointed out that all efforts to reduce the cost of short-term staffing are enacted on an ongoing basis.[41]As to the second of these, the judge made the following findings of fact (at §56 to §58) against which there is no appeal:(1) any realistically likely increase in the amount paid by self-funders (of which there were only seven) would not have made more than a minimal contribution to reducing the cost disadvantage of in-house provision;(2) the suggestion that other self-funders might emerge was speculative, and would at most have been a contributor to a small part of a package of steps aimed at reducing the deficit;(3) the statement “Do nothing – continue as is” was to be interpreted as indicating merely retaining the homes as opposed to selling them. It did not indicate the Council had set its face against making any change that might have saved costs.[42]Stepping back from the detail, there are two overarching points which count strongly against the suggestion that it was irrational for the Council either to decline to explore the extent of the potential savings or to make the Decision leaving the possibility of such savings out of account.[43]First, the Council had been running the Homes for a considerable time, in increasingly challenging financial circumstances. It is highly unlikely that it was doing anything other than seeking to run the Homes as efficiently as circumstances allowed. Mr Mant suggested in oral argument that the Council’s eye may have been taken off the ball in this regard while it was focused on selling the Homes. The judge made no finding to that effect, and we were not taken to any evidence that would justify such a finding or a conclusion that this led either to the failure to identify appropriate savings in the budget set each year, or to an avoidable overspend against budget.[44]Second, notwithstanding the detailed financial and other information presented by the Council officers across the whole process, and the close forensic analysis applied to it by the claimant in the context of these judicial review proceedings, no credible basis has been identified on which significant cost savings could have been made.[45]In truth, ground 1 of the appeal places impermissible weight on what was a passing reference (as the judge referred to it at §56 of his judgment) to the potential for some costs savings in the December 2024 report. I do not consider that it was irrational for the officers – given their knowledge and experience of the financial affairs of the Homes over some years – to take the view that it was unnecessary to explore and quantify that potential.

The respondent’s notice

[46]Consideration of the second ground of appeal (the judge was wrong to conclude that, had the Council not made the error of relying on the figure of £852.96 for the purposes of cost comparison, it is highly likely that the outcome would have been no different) becomes unnecessary, if the judge was wrong to conclude that the Council made that error in the first place. Accordingly, it makes sense to address, first, the logically prior question raised by the respondent’s notice.

The claimant’s case

[47]In the amended statement of facts and grounds (“ASFG”), the claimant contended that the Council’s decision-making in the Decision fell below the rationality standard summarised in cases such asthe Law Society case (above). In relation to the £852.69 figure, the point taken (see §28(b) of the ASFG) was that this was erroneous, because it was at odds with the empirical facts established by local market evidence. That was the point rejected by the judge, against which there is no appeal. No separate point was taken that it was wrong to use that figure because it was two financial years out of date.[48]In the claimant’s skeleton before the judge, the point was put in various ways:(1) it was irrational to use a figure from January 2024 to calculate savings against the budgeted costs for running the Homes in 2025/2026;(2) it was a procedural flaw not to inform the Cabinet that the figures for alternative provision in the December 2024 report were a known underestimate; and(3) it was plainly wrong and misleading to use the same figure in the February 2025 report in direct comparison with the 2025/26 budget for the Homes. The claimant contended that the figure should have been increased by 13.5% to take account of the increase in the notional cost of alternative provision.

A pleading point

[49]The Council objected before the judge (and they renew the objection on appeal) that this point could not be taken, because it was not pleaded. The judge held that the pleading at §28(b) of the Amended Statement of Facts and Grounds was sufficiently apt to encompass the point as argued in the claimant’s skeleton. He noted that the detail necessary for the claimant to plead this point only emerged from witness statements served by the Council after the commencement of the claim, that the Council was clearly alive, when serving its evidence, to the possibility that this point might be raised by the claimant, and that there was no sense in which the Council was taken by surprise by this point or placed in any difficulty by the contents of the Claimant’s skeleton argument.[50]I would dismiss this objection. The judge made a case management decision which will not lightly be interfered with on appeal. He made no misdirection as to the law. He clearly had in mind the importance of procedural rigour in public law proceedings, referring to R (Talpada) v Secretary of State for the Home Department [2018] EWCA Civ 841 (see per Singh LJ at §67-§69) and R (Bibi) v Secretary of State for the Home Department [2025] EWCA Civ 622. His conclusion was well within the range of reasonable case management decisions where an appeal court will not interfere.

