S/3030/2009

DECISION OF THE UPPER TRIBUNAL
(ADMINISTRATIVE APPEALS CHAMBER)
ON AN APPEAL

Decision 

1. This appeal does not succeed. Having granted permission to appeal to the Upper Tribunal on 10th December 2009, I now confirm the decision of the First-tier Tribunal (Health, Education and Social Care Chamber) made on 18th September 2009 (after a hearing on 11th September 2009) under reference 09-00984, on an appeal in respect of a statement of special educational needs.

Hearing

2. I held an oral hearing of this appeal on 11th May 2010. The appellant (the grandmother of the child in question, to whom I shall refer as “George”) was represented by David Wolfe of counsel, instructed by Levenes, solicitors. The respondent local education authority (“the authority”) was represented by Clive Rawlings of counsel. 

3. On 16th June 2010, as requested by the appellant, I directed that the parties be given an opportunity to make written submissions on the effect of the decision of the Court of Appeal in Slough Borough Council v SEND Tribunal and Others [2010] EWCA Civ 668 (“Slough”), issued on 15th June 2010. Final written submissions were received by the Upper Tribunal on 24th August 2010.

Background 

4. George was born on 19th October 1997. He is a child with special educational needs and in respect of whom the respondent local education authority has maintained a statement of special educational needs as from 18th July 2007. The First-tier Tribunal described him as articulate and communicative with average academic potential. However, he is impulsive, has difficulties with concentration and in acquiring literacy skills, has low self esteem and is often anxious (leading to some “bizarre and apparently obsessive requirements). He has been diagnosed as having ADHD and dyslexia.

5. George attended a maintained mainstream primary school until July 2009, although from October 2006 there was a prolonged period of absence followed by a mixture of school and home tuition. On 12th May 2008 the SEND Tribunal ordered an amendment of the statement but confirmed the placement at the same primary school.

6. On 13th February 2009 the authority issued an amended statement naming school H, a mainstream maintained school, as the appropriate school from September 2009. On 3rd April 2009 George’s grandmother appealed to the Health, Education and Social Care Chamber of the First-tier Tribunal against the contents of the statement. The tribunal considered the matter at a hearing on 11th September 2009. 
7. Mrs Y, the director of learning support at school H wrote to the authority to the effect that the school would be unable to meet the requirements of George’s very prescriptive statement while at the same time providing an appropriate inclusive educational experience. She subsequently told the First-tier Tribunal that this was on the assumption that the school would have to withdraw George from classes for up to 20 hours weekly (this had been done during year 6 at the primary school for 11 or 12 hours weekly) but she now understood that withdrawal would only be required for 3 sessions per week of 40 minutes each, and on that basis school H would be well able to meet his needs. There were many young people in the school whose needs far outweighed George’s and who did not need statements to feel well supported and successful (see paragraph 29 of the First-tier Tribunal’s reasons).

8. Meanwhile, in June 2009, George was assessed at school F, an independent special school for children with dyslexia, dyspraxia, speech and language problems and Asperger’s syndrome. The staff there were of the view that school F could meet George’s needs. 

9. George had also been assessed in 2007 by Mr F, a chartered educational psychologist, who reassessed him in July 2009 and concluded that his needs were such that he would not fit into a large comprehensive school, whereas school F would be ideal. Dr H, a senior educational psychologist employed by the authority challenged Mr F’s independence, failure to obtain information or views from others, and concluded that the assessment of Mr F failed to meet accepted professional standards. Mrs Y told the First-tier Tribunal that the results obtained by Mr F were wholly out of line with the results obtained by others.

10. On 18th September 2009 the First-tier Tribunal issued a decision agreeing to certain amendments to parts 2 and 3 of the statement but not to others, and dismissing the appeal in respect of the establishment named in part 4. It found that the annual cost of a day placement at school F would be £14,625 (assuming no transport costs), whereas the annual cost of a placement at school H would be £2899 (the age weighted pupil unit - the sum of money allocated to the school for each pupil according to age) plus transport costs of £3315, making a total of £6214. It declined to describe George’s dyslexia as “severe”, noted the agreement between the parties that he needed support from a learning assistant for 20 hours weekly and a scribe for examinations, and preferred other evidence to that of Mr F on as number of matters. It did not accept Mr F’s conclusion that George’s needs “are sufficiently complex to warrant him being educated in a highly specialised setting”. It concluded that both schools were suitable but that school H would be named on grounds of public expenditure.

