Neutral Citation Number: [2008] EWCA Civ 148
Case No: C1/2007/2413
C1/2007/2411
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
(ADMINISTRATIVE COURT)
MR JUSTICE UNDERHILL
CO/4310/2007
CO/3257/2007
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 04/03/2008
Before :

LORD JUSTICE WALLER
Vice President of the Court of Appeal, Civil Division
LORD JUSTICE CARNWATH and LORD JUSTICE RICHARDS
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Between :

	(1) SHREWSBURY & ATCHAM BOROUGH COUNCIL
(2) CONGLETON BOROUGH COUNCIL
	Appellants	
	                                           - and –
		
	THE SECRETARY OF STATE FOR COMMUNITIES AND LOCAL GOVERNMENT

- and -

        SHROPSHIRE COUNTY COUNCIL (Interested Party)	Respondent	
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(Transcript of the Handed Down Judgment of
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Andrew Arden QC, Jonathan Manning & Laura West (instructed by Congleton Borough Council and Shrewsbury & Atcham Borough Council) for the Appellants
James Eadie & Catherine Callaghan (instructed by Treasury Solicitors) for the Respondent
Richard McManus QC and Andrew Sharland for the Interested Party
Hearing dates : 28th, 29th and 30th January 2008
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Judgment
Carnwath LJ:
Introduction
1.	This appeal concerns proposals of the Secretary of State for Communities and Local Government to replace two-tier local government in some parts of the country with unitary authorities. The proposals with which we are concerned are those for Shropshire, advanced by the County Council (“Shropshire”), and for Cheshire, advanced by the Chester City Council (with three other councils). They are strongly opposed by the Borough Councils for Shrewsbury and Congleton (“the Boroughs”), both of which councils are liable to be abolished. They are jointly represented before us by Mr Arden QC, Mr Manning and Ms West. 
2.	The Boroughs brought judicial review proceedings to challenge the process adopted by the Secretary of State, and decisions made by her in the course of that process. They challenged both the right of the Secretary of State to embark on the exercise at all, in advance of the enactment of the necessary legislation; and also the way in which the exercise was carried out, particularly as respects the assessment of public support. On 10th October 2007, Underhill J dismissed the applications. The Boroughs appeal. 
3.	Since the judgment, the Local Government and Public Involvement in Health Act 2007 (“the 2007 Act”) has been passed and brought into effect; the Secretary of State has made decisions under the Act to proceed with the proposals; and the necessary orders have been laid before Parliament. During the hearing before us, after some pressure from the court, the Boroughs applied for and were granted permission to amend their applications to cover these later events. One of the issues before us is the extent to which, in this new legal context, the previous arguments remain relevant. 
Factual Background 
The Invitations
4.	The story began in October 2006, with the publication of a White Paper: Creating Strong and Prosperous Communities (Cm 6939-I). This explained the Government’s view that new “governance arrangements” were needed for areas with two-tier authorities, one object being to reduce “the risks of confusion, duplication, and inefficiency between tiers” (para 3.54). Authorities in England were invited to make -
“proposals for unitary local government that: 
•	enhance strategic leadership, neighbourhood empowerment, value for money and equity; 
•	command a broad cross-section of support; and 
•	are affordable, representing value for money and meeting any costs of change from councils' existing resources “ (para 3.55) 
5.	At the same time a separate “Invitations” document was sent to councils in England inviting “proposals for future unitary structures”. The criteria “with which any proposal must conform” were set out as follows:
“(i) the change to the future unitary local government structures must be:
•	affordable, i.e. that the change itself both represents value for money and can be met from councils’ existing resource envelope; and
•	supported by a broad cross section of partners and stakeholders; and
(ii) those future unitary local government structures must:
•	provide strong, effective and accountable strategic leadership;
•	deliver genuine opportunities for neighbourhood flexibility and empowerment; and
•	deliver value for money and equity on public services.” (para 3.1)
Under the heading “A broad cross section of support”, there was the following:
“The Government recognises that any proposal may not carry consensus from or within all sectors. While no single council or body, or group of councils or bodies, will have a veto, it will be necessary for any proposal to have support from a range of key partners, stakeholders and service users/citizens. The Government will consult on proposals that it is minded to implement prior to taking any final decisions.” (para 3.5, emphasis added)
It will be noted that the reference to “service users/citizens” does not in terms appear in the criteria as stated in paragraph 3.1. 
6.	Proposals were to be submitted to the Secretary of State by 25th January 2007. The Secretary of State would then implement a three-stage process for handling the proposals. Stage 1 would consist of an initial assessment whether the proposals conformed to the criteria specified in section 3. Detailed requirements were set out as to the supporting material that would be required, including “a business case and supporting financial analysis” (para.4.2) and a “full description of the proposed local government structure” (4.3). It was recognised that to prepare a proposal a council might need information from other local authorities. The Government “expects local authorities to co-operate with each other in the provision of information needed to construct robust proposals” (4.21), but in default of co-operation coercive powers might be used:
“The Secretary of State will be prepared to use her powers under section 230 of the Local Government Act 1972 to require such information to be provided, should such co-operation not be forthcoming.” (para.4.22)
7.	At the end of March 2007 the Secretary of State would announce which proposals would and would not proceed: 
“Only proposals which in the Government’s opinion meet the criteria set out in section 3 will proceed to stage 2 of the process.” (para 5.8)
Stage 2 would consist of consultation with “partners/stakeholders” in the areas affected by the proposals. “Partners/stakeholders” was defined as including all local authorities, “the wider public sector” (for example, the police), the business community, and the “voluntary and community sector”. The “financial case underpinning” proposals would be “subject to limited assurance in relation to the submissions of baseline figures”, which would be carried out by the Audit Commission at the expense of the councils making the proposals (para.5.11). 
8.	Stage 3 would consist of re-assessment of the proposals, taking account of the outcome of a “stakeholder consultation” to be held on each proposal, and any further development of the business case. The Government intended to announce by the end of July 2007 “which proposals will proceed to implementation” (para 5.13-4). Following that announcement, the Government would work with the authorities in the affected areas to prepare the necessary secondary legislation. It expected “all authorities affected to co-operate fully to ensure that the process is completed smoothly” (para.5.21). 
Statutory powers
9.	A policy decision was apparently made at the outset not to use the existing legislative machinery under the Local Government Act 1992 (“the 1992 Act”); but instead to promote new legislation. A Bill (The Local Government and Public Involvement in Health Bill), was introduced to Parliament on 12th December 2006, with a view to conferring the necessary powers to implement the proposals. The reasons for seeking new powers were most clearly explained in the Regulatory Impact Assessment which accompanied the Bill. 
