QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| THE QUEEN (ON THE APPLICATION OF ZACCHAEUS 2000 TRUST)
|- and -
|SECRETARY OF STATE FOR WORK AND PENSIONS
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MARTIN CHAMBERLAIN (instructed by the Department for Work and Pensions/Department of Health Legal Services) for the Defendant
Hearing dates: 19 and 20 December 2012
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The Hon. Mr Justice Underhill :
(1) Housing benefit for private-sector tenants is calculated by reference to an "appropriate maximum housing benefit" ("AMHB"): see section 130 (1) and (3) of the Social Security Contributions and Benefits Act 1992 ("the 1992 Act"). The amount of benefit payable is the lower of the actual rent paid by the claimant and the AMHB.
(2) Section 130A of the 1992 Act provides for AMHB to be determined by regulations, which may provide for it to be ascertained "by reference to rent officer determinations": see sub-sections (2) and (3).
(3) The relevant regulations – most recently the Rent Officers (Housing Benefit Functions) Order 1997 ("the 1997 Order") – provide for rent officers to determine, for each "broad rental market area" ("BRMA"), a "local housing allowance" ("LHA") for each of a series of categories of dwellings, defined by the number of bedrooms: see article 4B.
(4) Until the changes challenged in these proceedings the nature of the exercise performed by the rent officer under the 1997 Order was that he would ascertain the range of actual levels of rent being charged in the BRMA for each category in that month, using information gathered locally, and would fix the LHA at a prescribed point in that range. Originally the prescribed point was the median of the rents in question. The LHA so determined constituted the AMHB. With effect from April 2011 changes were introduced which (a) substituted for the median the thirtieth percentile point in the range, (b) introduced an overall monetary cap for the LHA in each category and (c) removed the previous five-bedroom category, so that the maximum rate of housing benefit would relate only to four-bedroom houses. These changes were effected by the Rent Officers (Housing Benefit Functions) Amendment Order 2010 ("the 2010 Order"). The introduction of the cap was unsuccessfully challenged in R (Child Poverty Action Group) v Secretary of State for Work and Pensions  EWHC 2616 (Admin) ("the CPAG case").
(5) The effect of the 2012 Order is to substitute for that regime a system under which the LHAs in force as at 2 April 2012 are frozen until April 2013 and are thereafter to be uprated annually to the lower of (a) the figure produced by a determination using the method described at (4) above and (b) the current figure as uprated by the percentage annual increase in the Consumer Price Index ("the CPI"). In crude terms, the effect is that any increases in housing benefit will be capped at the level of general inflation, even if inflation in the rental market has been higher.
These particular changes are concerned only with housing benefit paid to private sector tenants.
A. THE VIRES CHALLENGE
The Statutory Provisions
"(1) A person is entitled to housing benefit if -
(a) he is liable to make payments in respect of a dwelling in Great Britain which he occupies as his home;
(b) there is an appropriate maximum housing benefit in his case; and
(c) either -
(i) he has no income or his income does not exceed the applicable amount; or
(ii) his income exceeds that amount, but only by so much that there is an amount remaining if the deduction for which subsection (3) (b) below provides is made.
(2) In subsection (1) above "payments in respect of a dwelling" means such payments as may be prescribed, ...
(3) Where a person is entitled to housing benefit, then—
(a) if he has no income or his income does not exceed the applicable amount, the amount of the housing benefit shall be the amount which is the appropriate maximum housing benefit in his case; and
(b) if his income exceeds the applicable amount, the amount of the housing benefit shall be what remains after the deduction from the appropriate maximum housing benefit of prescribed percentages of the excess of his income over the applicable amount.
Section 130A, which was introduced by the Welfare Reform Act 2007, reads (so far as material):
"(1) For the purposes of section 130 above, the appropriate maximum housing benefit (in this section referred to as "the AMHB") is determined in accordance with this section.
(2) Regulations must prescribe the manner in which the AMHB is to be determined.
(3) The regulations may provide for the AMHB to be ascertained in the prescribed manner by reference to rent officer determinations.
(4) - (6) …
(7) A rent officer determination is a determination made by a rent officer in the exercise of functions under section 122 of the Housing Act 1996."
"(1) The Secretary of State may by order require rent officers to carry out such functions as may be specified in the order in connection with ... housing benefit ... ."
(Sub-section (7) provides that "housing benefit" has the same meaning as in part VIII of the Social Security Administration Act 1992, which in turn refers back to section 122 of the other 1992 Act.)
"(1A) On 20th March 2008 and so often thereafter as a rent officer considers appropriate, a rent officer shall, in relation to each local authority, -
(a) determine one or more broad rental market areas which will (during the month which next begins after the determination is made) fall, in whole or in part, within the area of the local authority so that every part of the area of that local authority falls within a broad rental market area and no part of the area of that authority falls within more than one broad rental market area; and
(2A) No more than 10 and not less than 8 working days before the end of each month a rent officer shall -
(a) for each broad rental market area determine, in accordance with the provisions of Schedule 3B -
(i) a local housing allowance for each of the categories of dwelling set out in paragraph 1 of Schedule 3B; and ...
(b) ... .
