The Bottom Line
- Increased Project Risk: Companies bidding on or holding public justice contracts face a higher risk of project delays, revisions, or cancellations if the underlying government policy is legally flawed.
- Due Diligence is Crucial: This ruling highlights the need for businesses to scrutinise the government’s own procedural compliance, particularly around public consultation and equality impact, before committing to major public sector tenders.
- Procedural Failures Can Void Policy: A reminder to all public bodies and their private partners that administrative shortcuts, even when aimed at solving urgent problems, can render an entire strategic policy unlawful, creating significant commercial uncertainty.
The Details
In a significant ruling, the High Court has declared the Secretary of State for Justice’s “Accelerated Capacity Programme” unlawful. The policy was designed to rapidly expand prison capacity by fast-tracking the use of private sector contractors for building and managing new prison facilities. The challenge, brought by the Howard League for Penal Reform, did not contest the need for more prison space but focused squarely on the legality of the process the government followed. This case serves as a critical lesson for any business engaged in public procurement.
The core of the court’s reasoning, delivered by Mr Justice Calver, centered on two major procedural failings. Firstly, the Secretary of State was found to have breached the Public Sector Equality Duty (PSED). The court deemed the government’s equality impact assessment a superficial “tick-box” exercise that failed to give rigorous consideration to the policy’s potential impact on vulnerable inmates, including young offenders and those with disabilities. Secondly, the judgment found the consultation process to be inadequate, failing to meaningfully engage with key stakeholders before the policy was finalised. The court emphasised that urgency does not override fundamental statutory obligations.
For CEOs and legal counsel, the implications extend far beyond the prison sector. This judgment underscores the inherent risk of partnering with public bodies on projects born from hastily constructed policy. It demonstrates that a government contract, however lucrative, is built on a foundation of administrative law. If that foundation is weak, the entire project is vulnerable to legal challenge, leading to reputational damage, wasted tender costs, and potentially unenforceable agreements. Businesses must now factor the robustness of a public body’s decision-making process into their own risk assessments.
Source
High Court of Justice (Administrative Court)
