CO/982/2013 |
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT at MANCHESTER
Strand, London, WC2A 2LL |
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B e f o r e :
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THE QUEEN on the application of KELLEY LAURA BUCKLEY IYABO CONGREAVES ANNE MILLS ALICIA MILLS |
Claimants |
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- and - |
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SHEFFIELD CITY COUNCIL |
Defendant |
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(instructed by (1) Irwin Mitchell Sheffield (2) Bhatia Best Nottingham) for the Claimants
Jonathan Manning
(instructed by Sheffield City Council Legal Services Dept) for the Defendant
Hearing dates: 08 February 2013
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Crown Copyright ©
Mr Justice Supperstone :
Introduction
i) that the Defendant's consultation on its proposed scheme was unlawful because it offended against the common law requirement that sufficient information should be provided to consultees to allow them to make an informed response (Ground 1);ii) that the Defendant has failed to have due regard to the impact of the proposals on persons with "protected characteristics" such as children and disabled people as required by section 149 of the Equality Act 2010 (Ground 2).
The Claimants no longer pursue a third ground of challenge described as "Tameside irrationality".
The legislative framework
"(a) in relation to England, a district council or London borough, the Common Council or the Council of the Isles of Scilly."
"(2) Each billing authority in England must make a scheme specifying the reductions which are to apply to amounts of council tax payable, in respect of dwellings situated in its area, by—
(a) persons whom the authority considers to be in financial need, or
(b) persons in classes consisting of persons whom the authority considers to be, in general, in financial need."
"(1) Before making a scheme, the authority must (in the following order)—
(a) consult any major precepting authority which has power to issue a precept to it,
(b) publish a draft scheme in such manner as it thinks fit, and
(c) consult such other persons as it considers are likely to have an interest in the operation of the scheme.
…
(3) Having made a scheme, the authority must publish it in such manner as the authority think fit."
"(1) The Secretary of State must by regulations prescribe a scheme ('the default scheme') for the purposes of this paragraph.
(2) The first financial year to which the default scheme relates must be the year beginning with 1 April 2013 (or such other year as is specified in section 10(4) of the Local Government Finance Act 2012).
…
(6) The default scheme is to take effect in respect of dwellings situated in the area of a billing authority, if the authority fails to make a scheme on or before 31 January 2013 (or such other date as is specified in section 10(4) of the Local Government Finance Act 2012)."
The factual background
"Council Tax Benefit is changing
From April 2013, the Government has announced that it will end Council Tax Benefit. Instead, councils will need to replace it with their own local Council Tax Support schemes. Like Council Tax Benefit, the Council Tax Support will reduce the amount of council tax people need to pay. Therefore we are consulting with you on our draft scheme for Council Tax Support.
No changes have been made to existing discounts such as the 25% Single Persons Discount and student exemptions. However there will be some changes and some of these have been set by the Government:
- A 10% reduction in funding for Council Tax Support. This equates to a reduction of about £4.6 million in the first year in Sheffield.
- Only working-age residents will be affected because the Government has told councils that pensioners who receive Council Tax Benefit will be protected from the changes.
…
- An average cut in support of 20% for working age customers.
…
We have some difficult choices to make and we need your views.
Our draft scheme:
- Matches as closely as possible to the Council Tax Benefit scheme so:
…
- Gives all working age residents who qualify for Council Tax support a discount of up to 80% off their Council Tax bill.
- Provides extra help to our most vulnerable citizens.
…"
"We are facing a huge gap in funding across all of our services. This means that we have to make some very difficult decisions about how that funding should be spent.
If we are to avoid funding the £4.6 million cut in Council Tax Support from money that could be spent on other services, we will need to limit the amount of Council Tax Support we pay out.
One way of doing this is to give all working age residents who qualify for Council Tax Support a discount of up to 80% of their Council Tax bill. …
…
This spreads the burden of the cut equally across all working age customers. Importantly, it also ensures that the most vulnerable and those in greatest need, for example those with children or with disabilities, will get a greater share of the support that is available."
