Ideological Decisions in Administrative Law

I hope to post in the coming week about the challenge to the recent prorogation of the Canadian Parliament. I am speaking at three separate events in February (at uOttawa, the Runnymede Society’s Law and Freedom conference, and the University of Alberta). For now, I have dug out a few pages of old lecture notes about the appropriateness of ideological considerations in taking administrative decisions: the high point of the applicants’ case, in my view, is that the prorogation decision was made in the interests of the Liberal Party of Canada, not in the national interest. The role of ideology in administrative decisions is, therefore, of interest in this context. The next post will be about administrative decisions influenced by considerations of political expediency…

Consider the following dictum of Farwell LJ:

If this means that the Board were hampered by political considerations, I can only say that such considerations are pre-eminently extraneous, and that no political consequence can justify the Board in allowing their judgment and discretion to be influenced thereby (R. v. Board of Education [1910] 2 KB 151, at p. 181).

In Roberts v Hopwood [1925] AC 578, a local authority paid a minimum wage to its workers, pursuant to statutory powers to “employ …. such …. servants as may be necessary, and [to] allow to such …. servants …. such …. wages as (the Council) may think fit” (Metropolis Management Act 1855, s. 62). However, a district auditor, who was empowered to review the local authority’s spending, considered the minimum wage to be a gratuity and accordingly disallowed the additional expenditure (the difference between a market wage and a minimum wage), which was charged instead to the councillors. Calculating the difference between a market wage and a minimum wage is complex, but as Lord Buckmaster observed, “the real difficulty in the present case lies in determining what is the limit of discretionary power given to the district council with regard to payment of wages” (at p. 587).

The local authority set out in an affidavit its view that “as a matter of policy, that a public authority should be a model employer and that a minimum rate of 4l. is the least wage which ought to be paid to an adult having regard to the efficiency of their workpeople, the duty of a public authority both to the ratepayers and to its employees, the purchasing power of the wages and other considerations which are relevant to their decisions as to wages”. What mattered though was whether this policy was compatible with “the sound construction of the section” (at p. 602, per Lord Sumner).

One possibility, on which Lord Wrenbury based his conclusion, was that the payments were not “wages”, because a wage “is such figure as is the reasonable pecuniary equivalent of the service rendered”: “Anything beyond this is not wages. It is an addition to wages, and is a gratuity” (at p. 612). Similarly, for Lord Sumner, the statutory scheme providing for audit and disallowance imposed legal limits on the discretion of the local authority:

The purpose…of the whole audit is to ensure wise and prudent administration and to recover for the council’s funds money that should not have been taken out of them. If, having examined the expenditure and found clear proof of bad faith, which admittedly would open the account, the auditor further found that the councillors’ evil minds had missed their mark, and the expenditure itself was right, then the expenditure itself would not be “contrary to law” and could not be disallowed. Bad faith admittedly vitiates the council’s purported exercise of its discretion, but the auditor is not confined to asking, if the discretion, such as it may be, has been honestly exercised. He has to restrain expenditure within proper limits. His mission is to inquire if there is any excess over what is reasonable (at p. 604).

For Lord Buckmaster, the implementation of a blanket rule as to the payment of wages was ultra vires because it was based on irrelevant considerations:

It standardised men and women not according to the duties they performed, but according to the fact that they were adults. It is this that leads me to think that their action cannot be supported, and that in fact they have not determined the payment as wages, for they have eliminated the consideration both of the work to be done and of the purchasing power of the sums paid, which they themselves appear to regard as a relevant though not the dominant factor…It appears to me, for the reasons I have given, that they cannot have brought into account the considerations which they say influenced them, and that they did not base their decision upon the ground that the reward for work is the value of the work reasonably and even generously measured, but that they took an arbitrary principle and fixed an arbitrary sum, which was not a real exercise of the discretion imposed upon them by the statute (at p. 590).