“Decisions about the form and structure of local government have always been decisions for Parliament. However, at present the Secretary of State can only implement changes to principal authority structure and administrative boundaries following a review by, and on receipt of recommendation for change from, the Electoral Commission. There is no method of local authorities instigating change or for regular checks that the structure and boundaries of local government are fit for purpose.” 
The option of “using the present legislation and asking the Electoral Commission for advice” had been rejected because - 
“it has never been the intention to use the Electoral Commission in this way. At the time of the transfer of the Local Government Commission to the Electoral Commission it was clearly stated that the ‘Electoral Commission would not be asked to conduct any wholesale review of local government’.  As set out above experience shows that such a review would be disproportionately lengthy, divisive and expensive.” (Section 3.1, paras 3, 12)
The Minister explained to Parliament that previous attempts at local government reform had “dragged on year in, year out. People were distracted from the job of delivering for local people…” (Hansard HC 22 January 2007 col 1148).
10.	In the Invitations document, it was made clear that the proposals could not be implemented unless and until the legislation was passed. It was noted that, “assuming legislation in the 2006/07 Parliamentary Session”, orders implementing proposals could be made by the end of 2007: 
“This would allow any elections to...be held in May 2008, permitting the new unitary structure to be fully operational by April 2009 at the latest” (para.5.20).
Initial consideration of the Proposals
11.	The Government received a total of 26 proposals. On 27th March 2007 it was announced that sixteen would proceed to the next stage of “stakeholder consultation”. 
12.	Shropshire submitted a proposal for a unitary authority for the whole county. Chester and Cheshire County Council submitted separate proposals. Chester’s proposal, which was ultimately accepted by the Secretary of State, was for two unitary authorities, one for the east of the county and one for the west. Both Shropshire and Chester were notified by letter dated 27th March 2007 that the proposals had passed stage 1 and would continue to stage 2. A “Frequently Asked Questions” document, issued by the Department in April 2007, stated that the Government intended to make “final decisions” by the end of July 2007 on “which proposals will proceed to implementation”. 
13.	On 25th July 2007, the Secretary of State made an announcement indicating that nine proposals would now go ahead. They included the Shropshire proposals. A letter to Shropshire, dated 25th July, stated that in the Secretary of State’s judgement there was “a reasonable likelihood” that the proposals would “meet the outcomes specified in each of the criteria set out in the invitation”; and that consequently she was “minded to implement” the proposals if and when the Bill was enacted. The response to Chester was in similar terms, subject to the final choice between the two Cheshire proposals (which was eventually made in Chester’s favour on 18th December: see below).  
Subsequent steps
14.	On 30th October 2007, the Bill received Royal Assent as the Local Government and Public Involvement in Health Act 2007. The relevant provisions in Part 1 were brought into force by order from 1st November 2007. I shall return to the content of the “2007 Act” later in this judgment.
15.	On 5th December 2007, the Secretary of State’s decision on the proposals was announced in a statement to Parliament by the Minister for Local Government (Mr John Healey). The statement repeated the five criteria, including that of support “by a broad cross-section of partners and stakeholders”. It stated:
“On this basis, having considered all the information and representations now available to her, including all the additional material she has received since July, the Secretary of State has decided to confirm her earlier ‘minded to’ decisions…”  
(There were exceptions in the cases of Exeter and Ipswich).  
16.	A letter of the same date to Shropshire stated that having had “due regard to all the relevant information available” she had -
“confirmed her ‘minded to’ decision of 25 July 2007 that there is a reasonable likelihood that, if implemented, your proposal would meet the outcomes specified by each of the criteria set out in the Invitation....”
and that accordingly she intended to implement the proposal by an order under the new Act. A similar statement was made on 18th December 2007 in a letter to Chester adopting their proposals for two unitary authorities. On 17th December 2007, a restructuring order was laid before Parliament with regard to Shropshire; a draft order was laid before Parliament with regard to Cheshire on 31st January 2008.
The grounds of appeal
17.	As matters stood at the commencement of the hearing of the appeal, the proceedings remained in the form of a challenge to the legality of the decisions made in March and July 2007, prior to the Act becoming law, and took no account of the subsequent decisions under the Act. The Boroughs maintained their challenge to the earlier decisions on five principal grounds, all of which (subject to variations of emphasis) had been advanced in the court below:
1)	Vires The Secretary of State had no power to issue the invitations or take decisions on them without statutory authority;
2)	1992 Act The procedure adopted was in any event inconsistent with the statutory regime for local government reorganisation laid down by the 1992 Act, which covered the same field;
3)	European Charter The procedure adopted was inconsistent with the obligation undertaken by the Government, under the European Charter of Local Self-Government, that local government powers should not be “undermined or limited” by another authority except “as provided for by the law” (art 4.4);
4)	Public support The Secretary of State failed to ensure that the proposals met her own criterion that they should have a “broad cross-section of support” from the public, and instead substituted a test of “reasonable likelihood”; 
5)	Website The Secretary of State acted unfairly by including on the Departmental website links to the web-pages of the promoting authorities, not of the councils who opposed.
18.	During the hearing, as I have said, Mr Arden applied for and was granted permission to amend the proceedings, to include a challenge to the legality of the December decision and of the orders laid before Parliament. The grounds, in summary, are that they are vitiated by the defects in the procedure previously adopted, and in particular: 
1)	Pre-determination The December decisions were based on and adopted the decision of 25th July 2007, without proper reconsideration.
2)	Ratification of a nullity In so far as the December decisions purported to ratify the July decisions, those decisions were nullities and therefore incapable of ratification.
19.	In response to these additional grounds, Mr Eadie was given leave to submit a further statement by Mr Rowsell on behalf of the Secretary of State dealing in more detail with the consideration leading to the December decisions. 
The judgment of Underhill J
20.	The judge rejected all the original grounds in a clearly argued judgment, which provides a helpful distillation of the essential issues and supporting arguments. I shall accordingly refer to it in some detail: 
21.	On (1) (Vires), he held, that, apart from any express or implied statutory restriction, there was no relevant limit on the powers of the Secretary of State to do what she had done. This conclusion followed the decision of this court in R v Secretary of State for Health ex p. C [2000] 1 FLR 627, concerning the legality of a non-statutory list of sexual offenders maintained by the Secretary of State for Health. The court held that the Secretary of State, as representative of the Crown, enjoyed non-statutory powers analogous to those of a natural person, not confined to those conferred by statute, or to her traditional prerogative powers. Hale LJ, with the agreement of the other members of the Court of Appeal (Lord Woolf MR, and Lord Mustill), said:  
“The Crown is not a creature of statute and in one respect at least is clearly different from a local authority. The Crown has prerogative powers. But what does this mean? Professor Sir William Wade, in Wade and Forsyth Administrative Law (Clarendon Press, 7th edn, 1994), at pp 248-249, draws a clear distinction between prerogative and other powers:
'"Prerogative" power is, properly speaking, legal power which appertains to the Crown but not to its subjects. Blackstone explained the correct use of the term … Although the courts may use the term "prerogative" in this sense, they have fallen into the habit of describing as "prerogative" every power of the Crown which is not statutory, without distinguishing between powers which are unique to the Crown, such as the power of pardon, from powers which the Crown shares equally with its subjects because of its legal personality, such as the power to make contracts, employ servants and convey land.'