11. On 23rd October 2009 the judge of the First-tier Tribunal refused the appellant permission to appeal to the Upper Tribunal against the decision of the First-tier Tribunal. She now appeals by my permission granted on 10th December 2009.

The Grounds of Appeal

12. The written and oral submissions have been (unnecessarily) elaborate and have expressed this in various ways, but the grounds of appeal are essentially that the First-tier Tribunal adopted a wrong approach to the question of public expenditure. 
13. I refer below to the principal relevant legal authorities. I observe here that the Upper Tribunal (which is a superior court of record) is bound as a matter of law by decisions of the Court of Appeal and higher courts on what the law is and how it is to be applied, but is not bound as a matter of law by such decisions of the High Court, and is not bound by any decision which rests on the particular facts of a specific case rather than on a point of law. I state this because assertions to the contrary are often implicit (and sometimes less implicit) in the arguments of counsel in this particular jurisdiction of the Upper Tribunal.   

The Principal Relevant Legal Provisions

14. So far as concerns this appeal the following provisions of the Education Act 1996 are particularly relevant:

Section 9: In exercising or performing all their respective powers and duties under the Education Acts the Secretary of State and local education authorities shall have regard to the general principle that pupils are to be educated in accordance with the wishes of their parents, so far as that is compatible with the provision of efficient instruction and training and the avoidance of unreasonable public expenditure.

Section 324(4): The statement [of special educational needs] shall – 
(a)	specify the type of school or other institution which the local education authority consider would be appropriate for the child, [and]
(b)	… specify the name of any school or institution … which they consider would be appropriate for the child and should be specified in the statement …

15. Where the matter is being considered on appeal by the First-tier Tribunal these duties apply to that tribunal as they do to the local education authority. In the present case the phrase “their parents” in section 9 includes the appellant.

16. It seems to me that in a case in which needs have been identified, and in which the local education authority and the parents each wish a different school to be named, and in which the First-tier Tribunal has to chose between the two schools, then in essence these provisions require three questions to be addressed:

(a)	Are both schools appropriate to meet the need? A school that is not appropriate cannot be named.
(b)	If they are both appropriate, which is the school preferred by the parents? Unless (c) applies that school must be named.
(c)	Would naming the school preferred by the parents be incompatible with the provision of efficient instruction and training or the avoidance of unreasonable public expenditure? If so the school suggested by the local education authority must be named.

The Case Law

17. I start with the decision of the Court of Appeal in Oxfordshire County Council v GB and Others [2001] EWCA Civ 1358 (“Oxfordshire”). The judgment of the Court was given by Lord Justice Sedley. He said:

“The problem posed by this appeal … can be stated in a narrow and a broad form. Put narrowly, it is whether it is whether in making a comparison between two appropriate schools, one an independent specialist school, the other a mainstream LEA [Local Education Authority] school with a specialist unit, the cost of the latter is to be taken as the global cost of LEA provision (either in total or for the school in question) divided by the relevant number of pupils, or simply the additional budgetary cost of placing the child there. In its broader form, it is whether the cost of placing a child in the state sector should be taken to be an individual fraction of the global cost of local state provision, or whether that provision is to be regarded as given and the relevant expenditure quantified as the additional amount which the placement will cost the LEA.” (Paragraph 4)

“It is of course true that unreasonable public expenditure is not a term of legal art. But neither is it, in its present context, a protean concept capable of producing opposite outcomes on the same facts and figures depending on the individual tribunal’s choice of accountancy method. In our judgment the chief object of the last part of [section] 9 is to prevent parental choice placing an undue or disproportionate burden on the education budget. When one considers that a single placement in the independent sector may well cost a ring-fenced education budget more than a teacher’s salary, one can readily see why”. (Paragraph 15).

