On 26 July The High Court (Mr Justice Langstaff) upheld the decision of the Secretary of State for Environment, Food and Rural Affairs to remove PFI credits towards the construction of waste infrastructure as part of the Spending Review from Cheshire East Borough Council, and Cheshire West and Chester Borough Council. The Court rejected that the Claimants had a procedural legitimate expectation to be consulted about the decision to remove the credits, holding that the policy decision not to consult in the circumstances of this case was rational and was not unlawful or unreasonable or unfair, being based upon a premise that consultation would be counter-productive. The Court also rejected the suggestion that given the “carefully structured, staged approval process” in the scheme for obtaining PFI credits, that the Claimants had a substantive legitimate expectation that they would be awarded credits where the relevant stages had not been completed.
The Court also held that if there had been a legitimate expectation, there was an overriding public interest given the Government’s commitment to cutting the deficit. A decision maker in an individual department of State was to be accorded a very wide margin of appreciation in decisions made as to the allocation of resources in such circumstances.