There is no suggestion of a specific prerogative power in this case but Halsbury's Laws of England, vol. 8 (2), at note 6 to para 101, confirms that 'At common law the Crown, as a corporation possessing legal personality, has the capacities of a natural person and thus the same liberties as the individual '. It was on this ground that Richards J declined to hold that the Index was unlawful.”
22.	The judge regarded himself as bound by this reasoning. As “the most workmanlike description” of this third category of powers, he adopted the term "common law powers" (in line with some of the speeches in R. (Hooper) v. Secretary of State for Work and Pensions [2005] 1 WLR 1681). He rejected Mr Arden’s argument that the reasoning in C did not extend to acts of “a governmental character”, as inconsistent with the facts of C itself:
“The maintaining of the Index… was not, as the Court of Appeal will certainly have appreciated, an act like renting office accommodation or buying paper-clips. It cannot realistically be regarded as anything other than… a governmental act, and one whose exercise would… have a profound adverse impact on the persons included in the list” (para 16). 
He summarised the position in the light of that judgment:
“…the fact that the Crown enjoys legal personality means that it is prima facie entitled - so far as vires in the strict sense are concerned - to do any lawful act, even if the act in question is plainly governmental. I say "prima facie" because such power is limited in a number of important ways. In particular: 
- It does not, as discussed above, extend to any act involving interference with the rights and liberties of the subject. 
- Its exercise is reviewable on ordinary public law grounds.
- It does not operate in any ‘field’ in which Parliament has chosen to legislate: …” (para 17).
23.	On issue (2) (the 1992 Act), he held that the action taken was not inconsistent with the 1992 Act. He acknowledged the well-established principle that “the Crown may not use prerogative or other common law powers in a ‘field’ which is already the subject of statutory regulation” (see A-G v. De Keyser's Royal Hotel Ltd. [1920] AC 508, R. v. Home Secretary ex p. Fire Brigades Union [1995] 2 AC 513). However, he thought that principle did not extend to actions taken, as here, by way simply of preparation for the introduction of a new statutory regime:
“If it did, the result would be to stifle any kind of consideration of, or preparation for, change in any field which was already subject to statutory regulation. In principle, it would be unlawful for any resources to be devoted to such a project – no civil servant could so much as lift a pen - unless and until paving legislation had been put in place.” (para 20) 
24.	Mr. Arden had conceded that “genuinely preparatory work such as might be necessary to produce a White Paper” was permissible; but had submitted that the Secretary of State had gone much further in this case, and reached what were “in substance final decisions, contingent only on the passage of the Bill”. The judge commented:
“… it seems to me that once it be conceded that in principle preparatory work of this kind may be lawful it is impossible to define meaningful boundaries of the kind necessary to Mr. Arden's submission. In my judgment such work will only cease to be lawful at the point at which the Minister purports to exercise actual governmental authority in a manner inconsistent with the existing statutory regime.” (para 21)
25.	He found support in the Divisional Court’s judgment in R. v. Secretary of State for Health ex p. Keen (1990) 3 Admin LR 180, which also concerned preparation for reorganisation in the public sector, this time in the National Health Service. In advance of legislation authorising the introduction of a new system of self-governing trusts, the Secretary of State invited hospital boards to apply for trust status, and initiated preparatory work which involved both his own department and the existing regional and district health authorities in substantial expenditure. The court held (per Woolf LJ, with whom Pill J agreed) that the powers under the National Health Service Act 1977 (“the 1977 Act”) were wide enough to cover the actions taken, and that, while there was no power to make “binding decisions” in advance of the new legislation: 
“there is nothing to prevent the Secretary of State and the two authorities deploying their resources under their existing powers to enable the necessary steps to be taken to prepare an application, so that when the legislation is passed the application can be made promptly if this is in accordance with the decision which is then made….
Until the new legislation is in force final decisions cannot be reached, but as long as the authorities do not fetter their ability to reach those final decisions, there is nothing to prevent them taking all necessary steps by way of preparation.”
26.	Woolf LJ observed by way of conclusion:
“Although initially it does appear surprising that large sums of money and considerable resources can be expended in anticipation of legislation, where the existing powers of the Secretary of State and the authorities are as wide as they are here, there is nothing to prevent the authorities choosing to make the preparations necessary to prepare for that legislation.”
27.	Underhill J acknowledged that this was not a direct authority for the present case, because it rested partly on the wide powers in the 1977 Act. But he considered that, in the light of C, the Secretary of State in the present case should be taken to have common law powers, as extensive as those that the Secretary of State for Health was held to have enjoyed under the 1977 Act (para 23). 
28.	On issue (3) (the European Charter), he accepted that the Charter, though not incorporated into domestic law, might be admissible as an aid to construction, but he found it of no real assistance. The issue was not the merits of the change, but rather the means by which it was being introduced; and the question whether those means involved the “undermining” of local authorities was “too vague to be justiciable”.
29.	On the issue of public support (4), the arguments ranged more widely before the judge than in this court. On the question before us, that is whether the Secretary of State had failed to apply her own test that the proposals should “meet the criteria” set out in the Invitations letter, the judge declined to read the reference to “meeting the criteria” in the Invitations document as involving an assessment “rigidly confined to what has been demonstrated at that date”. He rejected as “meaningless formalism” an approach which required the Secretary of State to make a definitive decision at an earlier date if she believed she would be in a better position to judge in due course. The Invitations was a “working document” for whose interpretation “a degree of flexibility” was appropriate. Mr. Arden had been unable to identify any prejudice to his clients in the Secretary of State assessing only “likelihood” at stage 1, “beyond the fact that it left open the route to an outcome to which they were opposed”. Further, he held:
“Even if the Invitations were to be construed as saying that a definitive assessment would be made at stage 1, it remained open to the Secretary of State to change her mind and defer the assessment to stage 3.” (para 36)
30.	Finally, as to the web-site (5), he accepted as reasonable the Secretary of State’s position that the link to the promoters’ web-sites was appropriate to show the details of the proposals themselves, but that it was “burdensome and unnecessary” to provide links to the sites of the many other authorities and other bodies with relevant views. The judge commented: 
“Even if it could be criticised as ungenerous, the omission could not possibly be regarded as a sufficiently substantial failing to justify treating the consultation as inadequate or the resulting decisions as unlawful.” (para 38)
Discussion
Which decisions?