"Hardship
We recognise that this change may be more difficult for some residents to manage than others and that a cut in support may place some residents in severe hardship. Therefore we are proposing extra support to meet the needs of those vulnerable residents."
Question 3 asks whether consultees agree that there should be extra support for people in severe financial hardship.
"(i) Those who would be entitled to 100% support under current council tax benefit arrangements pay between zero and no more than 8.5% of their net council tax liability;
(ii) The taper rate does not increase above 25%;
(iii) There is no sharp reduction in support for those entering work. The taper should continue to operate as under current council tax benefit regulations…"
Annex A to the Circular set out the amounts that would be available to each eligible authority. The Defendant's share, assuming it scheme met the criteria, would have been around £1.1m gross, which equated to £958,956 net. The closing date for applications for transitional grant was 15 February 2013.
The parties submissions and discussion
Ground 1: allegation that the Council failed to conduct proper consultation
i) be undertaken when proposals are at a formative stage;ii) include sufficient reasons for particular proposals to allow those consulted to give intelligent consideration and an intelligent response;
iii) give consultees sufficient time to make a response; and
iv) be conscientiously taken into account when the ultimate decision is taken.
"…must present the available information fairly. The options for change must be fairly presented. Nonetheless, a decision maker may properly decide to present his preferred options in the consultation document provided it is clear what the other options are: Nichol v Gateshead Metropolitan Borough Council [1988] 87 LGR 435, [1988] COD 97."
"It is one thing to say that when options for change are presented in a consultation paper (as they were in the Brompton case, see paragraphs 57-65 of the Court's judgment) they must be fairly presented, it is quite another to submit, as Mr Wise submitted on behalf of the Appellant, that in order to be fair a consultation paper must present information about other options that have been rejected. What fairness requires depends on the circumstances of the particular case."
In the present case, as in Haringey, the scope of the consultation is prescribed by paragraph 3(1) of Schedule 1A. The Defendant was required to publish a draft scheme and then to consult those persons who were likely to have an interest in the operation of that draft scheme. At paragraph 19 of his judgment, Sullivan LJ stated:
"Even if the statutory scheme had been less prescriptive and more open-textured as to the subject matter of the consultation process, I would not have concluded that the consultation document's failure to mention the other possible ways of meeting the shortfall in Central Government funding rendered the consultation process unfair."
Ground 2: that the Council acted in breach of the Equality Act 2010, s.149
"(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) Having due regard to the need to foster good relations 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) tackle prejudice, and
(b) promote understanding.
(6) Compliance with the duties of this section may involve treating some persons more favourably than others; but that is not to be taken as permitting conduct that would otherwise be prohibited by or under this Act.
(7) The relevant protected characteristics are—
age;
disability;
gender reassignment;
pregnancy and maternity;
race;
religion or belief;
sex
sexual orientation."
"I would emphasise the need for the court to ask whether as a matter of substance there has been compliance; it is not a tick box exercise. At the same time the courts must ensure that they do not micro-manage the exercise."
There is no formal duty to carry out a formal impact assessment (R (Domb) v Hammersmith and Fulham LBC [2009] EWCA Civ 941, per Rix LJ at [52]). Thus the absence or existence of an EIA in any particular case is not determinative of the issue. In R (Bailey) v LB Brent [2011] EWCA Civ 1586 Davis LJ observed at [102]:
"…In a case where the council was fully apprised of its duty under s.149 and had the benefit of a most careful Report and EIA, I consider that an air of unreality has descended over this particular line of attack. Councils cannot be expected to speculate on or to investigate or to explore such matters ad infinitum; nor can they be expected to apply, indeed they are to be discouraged from applying, the degree of forensic analysis for the purpose of an EIA and of consideration of their duties under s.149 which a QC might deploy in court. …"
"In my judgment, it is important to emphasise that the section 71(1) duty is not a duty to achieve a result, namely to eliminate unlawful racial discrimination or to promote equality of opportunity and good relations between persons of different racial groups. It is a duty to have due regard to the need to achieve these goals. The distinction is vital. … What is due regard? In my view, it is the regard that is appropriate in all the circumstances."
