Judicial Review Competency for Council “Well-being” Funding Decisions and the Sufficiency of Officer Reports Summarising Legal Risk

1. Introduction

Petition of Allanvale Homes (Prestwick) for Judicial Review ([2026] CSOH 25) concerns a refusal by a local authority (the respondent council) to approve in principle a request by the petitioner developer for £21.41 million in funding linked to proposed mixed-use development at land known as Corton, within the South-East Ayr Strategic Expansion Area.

The council’s decision of 12 December 2024 was taken on the basis of an officer report (dated 5 December 2024) and was recorded as resting on (among other matters) perceived risks under:

  • Subsidy Control Act 2022 (unlawful subsidy risk, noted in the minute as section 12(1)(b));
  • Local Government in Scotland Act 2003 (best value duty);
  • Public Contracts (Scotland) Regulations 2015, Regulation 14 (procurement risk if works were funded without regulated procurement);
  • the council’s acquisition/disposal policy (paying above valuation for land).

The petition sought reduction of the refusal decision. The case raised (i) whether the decision was amenable to judicial review (supervisory jurisdiction), and (ii) whether the decision-making process was unlawful due to alleged informational deficiencies, misdirection on subsidy/procurement law, and inadequate best value assessment/reasons.

2. Summary of the Judgment

Lord Lake refused the petition. In outline, the court held that:

  • The decision was amenable to judicial review because, as developed in submissions, it could be treated as an exercise (or refusal to exercise) the council’s statutory “well-being” power under Local Government in Scotland Act 2003, section 20, thereby satisfying the West v Secretary of State for Scotland 1992 SC 385 supervisory jurisdiction test.
  • Even if some councillors did not receive hard copies of senior counsel’s opinions, there was no legal requirement that councillors be provided with all source materials where an officer report provided an adequate summary; the report here fairly and accurately summarised the legal advice and risk.
  • The subsidy question was not “hard-edged” on the facts presented; the court would not grant declarator that the proposed funding “would not risk” being an unlawful subsidy, and the council was entitled to adopt a risk-avoidance approach.
  • The procurement point was framed as a risk (“may place the Council in breach”), and was legitimately considered at an “in principle” stage.
  • The best value challenge amounted largely to disagreement with a detailed appraisal; judicial review is not an appeal on the merits and there was no Wednesbury-level unreasonableness shown.
  • Reasons were adequate: the decision expressly adopted the report’s reasons.

The court sustained the respondent’s pleas and refused the remedies sought.

3. Analysis

3.1 Precedents Cited

(a) Supervisory jurisdiction / amenability to judicial review

  • West v Secretary of State for Scotland 1992 SC 385: Lord Lake treated West as binding and central. He relied on Lord Hope’s formulation that the supervisory jurisdiction regulates “the process by which decisions are taken” where a “jurisdiction, power or authority” has been “delegated or entrusted” by statute (or other instrument). The key move was to identify the statutory source of the power as section 20 of the 2003 Act, bringing the refusal squarely within the West framework.
  • Wightman v Secretary of State for Exiting the European Union 2019 SC 111: Cited for broader statements about the purpose of judicial review, but Lord Lake emphasised that Lord Drummond Young’s broader language did not necessarily represent the ratio because the other judges did not proceed on that basis. The case was used mainly to locate the modern debate about whether West is exhaustive, not to displace West.
  • Abundance Investment Ltd v Scottish Ministers 2020 SLT 163 and Redcroft Care Homes Ltd v City of Edinburgh Council 2025 SC 103: The petitioner relied on these to argue that the West “tripartite test” is not absolute. Lord Lake read them as consistent with West: the availability of review turns on the nature of the act/decision and its legal basis; a decision taken under statutory power may be reviewable. Their significance in this case was confirmatory: once section 20 was identified, review was competent.
  • The State of Mauritius v The (Mauritius) CT Power Ltd [2019] UKPC 27: Lord Lake placed little weight on it because it was not decided under Scots law, and therefore was not directly relevant to defining the scope of the Court of Session’s supervisory jurisdiction.

