The judge continued his exegesis of the preceding caselaw in his judgment in Hammersmith by looking at some of the preceding caselaw:
B v London Borough of Harrow (CO-1036/97)
67 This case ultimately came before the House of Lords — see below – having begun as a statutory appeal to the High Court against a SEN Tribunal decision. The High Court’s decision is relevant in the light of the House of Lords’ ruling.
68 A mother and a local authority, Harrow LBC, disagreed as to the maintained school to be specified in a child’s statement. Accordingly, the choice was not between a maintained and an independent school.
69 Harrow LBC favoured one of its own maintained special schools. The mother’s preference, Grangewood, was maintained by Hillingdon LBC. Since the dispute concerned maintained schools, Schedule 27(3) EA 1996 required Grangewood to be specified unless a statutory exception applied. Harrow argued that an exception did apply in that “the attendance of the child at the school would be incompatible with the…efficient use of resources”. The issue was whether efficiency of resource use was concerned only with the responsible local authority’s resources (Harrow’s) or whether, additionally, it was concerned with those of the authority which maintained mother’s preferred maintained school (Hillingdon’s).
70 There was a funding dimension to this case, described by Moses J (as he then was) as follows:
“Harrow is required to pay the sum of between £11–12,000 to Hillingdon if “F” goes to Grangewood, pursuant to Regulation 3 of the Education (Intra-authority Recruitment) Regulations 1994 …Whereas mainstream schools are funded by means of a formula which depends in part on the number of pupils which the school can attract, special schools’ funding depends upon the number of pupils for whom it is expected those schools will have to make provision… That, of course, is a vast over-simplification of the way in which education authorities exercise their powers to distribute the budget between such schools, but it is sufficient in my view for the purposes of this judgment.
In relation to special educational needs schools, it is hoped that there will be available provision for pupils with such needs. This leads to the need to keep open and fund spaces which may in fact not be filled during the year.
In this case [Harrow] says that if “F” leaves there will be an unfilled vacancy which Harrow will have to continue to fund, as well as paying the recruitment charge to Hillingdon.”
71 The SEN Tribunal found it would cost Harrow £11–12,000 for the child to attend the Hillingdon school which was not compatible with the efficient use of Harrow’s resources. And so the SEN Tribunal declined to specify the Hillingdon school. Before the High Court, mother argued the Tribunal erred in law by not comparing the costs of educating the child at the rival schools.
72 Rejecting mother’s case, Moses J held that Schedule 27(3) “directs attention to the resources of the authority who has made the statement of special educational needs”. He also found that, in inter-authority cases such as this, the responsible local authority will “be bound to consider the suitability of the preferred school in the other area, and balance the desirability of that school against the costs of paying the recoupment sum”.
Commenting briefly on the House of Lords decision he recorded:
B v Harrow LBC  1 All ER 876,  1 WLR 223,  WLR 223,  UKHL 2
73 In agreeing with Moses J’s decision, the House of Lords (Lord Slynn) found:
“Moses J. was right to have regard to the differences between the funding arrangements made for special schools on the one hand and other schools on the other. In the latter case, funding is in part geared to the number of pupils actually attending the school, in the former it is in part geared to the number of pupils for whom it is anticipated the school will need to provide places. This means that places may be provided for which if eg. a child leaves to go out of the borough, will not be utilised but the cost will be incurred.”
The judge then turned to consider a longstanding authority, regarded as one of the leading cases:
Oxfordshire CC v GB & Others  EWCA Civ 1358,  ELR 8,
74 This has long been considered the leading case about section 9 ‘s role in independent school naming disputes. A child had been educated in a maintained mainstream school but his parents moved him to an independent school. The local authority refused to amend the child’s statement to specify that school.
75 The independent school’s fees were £16,800 a year; that was its additional cost for section 9 purposes. The dispute concerned how to quantify the additional cost of the maintained school (were the child to attend) for the purposes of section 9 :
(a) it was agreed that an annual sum of £2,473 for a learning support assistant was to be taken into account. My understanding is that this provision required additional funding from the local authority;
(b) the Age-Weighted Pupil Unit (AWPU) funding was £2,076. The AWPU was described as a fee paid to the school “for each pupil placed there”. The parties agreed this represented an additional cost although I note that, subsequently, the Court of Appeal in Kent (see below) found that, in Oxfordshire , the court must have considered the AWPU to be a genuine on-cost (para. 21 of Kent );
(c) the parties disputed whether the 5 weekly hours of teaching from a teacher of the deaf was to be taken into account. The sum in issue was £5,500;
(d) the parties disputed whether transport costs were to be taken into account. The sum in issue was £4,000.
76 The local authority argued transport and the specialist teacher of the deaf would be supplied without incurring additional costs. Such a teacher was already on the school staff and an existing taxi service could take the child to school. Only the learning support assistant cost and the AWPU-funding were “genuine on-costs”.
