Edenred (UK Group) Ltd, R (on the application of) v HM Treasury & Ors
2014
QUEEN’S BENCH DIVISION
United Kingdom
CORAM
- MR JUSTICE LEGGATT
Areas of Law
- Contract Law
- Administrative Law
2014
QUEEN’S BENCH DIVISION
United Kingdom
CORAM
AI Generated Summary
The case involves Edenred challenging the government's move to replace the Employer Supported Childcare (ESC) scheme with the Tax Free Childcare (TFC) scheme, administered without a public tender. The court held that the automatic suspension preventing the government from entering into related contracts should remain until the trial concluded, considering the public interest and applying the principles established in American Cyanamid v Ethicon [1975] AC 396.
Judgment
MR JUSTICE LEGGATT:
At present there is a system of Government support for working parents known as Employer Supported Childcare (“ESC”). ESC operates by giving tax relief to employers who provide childcare for their employees either directly or through vouchers which can be used to purchase childcare. The voucher scheme is administered by private commercial operators, one of whom is the claimant in this case, whom I shall call “Edenred”.
In March 2013 the Government announced plans to replace the current system of ESC with a new scheme known as Tax Free Childcare (or “TFC”). A decision has been made that the TFC scheme will be administered by National Savings and Investments (“NS&I”), all of whose operations are contracted out to a private company called Atos.
In this action, which was begun on 27 August 2014, Edenred seeks declarations that that decision is unlawful - principally on grounds that the arrangements will involve the conclusion of a public services contract within the meaning of the Public Services Regulations 2006 between either or both of the first two defendants, HMT and HMRC, and the third defendant, NS&I, or alternatively that the arrangements will involve a material variation of a public services contract between NS&I and Atos - such that in either case it is necessary to hold a tender procedure in accordance with the Regulations. The defendants deny that the arrangements fall within the scope of the Regulations, and maintain that no such tender procedure is necessary.
At two hearings in late September, I gave directions in this action which are contained in an order dated 29 September 2014. In particular, I directed that there should be an expedited trial of the key issues in dispute, to be listed for hearing in the week commencing 24 November 2014, that is in four weeks' time.
A feature of the 2006 Regulations is that, pursuant to Regulation 47G, where proceedings are begun to challenge a decision to award a public contract before the contract has been entered into, the contracting authority is prohibited from entering into the contract until either that automatic prohibition or suspension is lifted by the court or the proceedings have been determined. As I have mentioned, it is the defendants' case that concluding a memorandum of understanding between HMRC and NS&I and entering into a variation of the Atos contract will not involve the conclusion of a public contract falling within the Regulations. Understandably, howe