For Lord Atkinson, the “admirably philanthropic” policy was at odds with the purpose for which the statutory power in question had been accorded to the local authority:

The indulgence of philanthropic enthusiasm at the expense of persons other than the philanthropists is an entirely different thing from the indulgence of it at the expense of the philanthropists themselves. The former wears quite a different aspect from the latter, and may bear a different legal as well as moral character. A body charged with the administration for definite purposes of funds contributed in whole or in part by persons other than the members of that body, owes, in my view, a duty to those latter persons to conduct that administration in a fairly businesslike manner with reasonable care, skill and caution, and with a due and alert regard to the interest of those contributors who are not members of the body. Towards these latter persons the body stands somewhat in the position of trustees or managers of the property of others. This duty is, I think, a legal duty as well as a moral one, and acts done in flagrant violation of it should, in my view, be properly held to have been done “contrary to law”… (at pp. 595-596)

The argument that the local authority had an electoral mandate did not avail the councillors:

Do they mean…that no matter how excessive or illegal their scale of wages might be, they were bound to put it into force because their constituents gave them a mandate so to do, or again, do the words mean that as the payment of wages was a subject with which they had legally power to deal, the amount of their funds which they devoted to that purpose was their own concern which no auditor had jurisdiction to revise, or in reference to which he could surcharge anything? The whole system of audit to which the Legislature has subjected every municipal corporation or council is a most emphatic protest against such opinions as these (at p. 597, per Lord Atkinson).

It has been said that these speeches “were loaded with class assumptions” (Robert Stevens, The English Judges: Their Role in the Changing Constitution (Hart Publishing, Oxford, 2005), at p. 23): “It is an easy step from [this] judgment to the conclusion that the House of Lords is, in entire good faith, the unconscious servant of a single class in the community” (Harold Laski, cited in Stevens, ibid.).

Several decades later, similar questions about the ability of local authorities to pursue within a statutory framework developed by Parliament policies that had received local electoral support arose in Bromley London Borough Council v Greater London Council [1983] 1 AC 768. In its manifesto for an election to the Greater London Council, the Labour Party promised the following in respect of transport fares:

Within six months of winning the election, Labour will cut fares on London Transport buses and tubes by an average of 25 per cent. At the same time a much simpler system of fares will be introduced, one which will be easy to understand, will allow faster boarding and will ease the burden on transport workers. There will then be a freeze on fares for four years. The existing system of free travel for senior citizens on London’s buses will be extended to the tubes and British Rail services within London

When Labour won the election, it required the transport authorities to cut fares by 25%. The financial consequences for the Greater London Council were significant: on the one hand, it would lose its “block grant” from central government. On the other hand, it would have to finance the reduction in transport fares. Ratepayers in the Greater London area would end up footing the bill. All members of the House of Lords agreed that the local authority owed a fiduciary duty to its ratepayers. Striking a balance between the interests of different categories of person is a difficult matter, falling within the local authority’s discretion, but here the effect of their decision was to “increase that total burden so as nearly to double it and to place the whole of the increase on the ratepayers” (at p. 830, per Lord Diplock): “once it became apparent that the ratepayers’ burden would be approximately doubled, it acted in breach of its fiduciary duty…” (at p. 820, per Lord Wilberforce). See similarly Prescott v Birmingham Corporation [1955] Ch. 210, where imposing on ratepayers the burden of paying for free travel for elderly persons was a breach of the local authority’s fiduciary duty to ratepayers.

Also of central importance was the construction of the Transport (London) Act 1969. The majority of the House of Lords read the relevant statutory provisions as imposing an obligation on the Greater London Council to run its transport services on business principles. As Lord Wilberforce explained:

The respective statutory obligations of the G.L.C. and London Transport Executive fit in with one another: the London Transport Executive must carry out its duty as defined in section 7 (3): the G.L.C. cannot exercise its powers unless and until the London Transport Executive carries out that duty and must then do so with proper regard to its fiduciary duty to its ratepayers. If these constraints were not to exist, there would be no limit upon the power of the G.L.C. to make grants in aid of revenue, since the Act provides for no governmental control (at p. 818).

Although there was some flexibility, the Greater London Council did not “have power totally to disregard any responsibility for ensuring, so far as practicable, that outgoings are met by revenue, and that the London Transport Executive runs its business on economic lines” (at p. 819).  It had to have “due regard to ordinary business principles” (at p. 834, per Lord Keith of Kinkel). Indeed, “the spirit” of the statutory scheme – that transport operations must, “so far as practicable” be undertaken “to avoid loss” – was said to be one that “accords well with the fiduciary duty owed…to the ratepayers” (at p. 845, per Lord Scarman).

