A decision to axe a £1.4 million funding package for 13 voluntary organisations, including the Citizens Advice Bureau, was unlawful, a High Court Judge has ruled.
Mr Justice Blake said a Birmingham City Council decision to stop giving money to groups such as the Citizens Advice Bureau was “clearly defective” and that councillors appeared not to understand their obligations under the Race Relations Act, Sex Discrimination Act and Disability Discrimination Act.
Council leaders failed to take proper account of the impact that withdrawing grants would have on disabled and vulnerable people, the judge added.
No consultation was carried out with people who would suffer because of the funding cuts, neither did the cabinet consider other ways of helping the organisations to identify alternative funding.
Although council officers drew up an Equality Impact Needs Assessment it was defective and did not address the real issues, the judge said.
Mr Justice Blake allowed a judicial review by users of the three of the affected organisations – the Birmingham Tribunal Unit, the Chinese Community Centre and St James’s Advice Centre – and ordered the council to continue to pay them a total of £25,000 a month until the cabinet can reconsider the matter and reach a lawful decision based on effective consultation.
In reality, the decision means that the three bodies will continue to receive council cash at least until June.
The judge was critical of the cabinet’s decision to cut funding from this March, when a commissioning process to approve a new grant regime would not be completed until July, leaving a four-month gap when the 13 groups would receive no money at all from the council.
He said it was “peculiar” that councillors ended existing contracts to provide grants without putting in place alternative provision.
Any fair decision maker would have considered continuing existing grant provision, especially for organisations like the Chinese Community Centre, St James’s and the Birmingham Tribunal Unit where no appropriate alternative provision existed in the city for vulnerable people.
The court heard from Richard Clayton QC, for the council, that the cabinet had no alternative but to act quickly to end funding arrangements because of the need to deliver severe public spending cuts.
Mr Clayton argued that councillors had taken due regard of equalities issues, but that the financial crisis was of overriding importance.
Mr Justice Blake dismissed the claim, adding that the local authority’s financial difficulties did not mean that it could ignore equalities legislation.
He said: “There is much to be said for the proposition that, even in straightened times, the need for clear and informed decision making that assesses the impact on disadvantaged members of society is great, if not greater.”
The council’s claim that a £300,000 transitional fund would help tide over organisations until a new grant regime could be put into place did not stand up to scrutiny because application rules stated that the money could not be used to pay wages or other staff costs.
This meant that some of the organisations would have to make employees redundant, or might even be threatened with going out of business, Mr Justice Blake added.
A council claim that the three-month funding gap was necessary because of European employment legislation was equally flawed, the judge said.
He awarded costs against the council, believed to be in the region of £100,000, and refused the local authority leave to appeal.