These observations are equally applicable to the duty under s.149, which has now replaced the s.71 duty.
i) The Council considered its duty under s.149 in the context of proposing a scheme which was required by statute to identify persons or classes of persons which the Council considers are in financial need. The Council focused on those groups with protected characteristics who were likely to be affected by the proposals.ii) The consultation documents recognised that the change may be more difficult for some residents to manage than others and that a cut in support may place some residents in severe hardship. Therefore the Council stated that it was proposing extra support to meet the needs of the most vulnerable and those in greatest need, for example those with children or with disabilities (see paras 18 and 19 above).
iii) The Cabinet Report for the meeting on 17 October 2012 states in the Summary at para 1.15:
"Inevitably some households will find a cut in support harder to manage than others. The Council is therefore considering ways that additional support may be provided to meet the needs of those particularly vulnerable households experiencing severe financial hardship."Paragraph 9 of the Report, headed "Equality of Opportunity Implications", includes the following:
"9.1 There is a commitment to fairness and social justice at the heart of the Council's values. We believe that everyone should get a fair and equal chance to succeed in Sheffield however we recognise that some people and communities need extra support and help to reach their full potential, particularly when they face multiple layers of disadvantage and discrimination. It is inevitable when funding levels are reduced that there will be an impact on the services we deliver including some of the work we do with groups who share a protected equality characteristic. As far as practically possible within the confines of a reduced financial settlement, we have tried to minimise the impact on these groups.9.2 The Council, in the implementation of the scheme, will need to be mindful of its legal duties toward certain groups and give careful consideration to the assessment of equalities implications including its duties under the Equality Act 2010.9.3 An Equalities Impact Assessment (EIA) has been undertaken to support the development and implementation of our local scheme and takes into account feedback from the formal consultation process. …"iv) The EIA assessed the impact level in relation to "Age" as "High". It was noted that:
"It is acknowledged that some households will find a cut in support harder to manage than others. Therefore in the run up to the implementation of the scheme the Council will consider ways that additional support, for example through the development of an additional hardship scheme, may be provided to these households."The impact level in relation to those with a "Disability" was assessed as "Medium". It was noted:"Pension age customers with a disability will not be adversely impacted by this change. Working age customers with a disability will be affected as they will have their CTS award based on 80%, rather than 100% of their Council Tax Liability. The Council recognises that this may cause hardship for customers in this group. However by aligning the scheme with the current CTB scheme, customers in receipt of disability benefits will continue to receive the highest possible level of CTS.It is acknowledged that some households will find a cut in support harder to manage than others. Therefore in the run up to the implementation of the scheme the Council will consider ways that additional support, for example through the development of an additional hardship scheme, may be provided to these households.Equally, some disabled customers or households may have a higher net income than other groups and although the Council recognises that this income is intended to meet their wider needs, they may still be in a better position to meet their Council Tax Liability than customers on non-disability welfare benefits. In addition the Council intends to continue to disregard as income Attendance Allowance, Disability Living Allowance and War Disablement Pension when assessing a customer's eligibility to CTS."The EIA includes another area of possible impact, referred to as "Financial inclusion, poverty, social justice, cohesion or carers" where the impact level is assessed as "High". In the "explanation and evidence" box of the report it is noted:
"It is intended that the CTS scheme is based on the current CTB regulations. These regulations provide for the maximum financial support being made available to those with the greatest financial need. They protect some of the income of the disabled and of families whilst providing assistance to those people who move off benefits into paid employment. The Council recognises however that requiring all working age customers to pay a minimum of 20% of their Council Tax may cause financial hardship amongst some households. Therefore in the run up to the implementation of the scheme the Council will consider ways that additional support, for example through the development of an additional hardship scheme may be provided to these households.The Council also recognises they will need to review the way in which Council Tax is recovered from those most impacted by this change in order to wherever possible minimise the level of indebtedness that this change may bring about."v) Following the EIA, the Council produced an Action Plan. In relation to those with "disability" it states:
"We will work to establish a baseline which shows the proportion of Disabled customers in receipt of CTB in order to support the work we will undertake to monitor the impact of this change on disabled customers."In relation to "All groups", the action and mitigation to be taken is stated to be as follows:"The Council will develop and implement a Communications Strategy which will ensure that all those affected by this change are made aware of the impact on them. We will also provide advice on how and where customers can pay their Council Tax and we will work with advice and support agencies to ensure customers have access to money advice services. In order to promote financial inclusion and reduce poverty we will work with the Credit Union to promote the take up of low cost saving and borrowing.However, it is acknowledged that some households will find a cut in support harder to manage than others. Therefore in the run up to the implementation of the scheme the Council will consider ways that additional support, for example through the development of an additional hardship scheme, may be provided to these households.We will review the Council Tax Recovery policy and procedures to try where possible to minimise any increase in indebtedness."vi) I accept Mr Manning's submission that the impact on children themselves cannot be divorced from the position of households in which they live. There is no separate impact in relation to children that councils should have considered separately.
vii) Mr Wise submits, relying on the decisions in R (W, M and others) v Birmingham City Council [2011] EWHC 1147 (Admin) and R (JM) v Isle of Wight Council [2011] EWHC 2911 (Admin), that the "due regard" duty required the Council to identify the number of children and disabled persons affected by the proposal, to analyse the impact of the proposal on them and to consider whether any negative impact could be avoided or mitigated. I reject this submission. The impact of the proposal on persons who share a relevant protected characteristic is not uniform, rather it depends on individual circumstances. Some families with children will be able to meet the proportion of their liability more easily than others.
viii) With regard to the hardship fund the Defendant proposes to operate to help those in severe financial hardship, Mr Walker states:
"69. The intention is that the hardship fund will assist those who are most affected by the change to CTS. We believe that this targeted approach, as opposed to a blanket approach providing support to certain categories of customers, will be a more effective and efficient way of meeting the need of those customers most affected by this change.70. We have based this on the stark reality that we do not, and cannot, know the individual circumstances of all 34,000 customers affected by the move to CTS. We can assume, as we have done when drawing up the EIA for CTS, that there will be customers in all of the protected characteristic groups who will be affected by this change, but we do not know this on an individual basis."The Claimants have not suggested anything that further consideration of the position of disabled people or children would have revealed in addition to that which the Defendant already knew. The authority did not have access to details of the financial position of all Council Tax Benefit claimants. At paragraphs 72-77 of his statement, Mr Walker explains how the hardship fund will operate. I reject the submission made by Mr Wise that the references to a hardship fund are precisely the sort of vague and generalised assertions which the court found in WM and others v Birmingham City Council to be insufficient to demonstrate due regard to the duty in that case.ix) The size of the proposed hardship fund, namely £500,000, is not material in determining whether the Council had due regard to the impact of the proposals on persons with protected characteristics. The Council proposes to monitor the situation and deal with cases of severe financial hardship, no doubt having regard to its own financial circumstances (see Finance Briefing Note of 3 December 2012, para 4, and minutes of Defendant's full Council meeting on 23 January 2013).
x) The Council were entitled to conclude that the impact on disabled people and children was not uniform; and that in the circumstances the creation and operation of the hardship fund is the best way to help those in severe financial hardship. It is clear from the consultation materials, the EIA and the minutes of full Council meetings (including Cabinet Reports) that the Council did consider whether there were alternative means of developing a scheme which had less impact on persons who share protected characteristics including disabled people and children.
Anonymity
Conclusion