(b) Reasons and the role of officer reports

  • North Lanarkshire Bio Power Ltd v Scottish Ministers [2021] CSIH 47: Cited for the proposition that when a decision is taken in accordance with a report’s recommendation, the report’s contents can be treated as providing the reasons. Lord Lake noted it was not even necessary to rely on a presumption in this case because the council decision expressly adopted the report’s reasons.
  • Patton v East Renfrewshire Council [2017] CSOH 158: This was the primary Scottish authority used to articulate the standard for reports: they must be sufficiently clear and full to enable councillors to understand the important issues and material considerations, but need not be exhaustive; courts should not “lightly interfere” and should give reports a fair reading, assuming an informed readership.
  • Cran v Campden London Borough Council [1995] RTR 346: Used to reinforce that reports should be fair, accurate and objective, but need not be perfect, and that it is not enough to bury key matters in appendices if councillors cannot be expected to “ferret out” them.
  • R (Hindawi) v Secretary of State for Justice [2011] EWHC 830 (QB), R (Crematoria Management Ltd) v Welwyn Hatfield Borough Council 2018 EWHC 382 (Admin), [2018] Env LR 26, and R (JP) v NHS Croydon Clinical Commissioning Group [2020] EWHC 1470 (Admin): These English authorities were used as comparative illustrations of fairness in summarising material and the consequences of material factual error/omission. Lord Lake distinguished the present report from the defective summarisation scenarios: here the report’s risk-focused summary of counsel’s advice was held fair.

(c) Misdirection in law; “hard-edged” questions; enquiry duties

  • R v Central Arbitration Committee ex p BTP Tioxide Ltd 1981 ICR 843: Cited for the uncontroversial proposition that a decision-maker errs if it misdirects itself on the law; discretion does not extend to choosing the law to apply. Lord Lake accepted the principle but held it did not assist the petitioner because the report/counsel advice addressed risk, not a definitive legal conclusion.
  • Secretary of State for Education and Science v Tameside Metropolitan Borough Council [1977] AC 1014: Relied on by the petitioner to argue for a duty to seek further information. Lord Lake treated Tameside as requiring only “reasonable steps” and stressed that what is “reasonable” is for the decision-maker; an attack must meet a Wednesbury standard and the petition’s legal formulation (a free-standing duty to make reasonable enquiries) was rejected as inaccurate.

3.2 Legal Reasoning

(a) Why judicial review was available

The council framed the refusal as a choice not to enter into a “commercial arrangement,” arguing this fell outside supervisory jurisdiction. The court’s analysis turned on the legal source of authority for the proposed funding. Although the petition had not clearly identified the empowering provision, the petitioner (late) characterised the decision as referable to Local Government in Scotland Act 2003, section 20 (power to do anything likely to promote or improve the well-being of the area/persons, including financial assistance). Lord Lake accepted that characterisation as “critical” and decisive.

Importantly, the court treated section 20 as providing a statutory discretion governed by a statutory test (promotion of well-being), and noted section 22(13) expressly embraces economic development. On that footing, a refusal to exercise the power is an exercise of statutory authority reviewable under West v Secretary of State for Scotland 1992 SC 385.

(b) Distribution of counsel’s opinions: “source materials” versus adequate summary

The petitioner attempted to force an evidential hearing on whether senior counsel’s opinions were physically included in all councillors’ printed packs. Lord Lake held that even if the factual dispute were resolved in the petitioner’s favour, it would not be material because:

  • There is no duty to provide all underlying source documents to councillors, provided the report supplies an adequate summary of the material issues and considerations (drawing from Patton v East Renfrewshire Council [2017] CSOH 158 and Cran v Campden London Borough Council [1995] RTR 346).
  • Councillors were aware the opinions existed; if a councillor wished to see them, the practical and constitutional safeguard is to request them or raise the point before voting. A contrary approach would be “unworkable,” allowing decisions to be destabilised post hoc by alleged non-receipt despite awareness of the documents.

