London cuts on hold

Both sides are claiming victory in a battle to overturn London Councils’ new budget, which plans to cut £10m from its grants for voluntary sector organisations in London. According to solicitors Pierce Glynn, the consultation process “must be re-run”, following a judicial review at which a judge upheld the claim that London Councils’ consultation process was flawed and that it had failed to meet its statutory equality duties. He ruled on 1 February that London Councils must repeat the process, this time with full equality impact assessments, and called a halt to “all decisions to terminate funding for existing commissions under the London Councils’ Grants Scheme”.

However, a spokesperson for London Councils told AP: “Following the result of the judicial review, the London Councils’ grants budget agreed by London borough leaders in December still stands”. The judge described the budget as “undoubtedly tainted and therefore potentially quashable as the result of flaws [in the assessments]”, but was “persuaded to exercise [his] discretion that the practical disadvantages
of [overturning the budget] are considerably greater than those of allowing it to stand subject to reconsideration.”

London Councils is in the process of assessing the best way of taking this forward. The spokesperson also made it clear that “the judge said that in a case like this the ‘due regard’ for equalities impact meant a very high standard”.

The controversial budget, which was proposed on 14 December, was passed with a two-thirds majority on 27 January, the morning of the trial. It remains to be seen what the new ruling means for the local authorities who signed up to it, and for the voluntary organisations whose funding is threatened. The ruling states that “No funding agreement with any organisation commissioned by the London Councils Grants Scheme shall be terminated, save either a. with the consent of the organisation, or b. following the expiry of the 4 year period of the original commission of an organisation, until three months after the conclusion of the lawful consideration process.” The London Councils’ spokesperson explained to AP: “the budget of £17.8m currently stands. We will now reconsider the equalities impacts and consider different options in more detail. Identified options will be given to Leaders’ Committee to decide upon.”

The claimants’ solicitor, Louise Whitfield, a specialist in claims raising equality issues and cuts to the voluntary sector, said: “it remains of paramount importance that public sector funding cut decisions are properly assessed for their gender, disability and race equality impacts. If they are not, public sector funding cut decisions will be unlawful. London Councils simply did not consider the full effect of their £10m cuts.”

Charlotte Jones, Chief Executive of the Independent Theatre Council (ITC), told AP that the decision to make cuts was “ill-thought-out”, but that “the morale of the sector has been heightened by the judiciary’s decision”. The ITC is convening a meeting for affected organisations at its London headquarters on 9 February.

London Councils is a cross-party organisation, funded and run by its member local authorities and the City of London, the Metropolitan Police Authority and the London Fire and Emergency Planning Authority. It currently funds 360 voluntary organisations and distributes more than £26m of funding on behalf of the London boroughs. The new budget reduced this to £17m.

In June 2010, the Leaders’ Committee announced a review of its grants scheme, and “it was anticipated that the review would lead to a significantly reduced London-wide Scheme”. The consultation invited views on the proposed scope of scheme from 2011 onwards, prompted by the squeeze on public sector finances.

In a letter to member councils explaining the consultation, John O’Brien, Chief Executive of London Councils, warned local authorities that they “will also need to have regard to the equalities impacts of plans they may have for continued funding for similar activities outside the Scheme… In assessing the equalities impacts you will need to assume that the “worst case” scenario will happen i.e. that the funding will not continue in any other form.” The consultation, conducted by Ipsos Mori, revealed opposition to the plans. Prominent reasons for opposing the proposal were “that the withdrawal of London Councils Grant Scheme funding will be detrimental to disadvantaged and marginalised groups in society.”