Councils win legal battle over school building cuts

The Government now faces shelling out potentially tens of millions of pounds in compensation payments to local authorities; with the judge accusing Mr Gove of “an abuse of power”.

It was was a major embarrassment for the Government and Mr Gove was told he must revise the decision to cancel the £55 billion Building Schools for the Future (BSF) scheme in six local authorities; Waltham Forest , Luton, Nottingham City Council, Sandwell, Kent County Council and Newham.

Those councils all hope they will now receive the BSF funds initially allocated to them.

Mr Justice Holman ruled that Mr Gove had unlawfully failed to consult them before imposing the cuts.

‘Abuse of power’

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

However, the ruling will not open the floodgates for other councils to follow suit.

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”.

Nevertheless, the ruling still leaves the possibility 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 news comes off the back of Birmingham City Council securing £339,000 compensation from the Government a fortnight ago over the scrapping of a community youth centre.

None of the schools axed by Mr Gove had started construction, but some had already signed contracts with various companies to work on the buildings.

For example, Bolton council had to sign a contract with IT company Northgate to manage new computer facilities that would have been received as part of the BSF programme.

It is seeking compensation because several schools are paying for the company to manage an IT system that does not exist.

Channel 4 News Home Affairs Correspondent Simon Israel says that the potential value of compensation claims across the country could run into tens of millions of pounds.

“It is a victory for common sense and fair play.” Waltham Forest Council leader Chris Robbins

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.”

A spokesman for the council told Channel 4 News that it had missed a deadline to seek compensation.

Nottingham City Council said that it could seek compensation, but were waiting to see what Mr Gove’s next move would be.

Following the court victory, 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.”

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

‘Catastrophic’

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.”

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.