18. The conclusions of law were in paragraphs 17 to 18:

“17. … there is no intelligible reason why a comparison of public expenditure as between an appropriate independent school and an appropriate maintained school should be at large. [T]he quantification of the cost of … the independent school [is] the bare annual fee – that is to say, the cost ot the LEA’s annual budget of placing [the child] there. In our judgment exactly the same is true of the cost of placing [the child] in [the maintained school]: the question is what additional burden it will place on the LEA’s annual budget. That means, generally speaking, that the exiting costs of providing [the maintained school] and of staffing it … do not come into account.

18. This is not to say that there may not be particular cases in which some other method of comparison needs to be used in order to meet [section] 9. But as a matter of purposive construction of the section, it seems to us that 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. Costs which either the private provider or the LEA would be incurring with or without the proposed placement are accordingly not in general relevant. This being so, it is not necessary to say anything about the accountancy problems which would bedevil any endeavour to quantify the per capita cost of providing for a child’s education in the state sector”.

19. The Court of Appeal remitted the case to the tribunal for reconsideration on the above basis, because the tribunal had failed to find whether a particular teacher at the school would be present and paid in full whether or not the child were placed there.

20. Coventry City Council v SEND Tribunal and Another [2007] EWHC 2278 (Admin); [2008] ELR 1 (“Coventry”) was a decision in the High Court by Mr Justice Underhill in a statutory appeal from the tribunal. He decided that, in the context of the Oxfordshire decision, it was irrelevant whether public expenditure was incurred by the authority directly or by the school under arrangements for delegating a budget to it. Section 9 was concerned with actual additional money paid out, no matter by whom. Notwithstanding any power given to the school to spend money under delegated arrangements, the expenditure was ultimately that of the authority. The marginal cost would depend on the individual details of the provision required and the staffing arrangements at the school in question. To a greater or lesser extent it might be possible to meet the child’s needs by the use of staff who were already employed and to whom no further payment would need to be made. The tribunal should have explained how it had arrived at the various figures it gave for the required expenditure, but it would not be right to allow an appeal from the tribunal if the essence of its reasoning was reasonably apparent from the evidence before it. 

21. I accept all of these propositions and I note that section 9 refers to public expenditure generally, and not to expenditure from any particular budget or in any particular way. Indeed, on the day before the Coventry decision was issued, O v London Borough of Lewisham [2007] EWHC 2130 (Admin), [2007] ELR 633 (“Lewisham”), another statutory appeal, was decided by Mr Justice Nicol (sitting then as a deputy judge of the High Court. He decided that the concept of public expenditure in section 9 was concerned with the impact on the public purse generally and not exclusively with the cost to the local education authority. In that particular case the appeal was allowed because the tribunal had not taken account of possible savings in respite care costs to the social services budget were a residential school to be named rather than a day school. 

21. As indicated in paragraph 3 above, the Court of Appeal issued its decision in the Slough case on 15th June 2010. This was also a statutory appeal and concerned the relative costs of a placement at a maintained school and a private school, which was the one preferred by the parents of the relevant child. The tribunal found that the annual cost of the maintained school was £32,490 (whereas the authority argued that the marginal cost was £4161 in respect of the cost of support additional to that which was already available) but that the private school, which would normally charge annual fees of £36000, had in fact agreed to charge £10,000 a year for two years in recognition of the parents’ fund raising activity for the school (the details of which were not available to the Court of Appeal). Accordingly, the private school was named in the statement.

22. The Court of Appeal agreed with the authority that the tribunal had failed to explain fully its figures in respect of the cost of the maintained school, but accepted the tribunal’s general finding of fact that the real cost of therapies and additional supplements at the maintained school “in reality bring the full cost of a placement” at the maintained school beyond the £10,000 being charged by the private school. Although section 348(2) of the Education Act 1996 required the authority to pay “the whole of the fees payable in respect of the education provided for the child at the [non-maintained] school” if such a school was named in the statement, this meant the fees actually charged and was designed to prevent the local authority from looking to the parents for some part of the fees. If the school was making a reciprocal gesture for fund raising work doe on is behalf, it did not necessarily follow that this should be regarded as disguised part-payment of fees by the parents. If, in fact, the family had simply made a donation, overt or covert, to the school in return for reduced fees, that would raise a legal issue for determination.