31.	Before considering the arguments in more detail, I should comment on why an amendment to the proceedings was in my view essential to ensure that the relevant decisions were within the scope of the proceedings.  This is by way of response to Mr Arden’s initial position, maintained until the last day of the hearing, that it was open to him to limit his challenge to the pre-Act decisions, even after the Act had been passed and after formal decisions had been taken under it. Without disrespect to him, I found this suggestion surprising. In case it reflects a view more widely held among public law practitioners, I should explain briefly why it seems to me misconceived. 
32.	Judicial review, generally, is concerned with actions or other events which have, or will have, substantive legal consequences: for example, by conferring new legal rights or powers, or by restricting existing legal rights or interests. Typically there is a process of initiation, consultation, and review, culminating in the formal action or event (“the substantive event”) which creates the new legal right or restriction. For example, the substantive event may be the grant of a planning permission, following a formal process of application, consultation and resolution by the determining authority. Although each step in the process may be subject to specific legal requirements, it is only at the stage of the formal grant of planning permission that a new legal right is created. 
33.	Judicial review proceedings may come after the substantive event, with a view to having it set aside or “quashed”; or in advance, when it is threatened or in preparation, with a view to having it stayed or “prohibited”. In the latter case, the immediate challenge may be directed at decisions or actions which are no more than steps on the way to the substantive event. In the planning example, judicial review may be directed at a local authority resolution to grant permission while it is still conditional on, say, the completion of a highways agreement, even though the resolution can have no legal effect until the issue of the formal permission. 
34.	In the present case, the substantive event, if it occurs, will be the taking effect of the necessary orders under the 2007 Act, bringing about the creation of the new authorities and the abolition of the old. Decisions or actions taken in advance of that event, whether before or after the Act, were no more than preparatory steps to that end. There is the difference, however, that steps taken after the Act were on their face formal steps in a statutorily defined procedure, whereas those taken before the Act were not. It was of course open to the Boroughs to commence proceedings at the earlier stage, and to use the March and July decisions as the focus of that challenge. But that challenge had no purpose in itself, except as a means of pre-empting the possibility of formal steps leading to a substantive order under the Act in due course. 
35.	Once the Act has been passed and formal decisions have been taken, the focus of the challenge inevitably shifts. To put it another way, there would be no purpose in the court “setting aside” the pre-Act decisions, while leaving the post-Act decisions in place, since it is only the latter which provide the direct legal foundation for the making of the Parliamentary orders. At best, such an order by the court would create great uncertainty as to its practical consequences. In my view, therefore, it would have been wrong in principle to allow the challenge to proceed in the form proposed by Mr Arden. Had he refused to amend, I would have been inclined to treat that in itself as sufficient reason to deny a remedy. 
36.	It follows that the only issue which ultimately matters is the legal effect of the December decisions, and the steps taken pursuant to them. This issue must be considered in the context of the statute under which they were purportedly made. Previous events are material only to the extent that they impinge on the legality of those actions. In that respect the judgment below, made in a different statutory context, has been overtaken by events. However, in view of the way the argument has been conducted, it is convenient to start by considering the issues dealt with by the judge on their own merits, before turning to the post-Act events. 
The issues before the judge
37.	The last three grounds of appeal can be dealt with relatively shortly.
38.	Public support As reflected in the judgment, this issue took up a considerable part of the argument in the court below, involving questions of law and fact. In this court the issue is much more limited. Mr Arden accepts that, if the Secretary of State was entitled to adopt a criterion of “reasonable likelihood”, her decision on the facts was not irrational. Further, although I have noted, as did the judge (para 30), some inconsistencies in the references to the views of “service users/citizens”, Mr Arden took no point on the omissions. Rather, he emphasised that, however the criteria were stated, the Secretary of State had never in fact claimed to have reached a final view as to whether there was actual public support (as opposed to a “reasonable likelihood” of support). He contends that, having established the ground rules in the Invitations letter, the Secretary of State was not entitled to change the criterion for assessing public support to one of “reasonable likelihood”.
39.	I see force in the contention that the emphasis changed between March and July. Taking the terms of the Invitations as they stood, the Boroughs might fairly have understood that continuing public support at each stage needed to be shown, and that, if they could show at stage 1 that the proposals did not have such support, they could be defeated. That understanding would have been reinforced if they had read what Ministers were telling Parliament. In February, Mr Phil Woolas, said in response to questions about proposals in Bedfordshire (Hansard HC 6th February 2007 col 160: Public Bill Committee):
“An authority has to show that there is broad public support for its proposal. (The Member) asked whether there was enough time for an affected district or authority to respond and show that it has public support…. It will be incumbent on an affected district or authority to respond and show that it has public support…” 
Similarly in July, in the House of Lords Baroness Andrews said:
“One of the key tests for any such proposal was that it must have support from a range of key partners, stakeholders and service users or citizens – the electorate. That was a deliberate form of words, because we wanted a formative process of consultation.” (Hansard HL 5th July 2007, col 1173)
By contrast, as we have seen, in the letters sent to authorities after the first stage, and following the final December decision, the Secretary of State stated no more than that there is a “reasonable likelihood” of meeting the outcomes in the specified criteria. 
40.	I can understand the frustration of the opponents, who no doubt had expended considerable time and resources in mobilising their forces in time for the July decision. It would have seemed as though the referee were moving the goalposts at one end in the middle of the game. However, there needs to be some legal peg on which to hang the argument. Mr Arden relies on a legitimate expectation created by the Invitations letter. It is well-established that a promise by a public authority to follow a particular procedure may give rise to an enforceable “legitimate expectation”. However, outside a specific statutory framework, such a procedural expectation is not set in stone. It may be varied or withdrawn, at least so long as due notice is given, and no procedural prejudice is suffered. I agree with the judge that Mr Arden was unable to point to any prejudice to the Boroughs, beyond their dislike of the ultimate outcome, or to establish any legal impediment to flexible interpretation, or even alteration, of the criteria. 
41.	European Charter It is difficult to see the reference to the European Charter (point (3)) as supporting a free-standing legal point. Mr Arden argued that, in so far as the preparatory steps created blight over the workings of the councils, they were “undermining or limiting” their powers, contrary to Article 4(4) of the Charter. Even if the Charter were part of English law, I would need some persuasion that preparatory steps for new legislation, if otherwise lawful, would be rendered unlawful by reason solely of the disruption and uncertainty inherent in the prospect of any structural change. As it is, the Charter is not part of domestic law, and cannot therefore be relied on as a source of substantive rights or restrictions (see R(Hurst) v London Northern District Coroner [2007] AC 189, paras 53-58, per Lord Simon Brown). In principle, it might be used as an aid to statutory construction, or perhaps as a guide to common law development (cf Derbyshire CC v Times Newspapers Ltd [1993] AC 534, 551F). But it was unclear to me which particular statutory provision or common law rule Mr Arden had in mind. At most, perhaps, the Charter emphasises the need for central government to tread warily in this area, with due respect for the independent democratic role of local government. But I would regard that as a principle already embedded in the common law (see Secretary of State v Tameside BC [1977] AC 1014, 1047H-1048C, per Lord Wilberforce). 