(c) Fairness and accuracy of the report’s summary: risk as the operative lens

The court conducted a close comparison between the report and the two opinions of the Rt Hon James Wolffe KC. The report repeatedly expressed the point as one of inability to conclude with a reasonable degree of certainty that no subsidy would arise, and characterised the position as a “significant risk.” Lord Lake held this accurately reflected counsel’s stated conclusion, which was itself framed in risk terms and against a “no real risk” instruction.

The petitioner’s critique sought to reframe the question as whether the funding actually was a subsidy, and to isolate passages (notably paragraph 7 of the supplementary opinion) suggesting a route by which infrastructure funding might be defended as non-subsidy if truly aimed at unlocking wider development. Lord Lake held that:

  • the opinion must be read as a whole; the same supplementary opinion immediately warned that such a stance would still “invite” the conclusion of a specific benefit to the developer and could be vulnerable to challenge; and
  • the report was entitled to discount the “unlocking wider area” hypothesis on the factual footing that there were no present wider development proposals requiring the works.

On the authorities, the report was to be given a fair reading and not subjected to “the same critical analysis as might be appropriate to the interpretation of a statute” (Patton). The court concluded it was not misleading and provided sufficient information for councillors’ function.

(d) “Carefully considered”: no justiciable inquiry into councillors’ reading, and the phrase was not in the decision

The petitioner argued the decision was vitiated by an error of fact because it allegedly stated the opinions were “carefully considered.” Lord Lake disposed of this on two bases:

  • The court rejected any attempt to police the quality of councillors’ pre-meeting reading as a ground of review: supervisory jurisdiction is concerned with legality, not adjudicating how well decision-makers read papers.
  • More fundamentally, the phrase “carefully considered” was not in the minute of the meeting; it appeared in a later email summarising the decision. Post-decision correspondence could not undermine the legality of the earlier decision.

(e) Subsidy Control Act 2022: not a “hard-edged” question; court will not declare “no risk”

The petition sought to characterise subsidy status as a “hard-edged” legal question on which the court should declare the council wrong. Lord Lake rejected that characterisation. Whether infrastructure funding is a subsidy depends on fact-sensitive judgments about selective advantage and the relationship between the works and the developer’s commercial activity. Given the novelty of the regime (as counsel observed) and the factual premise that the works would not be done but for the Corton development, the court considered it could not definitively conclude the arrangement “would not risk” being an unlawful subsidy.

Crucially, the judgment emphasises the separation between (i) the court’s role in legality review and (ii) the council’s responsibility to decide what degree of legal and financial risk is tolerable when borrowing to fund expenditure.

(f) Public Contracts (Scotland) Regulations 2015, Regulation 14: legitimate consideration of a procurement risk at an “in principle” stage

The petitioner argued the report incorrectly suggested the council would be subsidising more than 50% of a works contract, and relied on an alternative cost base. Lord Lake did not require final resolution of the competing figures at this stage because the recorded reason was conditional and risk-based: funding “may place the Council in breach” absent regulated procurement. Given the decision was only about “in principle” approval and negotiations would follow, it was lawful to consider procurement compliance risk as part of whether to proceed at all.

(g) Best value: detailed appraisal, not appealable merits; limited role of “enquiry” challenges

The court treated the best value materials (including lengthy appendices) as evidencing that the council did address the section 1 duty. The petitioner’s criticisms were described as selective and essentially merits-based disagreement. Lord Lake also rejected:

  • the claim that describing the request as “grant funding” misled councillors, because the report acknowledged the intended recoupment model; and
  • the attempt to elevate Tameside into a broad duty to make reasonable enquiries; rather, only Wednesbury-level unreasonableness in not seeking more information could ground review, and that was not established.