77 Sedley LJ, giving the only reasoned judgment, noted the absence of any authority directly on the point. He did refer, however, to the House of Lords’ decision in Harrow and, in fact, this was the only education case cited. Sedley LJ said:
“14. In other words, as we understand it, if unused special school places represent a loss which can be made good by making efficient use of them, then letting the child be unnecessarily placed elsewhere is an inefficient use of such resources.”
78 Sedley LJ also made the point, relevant in the present cases, that while “unreasonable public expenditure” is not a term of legal art, it is not “in its present context…capable of producing opposite outcomes on the same facts and figures depending on the individual tribunal’s choice of accountancy method”.
79 Sedley LJ identified section 9 ‘s purpose as to “prevent parental choice placing an undue or disproportionate burden on the education budget”. I note that, since then, the Court of Appeal has held section 9 is not limited to education expenditure (see Haining ). However, that does not matter for present purposes. The thrust of the Court’s finding about the purpose of section 9 was not affected by Haining case and, in any event, the present appeals are only about education spending.
80 Sedley LJ found “the question is what additional burden it will place on the LEA’s annual budget” and “that means, generally speaking, that the existing costs of providing [the maintained school] and of staffing it and its hearing-impaired unit do not come into account”. And so “what Parliament has called for in the ordinary run of cases is a consideration of the burden which the respective placements will throw on the annual education budget when matched against their educational advantages and drawbacks for the child in question”.
81 Under that ‘additional burden’ approach, costs that the local authority “would be incurring with or without the proposed placement are accordingly not in general relevant”. In principle, therefore, the local authority’s arguments were accepted. If the required specialist teaching and transport would be provided under previously paid-for arrangements they were to be excluded for section 9 purposes.
82 Once the additional burdens associated with the rivals schools are identified, a judgement can be made as to whether parental preference constitutes unreasonable expenditure. On this point Sedley LJ said:
“the parental preference for an independent school over an available state school, while perfectly reasonable, may have difficult cost implications for the LEA. In that event it is for the LEA, or on appeal the SENT, to decide whether those cost implications make the expenditure on the independent school unreasonable. This means striking a balance between (a) the educational advantages of the placement preferred by the parents and (b) the extra cost of it to the LEA as against what it will cost the LEA to place the child in the maintained school.”
83 I note that Sedley LJ said that his approach “chimes” with that taken by the House of Lords in Harrow , as referred to earlier in his judgment. In describing Harrow , I again note that Sedley LJ understood the decision to be that “if unused special school places represent a loss which can be made good by making efficient use of them, then letting the child be unnecessarily placed elsewhere is an inefficient use of such resources”.
He then turned to consider a later application of the Oxfordshire case:
Coventry City Council v SENDIST  EWHC 2278 (Admin)
84 A local authority specified a maintained school in a child’s statement and refused to specify an independent school. The SEN Tribunal allowed the parents’ appeal. The independent school’s annual fees were £11,500. The Tribunal accepted that, at the maintained school, the child would require “additional teaching support” at an annual cost of £13,000. On those figures, it is not surprising the Tribunal concluded the independent school would not involve unreasonable public expenditure.
85 The local authority appealed to the High Court, arguing the Tribunal erred in law by including the cost of additional teaching support because this was “not an additional cost to the LEA”. Under the statutory arrangements for delegation of funding for maintained schools, the maintained schools’ budget had been set and the child’s needs could be met from within that budget. There was no additional public expenditure.
86 Underhill J (as he then was) analysed Oxfordshire , in particular Sedley LJ’s finding that “the question is what additional burden it will place on the LEA’s annual budget”. He considered that Sedley LJ “plainly did not have in mind the distinction on which [the authority] relies between payment by the LEA directly from its own pocket and payment by the school under delegated arrangements”. The judge went on to find that “the precise route by which payment is made out of what is ultimately the LEA’s budget is plainly immaterial to the purpose underlying section 9 ”. Applying that, Underhill J rejected the authority’s appeal.
87 I should add that I get the distinct impression from the judgment that Underhill J might have felt hampered in his consideration of the appeal by the paucity of the local authority’s arguments and the late stage at which many of them were put or refined.
Sedley LJ then popped up again in a further decision of the Court of Appeal:
Slough v SENDIST  ELR 687,  EWCA Civ 668
88 The only reasoned decision of the Court of Appeal in this case was given by Sedley LJ who of course also gave the only reasoned decision in Oxfordshire .
89 A Tribunal found that the annual cost for section 9 purposes of a maintained school was £32,000 whereas the annual fees for the parents’ preferred independent school were £10,000. The authority argued the Tribunal erred in law and should have found the “true (or marginal)” cost of the maintained school to be around £4,000.
90 Factually, this case was unusual. The independent school’s usual fees were £36,000 but the parents’ fee was reduced to £10,000. This affected the Court of Appeal’s approach to the appeal, as Sedley LJ explained at paragraph 9 of his judgment. Since the Court of Appeal rejected the local authority’s challenge to the Tribunal’s finding that the fees were £10,000, the authority in fact had precious little scope to argue that any error made in identifying the additional costs of the maintained school was material.