42.	Website Finally, I agree with the judge that there is nothing in the web-site issue, for the reasons he gave (point (5)). Indeed, if a link to the website had been a matter of real concern, this issue could have been addressed by a separate application to the court at the outset of the process. As it is, there is no evidence that any actual prejudice has been caused to Boroughs or that potential supporters were lost. I did not understand Mr Arden to suggest that this point on its own could justify setting back the whole process if the other arguments failed. 
Powers – common law or statute
43.	The other two issues require more detailed treatment. For reasons which will become apparent, it may be artificial to separate them. 
Vires 
44.	The existence of a residual category of Ministerial power, not dependent on either statute or prerogative, is a matter of continuing academic controversy. One aspect is the so-called “Ram doctrine”, which has been interpreted as enabling Ministers, as representatives of the Crown, to do anything that a natural person may do except if prohibited by statute. However, for present purposes, as the judge held, the answer seems to me to be dictated by the decision in C in the judgment of Hale LJ (para 21 above). That decision, which is binding also on us, confirms that the powers of the Secretary of State are not confined to those conferred by statute or prerogative, but extend, subject to any relevant statutory or public law constraints, and to the competing rights of other parties, to anything which could be done by a natural person. 
45.	Mr Arden sought to rewind the clock to a time when the accepted wisdom was that Ministers had only two sources of power: statute or prerogative. I have some sympathy with that approach. Hale LJ found support for a more general “common law” power (or “third source” power, as Professor Harris describes it) in a passage in Wade and Forsyth. However, the examples given in that extract (“the power to make contracts, employ servants and convey land”) do seem to me, with respect, of limited assistance. They are in the nature of ancillary powers, necessary for the carrying out of any substantive governmental (or indeed non-governmental) function, whether statutory, corporate or common law. Similarly, the passage cited from Halsbury’s Laws refers to an earlier passage (Vol 8(2) para 6(1)), dealing with the “general legal capacity” of the Crown as a “corporation sole or aggregate”, which also gives as examples the power to enter contracts or own property. The obvious need for such powers to my mind throws no light on what, if any, non-statutory substantive functions the Crown retains beyond the scope of the “prerogative”, as traditionally understood. 
46.	More in point is Wade and Forsyth’s discussion of R v Criminal Injuries Compensation Board ex p Lain [1967] 2 QB 864. The compensation scheme was treated by the court as set up “under the prerogative”. The authors suggest that that term should be limited to powers unique to the Crown. The scheme, involving simply the setting up of a trust to distribute money to victims of crime, was better seen as an example of the Crown’s power to do what any private individual could do.  
47.	On the other hand, the Northumbria Police Authority case ([1989] QB 26) seems to support a narrower approach. The issue was whether the Secretary of State could maintain a central store of police riot equipment for the use of Chief Constables, even without the approval of their local police authorities. It was held that the Secretary of State had the necessary powers both under the Police Act 1964 and under the Crown’s traditional prerogative of keeping the peace. It is notable that there was no suggestion that the Secretary of State could rely on some “third source” power. That omission can be readily understood in the context of the authorities mentioned in the judgments. It is sufficient to cite two examples:
1)	Lord Parmoor, A-G v De Keyser’s Hotel [1920] AC 508, 568: 
“The growth of constitutional liberties has largely consisted in the reduction of the discretionary power of the executive, and in the extension of Parliamentary protection in favour of the subject, under a series of statutory enactments. The result is that, whereas at one time the Royal prerogative gave legal sanction to a large majority of the executive functions of the Government, it is now restricted within comparatively narrow limits. The Royal prerogative has of necessity been gradually curtailed, as a settled rule of law has taken the place of an uncertain and arbitrary administrative discretion.”
2)	Lord Denning MR, Laker Airways Ltd v Department of Trade [1977] QB 643, 705: 
“The prerogative is a discretionary power exercisable by the executive government for the public good, in certain spheres of governmental activity for which the law has made no provision, such as the war prerogative (of requisitioning property for the defence of the realm), or the treaty prerogative (of making treaties with foreign powers). The law does not interfere with the proper exercise of the discretion by the executive in those situations: but it can set limits by defining the bounds of the activity: and it can intervene if the discretion is exercised improperly or mistakenly. This is a fundamental principle of our constitution…” 
Lord Denning referred to Blackstone’s definition of the prerogative (following Locke) as -
“the discretionary power of acting for the public good, where the positive laws are silent…” (Commentaries Vol I p 252)
It is not easy to reconcile such statements of high authority with the existence of a residual category of substantive “third source” powers, apart from the prerogative. At the very least, they suggest that any such category is exceptional, and should be strictly confined. 
48.	Reference to the status of a Minister as “corporation sole”, or to analogies with the powers of natural persons, seem to me unhelpful. In the case of an artificial person, it may be important to distinguish between the power to act, as a matter of corporate capacity, and the legal constraints limiting the exercise of the power. Unlike a local authority, the Crown is not a creature of statute. As a matter of capacity, no doubt, it has power to do whatever a private person can do. But as an organ of government, it can only exercise those powers for the public benefit, and for identifiably “governmental” purposes within limits set by the law. Apart from authority, I would be inclined respectfully to share the view of the editors of De Smith that: 
“The extension of the Ram doctrine beyond its modest initial purpose of achieving incidental powers should be resisted in the interest of the rule of law.” 
49.	Following C, this is not a debate which can be continued usefully at this level. Nor, fortunately, does the solution of the present case require it. The issues are much narrower than in C. On the one hand, no-one is suggesting that local government reorganisation as such falls within any residual non-statutory central government power. It is accepted on all sides that legislation is needed to give effect to the present proposals. Conversely, the Secretary of State’s actions were undoubtedly “governmental” and undertaken for the public benefit as she perceived it. Further, it is not of course in dispute that the Secretary of State can promote new legislation, and lawfully take some preparatory steps in advance of doing so. As I understand it, that concession would extend to the preparation and publication of the 2006 White Paper, including any previous consultation on the policies in it. I do not see that it is necessary to invoke a “third source” category for that purpose. I see it as simply a necessary and incidental part of the ordinary business of central government, part of which is the promotion of new policies through legislation. The issue is how far such preparatory steps can properly go before crossing into territory reserved to statute. That issue can only sensibly considered in the context of the present statutory scheme. It therefore overlaps with the second ground of appeal, to which I now turn.
