Scunthorpe United Football Club Ltd, R (on the application of) v Greater Lincolnshire LEP Ltd & Ors, Court of Appeal - Administrative Court, November 20, 2018,  EWHC 3351 (Admin)
|Resolution Date:||November 20, 2018|
|Issuing Organization:||Administrative Court|
|Actores:||Scunthorpe United Football Club Ltd, R (on the application of) v Greater Lincolnshire LEP Ltd & Ors|
Claim no CO/237/2018
Neutral Citation Number:  EWHC 3351 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
20 November 2018
HH Judge Kramer
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THE QUEEN on the application of
SCUNTHORPE UNITED FOOTBALL CLUB LIMITED
GREATER LINCOLNSHIRE LEP LIMITED
(1) NORTH LINCOLNSHIRE COUNCIL
(2) KMG CAPITAL MARKETS LIMITED
(a company registered in Cyprus)
(3) MALTGRADE LIMITED
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JudgmentJudgment: HH Judge Kramer
This case concerns a challenge, by way of judicial review, by Scunthorpe United Football Club (the club) to a decision of the Greater Lincolnshire Local Enterprise Partnership (the LEP), made on 29th September 2017, concerning the grant of £1.9m to North Lincolnshire Council (NLC) for the construction of a road junction and roundabout to the west of Scunthorpe, currently lying on the line of the M 181, at what is referred to as the northern junction.
The club is represented by Mr Roe QC and Mr Pennington-Benton, the LEP is represented by Mr Strachan QC and Mr Stedman Jones and NLC by Ms Hutton. The other interested parties, KMG Capital Markets Ltd and Maltgrade Limited, have been served but took no part in these proceedings.
The evidence is to be found in the statements of Marcus Walker, dated 5th April 2018, which verifies the statement of facts, and his second statement, dated 1st October 2018, and the statements of Ruth Carver, a director of LEP, the defendant, dated 13th February 2018 and 10th July 2018 and Lesley Potts, head of economy and growth for NLC, dated 9th July 2018.
Background and parties
The claimant is a professional football club whose chairman is Peter Swann. The Defendant is a company limited by guarantee. Its members are the three local authorities serving Lincolnshire. The board is comprised of councillors from the member authorities and representatives from local businesses. The task of LEPs is to develop the economies of their regions. They compete nationally for funding from central government through ``single local growth funds''. They are responsible for investing such funds to deliver economic growth in their area in accordance with their Strategic Economic Growth Fund and Growth Deals signed between the LEP and Government. In the case of this LEP it is required to deliver 12,851 jobs and 1615 homes. For the period 2015/16 to 2018/19 it has received £98.7m of funds and for the period 2019/20 to 2020/21 is has been allocated £25m. LEPs are assessed annually by central government. The grant funding for the LEP is held by the local authority which releases payments to recipients at the request of the LEP. NLC is the local authority for Scunthorpe and its surrounds and has been awarded the £1.9m grant as a contribution towards the construction of the northern junction. The claimant challenges the lawfulness of the award and seeks an order that the decision to make the grant be quashed, or at the very least be declared unlawful. KMG Capital Markets Ltd is an investment vehicle which owns the land on which the northern junction is to be built and it proposes to build a business park to be used with the junction. Maltgrade Limited owns land further to the south on the M181 at which it is proposed that a terminal junction for the M 181 will, in due course, be built.
The claimant's primary case, put shortly, at grounds 2 to 4 of the statement of facts and grounds, is that the LEP did not give adequate consideration to the club's rival proposal to use the grant to develop a junction elsewhere, referred to as the southern junction, as part of its scheme to build a new football stadium at that location and that, in any event, the LEP did not adequately investigate the council's proposal; it argues that insufficient consideration was given to the outputs which each scheme could produce and in what time such outputs could be achieved. As a quite separate ground, ground 1, it asserts that LEP's decision was procedurally unfair because it was not informed of the detail of the NLC proposal.
