The Supreme Court and Resource Allocation: Revisiting R (Tigere) v Secretary of State for Business, Skills and Innovation [2015] UKSC 57, [2015] 1 WLR 3820

by Byron Karemba*

i. Context

In 2015, the Supreme Court of the United Kingdom allowed an appeal by a prospective undergraduate student, Beaurish Tigere, who had been denied access to the ‘loan and grant’ facility provided to undergraduate students in England. As noted in the judgement, the appellant was one of over 2000 people aged between 16 and 23 granted “discretionary leave to remain (DLR)” or its subsequent replacement “limited leave to remain (LLR)” as an interim status before being granted indefinite leave to remain. This category of migrants were excluded from the student loan regime notwithstanding their habitual residence in the UK, and absence of any realistic prospect of removal. They were disentitled to the financial aid because they failed to meet the eligibility criteria set by the Secretary of State for Business Innovations and Skills (BIS). This desiderata included the ‘settlement’ criterion, which by a divided majority of 3:2, the Supreme Court found wanting.

The Teaching and Higher Education Act 1998 empowers the relevant Secretary of State to make ‘grants or loans, for any prescribed purpose, to eligible students in connection with their undertaking of higher education courses or further education courses.’ And crucially, the same provision also provides that, the minister ‘may in particular, make provision for determining whether a person is an eligible student in relation to any grant or loan available.’

The appellant in Tigere challenged two limbs of the eligibility criteria in the regulations (SI 2011/1986) governing entitlement to the ‘loan and grant’ facility on the grounds that they violated the substantive right to education, and the ancillary principle of non-discrimination protected by Article 2 of the First Protocol and Article 14 of the European Convention on Human Rights (ECHR) respectively. The specific impugned criteria is the requirement that, at the start of the academic year, a prospective student must:

  • Have been ‘lawfully resident’ in the United Kingdom for the three years before then [and,]
  • Be ‘settled’ in the United Kingdom on that day

The Court upheld both the ‘lawful residence’ and duration element of criterion (i); but made a declaration that the ‘settlement’ requirement in criterion (ii) violated the Convention rights of the appellant, and by implication, everyone in a situation identical to her. The concept of ‘settlement’ is an import from the field of immigration law and policy. It is given meaning with reference to section 33(2A) of the Immigration Act 1971 which describes it as being ‘ordinarily resident in the United Kingdom [..] without being subject to any restriction on the period for which [a person] may remain.’ Defined in this narrow way, setting aside EU migrants and those afforded protection under international humanitarian law, only persons granted Indefinite Leave to Remain qualify as ‘settled’ immigrants as they are the only relevant group not subject to restrictions on the period for which they can remain in the UK.

Therefore, at first glance, Tigere could be viewed as being principally concerned with the nexus between immigration status and access to public funds. However, from an institutional standpoint, the litigation and outcome of this case also raises the equally important issue about the capacity of courts to deal with questions of resource allocation. Although the Court did not expressly frame the issue before them as such, instead it chose to focus on whether the discrimination was justified, however this assessment needed to be made with reference to the Court’s own institutional capacity.

For proponents of judicial restraint and deference, the outcome Tigere arguably represents a “judicial overreach.” The Judicial Power Project listed Tigere (at No.46) among “50 Problematic Cases” decided by domestic courts and the two supranational tribunals. The knife-edge 3:2 division amongst the Justices who heard the appeal also highlights the contentiousness of judicial intervention in matters raising questions of resource allocation. The fragmented majority allowing the appeal was formed of a coalition between Lady Hale (with whom Lord Kerr agreed), and Lord Hughes who reached the same outcome but differed on whether discretion was required in the application of the criteria. The 5-member panel was completed by Lord Sumption who was joined in dissent by Lord Reed in holding that the discrimination was justified.

ii. Analysis

Article 2 of the First Protocol to the ECHR provides that:

No person shall be denied the right to education. In the exercise of any functions which it assumes in relation to education and to teaching, the State shall respect the right of parents to ensure such education and teaching in conformity with their own religious and philosophical convictions.

However, as Lady Hale notes, ‘this does not, however, oblige Member States to provide any particular system of state education’ [23]. As observed by the Strasbourg Court itself in Ponomaryov v Bulgaria, this is partly because the provision of education ‘is an activity that is complex to organise and expensive to run, whereas the resources that the authorities can devote to it are necessarily finite [55].’ Thus, in the provision of this right, the state ‘must strike a balance between, on the one hand, the educational needs of those under its jurisdiction and, on the other, its limited capacity to accommodate them.’ This is why both Lady Hale and Lord Hughes’ judgments (like Laws LJ before them in the Court of Appeal) put a strong emphasis on the (Art. 14) discrimination aspect of the appeal.  Lady Hale assess that:

[T]hough the appellant complains that denial of access to a student loan has denied her access to the higher education provided in this country, [her] real complaint is that some people get student loans and other do not, in short discrimination.’

The Government had justified the discrimination against students under the DLR/LLR regime on the basis that ‘settled’ applicants as defined by the 1971 Act were in a better position to make significant economic contribution and have a right to remain and work in the United Kingdom.’ Therefore, in legal theory-speak, the allocation of resources – such as the distribution of loans and grants – can be seen as a “polycentric issue.” As conceived by Lon Fuller, a polycentric issue is one that ‘comprises a large and complicated web of interdependent relationships, such that a change to one factor produces an incalculable series of changes to other factors.’ Fuller singles out resource allocation in particular as an archetypical polycentric issue because of its strong connectivity to other spheres of government action. This philosophy seems to be captured in Lord Sumption’s dissent in Tigere when he explains that:

There are finite funds available for providing this subsidy, and funding for higher education must itself compete with other potential uses of the money which may also have a high social or economic value [80].