Inconsistency with statute
50.	There is no dispute that, whatever the scope of the Secretary of State’s “common law” powers, they may be expressly or implicitly excluded by a statutory scheme covering the same subject-matter. This “inconsistency” principle, as the judge noted, is traditionally associated with the De Keyser case in 1920. The speeches in that case give several different formulations. More recently, in R. v. Home Secretary, ex p. Fire Brigades Union [1995] 2 AC 513, 552, Lord Browne-Wilkinson summarised the principle thus:
“… if Parliament has conferred on the executive statutory powers to do a particular act, that act can only thereafter be done under the statutory powers so conferred: any pre-existing prerogative power to do the same act is pro tanto excluded.”
51.	In that case, it was held that, where Parliament had legislated for a new criminal injuries compensation scheme, subject to the power of the Secretary of State to bring it into effect, he could not lawfully decide to delay its introduction indefinitely, while introducing a new non-statutory scheme which was inconsistent with Parliament’s intention. In the passage immediately preceding his reference to De Keyser Lord Browne-Wilkinson said:
“My Lords, it would be most surprising if, at the present day, prerogative powers could be validly exercised by the executive so as to frustrate the will of Parliament expressed in a statute and, to an extent, to pre-empt the decision of Parliament whether or not to continue with the statutory scheme even though the old scheme has been abandoned. It is not for the executive, as the Lord Advocate accepted, to state as it did in the White Paper (paragraph 38) that the provisions in the Act of 1988 ‘will accordingly be repealed when a suitable legislative opportunity occurs.’ It is for Parliament, not the executive, to repeal legislation. The constitutional history of this country is the history of the prerogative powers of the Crown being made subject to the overriding powers of the democratically elected legislature as the sovereign body. The prerogative powers of the Crown remain in existence to the extent that Parliament has not expressly or by implication extinguished them.”
52.	Mr Arden submits that the 1992 Act provides comprehensive machinery for consideration of proposals by the Secretary of State for local government reorganisation, under the control of the independent Electoral Commission, set up as recently as 2000 for that specific purpose. The Secretary of State of State’s power to influence that process is subject to specific limits, which the courts will enforce (see R v Secretary of State, ex p Lancs CC [1994] 4 All ER 165). So long as the existing system remained in place, it was wrong for her to pre-empt Parliament’s decision by initiating and pursuing proposals under a wholly different “common law” process.
53.	As a general proposition, that seems to me correct. I do not, with respect, agree with the judge that, once the propriety of the White Paper had been conceded, there could be no “meaningful boundaries” (see para 21). There is a reasonably clear distinction, in my view, between policy-making and implementation. The White Paper was general statement of policy. What followed was designed to convert the general policy into specific proposals and to take them to the point where they could be incorporated in formal orders as soon as the Act was passed. The original documentation was quite explicit in that respect. A speedy timetable was deliberately adopted with a view to making “final decisions” in July, and so minimising avoidable delay once the Act was passed.  By July the language had been modified, and the references were to “minded to” decisions, thus no doubt acknowledging the need for something more than rubber-stamping after the Act was passed. However, by then the future scope of the exercise had been established, and the field narrowed down to nine potential candidates. Although in theory it was possible for the Secretary of State to re-open the invitation list, in practice the timetable precluded it. 
54.	Again, unlike the judge, I do not think that the Secretary of State’s argument is assisted by the decision of the Divisional Court in Keen. If anything, it points the other way. The decision turned on the broad interpretation the court felt able to give to the existing statute, not on any more general common law powers. As I read the judgment, the court did not accept the respondents’ submission that the preparatory steps could and should be taken “in the context of the Bill which is now before Parliament” (p 184). The judge’s suggestion, adopted by Mr Eadie, that the “common law powers” available in this case were the same as those found in the statute in Keen, seems to me, with respect, to beg the question which lies at the heart of this ground of appeal. The question is whether the existing legislation covers the whole of the relevant “field”. If it does, there are no residual common law powers. 
55.	Nor do I accept Mr Eadie’s alternative submission (of which the judge was sceptical: para 27), that it was sufficient that what happened could have been done as a preliminary to initiating the formal process under the 1992 Act. That in my view is wholly artificial. I accept that, as a preliminary for making formal requests to the Electoral Commission for particular areas, the Secretary of State could have taken steps to sound out local opinion, and could perhaps have invited proposals from the authorities. Had he done so, those affected would have been free to participate in that informal process, or reserve their positions for the formal processes under the Act. But that is not what he did. It was made quite clear from the start that the 1992 Act machinery was not to be used, and that this was the only effective chance dissenting authorities would have to  oppose the proposals.
56.	Thus far, therefore, I accept the thrust of Mr Arden’s submissions. The more difficult question is where that thrust takes him. His assumption seemed to be that, inconsistency having been shown, everything which followed must be taken as infected by “illegality”, and therefore as “void and without legal effect”. For the latter proposition he relies on the now settled doctrine of ultra vires in public law (established by the familiar line of authority, from Anisminic Ltd v. Foreign Compensation Commission [1969] 2 A.C. 147 to Boddington v. British Transport Police [1999] 2 AC 143), that a decision-maker who exercises legal powers contrary to public law principles is acting ultra vires, and that an act or order which is ultra vires (at least once so declared by the court) is “a nullity, utterly without existence or effect in law”.
57.	In my view, that simple analysis ignores the context in which the courts enunciated these principles. The inconsistency principle was developed by the courts in response to attempts by the executive to override statutory controls, in a way which materially affected private or public rights: compensation for expropriation of property (De Keyser), compensation for criminal injuries (Fire Brigades Union), a police authority’s right to determine policing policy (Northumbria). It does not follow, in my view, that the same principle can be applied so as to categorise a course of action as “illegal” in the abstract, regardless of its practical effects. Similarly, the cases on the ultra vires doctrine (such as Anisminic and Boddington) were directed to formal acts or orders which would otherwise have legal consequences (“substantive events”, as I have termed them). If the steps leading to such a formal act are procedurally flawed, for example because of unfairness, the act itself will be a nullity. But it does not follow that it is appropriate, or meaningful, for every step on the way to be categorised as a nullity, nor that the court will so declare it. I am not aware of any authority which goes so far. Nor in my view can there be any general rule. How far in any case it is necessary or appropriate to review the procedural steps will depend on the facts and circumstances, including the nature of the illegality and the substantive relief sought in respect of it. 
58.	In the present case, it is particularly inappropriate to use the language of “nullity” in relation to the steps taken before the Act. That implies that apart from an order of the court, they had some intrinsic legal effect which needs to be “nullified”. However, as has been seen, they were entirely informal processes. They did not and were never intended to have legal effect in themselves. Their legal significance, if any, only came retrospectively with the passing of the Act, and their use as the basis for the formal decisions then made. It is only in that context that the availability of any legal remedies can sensibly be judged.  