91 The Court of Appeal did not give a ringing endorsement of the Tribunal’s costings of the maintained school at £32,000. They were “delphic” (para. 11). However, the Tribunal also seemed to harbour doubts because it also found that, whatever the actual additional cost, it was more than the £10,000 charged by the independent school. Sedley LJ said that this was “a factual finding, made by a specialist tribunal with knowledge of the field, that the apportioned costs of providing for this child in a maintained school, whatever their precise amount, would inevitably exceed the £10,000 for which [the independent school] was prepared to accept [the child]”.
92 That meant the Tribunal’s decision would stand unless the local authority were right that “admission to a maintained school with space for the child is cost-free apart from any special requirements that the child brings with her”. Sedley LJ said the authority’s argument was unsustainable. It was legitimate for the Tribunal to “take a short cut” and decide that, whatever the actual relevant cost of the maintained school, it had to be more than the £10,000 cost of the independent school. For my part, I consider that this case, given its unusual and opaque facts, does not advance matters one way or another.
A further decision of the Court of Appeal looked at the minutiae of calculating costs:
EH v Kent CC  AACR 36,  ELR 433
93 The rival schools were a maintained mainstream (not special) school and an independent school. The parents appealed against a decision of Upper Tribunal Judge Levenson on the ground that he erred in law by “holding that the FtT did not need to consider the real, full or notional per capita cost of a placement (and was concerned only with the marginal cost)”.
94 The dispute centred on learning assistant costs. The First-tier Tribunal accepted the local authority’s evidence that the necessary 20 hours a week support would be supplied by the maintained school. My reading is that the authority argued this provision would be met by the school’s existing learning support assistants.
95 The Court of Appeal held it was wrong to argue that public expenditure did not occur unless and until a maintained school spends monies within its delegated budget share, so that a school’s accounts would need to be examined in order to resolve a section 9 dispute. Sullivan LJ said:
“25 …It seems to me that there can be “public expenditure” for the purposes of section 9 at either or both stages of the process: when the LA allocates public funds to the school, and when the school spends those public funds.”
96 The Court also analysed Coventry and Slough . The local authorities there wrongly distinguished between payment by itself, and payment by the school, as a prelude to arguing that, even though there would be a need for additional payment by the school, the absence of an additional payment by the local authority rendered a maintained school placement “cost free”:
“the Tribunal was entitled to reject such a “cost free” approach as artificial, and as not being a fair reflection of the cost to the public purse of placing a child in a maintained school for the purpose of comparison with the cost of placing the child in the parents’ preferred alternative.”
97 The Court went on to find “whether a child’s parents’ choice of school would be compatible with the avoidance of unreasonable public expenditure is a question of fact to be answered by the FtT in a common-sense way. It is for the FtT to decide what evidence it considers most helpful in resolving this issue in any particular case. In undertaking that task it is entitled to have regard to other information, such as a school’s accounts, if it is not satisfied that the figures based on the LA’s budgetary arrangements are a fair reflection of the cost to the public purse of educating the child at the school in question.”
98 Having added that the local authority’s budgetary arrangements (which I note are to a significant extent prescribed in regulations) will usually be a sensible starting point Sullivan LJ went on:
“30. If the LA’s budgetary arrangements do make provision for the payment of an AWPU to the school there is no reason why the FtT should not accept that the AWPU, together with any additional costs specifically incurred in respect of the child in question, for example transport costs or the costs of therapy or learning support if an additional therapist or learning support assistant has to be employed by the school, or if an existing therapist or learning support assistant at the school has to be paid to work additional hours (if it is satisfied that there are such additional costs), are a fair reflection of the cost to the public purse of educating the child at that school.”
99 Sullivan also gave guidance on cases without an AWPU or where a Tribunal is satisfied that the AWPU-funding, plus the additional costs mentioned in para. 30 of its judgment, do not “fairly reflect the cost to the public purse”. In that case, however, there was “no reason to suppose that [the AWPU] did not fairly represent the cost of [the child’s] placement”. The Upper Tribunal’s decision was upheld. I note that, in this case, because of the type of maintained school involved, the Court of Appeal was not concerned with the implications of place funding.
Finally the issue was summarised succinctly, even pithily by the Court of Appeal in these terms:
Haining v Warrington BC  AACR 28,  WLR(D) 152
100 The issue in this case was whether section 9 was concerned with public expenditure other than on education functions, for example the affect of a particular placement on social services expenditure. The Court of Appeal held that it was.
101 The Court also said this:
“the meaning of “public expenditure” cannot be affected by the particular budgetary arrangements that local authorities may make from time to time in managing their financial affairs. In many (if not most) cases, the only relevant public expenditure will be that incurred by the local authority in the discharge of its education functions in the particular case. In those cases, the question of whether there will be unreasonable public expenditure will depend on a comparison between the direct cost of placing the child at school A and the direct cost of placing the child at school B and nothing else.”
I continue my analysis of this important decision in the next post.