Non-renewal of ELC Partnership Agreements as a Contractual Act: Limits of Judicial Review, Standing, and Strict JR Time Limits

1. Introduction

St Margarets Nursery Limited sought judicial review against the City of Edinburgh Council concerning the Council’s approach to continued “partner provider” status for funded Early Learning and Childcare (“ELC”). The parties had an Early Learning and Childcare Agreement (“ELCA”) originally running to August 2024 and renewed to 12 August 2025.

The dispute arose after the Council placed the nursery into a Service Improvement Period (“SIP”) in October 2024 for alleged non-compliance with the “National Standard” (particularly payment processes and related requirements), then notified the nursery on 18 February 2025 that the ELCA would not be renewed beyond August 2025. In March/May 2025, the Council also published and “noted” Eligibility Criteria for renewal of ELCAs, and on 2 May 2025 wrote giving reasons referring to those criteria.

The petition challenged (i) the Council’s adoption/presentation of Eligibility Criteria (committee report/arrangements for August 2025 onwards) and (ii) the application of those criteria to exclude the petitioner from renewal. The grounds pled were Wednesbury unreasonableness/irrationality, procedural unfairness (including legitimate expectation linked to the SIP), and inadequate reasons.

The case came before Lady Tait at a permission hearing (Outer House) focused on permission and time limits. Permission was refused and the petition dismissed.

2. Summary of the Judgment

• Non-renewal decision not amenable to judicial review: The Council’s decision not to renew/enter a fresh ELCA was characterised as a decision taken within a contractual relationship, and therefore (on the authorities) not susceptible to judicial review. As a result, the petition did not have real prospects of success.
• No sufficient interest to challenge later Eligibility Criteria: Having already been notified on 18 February 2025 that renewal would not occur, the petitioner lacked a particular/sufficient interest to challenge Eligibility Criteria published subsequently for future renewals.
• Time bar: The three-month period under section 27A(1) of the Court of Session Act 1988 ran from (a) 18 February 2025 for the non-renewal decision and (b) 14 March 2025 for the published Eligibility Criteria, not from 1–2 May 2025. The petition lodged on 30 July 2025 was late, and it was not equitable to extend time.

3. Analysis

3.1 Precedents Cited

(a) Contract vs public law reviewability

The decisive strand of authority was the modern line confirming that, ordinarily, contractual decisions by public bodies are not supervised by judicial review merely because the counterparty is a public authority.

• Redcroft Care Homes Ltd Petr [2024] CSIH 34; 2025 SC 103: Treated as the culminating Inner House authority in this line. Lady Tait relied on it to conclude that a decision not to renew a contract “falls within the contractual relationship and is not amenable to judicial review.” The opinion emphasised Redcroft’s approval of the analytical approach in Abundance.
• Abundance Investments Ltd v Scottish Ministers 2020 SLT 163: Quoted for the proposition that, in assessing whether supervisory jurisdiction is competently invoked, the court examines “the act or decision under challenge and the basis of that act or decision.” Its core contribution (as applied through Redcroft) is the distinction between: (i) decisions about “rights and obligations under the contract” (normally not reviewable), and (ii) decisions that can truly be characterised as statutory/external to the contracting role (potentially reviewable).
• Sheridan v Glasgow City Council [2025] CSOH 54: Used to reinforce that supervisory jurisdiction is not a general oversight mechanism for all decisions by public bodies. The judgment (as quoted) reiterates that supervisory jurisdiction is engaged where the decision is made under a “legally circumscribed” power and that contractual contexts (including employment contracts) “will rarely be amenable.”
• West v Secretary of State for Scotland, Watt v Strathclyde Regional Council, Blair v Lochaber District Council, Dryburgh v NHS Fife: These were referenced (via Redcroft/Abundance) as part of the historic lineage supporting the contract/public law boundary. Their role here was not detailed fact-by-fact, but doctrinal: they underpin the principle that public bodies do not become subject to JR for routine contractual acts unless a separate public-law character is demonstrated.

(b) Permission threshold and “real prospects”

• Wightman v Advocate General 2018 SC 388: Applied to explain the statutory permission test under section 27B(2): “real prospects” requires something with substance; mere arguability/statability is insufficient. Once the court held the decision was non-reviewable (contractual), the petition necessarily lacked real prospects.

(c) Standing as an “interest” and context-specific approach

• AXA General Insurance Co Ltd v Lord Advocate 2012 SC (UKSC) 122: Cited to justify a context-sensitive standing analysis: standing is based on interests (not strictly “rights”) and the nature of the interest required varies by context. Lady Tait used AXA to conclude that, in this specific factual matrix—where the petitioner had already been told it would not be renewed—the petitioner lacked sufficient interest to challenge Eligibility Criteria published later for future contracting rounds.

(d) Time limits: when grounds “first arise”

• S v Scottish Ministers 2021 SLT 711: Applied to reject the notion that time runs from when a litigant feels able to mount a legal challenge. The clock runs from when the grounds first arise, assessed on the pleadings and the operative decision/act. This was central to holding that the 2 May 2025 reasons letter did not reset the section 27A timetable.