59.	That does not mean of course that the court would have been unable to intervene at an earlier stage, if the Secretary of State’s actions had infringed legally protected rights, or required authorities to go outside their own statutory powers. Those would be substantive legal effects which would justify the intervention of the court. 
60.	For example, I have noted the Secretary of State’s threat, if the authorities did not co-operate voluntarily, to use powers under section 230 of the Local Government Act 1972. That requires authorities to respond to requests for information “with respect to their functions”.  In the course of argument I raised the question what “functions” of the Boroughs were engaged. The only answer, as I understood it, was a reference to the general powers of a local authority (under section 2 of the Local Government Act 2000), to do anything which “they consider” likely to achieve the promotion of the economic or social well-being of their area. At first sight it seems somewhat artificial to read that as enabling the Secretary of State to compel participation in a non-statutory process with which the authorities fundamentally disagree and which would lead to their destruction.
61.	I mention that solely as an example of a situation in which the jurisdiction of the court might be invoked to challenge a formal request. More generally it illustrates the possible risks of using extra-statutory machinery on matters which materially affect the interests and functions of statutory authorities. This may have been one of the reasons why “common law” powers were not prominent in the argument in Keen. Even if they had provided a basis for the Secretary of State’s actions, they would not have justified the participation of the statutory health authorities who were also respondents to the challenge. In the present case, however, Mr Arden does not base his arguments on any limits to the powers of the local authorities as such (or of the Audit Commission, which was involved in assessing the proposals). No such points accordingly arise. 
The 2007 Act
62.	It is necessary to return to the content of the 2007 Act, under which the December decisions were made. Section 2 enables the Secretary of State to invite or direct authorities to make proposals of the kind here in issue. Section 3 contains supplementary provisions, one of which (s 3(5)) requires authorities to have regard to “guidance” from the Secretary of State as to “what a proposal should seek to achieve” or “matters that should be taken into account in formulating a proposal”. Section 4 enables, but does not require, the Secretary of State to request the advice of the Boundary Commission. Section 7 allows the Secretary of State to implement the proposals by order, with or without modifications, but not until he has consulted affected authorities and “such other persons as he considers appropriate”. Section 21 is headed “Pre-commencement invitations etc”. In view of its importance to the last stage of the arguments, I should set it out in full:
“(1) In this section a "pre-commencement invitation" means an invitation given by the Secretary of State before the commencement of this Chapter which, after that commencement, could have been given under the power in section 2.
(2) If before the commencement of this Chapter—
(a) a pre-commencement invitation was given,
(b) guidance as to what a proposal should seek to achieve, or as to matters that should be taken into account in formulating a proposal, was given by the Secretary of State in connection with such an invitation,
(c) a proposal was made in response to such an invitation, or
(d) consultation was carried out by the Secretary of State in relation to such a proposal,
it is immaterial that the invitation or guidance was given, the proposal made, or the consultation carried out, before rather than after the commencement of this Chapter.
(3) Accordingly (and without prejudice to the generality of subsection (2))—
(a) any reference in this Chapter to an invitation under section 2 includes a pre-commencement invitation;
(b) any reference in this Chapter to a proposal made by virtue of section 2 includes a proposal (whenever made) made in response to a pre-commencement invitation;
(c) any reference in this Chapter to the Secretary of State's receiving a proposal in response to an invitation under section 2 includes his receiving before the commencement of this Chapter a proposal made in response to a pre-commencement invitation.”
63.	On its face, as the judge said, section 21 seems clearly designed to enable the steps already taken in anticipation of the Act to be treated as though taken under it, so as to provide a legally effective basis for the laying of the orders. Indeed, since Parliament had been made fully aware more than a year before that that was how the Secretary of State proposed to proceed, it would be wholly artificial to interpret it in any other way. Mr Arden faintly submitted that the section should be restricted to steps taken between the passing and the commencement of the Act. But that would have been a pointless provision, since the Secretary of State had control over the time of commencement in any event. Mr Arden fairly acknowledged that he did not expect to succeed on that point. 
64.	Reference was also made to earlier statements on behalf of the Government to Parliament that there was “nothing retrospective” about the clause 21:
“It in no way validates or seeks to make lawful things that, before the Bill’s enactment, were not valid or lawful” (Baroness Andrews Hansard HL 5th July 2007 col 2005; Committee)
That no doubt fairly reflected Government’s legal advice at the time, but, whether right or wrong, it cannot in my view be determinative of the meaning of the Act itself. 
65.	Mr Arden’s principal argument, as I understand it, is that there was no genuine reconsideration in December 2007. As he puts it in the amended grounds:
“The decision was… based on and adopted the decision of July 25, 2007 and did not comprise any kind of reconsideration, de novo or otherwise; the test applied was whether to change her mind about her earlier decision…. it was a decision to adopt an earlier decision that she had no power to take, pursuant to a process she had no power to embark on.”
Nor could it be regarded as a ratification because there was nothing to ratify. 
66.	Mr Eadie does not, as I understand it, rely on any principle of ratification. Nor does he dispute that there needed to be a genuine reconsideration of the merits of the proposals following the commencement of the Act. In a similar context in Keen, Woolf LJ made clear that final decisions could not be made until the new legislation was in force, and that the authorities must not “fetter their ability to reach those final decisions” (p 188). Although Mr Arden did not use the term “fettering”, that concept seemed to underlie his submission. 
67.	The overwhelming difficulty Mr Arden faces in making that submission is in the evidence. On the unchallenged evidence of Mr Rowsell for the Secretary of State, there was in December a genuine reconsideration of the merits of the two proposals now in issue. If that was not clear from the other documents, it is put beyond doubt by his sixth witness statement filed in response to this allegation. He explains the steps taken following the decisions in July 2007, including meetings with the affected authorities, and consideration of new representations. As to the decisions taken in December, following the commencement of the Act, he says:
“The Secretary of State decided that in all the circumstances, the appropriate course when taking these decisions would be to judge the 26 proposals against the criteria (which now had the status of guidance under section 3(5) of the Act as to what a proposal should seek to achieve.) 
It was on this basis, having considered the factors and options set out to her, including all of the additional material that she had received after 25 July 2007… that the Secretary of State took her decisions…”  (paras 13-14)”
68.	On the facts, the most that might be said is that there was no genuine reconsideration of the field of potential candidates. That had been settled for all practical purposes in July, and given the timetable there was no realistic possibility of it being reopened. The Boroughs’ chances of defeating the Shropshire and Cheshire proposals might have been significantly enhanced if in December the Secretary of State had been faced with a wider choice. That is not in terms how the matter is pleaded. But in any event I do not think the point assists the legal argument. The 2007 Act directs attention at individual proposals. Provided proper consideration has been given to a particular proposal on its own merits, there is nothing to support an argument that its approval should depend on the comparative merits of other proposals, actual or potential.
