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Education secretary hit by judicial reviews after cancelling school building projects

11 October 2010

Five councils have launched judicial reviews against education secretary Michael Gove’s decision to scrap the building schools for the future (BSF) programme.

Nottingham City Council, Luton, Sandwell in the West Midlands and Waltham Forest and Newham in London are expected to argue that they acted on a legitimate expectation that central funding would be forthcoming.

Gove announced that the government was halting the BSF programme in July, and that ‘repeat schemes’ which were not approved by the department before 1 January 2010 would be refused funding. The cut-off date for other schemes was the date of the announcement.

A spokesman for Luton Council said: “We have reluctantly decided to take legal action, after having failed to reach an agreement on a way forward with the Department for Education. In total, six projects were cancelled in Luton, with a value of more than £140m.

“Our action relates to just two, at Cardinal Newman Catholic School and Stopsley High School, at a combined cost of £45m,” he said.

“These two projects were particularly affected since we were just seven weeks away from construction starting. Cancellation at this extremely late stage will result in the council having to pay £3.6m for the abortive work already done, and therefore having to find further savings from an already scarce budget.”

The spokesman said the council was not disputing the secretary of state’s right to make the decision, but was concerned about the impact the timing of the decision would have on the children. He said to minimise legal costs the action would be taken jointly with Nottingham.

A spokesman for Nottingham City Council said it would argue that it had acted on a legitimate expectation, since the outline business case for three projects had been approved in February 2010, and that Gove’s decision was irrational, being based on an “arbitrary” cut-off date.

He said the council would ask for the decisions on school projects at Top Valley and Trinity schools to be quashed and for its schemes to receive the promised funding.

Waltham Forest said it had spent around £17m “driving the scheme forward” and its cancellation was having a “devastating impact” on thousands of young people.

A spokesman said the council would ask the High Court to expedite the review.

In a letter sent to Gove following his announcement, the council said one of its schools was only days away from moving to a new site.

It warned that, because of the education secretary’s decision, “we are now at risk of litigation, adding further potential costs to the abortive expenditure we already face”.

Nine schools in Sandwell were affected by the scrapping of BSF. A spokeswoman for Newham confirmed that it had also launched a judicial review.

Laura Hughes, solicitor in the education team at Browne Jacobson in Nottingham, said the councils would argue that they had relied to their detriment on a promise of funding from central government.

She said the courts would not order the government to make good its promise unless it was in the public interest, but could order compensation to be paid to the councils.

“For the councils, it’s a high-risk strategy,” Hughes said. “The courts can consider all the circumstances behind the decision, including the financial crisis.”

She said that since the three-month deadline for issuing judicial review applications following the July announcement had passed, any further challenges would have to come from councils whose building projects were being reviewed by the DfE.

A spokesman for the department said ministers had made it clear that “the end of BSF is not the end of school rebuilding”.

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