When assessing whether the school the parents preferred to be named in their child’s statement of special educational needs would incur “unreasonable public expenditure” within section 9 of the Education Act 1996, a local authority was to have regard to all public expenditure by a public body, not only the expenditure incurred by that authority in discharging its education functions.

The Court of Appeal so held, allowing the appeal of the claimant, Wendy Haining, against the decision of the Upper Tribunal (Administrative Appeals Chamber) on 28 August 2013 ([2013] UKUT 391 (AAC)) to uphold the dismissal by the First-tier Tribunal on 27 February 2013 of her appeal against the naming by the defendant, Warrington Borough Council, of a maintained day special school, rather than the parents’ preferred option of an independent residential special school for their son, B, on his statement of special educational needs on the basis that, by reference to the authority’s education budget only, the residential school placement would incur unreasonable public expenditure.

Section 9 of the Education Act 1996 provided: “In exercising or performing all their respective powers and duties under the Education Acts, the Secretary of State and local authorities shall have regard to the general principle that pupils are to be educated in accordance with the wishes of their parents, so far as that is compatible with the provision of efficient instruction and training and the avoidance of unreasonable public expenditure.”

LORD DYSON MR said that the question was how the words “ public expenditure” in section 9 of the Education Act 1996 should be interpreted. In relation to local authorities, did they mean expenditure incurred by local authorities in discharging their functions under the Education Acts (the narrow meaning) or expenditure incurred by any public authority as a result of the discharge by the local authority of the education functions (the wide meaning)? The claimant was the mother of B, who was aged 12 and had significant special educational needs. B’s parents would like him to attend an independent residential school which the authority accepted met his needs. The authority named on his statement of special educational needs a maintained day special school, and accepted that it would then also provide him with residential respite care at the school of his parents’ choice. The issue was whether, in comparing the costs of placements at the two schools, the authority and on appeal the tribunals should have left out of account respite care and other costs which were to be met from public expenditure and limited the comparison to the costs which were to be met from its education budget. The meaning of “unreasonable public expenditure” in section 9 of the 1996 Act and its predecessor had been considered on a number of occasions. There were conflicting decisions but none of them was binding on the Court of Appeal. In his Lordship’s view the correct meaning of “public expenditure” in section 9 of the 1996 Act was expenditure incurred by a public body, as opposed to expenditure incurred by a private body. That accorded with the natural and ordinary meaning of the words, and if it had been intended to limit the expenditure to expenditure in the exercise of education functions section 9 could and would have said so. Instead Parliament had chosen the general words “public expenditure”. Further the language of paragraph 3(3) of Schedule 27 to the 1996 Act, contrasted with that of section 9. Paragraph 3(3) required the local authority to specify the name of the school preferred by the parent (where the parent chose a maintained school), unless the child’s attendance at the school was incompatible, inter alia, with “the efficient use of resources”. That phrase referred to the resources of the local education authority (now the local authority) and no other authority: see B v Harrow London Borough Council [2000] 1 WLR 223. In enacting paragraph 3(3) of Schedule 27 Parliament had not reproduced the language of section 9. None of the points put forward for the local authority persuaded his Lordship that the natural meaning could not have been intended by Parliament. It was common ground that section 9 had to be addressed even where paragraph 3(3) of Schedule 27 was engaged. The authority had to ask itself whether naming the school preferred by the parent would involve incurring public expenditure generally. In many cases the only relevant public expenditure would be expenditure incurred by the local authority in discharging its education functions. The present case was more complicated because, although all the public expenditure was incurred by the same authority, substantial residential care fees were involved. If those costs had not been left out of account the cost to the public purse of placing B at the residential school his parents preferred was lower than the costs of placing him at the day school. In those circumstances it was impossible to say that, if the judge at the First-tier Tribunal had directed himself correctly, he would have reached the same conclusion. The matter should be remitted to that tribunal for reconsideration in the light of the Court of Appeal’s judgment.

PITCHFORD and RAFFERTY LJJ agreed.