(3A) Any broad rental market area determination made in accordance with paragraph (1A), or local housing allowance determination made in accordance with paragraph (2A) before 7th April 2008, shall take effect on 7th April 2008 and any subsequent determination shall take effect on the first day of the month which begins after the day on which the determination is made."
Schedule 3B, as referred to at paragraph (2A) of article 4B, prescribes, at paragraph 1, the various categories of dwelling: I need not set those out. Paragraph 2 provides for how the LHA required by paragraph (2A) (a) (i) of article 4B is to be determined. It begins:
"(1) … [T]he rent officer must determine a local housing allowance for each category of dwelling in paragraph 1 in accordance with the following sub-paragraphs."
The details of the method of determination set out in the following sub-paragraphs are immaterial for present purposes. Essentially the rent officer is required to maintain a list of rents being charged within the BRMA for assured tenancies in each category which satisfy certain criteria. Paragraph (9) then provided:
"Subject to paragraph (12), the local housing allowance for each category of dwelling specified in paragraph 1 is the amount of the rent at the 30th percentile in the list of rents for that category of dwelling."
(Paragraph (12) provided for the cap introduced in 2010, as referred to at paragraph 1 (4) above.)
"... the local housing allowance determined by the rent officer by virtue of article 4B (2A) or (4) of the Rent Officers Order which is applicable to—
(a) the broad rental market area in which the dwelling to which the claim or award of housing benefit relates is situated at the relevant date; and
(b) the category of dwelling which applies at the relevant date …".
("The Rent Officers Order" is defined as the 1997 Order: see regulation 2.)
(1) For the obligation in paragraph (2A) of article 4B to make a monthly determination of an LHA for each BRMA is substituted an obligation to make an annual determination, within twenty days of the publication of the CPI for annual inflation as at September of any given year.
(2) Schedule 3B is amended by introducing a paragraph (1A) in the following terms:
"Subject to sub-paragraph (12), the local housing allowance for a category of dwelling is –
(a) the rent at the 30th percentile determined in accordance with sub-paragraphs (2) to (10) where that does not exceed the amount determined in accordance with sub-paragraph (11); or
(b) in any other case, the amount determined in accordance with sub-paragraph (11)."
The "amount determined in accordance with sub-paragraph (11)" is, in effect, the previous LHA uprated by reference to the CPI.
(3) A new paragraph (3B) is introduced into article 4B providing that any determination made under the new paragraph (2A) will take effect on the following 1 April. It is this provision which produces the freeze in the current year referred to at paragraph 1 (5) above.
(4) In short, therefore, in each BRMA from 1 April 2013 onwards, the LHA will be either the 30th percentile figure using the old method or the current figure increased by the CPI, whichever is the lower. The old-method calculation will accordingly still have to be performed in every case.
The Claimant's Case
"342. The amendments made by section 69 generalise section 130A to reflect the Secretary of State's intention to exercise the powers in that section to provide for AMHB to be determined by methods other than by reference to rent officer determinations.
344. Using these powers the Secretary of State will bring forward regulations that will:
- set out that eligible rent may be determined by reference to either rent officer determinations or the rate of CPI. Currently local housing allowance (LHA) determinations are made by rent officers. The amendments made by section 69 will ensure the Secretary of State has the power to set LHA rates from April 2013, by reference to the lower of either the CPI or the bottom 30th percentile of private sector rents.
If the Secretary of State's contentions in the present case are right, Ms Laing submitted, he would have no need to make amendments having the effect described. The only explanation for their introduction is that he was in fact – to put it no higher – doubtful whether he had the power under the 1996 Act to introduce reference to the CPI by the route of rent officer determination. Ms Laing referred to statements by civil servants, in materials produced by the House of Commons Library, and by experienced outside commentators, which all appear to assume that the introduction of uprating by reference to the CPI was to be effected through section 69 of the 2012 Act.
"When market rents were introduced by the Housing Act 1988 the then Government gave a promise to link housing benefit rates to market rents."
Although Ms Laing did not seek to rely on the alleged promise as such, she said that it assisted her argument in that it stated explicitly what in her case is the necessary implication of the reference in section 130A to "rent officer determination". The Claimant's solicitors had asked the Treasury Solicitor to confirm that such a promise had been made but had received no answer: I was asked to infer that the Government was unable to dispute the RLA's assertion. (Ms Laing acknowledged that the Claimant had not done any research of its own about the alleged promise, for example by asking the RLA on what it had based its statement.)
(B) THE EQUALITY ACT CHALLENGE
"149. Public sector equality duty
(1) A public authority must, in the exercise of its functions, have due regard to the need to—
(a) eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under this Act;
(b) advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it;
(c) foster good relations between persons who share a relevant protected characteristic and persons who do not share it.
(3) Having due regard to the need to advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it involves having due regard, in particular, to the need to—
(a) remove or minimise disadvantages suffered by persons who share a relevant protected characteristic that are connected to that characteristic;
(b) take steps to meet the needs of persons who share a relevant protected characteristic that are different from the needs of persons who do not share it;
(c) encourage persons who share a relevant protected characteristic to participate in public life or in any other activity in which participation by such persons is disproportionately low.