The judgment

[51]The judge concluded (at §48) that an appropriate figure to use as a comparison for 2025-26 was one which was 10.7% higher. That would have resulted in a per-unit weekly cost for alternative provision of £943.93. He said, at §52, that even though the exact amount of the increase in the rate for 2025-26 was not ratified by the Council until after the date of the Decision, “a report presenting the comparison fairly would have needed to draw attention to the fact that the £852.69 figure was two financial years old, referred to the 2024-2025 increase [of 4%] and said whatever could be said in February 2025 about the projected increase for 2025-26.” He noted, at §53, that by adopting a per-unit weekly cost that was 10.7% higher, the annual costs savings would reduce from £867,295 (as set out in the report of 11 February 2025) to £524,000. He concluded, at §54, that adoption of a figure that was two years out of date “without addressing it” does constitute “a logical error or critical gap” as contemplated by R(KP) v Secretary of State for Foreign, Commonwealth and Development Affairs [2025] EWHC 370 (Admin).[52]In the section of his judgment dealing with s.31(3C) and (2A), however, the judge observed that the Council had regard to broader factors beyond the saving in budgeted costs (see §147 and §159 of the judgment). He also observed that even when the figure of £852.69 was increased by 10.7%, there was still a saving “which let it not be forgotten is an annual figure” of in excess of £500,000 against budget. In light of those factors, he considered that it was highly unlikely that the Decision would have been different, had an updated figure been used for the purposes of comparison.

The respondent’s arguments

[53]Mr Oldham, who appeared for the Council, submitted that the judge was wrong to conclude that the Council’s reliance on the figure of £852.69 was irrational. First, as explained in the Council’s evidence, the officers in preparing the report had intended the figure to be reflective, and they determined that it would have been unnecessarily confusing to keep updating the figure in subsequent reports. Second, he contended that the judge had been wrong to conclude that reliance on the 2023-2024 figure was irrational before he considered the Council’s reliance on the overall context of the savings that the Decision would bring. Had he not done so the judge would have concluded that any error in using the figure of £852.69 was immaterial to the Decision and thus not irrational.

The claimant’s arguments

[54]I have set out the three general propositions relied on by Mr Mant at §‎33 above. So far as these related to the respondent’s notice (and the second ground of appeal), he submitted that a difference of 40%, between estimated savings of £867,000, (utilising the figure of £852.69 for the cost of external provision) and £524,000 (using an updated and increased figure), had a clearly material effect on the extent of the savings to be made. It was accordingly irrational for the Council to base its decision on the older figure. He submitted that, since little if anything is known about the Cabinet’s actual thinking on balancing the potential savings against the risks of selling the Homes, it cannot be said that the use of the outdated figure made no difference.

