High Court rejects challenges to decisions by councils to enter “safety valve” agreements with Department for Education over SEND deficits

Three linked claims challenging decisions by Devon County Council and Bristol City Council to enter so-called “safety valve” agreements (SVAs) with the Department of Education over their Dedicated Schools Grant (DSG) deficits have been dismissed by the High Court.

The claims in AB, R (On the Application Of) v Bristol City Council [2025] EWHC 893 (Admin) (10 April 2025) were brought on behalf of disabled children with Education, Health and Care Plans (EHCPs).

“AB” brought a claim against Bristol City Council and “ES” and “JX” brought claims against Devon County Council, which proceeded on a rolled-up basis.

Mr Justice Linden noted that provision for special educational needs and disability (SEND) in a given area is paid out of part of the local authority’s DSG, known as the High Needs Block (HNB).

In recent years, there have been significant financial pressures on High Needs Block spending, and many local authorities now have notable DSG deficits.

SVAs are written agreements between individual local authorities and the Department for Education, agreeing that the DfE will “bail out” local authorities that have over-spent on their special educational needs budgets.

In exchange for financial assistance, the local authority agrees to take action to bring its DSG back into balance.

Linden J noted: “The concern of the Claimants which lies at the heart of their Claims is that, they contend, the action plans which Bristol and Devon have agreed to implement pursuant to their SVAs, and the commitment to eliminating their DSG deficits, necessarily entail cuts in funding and potentially adverse changes to SEND provision in their areas.”

Outlining the “live” grounds of challenge, he said:

1. In the claims brought by AB against Bristol and by ES against Devon, but not in JX’s claim against Devon, there was an allegation of breach of the duty to consult under section 27(3) of the Children and Families Act 2014. (Ground 1)
2. There was an allegation of breach of the public sector equality duty (PSED) under section 149 of the Equality Act 2010 (“Ground 2”) in the Devon cases but not in the Bristol case, permission having been refused in relation to this ground in that case.
3. In the JX v Devon case but not the other claims, there were the following further grounds. It was alleged on behalf of JX that:

a) Devon acted in breach of its duty of reasonable inquiry under the so called Tameside duty (“Ground 3”).

b) By entering into the SVA, Devon frustrated the policy of Part 3 of the Children and Families Act 2014 which is to require that the assessed needs of disabled and young people in the local authority’s area are met: see Padfield v Ministry of Agriculture and Fisheries (“Ground 4”).

c) In entering into the SVA, Devon was applying a secret policy: see R (Lumba) v Secretary of State for the Home Department at [20] and [26] (“Ground 5”).

Detailing the relevant provisions of the Children and Families Act, Linden J said: “The key statutory context is Part 3 of the Children and Families Act 2014, which is concerned with children and young people in England with special needs or disabilities.

“Part 3 sets out various duties on local authorities in relation to this category of children and young people and the principles which are to be applied in considering their needs, as well as the machinery for assessing and determining their needs and for enforcement of the duties owed to them as individuals.”

Section 27 is one of the provisions of Part 3 of the 2014 Act. It states as follows:

“27 Duty to keep education and care provision under review

(1)  A local authority in England must keep under review -

(a)  the educational provision, training provision and social care provision made in its area for children and young people who have special educational needs or a disability, and

(b)  the educational provision, training provision and social care provision made outside its area for -

(i)  children and young people for whom it is responsible who have special educational needs, and

(ii)  children and young people in its area who have a disability.

(2)  The authority must consider the extent to which the provision referred to in subsection (1)(a) and (b) is sufficient to meet the educational needs, training needs and social care needs of the children and young people concerned.

On ground 1, counsel for AB and ES submitted that that it was for the court to decide whether section 27 had been “triggered”.

It was contended that in this case, section 27 was triggered by the decisions of Bristol and Devon to enter into the SVAs given that these were “strategic level decisions” to make significant spending cuts across their SEND budgets. Therefore, in the course of deciding to enter the SVA, the defendant councils considered sufficiency of provision, and yet they failed to consult.

