Shrewsbury & Atcham Borough Council & Anor v Secretary of State for Communities & Local Government & Anor

Factual and Procedural Background

This appeal concerns proposals by the Secretary of State for Communities and Local Government to replace two-tier local government in certain areas with unitary authorities. The proposals at issue were those for Shropshire, advanced by the County Council ("Shropshire"), and for Cheshire, advanced by the Chester City Council with three other councils. These proposals were strongly opposed by the Borough Councils for Shrewsbury and Congleton ("the Boroughs"), both liable to be abolished. The Boroughs initiated judicial review proceedings challenging the Secretary of State's authority to undertake the exercise prior to the enactment of necessary legislation and the manner in which the process was conducted, particularly regarding the assessment of public support. Their initial applications were dismissed by Underhill J on 10 October 2007, and the Boroughs appealed.

Subsequently, the Local Government and Public Involvement in Health Act 2007 ("the 2007 Act") was enacted and brought into effect. The Secretary of State made decisions under the Act to proceed with the proposals, and the relevant orders were laid before Parliament. The Boroughs were permitted to amend their applications to include challenges to these later decisions. The appeal thus concerns the legality of both the pre-Act and post-Act decisions and the extent to which earlier arguments remain relevant in the new statutory context.

The background includes the Government's October 2006 White Paper "Creating Strong and Prosperous Communities," which invited proposals for unitary local government structures meeting specified criteria, including affordability, strategic leadership, neighbourhood empowerment, and broad cross-section support. A three-stage process for handling proposals was set out: initial assessment (stage 1), consultation (stage 2), and re-assessment leading to implementation decisions (stage 3). The Secretary of State deliberately chose not to use the existing Local Government Act 1992 ("the 1992 Act") machinery, instead promoting new legislation to confer the requisite powers.

Proposals were submitted by the deadline and assessed, with Shropshire and Chester's proposals passing stage 1. The Secretary of State announced in July 2007 a "minded to implement" decision for certain proposals, including Shropshire's. The 2007 Act received Royal Assent in October 2007, and formal decisions were made under it in December 2007. The Boroughs challenged these decisions on several grounds, including vires, inconsistency with the 1992 Act, compliance with the European Charter of Local Self-Government, adequacy of public support assessment, and fairness of the consultation website.

Legal Issues Presented

1. Whether the Secretary of State had lawful authority (vires) to issue invitations and make decisions on local government reorganisation proposals prior to the enactment of statutory powers.
2. Whether the procedure adopted was inconsistent with the statutory regime under the Local Government Act 1992.
3. Whether the procedure complied with obligations under the European Charter of Local Self-Government, particularly regarding not undermining local government powers.
4. Whether the Secretary of State properly applied the criterion of a "broad cross-section of support" from the public, or unlawfully substituted a test of "reasonable likelihood" of support.
5. Whether the Secretary of State acted unfairly in providing links only to the promoting authorities’ websites and not to those opposing the proposals.
6. Whether the December 2007 post-Act decisions involved genuine reconsideration or unlawfully ratified earlier decisions made without statutory authority.

Arguments of the Parties

Appellants' Arguments (the Boroughs)

• The Secretary of State lacked statutory authority to issue invitations or make decisions before legislation was enacted (vires).
• The procedure conflicted with the comprehensive statutory framework of the 1992 Act for local government reorganisation.
• The Government’s process violated the European Charter by undermining local government powers without lawful basis.
• The Secretary of State failed to ensure proposals had actual public support, substituting instead a lesser standard of "reasonable likelihood," contrary to the Invitations' criteria and legitimate expectation.
• The Secretary of State’s website was unfairly biased by linking only to promoting authorities, disadvantaging opponents.
• The December 2007 decisions did not involve genuine reconsideration and unlawfully ratified earlier unlawful decisions.

Respondent's Arguments (Secretary of State)

• The Secretary of State possessed common law powers as Crown representative to take preparatory steps pending legislation.
• The 1992 Act did not preclude preparatory action before new legislation; the Secretary of State did not fetter discretion or pre-empt Parliament’s decision.
• The European Charter is not incorporated into domestic law and does not provide a substantive legal basis to challenge the process.
• The criterion of "reasonable likelihood" was a flexible, working interpretation appropriate for the stage of the process, with no prejudice to opponents.
• Providing links only to promoters’ websites was reasonable to avoid burden and did not cause prejudice.
• The December 2007 decisions involved genuine reconsideration of proposals in light of additional material and statutory guidance under the 2007 Act.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by examining the scope of the Secretary of State’s powers absent statute or prerogative, relying chiefly on the binding authority of R v Secretary of State for Health ex p. C, which recognizes a residual category of common law powers enabling the Crown to act as a legal person with capacities beyond statute or prerogative, subject to legal limits.

The court distinguished between preparatory governmental acts, which are lawful, and substantive acts that interfere with rights or fall within statutory schemes. It found that preparatory steps taken before the 2007 Act were lawful exercises of common law powers, provided they did not fetter final decisions or conflict with existing statutory regimes.

Regarding the 1992 Act, the court held that while statutory powers exclude prerogative or common law powers in the same field, the Secretary of State’s preparatory actions did not conflict with the 1992 Act because they were contingent steps preparing for new legislation rather than attempts to implement changes under the 1992 Act.

The court acknowledged the Boroughs’ frustration that the Secretary of State appeared to shift the public support criterion from requiring actual broad support to a "reasonable likelihood" of support. However, it found that the Invitations document was a working document allowing some flexibility, and no legal prejudice to the Boroughs was demonstrated.

The European Charter argument was rejected as the Charter is not incorporated into domestic law and does not create enforceable rights. The court noted that any principles respecting local government’s democratic role are already embedded in common law.

The court also dismissed the complaint about the Secretary of State’s website links as not sufficiently prejudicial to invalidate the consultation process.

On the post-Act December decisions, the court found, based on unchallenged evidence, that there was genuine reconsideration of proposals under the statutory framework of the 2007 Act, including consideration of additional material and statutory guidance. The court rejected the argument that these decisions simply ratified unlawful earlier decisions without fresh consideration.

The court emphasized that pre-Act decisions had no intrinsic legal effect and were preparatory only. It was only the post-Act decisions and orders laid before Parliament that carried legal weight and were properly challengeable. The court considered that Parliament, by enacting section 21 of the 2007 Act, retrospectively validated the pre-commencement invitations and consultations, thereby providing a lawful basis for the Secretary of State’s actions.

The court noted the constitutional importance of local authorities being able to rely on statutory safeguards but concluded that no evidence showed prejudice or procedural unfairness sufficient to invalidate the process. The court also highlighted the need to avoid stifling preparatory governmental work essential for legislative implementation.

Holding and Implications

The appeal is dismissed.

The court held that the Secretary of State lawfully exercised preparatory common law powers prior to the enactment of the 2007 Act and did not act inconsistently with the 1992 Act. The post-Act decisions involved genuine reconsideration under the statutory framework and were lawful. The court found no substantive procedural unfairness or illegality warranting quashing the decisions or orders.

As a result, the proposals for unitary authorities in Shropshire and Cheshire may proceed as legislated. The decision does not establish new precedent beyond affirming the existing principles regarding the scope of common law powers of the Crown, the interaction with statutory schemes, and the limits of judicial review in the context of preparatory governmental actions. The ruling underscores the constitutional balance between enabling government to prepare for legislative change and protecting statutory rights and procedural fairness.