69.	As an alternative, accepting that the pre-Act processes are to be treated as carried out under the Act, Mr Arden renews his submission that they were procedurally flawed for the reasons already given. Subject to one point these arguments have been covered sufficiently in the earlier part of the judgment. The one possible exception is the argument that the criteria for public support were unfairly altered in the course of the process. These criteria, as Mr Rowsell accepts, should now be seen (retrospectively), and judged, as part of the statutory guidance under section 3(5). However, even accepting that they were modified, or at least re-interpreted, by March or July 2007, the new statutory context does not add to the force of the argument. The guidance is directed at the proposing authorities (not to anyone else), and they are required simply to “have regard to it”. If anything that section makes it more difficult to argue that they were to be treated as binding and unalterable.
Conclusion 
70.	In conclusion, I generally support the reasoning and conclusions of the judge. As I have made clear, I have more concerns than him about the extent to which a wholly non-statutory procedure has been used to prepare the way for decisions, in an area which is accepted as the province of the legislature. I have also pointed out the potential risks of such a course. I understand that one purpose was to limit the period of uncertainty accompanying structural change. But it seems to me a constitutional principle of some importance that local authorities should be able to rely on the safeguards of a statutory framework for the processes leading to decisions of this importance. However, in the end, I find it impossible to avoid the conclusion that Parliament has (if only retrospectively) given its stamp of approval to the procedure in this case, and there is no evidence that the authorities have been prejudiced in presenting their opposition. 
71.	Accordingly, I would dismiss the appeals.
Lord Justice Richards : 

72.	I agree with Carnwath LJ’s conclusions and with much of his reasoning.  I do not, however, share his reservations about the extent of the common law powers of the Crown. As the first instance judge whose decision was upheld by the Court of Appeal in R v Secretary of State for Health, ex p. C [2000] 1 FLR 627 I took a broad view of those powers, and nothing in the materials deployed before us in the present case has caused me to change my mind.  The Court of Appeal’s judgment in that case is not only determinative of the issue at this level (see paras 44 and 49 of Carnwath LJ’s judgment) but was in my view correct.  
73.	The complex process of government includes a vast amount of work in relation to the formulation of policy, drafting new legislation and preparing for its implementation.  Carnwath LJ states that it is not necessary to invoke a “third source” of power for such work, which is simply “a necessary and incidental part of the ordinary business of government” (para 49).  To my mind, however, it is still necessary to explain the basis on which that ordinary business of government is conducted, and the simple and satisfactory explanation is that it depends heavily on the “third source” of powers, i.e. powers that have not been conferred by statute and are not prerogative powers in the narrow sense but are the normal powers (or capacities and freedoms) of a corporation with legal personality.  The context is a special one, but the powers are the same.
74.	I accept, of course, that such powers cannot override the rights of others and, when exercised by government, are subject to judicial review on ordinary public law grounds.  But I think it unnecessary and unwise to introduce qualifications along the lines of those suggested by Carnwath LJ at para 48, to the effect that they can only be exercised “for the public benefit” or for “identifiably ‘governmental’ purposes”.  It seems to me that any limiting principle would have to be so wide as to be of no practical utility or would risk imposing an artificial and inappropriate restriction upon the work of government.
75.	It is not in dispute that such powers may be excluded expressly or impliedly by statute or that their exercise may be limited by statute.  But in so far as Carnwath LJ accepts Mr Arden’s submissions that the Secretary of State acted in this case in conflict with the 1992 Act, again I respectfully disagree.  Like Underhill J, I do not read the 1992 Act as preventing the taking of action by Ministers by way of preparation for the introduction of a different statutory regime.  Moreover the work done did not pre-empt Parliament’s decision in relation to the proposed new legislation but prepared for it on a contingent basis.  The process engaged in was not intended to produce, and was not capable of producing, a result with legal effects unless and until the proposed legislation was enacted and relevant measures were taken under it.  It is true that the existing machinery of the 1992 Act was not used and, so far as one can see, was not intended to be used even as a fall-back in the event that Parliament did not enact the proposed legislation.  But nothing done was, in my judgment, inconsistent with the 1992 Act.  However improbable it was in practice, it would still have been possible in principle to fall back on the machinery of that Act if the new legislation had not been forthcoming and the Secretary of State had wished to pursue the matter.   
76.	On these issues, therefore, I would endorse the conclusion reached by Underhill J, even before the 2007 Act was enacted, that the Secretary of State acted lawfully.  The Secretary of State’s actions did not depend for their lawfulness on the retrospective effect of the Act.  But if there were any doubt about that, then I agree with Carnwath LJ that the position was resolved against the Boroughs by the Act and the measures adopted under it.  
77.	In the circumstances I think it unnecessary to deal any more elaborately with the points on which Carnwath LJ and I are not fully ad idem.
Lord Justice Waller
78.	I too agree with the decision reached by both my Lords. The points on which Richards LJ does not agree with Carnwath LJ are two fold. As to the first “the third category” and its existence or breadth, there is a difference of view as to what should be the position albeit both accept that C binds this court at present. The view of Carnwath LJ is summarised by him in the following words – 
“Unlike a local authority, the Crown is not a creature of statute. As a matter of capacity, no doubt, it has power to do whatever a private person can do. But as an organ of government, it can only exercise those powers for the public benefit, and for identifiably ‘governmental’ purposes. Apart from authority, I would be inclined respectfully to share the view of the editors of De Smith that: 
‘The extension of the Ram doctrine beyond its modest initial purpose of achieving incidental powers should be resisted in the interest of the rule of law.’” 
79.	Richards LJ is of the view that qualifications such as “for the public benefit” and its use being “confined to identifiably governmental purposes, accepted by the law as justifying exceptional treatment” are not appropriate.
80.	I doubt whether anything that I can say will influence any future debate, and since C is binding, it is not appropriate to say very much. But it seems to me that once one accepts capacity, the limit so far as any challenge before the courts is concerned cannot be other than by reference to “the limits set by the law”. The question is thus whether there should be an ability to challenge as unlawful an action taken “not for the public benefit” or which has not been taken for “identifiably governmental purposes”. 
81.	I instinctively favour some constraint on the powers by reference to the duty to act only for the public benefit but until one has actual facts by reference to which the matter can be fully tested, it is unwise to say more. 
82.	The second area where there is a difference of opinion relates to the question whether the Government were acting inconsistently with the 1992 Act. I would agree with Carnwath LJ’s view on this aspect. One reason I have for supporting his view is that it seems to me that the action being taken was in an area which the 1992 Act was designed to cover. The action was not simply preliminary to bringing in an Act to change the 1992 Act with the intention thereafter of acting under a new statutory scheme. The action being taken was to treat the 1992 scheme as having already been repealed. As to the consequences however I also agree with both Carnwath LJ and Richards LJ, and thus support the dismissal of the appeal.