23. Were the child in that particular case not the subject of a further new statement and about to move to a new school, it might well have been appropriate to remit the case for a fuller investigation of the facts. In the circumstances the decision of the tribunal was upheld.

24. Finally, I refer to the recent decision of Upper Tribunal Judge Williams in B v Worcestershire County Council [2010] UKUT 292 (AAC); S 3171/2009 (9th August 2010). In this case, also, the parents preferred an independent school (which the child was already attending) but the authority had named a mainstream school. The First-tier Tribunal found that both schools were appropriate and named the maintained school on public expenditure grounds. It was agreed that the annual cost of the independent school was £14,805. It was also agreed that for the maintained school the age weighted pupil unit was £2832 plus £310 transport costs. The authority argued that there were no further costs for the maintained school. The parents argued that there were further costs involved in the specified teaching assistant and specialist teaching support, voice recognition software and training, and monitoring. The authority argued that the support would be available from within the school’s existing budget and that there was no evidence in relation to other items raised.

25. Judge Williams pointed out how fact specific and local authority specific is any decision under section 9 (including the decision in Coventry). This showed the importance of clarifying both in evidence to the First-tier Tribunal and in the decision of that tribunal “what is the factual position in connection with that maintained school and that local authority in that year ‘in the ordinary run of cases’ and then with regard to any special aspects of that particular child” (paragraph 32).

26. He pointed out (in paragraph 34) that section 9 does not invite speculation or a “forensic examination of every detail of possible on-costs of a placement or savings from a non-placement” and that:

“ … the tribunal is working to the civil standard of proof and, not to a mathematical formula. The tribunal should identify probable costs when it takes its decision and not be concerned about, for example, possible savings after the event. Nor does section 9 require an arithmetical calculation. Disproportionate precision is not necessary. Rather, it is a balancing exercise of which the probable comparable costs of the two placements are part. What is required is sufficient accurate information to ensure that anything material to the final decision is considered in that balancing exercise. Its decision should reflect the auditor’s concept of materiality rather than the economist’s concept of marginal cost. For an auditor, information is material if its omission or misstatement could influence the economic decisions of users. Materiality depends on the size of the item judged in the particular circumstances”.

27. I agree with this except for the words that I have underlined. Those words contradict the decision of the Court of Appeal in the Oxfordshire case, they are not necessary to the rest of what is said, and they are about the type of cost that is to be taken into account (the marginal cost) rather than about whether the amount is significant enough to be taken into account (materiality).

28. On the facts he decided that although the First-tier Tribunal had not conducted any precise calculation of the difference in costs, it did not need to do so. There was evidence to support the findings that it had made, and on that basis the discrepancy in cost was obvious.

The First-tier Tribunal Decision

29. As stated above, the First-tier Tribunal found that the annual cost of a day placement at school F would be £14,625, whereas the annual cost of a placement at school H would be £6214. It did not really explain these figures but it did state (paragraph K):

“The tribunal accepted the submissions of Mr Rawlings [on behalf of the authority] as to the effect of the formulae used for the delegation of funds by the authority to [school H] and the way in which provision would be made for [George] at [school H] using its delegated funds. The Tribunal therefore concluded that it was not constrained by the decision of Underhill J in [Coventry] to find that additional costs should be added to the Age Weighted Pupil Unit so as to produce, for the purposes of proper comparison, a significantly higher figure for the cost of placing [George} at [school H]. It follows that, even accepting that the cost of transporting [George] to and from [school F] would be nil, it would be significantly more expensive to place [George] at [school F]”.

30. The reference to Coventry is not easy to construe, and this has lead to great deal of argument in the submissions. Mr Justice Underhill had said: “The marginal cost would depend on the individual details of the provision required and the staffing arrangements at the school in question”. I assume that in the present case the First-tier Tribunal was essentially making a finding that there were no marginal costs beyond the Age Weighted Pupil Unit. 