3.2 Legal Reasoning

(a) The core characterisation: a contractual non-renewal

Lady Tait’s reasoning turned on characterisation. The ELCA was a contract governing funding and provision of ELC. A key contractual clause (clause 16.3) allowed the Council to follow (or dispense with) steps in the Service Improvement Protocol “in its sole discretion.”

On that footing, the Council’s act of deciding it would not contract again with the petitioner on expiry was treated as a contracting party’s decision—not the exercise of a “legally circumscribed” statutory power in a way that attracts judicial review. The court did not accept that section 35 of the Standards in Scotland’s Schools etc Act 2000 converted a non-renewal decision into a reviewable public-law act merely because the broader service area is statutory.

(b) Permission: sufficient interest + real prospects

Because the non-renewal decision was held non-reviewable, the petition failed at the “real prospects” limb of section 27B(2). Separately, on standing, the petitioner’s challenge to the Eligibility Criteria was framed as consequential upon its own exclusion; but once the court treated the exclusion as already determined by February 2025, the petitioner’s “interest” in later criteria was not the particular interest contemplated in that context.

(c) Time bar and refusal to extend

The court identified two operative starting points: 18 February 2025 (non-renewal notification) and 14 March 2025 (publication of the report setting out Eligibility Criteria). On that approach, the petition lodged on 30 July 2025 was out of time for both.

When considering equitable extension, Lady Tait weighed: (i) the petitioner’s early knowledge and actions after February 2025, (ii) continued legal representation, (iii) the claimed need for reasons (said to arise only on 2 May 2025), (iv) claimed lack of prejudice to the Council, and (v) asserted public interest in clarifying the scope of section 35. She nevertheless declined to extend, noting (among other things) the absence of a wider cohort in the petitioner’s position and the overall circumstances.

3.3 Impact

• Reinforcement of the “contractual boundary” in public services delivery: The decision underscores that where a public authority is acting as a contracting party—especially on renewal/non-renewal—judicial review may be unavailable even if the contract sits within a statutory service environment (here, ELC under section 35). The practical implication is that providers may be pushed toward private law remedies (contractual claims) rather than JR, depending on contractual terms and the nature of the decision.
• Standing will be tightly tied to the applicant’s concrete stake at the relevant time: Providers seeking to challenge “general” eligibility frameworks may struggle where their own exclusion is already fixed by an earlier decision; AXA’s “context matters” approach is used to narrow standing in a fact-specific manner.
• Strictness on section 27A timing: The judgment is a cautionary precedent on identifying when “grounds first arise.” Later reasons letters, committee “noting” papers, or subsequent articulation of criteria will not necessarily restart time if the substantive adverse decision was already clearly communicated.
• Operational takeaway for local authorities: Although the court described it as “unfortunate” that the 2 May 2025 letter referred to Eligibility Criteria not formulated at the time of the February notification, it did not treat that as creating JR reviewability or standing. Authorities may still wish to align decision letters, reasons, and policy documents to reduce dispute risk, but this case suggests misalignment will not automatically create JR exposure.

4. Complex Concepts Simplified

• Judicial review / “supervisory jurisdiction”: A court process to ensure public bodies act lawfully within the limits of their powers. It is not a general appeal on merits.
• Amenable to judicial review: A decision is “amenable” if it is the kind of decision the JR court can supervise (typically an exercise of public power), rather than a private-law act like a routine contractual choice.
• Wednesbury unreasonableness: A very high threshold: a decision so unreasonable that no reasonable decision-maker could have reached it.
• Procedural unfairness and legitimate expectation: Public bodies must follow fair procedures; if they make a clear representation that they will follow a certain process or confer a benefit, individuals may acquire a “legitimate expectation” that it will be honoured unless lawfully departed from. Here, the court did not reach the merits because permission failed on reviewability/standing/time.
• Declarator and reduction: “Declarator” is a court declaration as to the legal position; “reduction” is the Scottish remedy akin to setting aside/quashing an unlawful decision.
• Permission stage (“real prospects of success”): Under section 27B(2), the petitioner must show both a sufficient interest and that the case has substance; arguability alone is insufficient (per Wightman).
• Time limit (section 27A): JR must be brought within 3 months from when the grounds first arise, subject to an equitable extension. The clock generally starts when the operative decision is communicated, not when reasons arrive or legal strategy crystallises.

5. Conclusion

St Margarets Nursery LTD for Judicial Review is a clear application of the modern Scottish authorities limiting judicial review where the impugned act is, in substance, a contractual non-renewal. Lady Tait held that the Council’s decision not to renew an ELCA was not amenable to JR; that the petitioner lacked sufficient interest to challenge later Eligibility Criteria in the specific circumstances; and that the petition was in any event time-barred with no equitable extension.

The decision’s broader significance lies in its firm reaffirmation that: (i) participation in publicly funded service delivery via contract does not itself transform renewal decisions into public-law decisions, (ii) standing is context-dependent and may be denied where the applicant’s stake is not genuinely engaged by the measure challenged, and (iii) JR time limits run from the earliest operative decision/publication, not from later explanatory correspondence.