The fact that the Labour Party had won the election based on a manifesto containing a clear commitment to reduce transport fares was not decisive. While the election manifesto would be a factor entitled to “considerable weight” in the exercise of discretionary powers, councillors should never “treat themselves as irrevocably bound to carry out pre-announced policies contained in election manifestos even though, by that time, changes of circumstances have occurred that were unforeseen when those policies were announced and would add significantly to the disadvantages that would result from carrying them out” (at p. 829, per Lord Diplock; see also ibid., at p. 845, per Lord Brandon of Oakbrook). As Lord Scarman put it, though not referring specifically to the election manifesto, “If the G.L.C. should develop a policy outside the definition of its duty under section 1 (1), the executive would be at risk of acting unlawfully if it implemented it, unless (which is not suggested in this case) it could point to some duty imposed by some other Act” (at p. 840). A typically clear passage from Lord Denning MR’s judgment in the Court of Appeal is also worth quoting at length:

In giving such weight to the manifesto, I think the majority of the council were under a complete misconception. A manifesto issued by a political party – in order to get votes – is not to be taken as gospel. It is not to be regarded as a bond, signed, sealed and delivered. It may contain – and often does contain – promises or proposals that are quite unworkable or impossible of attainment. Very few of the electorate read the manifesto in full. A goodly number only know of it from what they read in the newspapers or hear on television. Many know nothing whatever of what it contains. When they come to the polling booth, none of them vote for the manifesto. Certainly not for every promise or proposal in it. Some may by influenced by one proposal. Others by another. Many are not influenced by it at all. They vote for a party and not for a manifesto. I have no doubt that in this case many ratepayers voted for the Labour Party even though, on this one item alone, it was against their interests. And vice versa. It seems to me that no party can or should claim a mandate and commitment for any one item in a long manifesto. When the party gets into power, it should consider any proposal or promise afresh – on its merits – without any feeling of being obliged to honour it or being committed to it. It should then consider what is best to do in the circumstances of the case and to do it if it is practicable and fair (at pp. 776-777).

The Divisional Court recently took a similar view of referendums: “a referendum on any topic can only be advisory for the lawmakers in Parliament unless very clear language to the contrary is used in the referendum legislation in question” (R (Miller) v Secretary of State for Exiting the European Union [2016] EWHC (Admin) 2768, at para. 106).

The flipside of these cases is, perhaps, R (Palestine Solidarity Campaign Ltd) v Secretary of State for Communities and Local Government [2017] EWHC 1502 (Admin.), where guidance from the Secretary of State forbidding local authorities from using “pension policies to pursue boycotts, divestment and sanctions against foreign nations and UK defence industries are [sic] inappropriate, other than where formal legal sanctions, embargoes and restrictions have been put in place by the Government” (Guidance on preparing and maintaining an investment strategy statement (15 September 2016). Given that guidance could only be issued for pensions purposes, this aspect of the guidance was unlawful:

the flaw in the Secretary of State’s approach is that the guidance has singled out certain types of non-financial factors, concerned with foreign/defence and the other matters to which reference has been made, and stated that administering authorities cannot base investment decisions upon them. In doing this I cannot see how the Secretary of State has acted for a pensions’ purpose. Under the guidance, these factors cannot be taken into account even if there is no significant risk of causing financial detriment to the scheme and there is no good reason to think that scheme members would object. Yet the same decision would be permissible if the non-financial factors taken into account concerned other matters, for example, public health, the environment, or treatment of the workforce. In my judgment the Secretary of State has not justified the distinction drawn between these and other non-financial cases by reference to a pensions’ purpose. In issuing the challenged part of the guidance he has acted for an unauthorised purpose and therefore unlawfully (at para. 32).

Cf R(A and B) v Health Secretary [2017] UKSC 41, where the respondent’s refusal to exercise his power to permit UK citizens normally resident in Northern Ireland access NHS abortion services in England was not unlawful, given that the statutory scheme provided for the possibility of asymmetry within the UK: “The respondent was entitled to afford respect to the democratic decision of the people of Northern Ireland; was entitled to have in mind the undeniable ability of Northern Irish women lawfully to travel to England and to purchase private abortion services there; and was entitled to decide not further to alter the consequences of the democratic decision by making such services available to them free of charge under the public scheme in England for which he was responsible” (at para. 20).

This content has been updated on January 28, 2025 at 23:18.