The defendant's case, in summary, is that this is a veiled attempt to make a merits challenge dressed up as a challenge on the ground of irrationality. The LEP was faced with rival bids which it investigated adequately by commissioning an independent expert report, considering its factual content and recommendations and reaching a conclusion which was far from irrational, indeed the defendant would say it was clearly the reasonable course to take, in the circumstances. The relevant circumstances relied upon were that preparatory works for the NLC bid were well advanced and it appeared that suitable outputs would be achieved within the time required by the grant whereas the club's proposal was at a more gestative phase and its delivery was highly speculative. Thus it was able to deal with the uncertainty as to the production of outputs by the NLC bid by making a decision in principle to award the grant but setting out conditions, including the confirmation of outputs which had to be fulfilled before the making of a final decision, and did not need to look in detail at potential outputs from the club's proposal.
It denies there was procedural unfairness as there is no obligation on an LEP to inform rival bidders of the details of other bids; in any event the club knew the general nature of the NLC bid, namely that the northern junction was to be built in association with the development of a business park.
The LEP also argue that relief should be refused, even if the allegations relied upon are made out, as this dispute is academic because first, the chairman of the club issued a public statement that it was not going to pursue its proposal to build its stadium at the southern junction, secondly, should it change its mind, even if its decision was quashed there would no longer be time for the claimant to construct its stadium at that junction within the period required by the grant, thirdly the claimant delayed in issuing the claim till the last day of the 3 month maximum period for making these challenges, fourthly the complaint has been overtaken by the making of the final decision to grant, in July of this year, which is not subject to challenge in these proceedings and fifthly it argues that whatever valid criticism there could be of the September 2017 decision it is highly likely that the outcome would not have been substantially different and I am thus bound to refuse relief by virtue of s.31 (2A) of the Senior Courts Act 1981. It also seeks to invoke s.31(6) as a reason for refusing relief.
NLC, the first interested party, supports the arguments of the LEP. It highlights the planning obstacles faced by the club's scheme to demonstrate that the LEP's judgment as to whether it was likely to deliver any outputs in time was rational. It also points to changes in the case of the claimant as advanced in its skeleton argument and in its original grounds, most notably, as to the viability of the construction of the northern junction without the prior construction of the southern junction.
The events leading up to the impugned decision start with the creation of the Lincolnshire Lakes Area Action Plan (the Action Plan), which is part of the Development Plan for this part of Lincolnshire and was formulated by a process of consultations starting in 2013 and culminating in its adoption on 10th May 2016, although the preparation for the scheme started in 2002. This provides for the creation of the Lincolnshire Lakes development, a £1.2billion plan consisting of the creation of 5 lakes and 6 villages on land between the river Trent and the West of Scunthorpe with up to 6000 homes, 23 hectares of strategic mixed area, such as for retail, offices and leisure, and areas allocated for natural and semi greenspace. The Action Plan followed rigorous assessment of flood risk management and drainage and transport. It envisaged that the M 181 would terminate at the southern junction and will provide a new link to the existing Scunthorpe urban area. The M 181 to the north of that junction was to be de-trunked to where it met the northern junction, which would provide a second western access to Scunthorpe and assist in relieving traffic capacity issues in part of the town. In their preparation of the Area Action Plan NLC investigated what infrastructure would be required to bring forward development within each village and concluded that if the northern junction was to come forward without the southern junction the 23 ha strategic mixed use area, 2.15ha district centre and villages 1, 2 and 5 could be delivered.
In 2014 NLC was successful in a bid to the LEP for £2.9m to improve Berkley Circle in Scunthorpe. Consultation revealed that the delivery of the Lincolnshire Lakes infrastructure would negate the need for the redevelopment of Berkley Circle. This, together with the loss of 900 jobs at Tata Steel in Scunthorpe and thus a desire for short and medium term job creation, led NLC to the reallocation of the Berkley Circle money as to £1m to Normanby Enterprise Park and £1.9m to the construction of the northern junction. By this stage the northern junction had already been the subject of an application for planning permission, on 19th August 2013, and KMG had an outstanding application for outline planning permission for the adjacent business park, also made in 2013.
It is a feature of the grant that it can only be awarded if it produces economic development which is evidenced by the production of some tangible economic benefit such as jobs or buildings. Furthermore, some of the outputs have to be delivered within the period of the grant, which in this case was by the end of the financial year 2020/2021. Prior to the involvement of the club with the northern roundabout scheme...
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