Discussion and conclusions

[55]It is important to be clear as to the basis of the public law challenge. The test for irrationality is as set out in the Law Society case (above). The claimant particularly relies on the reference to there being some serious logical or methodological error in the reasoning (or some “unexplained evidential gap or leap in reasoning which fails to justify the conclusion”, as the test was put by Saini J in R (Wells) v Parole Board [2019] EWHC 2710 (Admin) at §33).Some care is needed in the application of this to a case where the decision-maker (the Cabinet) provides little or no reasoning for the conclusion reached, because the decision is made on the basis of a recommendation from others, in this case the Council’s officers as set out in the reports.[56]In such cases, the approach set out by the Court of Appeal in Mansell v Tonbridge & Malling BC [2017] EWCA Civ 1314 is apposite. That case concerned the approach to be taken in the context of quasi-judicial decisions taken by planning authorities. Nevertheless, in my view the principles concerning the interplay between the recommendation set out in officers’ reports and the decision taken in reliance on them apply equally to the circumstances of this case.[57]At §42, Lindblom LJ summarised the law as follows:
“(1) The essential principles are as stated by the Court of Appeal in R. v Selby District Council, ex parte Oxton Farms [1997] E.G.C.S. 60 (see, in particular, the judgment of Judge L.J., as he then was). They have since been confirmed several times by this court, notably by Sullivan L.J. in R. (on the application of Siraj) v Kirklees Metropolitan Borough Council [2010] EWCA Civ 1286, at paragraph 19, and applied in many cases at first instance (see, for example, the judgment of Hickinbottom J., as he then was, in R. (on the application of Zurich Assurance Ltd., t/a Threadneedle Property Investments) v North Lincolnshire Council [2012] EWHC 3708 (Admin), at paragraph 15). (2) The principles are not complicated. Planning officers’ reports to committee are not to be read with undue rigour, but with reasonable benevolence, and bearing in mind that they are written for councillors with local knowledge (see the judgment of Baroness Hale of Richmond in R. (on the application of Morge) v Hampshire County Council [2011] UKSC 2, at paragraph 36, and the judgment of Sullivan J., as he then was, in R. v Mendip District Council, ex parte Fabre (2000) 80 P. & C.R. 500, at p.509). Unless there is evidence to suggest otherwise, it may reasonably be assumed that, if the members followed the officer’s recommendation, they did so on the basis of the advice that he or she gave (see the judgment of Lewison L.J. in Palmer v Herefordshire Council [2016] EWCA Civ 1061, at paragraph 7). The question for the court will always be whether, on a fair reading of the report as a whole, the officer has materially misled the members on a matter bearing upon their decision, and the error has gone uncorrected before the decision was made. Minor or inconsequential errors may be excused. It is only if the advice in the officer’s report is such as to misdirect the members in a material way – so that, but for the flawed advice it was given, the committee’s decision would or might have been different – that the court will be able to conclude that the decision itself was rendered unlawful by that advice. (3) Where the line is drawn between an officer’s advice that is significantly or seriously misleading – misleading in a material way – and advice that is misleading but not significantly so will always depend on the context and circumstances in which the advice was given, and on the possible consequences of it. There will be cases in which a planning officer has inadvertently led a committee astray by making some significant error of fact (see, for example R. (on the application of Loader) v Rother District Council [2016] EWCA Civ 795), or has plainly misdirected the members as to the meaning of a relevant policy (see, for example, Watermead Parish Council v Aylesbury Vale District Council [2017] EWCA Civ 152). There will be others where the officer has simply failed to deal with a matter on which the committee ought to receive explicit advice if the local planning authority is to be seen to have performed its decision-making duties in accordance with the law (see, for example, R. (on the application of Williams) v Powys County Council [2017] EWCA Civ 427). But unless there is some distinct and material defect in the officer’s advice, the court will not interfere.”
[58]In the same case, the Chancellor (Sir Geoffrey Vos) warned, at §63, against mounting a challenge based on a legalistic analysis of the planning officer’s report, noting that such reports are not written for lawyers, but for councillors who are well-versed in local affairs and local factors:
“They should be allowed to make their judgments freely and fairly without undue interference by courts or judges who have picked apart the planning officer’s advice on which they relied.”