(h) Reasons

Because the decision expressly adopted the report’s reasons (and, in any event, North Lanarkshire Bio Power Ltd v Scottish Ministers [2021] CSIH 47 supports treating an adopted report as supplying reasons), the court held the petitioner could not plausibly claim real doubt about the basis of refusal. The council was not obliged to answer point-by-point the petitioner’s contrary submissions where the council had legitimately framed the operative issue as risk avoidance.

3.3 Impact

  • Clarifies reviewability of “funding refusal” decisions where grounded in statute: a local authority’s refusal to provide development-enabling funding can be amenable to judicial review when it is (or can properly be characterised as) an exercise of the Local Government in Scotland Act 2003, section 20 discretion. This is particularly important in regeneration/economic development contexts where councils may treat funding arrangements as “commercial.”
  • Reinforces the practical constitutional role of officer reports: councils are not generally required to circulate all underlying legal advice or appendices if the report fairly summarises the issues. Challenges founded on alleged non-receipt of source documents will face a materiality hurdle where the report is adequate and councillors knew the documents existed.
  • Legitimises “risk” as a rational public law basis in subsidy/procurement contexts: where regimes are novel or fact-sensitive (e.g., subsidy control), councils may lawfully refuse to proceed because they cannot be sufficiently confident the arrangement is lawful. Judicial review will not usually transform such cases into merits adjudications on legality in the abstract (“no risk” declarators).
  • Constrains “Tameside” style attacks on information-gathering: challengers must plead and prove Wednesbury-level unreasonableness, not merely assert a free-standing duty to make “reasonable enquiries,” particularly where the authority has carried out detailed appraisals and the dispute is essentially evaluative.

4. Complex Concepts Simplified

  • Supervisory jurisdiction (judicial review): the Court of Session’s power to review whether a public body acted lawfully when exercising (or refusing to exercise) statutory powers; it is about legality and process, not whether the court agrees with the decision.
  • Reduction: the Scottish judicial review remedy that sets aside (quashes) an unlawful decision.
  • “Hard-edged” question: a question with a single correct legal answer (as opposed to a judgment call). The court held subsidy risk here was not hard-edged because it depended on contested, fact-sensitive evaluations.
  • Subsidy (Subsidy Control Act 2022): broadly, a public authority providing financial assistance that confers a selective economic advantage on an “enterprise.” The key difficulty here was whether infrastructure funding, though “public” in form, would in substance provide a specific benefit to the developer.
  • Best value (Local Government in Scotland Act 2003, section 1): a duty on councils to make arrangements securing value in performance and spending; not a requirement that any particular project be chosen, but that the council’s appraisal and decision-making be rational and lawful.
  • Wednesbury unreasonableness: a very high threshold for intervention—roughly, a decision so unreasonable that no reasonable authority could have made it.
  • Regulation 14 (Public Contracts (Scotland) Regulations 2015): can extend procurement obligations to certain subsidised works contracts; the council was entitled to consider the risk that funding arrangements might trigger procurement duties.
  • Section 75 (Town and Country Planning (Scotland) Act 1998): a planning obligation mechanism through which developers can be required to contribute to infrastructure necessary for development; here negotiations extended beyond section 75 into proposed council payments and land transfers.

5. Conclusion

Lord Lake’s decision confirms that where a council’s funding decision can be anchored in a statutory power—here, the Local Government in Scotland Act 2003, section 20 “well-being” power—it falls within the West v Secretary of State for Scotland 1992 SC 385 supervisory jurisdiction. On the merits of the legality challenges, the judgment underscores that courts will not demand councillors be given every source document if an officer report provides a fair and accurate summary, nor will courts convert judicial review into an appellate merits inquiry into subsidy/procurement/best-value evaluations. The case is likely to be cited in future disputes about development-enabling funding to support (i) councils’ reliance on risk-based legal advice summaries and (ii) a restrained approach to judicial intervention where the real complaint is disagreement with a council’s risk appetite and spending priorities.