Town halls face legal threat over cuts

08/04/2011 | By Rhiannon Bury, Inside Housing

Local authorities face being taken to court over their spending cuts, following a landmark court case.

In the High Court last Friday Birmingham Council was told its £1.4 million cut to voluntary sector funding was unlawful.

The court found in favour of 13 voluntary organisations which argued the council no longer fulfilled its equalities duties because the cuts negatively impacted on disabled people, ethnic minorities and women.

Organisations involved in the case include Birmingham’s Citizens Advice Bureau, Age Concern Birmingham and the Bangladesh Welfare Centre.

The court found that England’s largest local authority failed to consult adequately on the funding changes to the groups.

Mr Justice Blake criticised the council’s decision to implement the cuts last month, even though a consultation to approve new grant management will not end before July. This would leave a four-month gap in which the 13 voluntary groups would receive no money at all from the council.

Lucy James, a solicitor specialising in judicial review at law firm Trowers & Hamlins, said she expected similar cases to arise in the coming months. ‘Organisations are more likely to use [judicial review] now in the face of big cuts than they would have been in the past. That’s not to say that local authorities won’t make cuts, but they will have to make sure any decision-making is robust.’

The court ordered Birmingham Council to continue to pay £25,000 a month to three organisations – The Birmingham Tribunal Unit, the Chinese Community Centre and St James’s Advice Centre – which provide a unique function in the city, until July’s grant management consultation concludes.

A council spokesperson said: ‘We are disappointed by the court’s judgement. The council is considering its position, including potential appeal against the judgement.’

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