Second, and alternatively, counsel for AB and ES argued that even if it was not for the court itself to decide whether section 27 was triggered and, instead, it was a matter for the local authority to decide whether there should be a review, subject to Wednesbury irrationality standards, the failures to conduct reviews in these cases, which necessarily entailed an obligation to consult, were “irrational”.

In relation to the first argument, Steve Broach KC (on behalf of AB and ES) clarified that his case was not that the Defendants had carried out reviews but, contrary to section 27(3), had failed to consult. It was that they had not carried out reviews, which would have included consultation as part of the review process, when they were obliged, by section 27 itself or any rational approach to their duties under section 27, to do so before entering into the SVAs (judge’s emphasis).

Considering ground 1, Linden J said: “Given that the duty under section 27 is to ‘keep [education, training and social care provision] under review’, rather than expressly ‘to review’ such provision on a particular occasion, I have some doubts about the foundations of Mr Broach’s argument. As I have noted, this proceeds on the basis that, for the purposes of section 27, there is a concept of ‘a review’. He argues from this premise that there was an obligation to conduct a review in the circumstances of the present case and that if one had been conducted there would have been an obligation to consult as part of that review.

“I am not clear that this approach is consistent with the terms of section 27. A more natural reading of the section […] is that the obligation under section 27 is to keep education, training and social care provision, and particularly the sufficiency of such provision, under consideration and, as part of this, to consult the specified interested parties from time to time.

“Looked at in this way, there might be circumstances in which it would be irrational not to consult - e.g. an event of a nature which compelled the local authority to ascertain the views of the specified parties as to the sufficiency of provision - but the notion of a requirement to carry out a ‘global strategic review’ being ‘triggered’ would seem somewhat artificial in the context of the section read as a whole.”

He continued: “In my view, […] section 27 leaves to the local authority the decisions as to how to keep provision under review and whether and when to consult the specified parties as to this question.

“I am therefore satisfied that I may only hold that Bristol and/or Devon were obliged to review/consult if it would have been Wednesbury irrational for them to decide to do otherwise before entering into their SVAs.”

Considering then whether the councils’ decisions to enter into the safety valve agreements without carrying out a section 27 review were “irrational”, Linden J concluded: “Bristol and Devon were entitled to consider, as they did, that they had a good awareness and understanding of the views of interested bodies and individuals in their areas in relation to the high level strategies which they proposed to pursue and the steps which they proposed to take to implement them.

“It was perfectly rational for them to decide that they need not consult at this stage, given the overall beneficial nature of the SVAs, given their intention to consult on the specific proposals which would implement these objectives, and given their ability to alter these proposals or introduce new proposals over the course of the agreements. It was not the case that, by entering into the SVAs, the authorities irrevocably bound themselves to a particular set of proposals, and the achievement of particular levels of savings by those proposals, ‘come what may’.”

Ground 1 was dismissed.

Turning to the Public Sector Equality Duty (PSED) challenge, (concerning the Devon cases only), Linden J noted:

“Section 149 of the Equality Act 2010 provides, so far as material to the present case, as follows:

“(1) A public authority must, in the exercise of its functions, have due regard to the need to -

(a) eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under this Act;

(b) advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it;

(c) foster good relations between persons who share a relevant protected characteristic and persons who do not share it.” (judge’s emphasis added)”

On ground 2, counsel for AB and ES submitted that Devon had failed to have “due regard” to the relevant equality considerations as required by section 149 of the 2010 Act.

Linden J noted: “The view of the authority was expressly that at the stage of entering into the SVA the implications were not sufficiently specific, that there may be equalities issues for children with disabilities and that the equality implications would be considered further in detail in relation to any changes to provision.

“This view was consistent with the approach which it adopted to the question of consultation which, of course, would potentially help to identify equality issues when the time came. I do not accept that this amounted to a failure to have ‘due regard’ to the relevant matters given the stage which Devon had reached in the decision-making process.”

Permission was refused on ground 2.

On ground 3 – that Devon acted in breach of its duty of reasonable inquiry – counsel for JX alleged that reports provided to Cabinet and supporting documents/materials did not provide “sufficiently clear and full information”, so the decision of the council to enter into the SVA was therefore “irrational”.