The discrimination against students in the appellant’s position was underpinned by a policy concern that this class of persons would be unlikely to contribute (through taxation and labour participation) to the economy of the United Kingdom. To address this ‘legitimate concern’ Lady Hale leant on the ‘unchallenged’ evidence provided by Professor Ian Walker that, ‘there would be sizeable gains to the Exchequer in the long-run [by] extending student loans provision to this relatively small group [12].’

Arguably, Tigere and other recent judgments of the Supreme Court demonstrate a growing confidence of courts in dealing with cases raising questions of resource allocation. This trend has been aided by the domestic incorporation of the ECHR through the Human Rights Act. As evident in Tigere, the domestication of the Convention has provided scope for the deployment of legalistic concepts like “discrimination” and “proportionality” as instruments to justify judicial intervention in a ‘holistic policy area’ which orthodoxy once deemed non-justiciable: see R (Prolife Alliance) v British Broadcasting Corporation [2003] UKHL 23, [2004] 1 AC 185 [144] per Lord Walker.

However, notwithstanding the entrenchment of a ‘rights’ discourse around litigation involving resource allocation, the ECtHR itself has acknowledged that:

[A] wide margin of discretion is usually allowed to the state under the Convention when it comes to general measures of political, economic or social strategy, and the court generally respects the legislature’s policy choice unless it is manifestly without reasonable foundation: Gogitidez v Georgia  [97].

Generally, such a deferential approach and a significantly high threshold for judicial intervention in particular areas of policy is not alien to domestic courts. Alongside litigation touching on national security, cases concerning the allocation of resources are also associated with the distinct, but related concepts of judicial restraint and judicial deference. This is evident in the remarks of Scott Baker LJ in R (Douglas) v North Tyneside Metropolitan Borough Council and another [2003] EWCA Civ 1847, [2004] 1 W.L.R. 2363 [62]:

The courts in my judgment have to be careful when considering an issue of justification such as would arise in the present case. [They should] not trespass into the discretionary area of resource allocation. That is an area that is not justiciable.

In Tigere, Lord Sumption also emphasises the discretionary nature of resource allocation. He opines that entitlement to ‘welfare benefits’ such as the student loans and grant facility are ‘almost invariably selective and the criteria for selection necessarily involve decisions about social and economic policy and the allocation of resources’ [75]. Relying on the Strasbourg jurisprudence above, Lord Sumption concludes that ‘the decision which best provides for the best allocation of scarce resources is a question of social and economic evaluation’ [99]. And furthermore, that discrimination on the basis of residence and settlement are not “manifestly without reasonable foundation” and within the relevant minister’s discretion.

Interestingly, Lady Hale was also keen to emphasise that her half of the majority were not unaware of the discretionary nature of resource allocation. She noted that her half of the majority was:

Equally concerned with the distribution of finite resources at some cost to the taxpayer, and the court must treat the judgments of the Secretary of State, as primary decision-maker, with appropriate respect [32]

This discourse over what Lord Sumption calls ‘the marginal area of judgement’ in Tigere [95] (and also in an extra-judicial speech) also highlights the “administrative problem” of judicial determinations in the context of resource allocation. Lady Hale and Lord Kerr resolved that the ‘settlement’ criterion could be sustained by the existence of discretion to consider applications for financial aid from this group of students on a case by case basis. In Lady Hale’s view, ‘given the comparatively small numbers involved it has not been shown that this would be administratively impracticable.’ The Court’s Deputy President further recommends that, ‘in principle, different fees could be charged for processing different applications, based on the administrative cost of doing so’ [38].

However, it is legitimate to ask whether courts have the capacity to assess with any precision the administrative viability of any given policy. This question is even more pertinent in the context of allocation of financial resources where the means of administration may be informed by the scale of resources being distributed or the resources available for the administration itself. These considerations appear to escape the Hale/Kerr judgment. By asserting that ‘the harms to both the class of individual concerned and the community as a whole cannot be outweighed by the administrative benefits of the impugned regulations [41]’, they underplay the importance of administrative concerns. In his solo judgment, Lord Hughes was more circumspect and less prescriptive. He conceded that:

It is not for the Court to devise such a scheme, but for the Secretary of State. The role of the Court is limited to determining whether the justification for the present rule which is advanced is or is not made out [64].

The dissent is equally guilty of speculation about what amounts to “good administration.” Lord Sumption asserts that the settlement criterion ‘can be applied accurately and consistently, and without the element of arbitrariness […and] enables speedy decisions to be made and a larger proportion of the available resources to be applied to supporting students.’ Lord Sumption’s defence of the impugned measure suffers the same “capacity problem” because the positive administrative outcome he envisages is dependent on executive action rather than judicial direction. There is no guarantee that effective application of a ‘bright-line’ rule such as the settlement criterion results in more resources being available for loans and grants.

Lastly the declaratory nature of the remedy granted in Tigere demonstrates the institutional limitations of courts even when there is a desirable outcome for a litigant. Although Lady Hale contended that ‘such a declaration would leave the department in no doubt that Ms Tigere is entitled to a student loan’, she concedes the realisation of that entitlement was dependent on the ‘Secretary of State [not the Court] devising a more carefully tailored scheme which would avoid breaching the Convention.’ The resultant executive response was initiated with the written statement laid before the House of Commons by the Minister of State for Universities and Science outlining the Government’s intention to modify the rules governing eligibility to student loans and grants in England.

*Byron is a PhD Student at the University of Leeds School of Law and one of the co-organisers of the University of Leeds School of Law Postgraduate Conference on September 13th.