Summary of Opinion — Outer House, Court of Session

Factual and Procedural Background

The Petitioner entered into an Early Learning and Childcare Agreement ("ELCA") with the Respondent on 23 June 2021, initially until 13 August 2024 and renewed until 12 August 2025. By letter dated 18 February 2025 the Respondent notified the Petitioner that the ELCA would not be renewed when it ended on 12 August 2025. On 14 March 2025 the Respondent published a report and, on 1 May 2025, its Education, Children and Families Committee was invited to note arrangements and set out Eligibility Criteria for future funded Early Learning and Childcare ("ELC") partnerships from 13 August 2025. On 2 May 2025 the Respondent applied the published Eligibility Criteria to the Petitioner in informing it that the ELCA would not be renewed. The Petitioner sought judicial review challenging (i) the setting out of the Eligibility Criteria in the Committee Report (1 May 2025) and (ii) the application of those Criteria to exclude renewal of its ELCA (2 May 2025). The Petition asserted Wednesbury unreasonableness/irrationality, procedural unfairness, and failure to give adequate reasons. At an oral hearing on time limits and permission, Judge [Tait] refused permission and provided reasons now published.

Legal Issues Presented

1. Whether the Respondent's decision not to renew the Petitioner’s ELCA was Wednesbury unreasonable or irrational.
2. Whether the Respondent acted in a procedurally unfair manner or breached a legitimate expectation in applying the Eligibility Criteria to the Petitioner.
3. Whether the Respondent failed to provide adequate reasons for its decisions.
4. Whether the decisions (both the non-renewal and the Committee Report setting out Eligibility Criteria) are amenable to judicial review, and if so whether the Petition has sufficient interest and real prospects of success and is in time.

Arguments of the Parties

Petitioner’s Arguments

• The Respondent's decisions were Wednesbury unreasonable and irrational in setting Eligibility Criteria that allowed renewal for providers previously found not to meet quality aspects of the National Standard while excluding providers found not to meet non-quality aspects (e.g., payment processes).
• The Respondent irrationally excluded providers still subject to an ongoing Service Improvement Period ("SIP")—including the Petitioner—rather than distinguishing them from providers who had completed a SIP without improvement.
• The exclusion of providers subject to SIPs was procedurally unfair; the Petitioner had a legitimate expectation it would not be deemed ineligible while a SIP was underway.
• Alternatively, even if substantive unlawfulness is not established, the Respondent failed to provide adequate reasons to justify its decisions.

Respondent’s Arguments

• The decision not to renew the ELCA was taken on 18 February 2025 and is a contractual decision by the Respondent as contracting party; such decisions are generally not amenable to judicial review.
• The factors giving rise to challenge to the Eligibility Criteria first arose on 14 March 2025 when the report was published; the Petitioner lacks sufficient interest to challenge the Criteria because it had already been notified of non-renewal on 18 February 2025.
• The Eligibility Criteria were rational: the Respondent is responsible for monitoring compliance with non-quality criteria (e.g., criteria 6, 8, 9) and reasonably declined to renew contracts with providers in breach of those non-quality criteria.
• A provider subject to an extant SIP remains in breach of contract, so excluding such providers from renewal is rational. The SIP letter did not create a legitimate expectation of renewal. The Respondent had no duty to give reasons for a contractual non-renewal, and the Committee Report provided sufficient rationale for the Eligibility Criteria.
• Time limits: the relevant grounds arose on earlier dates (18 February 2025 and 14 March 2025) so the Petition, lodged 30 July 2025, is out of time; extension of time is not equitable in the circumstances.

Table of Precedents Cited

Court's Reasoning and Analysis

The court proceeded in two principal strands. First, it analysed amenability to judicial review. The ELCA is a contract; clause 16.3 permits the Respondent to follow a Service Improvement Protocol and to dispense with those steps at its discretion. The court relied on a line of authority (including Company A Petr, Company B v Scottish Ministers and the cases collected in the opinion) establishing that decisions made by a public body in the context of contractual relationships will generally not be amenable to judicial review unless the decision can also be characterised as the exercise of a statutory power affecting all subject persons or the body was performing a function independent of its contractual role. Applying that principle, Judge [Tait] concluded the Respondent's decision not to renew the contract fell within the contractual relationship and was not amenable to review; accordingly the Petition lacked a real prospect of success on that foundation.

Second, the court addressed standing/sufficient interest and time. Even if amenable to review, the court found the Petitioner did not have a sufficient interest in the Eligibility Criteria published after it had been informed of non-renewal: the briefing paper of 14 February 2025 already recorded relevant breaches and the Petitioner had been notified on 18 February 2025. The court also held the grounds for challenge arose on 18 February 2025 (non-renewal) and 14 March 2025 (Eligibility Criteria); the petition was lodged outside the statutory three-month period and, having considered whether it was equitable to extend time (including knowledge of the decision, representation, informal steps taken, and prospects of success), refused to extend time.

Holding and Implications

REFUSED PERMISSION AND DISMISSED

Holding: The court refused permission to proceed with the petition and dismissed it. The core rulings were (i) the Respondent's decision not to renew the ELCA was a contractual decision not amenable to judicial review in the circumstances, (ii) the Petitioner lacked a sufficient interest in the subsequently published Eligibility Criteria given prior notification of non-renewal, and (iii) the Petition was out of time and it was not equitable to extend the statutory period.

Implications: The direct effect is that the Petitioner’s challenge fails and the non-renewal stands. The decision applies established principles limiting judicial review of contracting-party decisions and does not purport to establish a new precedent beyond applying those existing authorities.