[59]Mr Mant accepted that in circumstances where the Cabinet reached its decision on the basis of the reports provided to it, the reasons for its decision are to be found in those reports. The critical question, therefore, is best framed as being whether the content of the reports (read together and in context) was such as to misdirect the Cabinet in a material way. There is not, I think, a substantive difference between posing the question in that way, and asking whether (per the Law Society case) there was a “serious logical or methodological error”, provided this is understood as being one that played a material part in the decision-maker’s reasoning. Whichever way it is framed, the inquiry must be as to whether the content of the reports was(a) misleading(b) in a way which materially affected the Decision.[60]The judge in this case, no doubt as a consequence of the way in which the arguments were framed before him, did not isolate the inquiry in this way. I would accept, in this regard, Mr Oldham’s submission that the judge fell into error in not considering the Council’s reliance on the overall context of the savings that the Decision would bring before, and as part of, his consideration of whether the Decision was irrational. I turn, therefore, to consider the question posed in §59 above.[61]In my judgment, for the following reasons, the continued reliance on the figure of £852.69 is not misleading, at least not materially so having regard to the nature of the Decision and the overall context in which it was made.[62]First, the officers’ reports did not purport to identify the figure of £852.69 as an up-to-date figure. The Cabinet knew that it dated from early 2024, because members had seen it used in earlier reports, and they had before them the March 2024 report.[63]Second, the Cabinet was expressly told, in the December 2024 report, that the information used to inform the analysis as to likely cost savings was based on outdated values, and that actual values for 2025/26 might change, although this was unlikely to be material. The officers had taken the view that it would be confusing to update the precise figure for the cost of external provision in each report. That was a perfectly rational view to take. The fact is, however, that the Cabinet was made aware that outdated figures were being used.[64]Third, taking a realistic view, the Cabinet must have been aware of the possibility, at the very least, that the figure of £852.69 was likely to be out of date. The amount the Council pays to independent providers, although based on a decision reached by the Council itself, will inevitably increase as the cost to the independent providers of running a care home increases. The Cabinet was aware – from the detailed 5-year financial information, that the cost of running the Homes was increasing year-on-year.[65]Fourth, the extent of the costs savings to be made must be seen in the context of the Council’s overall strategy, namely that, in circumstances where it was under severe financial constraints and was struggling to balance its budget, it wished to focus its limited resources away from residential care, which was well catered for by the private sector, and towards areas where it was needed because there were fewer providers and fewer options for people.[66]Fifth, and having regard to that wider strategy, the important point was that substantial amounts would be saved by selling the Homes. It is unrealistic to think that savings of more than £500,000 every year against budgeted income, plus the avoidance of unbudgeted overspend and substantial capital costs over the coming years did not count in that context as “substantial” or (as it was put in the December 2024 report, “an attractive option financially”). As to Mr Mant’s submission that the members of the Council had to weigh the financial benefit of the proposal against the risks and disbenefits, and this meant that a reduction in budgeted savings from £867,000 to £524,000 was material, I disagree that the decision for the Council can be viewed as a simple balance between those two factors. It was a decision based on broader considerations (see the fourth point above in particular). That is borne out by the fact that nowhere in the officers’ reports or the record of the Cabinet’s decisions is there any suggestion that savings had to be at a specific level before they outweighed the disadvantages of sale which had been identified.[67]It is also borne out by the fact that in each of the reports it is noted that the budgeted savings formed only one part of the picture, but so far as the other savings are concerned, these were referred to in the reports without much elaboration. Although a figure was put on the anticipated saving in capital expenditure (of £1.4 million), there had been no attempt (as the judge found) to provide detailed costings.[68]Mr Mant criticised the judge’s finding that there had historically been an overspend against budget. He referred to the fact that in the five-year figures appended to the 11 February 2025 report, the direct costs (before taking account of income) only showed an overspend against budget in one year for Claremont House and three out of five years for Castle Grange. I consider however, that the judge’s finding was justified. First, the figures for the two Homes combined showed an overspend in relation to direct costs in three out of the five past years and, importantly, in the forecast for the present year. Second, in the officers’ report for February 2025, the reference to overspend was by reference both to direct costs and net costs and, in the latter case, the detailed figures showed an overspend for each of the Homes in all but one of the five past years as well as the current year.[69]Whether or not the reference in the February 2025 report to “potential revenue cost savings of more than £0.8 million each year”, if taken in isolation, can be said to be inaccurate, I have no doubt that viewed in context as described above it cannot be said that the use in the report of an outdated figure of £852.69 for the per-unit weekly cost of external provision was materially misleading, or that it was irrational for the Council to rely on it in making the Decision.[70]Given my conclusion on the issue raised by the respondent’s notice, it is unnecessary, if the other members of the Court are in agreement, to consider the second ground of appeal.[71]I agree.[72]I also agree.

Cited in 1 later judgment