(4) The steps involved in meeting the needs of disabled persons that are different from the needs of persons who are not disabled include, in particular, steps to take account of disabled persons' disabilities.
(5) – (6) …
(7) The relevant protected characteristics are—
pregnancy and maternity;
religion or belief;
(8) - (9) ..."
Provisions to essentially the same effect appeared in earlier anti-discrimination statutes: I note in particular, because they feature in the authorities cited to me, section 76A of the Sex Discrimination Act 1975, section 71 of the Race Relations Act 1976 and section 49A of the Disability Discrimination Act 1995.
(1) Paragraphs 1-6 outline the proposed changes and describe what consultation has taken place and is planned. They make it clear that the measure the impact of which is being assessed is the restriction of increases in housing benefit in the private rented sector by reference to annual increases in the CPI.
(2) Paragraphs 7-25 address the impact of the measure by reference to the protected characteristics. The unit of analysis is, understandably, not actual individuals but households containing at least one individual with a protected characteristic. I will use the shorthand "protected households": its convenience outweighs its inaccuracy.
(3) Paragraphs 7-9 are introductory to the characteristic-by-characteristic analysis. Paragraph 7 acknowledges that the measure will affect many housing benefit claimants in the private rented sector because (though this is implicit rather than explicit) their rents may increase by more than CPI; but paragraph 9 anticipates the overall conclusion, which is that "breakdown of the composition of the private rented sector housing benefit caseload as a whole … [shows that] … no [sc. protected] group is likely to be disadvantaged more than another". It goes on to say that a breakdown has also been performed of "the overall Housing Benefit caseload", i.e. including also the social housing sector, "as a comparator". I am not sure how that comparison could provide relevant information, given that the measure in question applies only to private-sector claimants; but the point does not matter for present purposes.
(4) The EIA then proceeds to consider each protected characteristic in turn. Gender reassignment, sexual orientation, religion or belief, marriage and civil partnership and pregnancy and maternity are – plainly sensibly – dealt with very summarily. As regards gender, disability, age (broken down simply into "aged under 60" and "aged 60 or over") and race, there are simple statistical tables provided, but these are concerned with the (at best) secondary question noted above of possible differentials between the proportions of protected households as between the private and social sectors. As regards the primary question of the impact of the measure on protected households in the private sector, the assessment consists in each case of a single sentence to the effect, to take disability as an example, that "as the measure potentially affects everyone in the private rented sector on Housing Benefit, disabled people are no more likely to be affected than people without a disability". (There are minor differences of wording as regards the other protected characteristics, but the point is the same.)
(5) Paragraph 25 is headed "Mitigation" and reads as follows:
"The Government recognises that many Housing Benefit private rented sector customers paid accordingly to Local Housing Allowance rules may be affected by these changes. However, we already have measures in place to support those who need it most. In particular, Discretionary Housing Payments can be considered by local authorities for those affected households where the type and level of disability places restrictions on the amount of suitable alternative accommodation available. For those that can move additional financial support can be considered to help facilitate including help with removal expenses. The Secretary of State will be able to review rates and, if he considers it necessary set them at a different level than the increases in the Consumer Price Index through secondary legislation."
In the witness statement of Marie Savage, a civil servant in the Department of Work and Pensions, the reference to "discretionary housing payments" is explained (see paragraphs 54-57). The Government has allocated to local authorities an additional £130m. over the (unspecified) 2010 spending review period in order "to enable [local authorities] to provide support where they consider it is most needed as a result of the [housing benefit] reforms", together with a further £49m. "to assist people with housing advice and removal costs".
(6) Paragraphs 26-27 set out what steps the Department intends to take to monitor and evaluate the impact of the proposed measures.
The Claimant's Case
(1) Same Impact but Greater Disadvantage
(a) the disabled; and
(b) children of school age - these constitute a particular age group, however precisely it may be defined, and thus share the protected characteristic of age (see section 5 of the 2010 Act).
The disproportionate disadvantage to the members of those two groups was not addressed at all.
"Those with physical disabilities who live in adapted housing, or are reliant on local support services, will experience … disruption and an effect on their equality of opportunity. A similar argument applies to those who suffer from mental illness, particularly those whose conditions mean that they benefit from settled surroundings and a regular routine."
"… [C]hildren who are settled at school will have not only to move house but to change schools. This is likely to affect both their social development and educational prospects, and thus their equality of opportunity."
(2) Ethnic Minorities
"… [It] is generally accepted, and has previously been accepted by the Defendant (see CPAG judgment paragraph 60), that families of claimants who are from ethnic minorities tend to be larger than those who are not from ethnic minorities. The effect of the earlier caps, exacerbated by the widening gap between actual rents and housing benefit which this change will lead to, is likely to mean that members of bigger families are more likely to be homeless, or to have to move, than members of smaller families."
That differential impact is nowhere addressed in the EIA. (This point is an exception to the Claimant's overall acceptance – see paragraph 30 above – that the 2012 Order will not lead to more protected than non-protected households having to move.)
(3) EIA not Directed to the 2012 Order
Conclusion on the Equality Act Challenge
DELAY AND RELIEF