Linden J said: “Mr Goudie [for Devon] relied on a number of authorities which address the level of detail required in officers’ reports to local authorities or their committees. […] I have taken the guidance in these authorities into account but, ultimately, I was not convinced that this is the best lens through which to view the issue.

“I have therefore focussed on the test in Tameside itself and the helpful summary of the principles to be derived from the caselaw on this principle which was provided by the Court of Appeal in R (Balajigari) v Secretary of State for the Home Department [2019] at [70]:

“First, the obligation on the decision-maker is only to take such steps to inform himself as are reasonable. Secondly, subject to a Wednesbury challenge ... it is for the public body and not the court to decide upon the manner and intensity of inquiry to be undertaken… Thirdly, the court should not intervene merely because it considers that further inquiries would have been sensible or desirable. It should intervene only if no reasonable authority could have been satisfied on the basis of the inquiries made that it possessed the information necessary for its decision. Fourthly, the court should establish what material was before the authority and should only strike down a decision not to make further inquiries if no reasonable authority possessed of that material could suppose that the inquiries they had made were sufficient. Fifthly…, Sixthly, the wider the discretion conferred on the [authority], the more important it must be that he has all the relevant material to enable [it] properly to exercise it.””

Linden J continued: “Applying this summary, I can see that Cabinet might have chosen to make further inquiries but I do not consider that it is realistically arguable that Cabinet acted irrationally in ratifying the SVA on the basis of the information which it had.

“[…] Of course, a member of Cabinet might have asked for more information on what savings would need to be made, more detail on how it was proposed that they would be achieved and how likely it was that the proposed reforms would succeed. But they could perfectly rationally take the view that they did not need additional detail about these or any other matters in order to decide whether it was in Devon’s interests to enter the SVA.

“The need to take steps to address the deficit was clear, well understood and pressing. It was clear that it would be necessary to make substantial savings, that reform would be required and that success could not be guaranteed. But the proposals had been approved by the DfE. For the reasons which I have given, members of Cabinet could rationally consider that the SVA was an essentially beneficial opportunity to take steps which needed to be taken in any event whilst receiving financial assistance from central government and being permitted to invest other sums in order to make progress. The downside to not going ahead with it at that point was a great deal more obvious than the downside to entering into it, even if ultimately it was not as successful as was hoped.”  

He refused permission in relation to Ground 3.

On ground 4, Linden J identified two issues to consider:

1. Is it permissible in principle for the exercise of a statutory power to be unlawful (per Padfield) for frustrating the legislative intention of a separate statute which is not the source of that power?
2. If so (per Padfield), did the Defendant’s decision to enter into the Devon SVA have the effect of frustrating the legislative intention underpinning Part 3 of the Child and Families Act 2014?

He concluded: “The aim of the SVA was to enable Devon to comply with its obligations more cost effectively and to improve its SEND provision. If frustration of Part 3 was a likely or intended consequence of entering into the SVA the DfE would have declined to approve Devon’s proposal. Moreover, the FTT would also be on hand to police the 2014 Act and prevent any breaches of its requirements.”

Permission was refused in relation to Ground 4.

Finally, ground 5 was also refused permission, on the basis that the judge had already accepted (in the discussion of ground 3), that the information provided to Cabinet was not misleading and was sufficient to enable it to make a rational decision as to whether to enter into the SVA.

Concluding the case, Linden J dismissed ground 1 and refused permission on grounds 2-5.

Commenting on the judgment, barristers’ chambers 11KBW said: “The judgment provides useful guidance on several matters, including the nature of the section 27 CFA 2014 duty on local authorities to keep education and care provision under review. In particular, it confirms that section 27 leaves to local authorities the decisions as to how to keep provision under review and whether and when to consult the relevant parties as to this question, subject only to Wednesbury irrationality standards. It will be for a local authority to decide whether an occasion requires the exercise of its powers and duties under section 27.”

James Goudie KC, Oliver Jackson and Rita Dias of 11KBW acted for Devon. Joanne Clement KC and Peter Oldham KC, both also from 11KBW, acted for Bristol City Council.

Lottie Winson