The Arguments

31. The appellant argues that First-tier Tribunal was wrong in law not to take account of the cost of providing a learning support assistant for 20 hours weekly; that it does not matter that school H would receive the same funds whether or not George attended; that it was not correct to say, as did the authority, that the First-tier Tribunal found that there would be no additional expenditure arising from placing George at school H – what the tribunal found was that under the authority’s scheme of delegation no additional funds would be paid by the authority to the school; that although the authority argued that there were staff already appointed to school H who could fulfil the support arrangements, that does not deal with the issue unless the staff “were currently sitting idle”; the First-tier Tribunal found that additional expenditure by the school was legally irrelevant, made no factual findings in relation to such expenditure, and wrongly found that there would be no additional expenditure; that evidence sought by the authority to be submitted subsequent to the First-tier Tribunal decision should not be considered; that in Oxfordshire the Court of Appeal was dealing only with the case of a mainstream school with a specialist unit, that it was not concerned with how the underlying cost of a placement should be dealt with; that Slough was dealing with mainstream schools without specialist units, and decided that it is not the case that every admission to a maintained school with space is cost free.

32. In addition to new witness statements on which the authority seeks to rely, it argues that the First-tier Tribunal was required to and did take account of any additional expenditure arising from the requirement for a learning assistant; that the appellant has misinterpreted Coventry, which does not effect the marginal cost rule in Oxfordshire and is essentially about proof rather than principle; that “the schools expenditure is the same irrespective of George’s attendance”; that the evidence to the First-tier Tribunal supports its decision; that Slough confirms the marginal cost rule in Oxfordshire and applies it to maintained schools and confirms that the specialist expertise of the First-tier Tribunal should not be interfered with lightly.

Conclusions

33. I do not accept the distinction that the appellant is seeking to make between the Court of Appeal decisions in Oxfordshire and Slough. The former decision sets out (quite clearly, in my view) the approach that is to be adopted in all cases and gives a clear policy explanation. Slough was about the application of that general approach in a particular case, and about the issue of parental contribution. Neither do I accept the assertion that it does not matter that school H would receive the same funds whether or not George attended. The First-tier Tribunal did not find that additional expenditure by the school was legally irrelevant – what it did was to express rather clumsily its application of Coventry.

34. Coventry and Lewisham make it clear that it is public expenditure more generally that has to be considered, rather than the delegated budget of a particular school, but that does not detract from the general principles in Oxfordshire and does not justify the way in which at one stage the parties tried to turn this appeal into a debate about the philosophy of book-keeping

35. In the present case the First-tier Tribunal did not make clear whether the age weighted pupil unit cost of school H, was part of the additional cost that would be caused by George’s attendance, or was a cost that would be incurred in any event. However, if this was an error, it was made in favour of the appellant and cannot be a basis for setting aside the decision.

36. In relation to the learning support assistants, I accept the authority’s argument that “the evidence before the Tribunal illustrates that the relevant staff, skills, experience and commitment required to fulfil the provision in Part 3 of [George]’s statement was already available within [school H]’s resources”. This is made clear in particular in paragraphs 29 and L of the First-tier Tribunal’s decision. I have referred above to paragraph 29. In paragraph L the tribunal stated:

L. [School H] makes very good provision for children with specific learning difficulties and associated emotional and behavioural difficulties. The school also has wide experience of pupils with ADHD. [Mrs Y] manages an excellent team of well-qualified and experienced staff with considerable skill and commitment and is able to seek advice and support as necessary from appropriate Local Children’s Service Partnership staff”.

37. The First-tier Tribunal also accepted evidence that there would be no additional cost to the authority for additional support such as a learning support assistant.

38. I have not found it necessary to consider the additional evidence that the authority has sought to introduce before the Upper Tribunal. The better practice is, of course, to produce any such relevant and necessary evidence to the First-tier Tribunal.

39. However, it is clear on the evidence that was justifiably accepted, and on the basis of its own expertise, that the First-tier Tribunal was entitled to find that school H was appropriate, and that to name school F would incur unreasonable public expenditure. For these and the above reasons this appeal by George’s grandmother does not succeed.

H. Levenson
Judge of the Upper Tribunal 
19th October 2010