Another cuts challenge fails: Changes to housing benefit scheme is lawful

Child Poverty Action Group v Secretary of State for Work & Pensions [2011] EWHC 2616 (Admin) – Read judgment

On 13 October 2011 Mr Justice Supperstone in the High Court held that changes to rules for calculating housing benefit were lawful and in particular did not breach equality legislation.

Two particular measures were under challenge. The first was the introduction of maximum weekly caps on the amount of local housing allowance (LHA). The second was the reduction of the maximum size in accommodation eligible for housing benefit from five bedrooms to four bedrooms.

The Child Poverty Action Group (CPAG – the leading charity campaigning for the abolition of child poverty in the UK) challenged these measures, saying first that the introduction of caps was ultra vires i.e. outside the powers conferred on the Secretary of State for Work & Pensions under the Housing Act 1996 and, second, that the Secretary of State had failed to comply with the general equality duty under the Race Relations Act 1976 (RRA). As regards the measure reducing the maximum size of accommodation eligible for housing benefit, it was argued that the Secretary of State had failed to fulfil duties under both the RRA and the Sex Discrimination Act 1975 (SDA).

The background to the measures will be familiar to anyone who has read a newspaper or turned on a television in the last 12 months – cuts. A Ministerial statement laid in Parliament on 30 November 2010 declared that

The Government is convinced that it is absolutely necessary to take urgent steps to manage Housing Benefit expenditure, and to ensure that people who make new claims for Housing Benefit in the private rented sector are prevented from claiming the higher rates of Local Housing Allowance.

It was further acknowledged by counsel for the Secretary of State in this case that “while the Defendant would not express the purpose of the new caps as being to “drive people… out of more affluent areas”, it can “fairly be deduced” that the caps are intended to end the subsidising of the most expensive rents across the country.”

The grounds of challenge

The keystone of the Claimant’s “vires” challenge to the LHA caps was the argument that the introduction of caps was inconsistent with the purpose of the pre-existing legislative scheme of contributing to rental costs in such a way that claimants are not made homeless through inability to pay their rent.

Further, the pre-existing scheme was structured in such a way as to ensure UK-wide provision of housing benefit, with appropriate account being taken of local rents. The effect of the caps would exclude claimants in certain areas, in particular central London, from access to housing benefit and would require them to move beyond the area where it would be reasonable for them to live.

The Defendant’s argument on vires boiled down to the need to distinguish between the enabling primary legislation (which provided very broad powers to the Secretary of State) and the detail of the existing scheme enacted under secondary legislation, which was not determinative of the Secretary of State’s powers.

Balance between housing benefit claimants and the tax payer

Supperstone J was inclined to the Defendant’s argument that the Secretary of State’s powers were not restricted in the way suggested by the Claimant. In reaching that conclusion he emphasised the balance to be struck between the interests of housing benefit applicants and the taxpayer at large, commenting (at para 36)

The purpose of the scheme is to assist claimants with rent, while also protecting the public purse.

This contrasted with a more applicant-oriented description of the scheme given by Sedley LJ in R (Saadat) v Rent Service [2002] HLR 32:

The fundamental purpose of the housing benefit scheme … is to ensure that people who are not under-occupying property and not over-paying rent are not made homeless through genuine inability to pay.

What is perhaps most significant about the judgment on this point is the express acknowledgment that there is nothing in the primary legislation to prevent alterations to the housing benefit scheme (such as the introduction of caps) which would have the effect of putting some areas “beyond a claimant’s reach” (para 41).

Equality challenge

As regards the equality-based challenges to each measure, the argument came down to whether the Secretary of State had made suitable efforts to have appropriate information before him when paying “due regard” to the equality duties.

The Claimant argued that he had not and that certain sources of information, primarily the Annual Population Survey produced by the New Policy Institute, should have been taken into account. Such information, the Claimant argued, would have led the Secretary of State to conclude that, amongst other things, any reforms to housing benefits that affect only large families with four or more children are roughly twice as likely to affect ethnic minority households than white British households.

The Secretary of State argued that he had looked at appropriate sources of information, in particular the Family Resources Survey, when assessing the impact of the measures on protected groups; in any event, some of the conclusions drawn from the alternative sources of information were disputed.

Notoriously difficult to win

Arguments of this kind are notoriously difficult for the court satisfactorily to weigh on judicial review, where time is of the essence and cross-examination of witnesses extremely rare. Indeed, the Defendant relied on dicta to the effect that technical decisions around the use of particular data sets should only be interfered with if “unreasonable or perverse”.

In the end, the Judge concluded that the Defendant had done enough not to fall foul of the rather vague equality duties in issue, particularly against the background of what the Defendant described as “the strong socio-economic imperatives in play.”

This is not the first and is unlikely to be the last challenge to measures which give expression to the public sector cuts agenda: see for example the Brent libraries case judgment handed down the same day (not yet available on BAILII), and the posts linked to below. It will be interesting to see whether any measures, particularly those contained in secondary legislation such as the present, fail to withstand the courts’ scrutiny.

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2 thoughts on “Another cuts challenge fails: Changes to housing benefit scheme is lawful

  1. Yet again, a judge who seems to think that ‘taxpayers’ and ‘benefit claimants’ are two separate types of people – the ‘givers’ and ‘the spongers’ – and fails to see that ‘the spongers’ are now a) people who have paid into an insurance scheme through taxes for their entire adult life, and are now unemployed through no fault of their own or b) retired pensioners, many WW2 vetarans, whose LHA will no longer cover their rent. There have already been several pensioner suicides in which the juries have decided that worries about losing a rented home was the cause (see discussion section of Wikipedia entry for Ian Duncan Smith) – I despair at the almost complete ignorance of the Judiciary, and the utter lunacy of Ian Duncan Smith (who, according to sources cited on his Wiki entry) proffered a bogus degree on the CV that won him his present job, and should therefore be sacked and told to return every penny in salary and expenses to the public purse

  2. Other inequities:

    1. The ‘anniversary dates’ for LHA – once awarded, LHA amounts can only be reviewed annually. Rent increases however, occur at random, and do not run in synchrony. Because of this, individuals subjected to a rent increase cannot obtain an increase in LHA until the ‘anniversary date’ of their claim – which could hypothetically be an entire year, despite the fact they are entitled to the higher amount . There is no backdating mechanism.

    2. Assured tenants have (on paper) the right to challenge increases – however, this right does not exist for those who are already receiving a housing benefit – they can only challenge a rent increase with the Rent Assessment Committee if they sign off of benefits for a fortnight, thereby accruing a debt of 2 weeks rent. The RAC rules and regulations were written on the assumption that HB would automatically cover any rent increase at all – it does not.

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