UK Social Security and Child Support Commissioners' Decisions

[2008] UKSSCSC CH_3528_2006 (05 February 2008)

DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. My decision is given under paragraph 8(4) and (5)(a) of Schedule 7 to the Child Support, Pensions and Social Security Act 2000:

I SET ASIDE the decision of the Birmingham appeal tribunal, held on 24 November 2005 under reference U/04/024/2005/06636, because it is erroneous in point of law.

I give the decision that the appeal tribunal should have given, without making fresh or further findings of fact.

My DECISION is:

The claimant's rent under regulation 12(1)(a) includes the amounts charged by the landlord for voids and long-term maintenance. Any dispute about the effective date from which the rent is to be increased may be referred to me or to another Commissioner for decision.

Otherwise I confirm the tribunal's decision on service charges.

The amount of the claimant's eligible rent is not to be restricted under the alternative regulation 13 of the Housing Benefit Regulations 2006.

INTRODUCTION
2. This is one of 32 cases that all involve the same local authority and claimants of the same landlord. All the appeals raise the issue of the restriction of the claimant's rent. Some also raise the issue of service and other charges. The law on each issue is common to all the appeals concerned. However, the facts of each individual case are different. The appeal tribunal dealt with some general issues in a series of appendices and the more individual issues in the full statement of the tribunal's decision in each case. I have preferred to give separate decisions on each appeal, although they inevitably repeat much of the same reasoning.
3. The chairman's appendices contain detail about the undisputed background to these appeals. I will take that background as read.
4. The cases were decided under the Housing Benefit (General) Regulations 1987, which were in force at the time. Since then, the legislation has been consolidated in the Housing Benefit Regulations 2006. For convenience, I refer to the 2006 Regulations in this decision. This has not affected the reasoning.
5. This case raises two issues relating to the amount of the claimant's housing benefit entitlement. First, should the claimant's rent include some payments that the landlord described as service charges in the tenancy agreement? Second, should the rent eligible for housing benefit purposes be restricted?
REASONS – SERVICE AND OTHER CHARGES

The legislation

6. Housing benefit is governed by section 130 of the Social Security Contributions and Benefits Act 1992. This provides:

'(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'.

Section 130(2) provides:

'(2) In subsection (1) above "payments in respect of a dwelling" means such payments as may be prescribed.

7. Regulation 12 of the Housing Benefit Regulations 2006 is made under that authority. Regulation 12(1) provides:

'(1) Subject to the following provisions of this regulation, the payments in respect of which housing benefit is payable … are the following periodical payments which a person is liable to make in respect of the dwelling which he occupies as his home-

(a) payments of, or by way of, rent;

…

(e) payments of, or by way of, service charges payment of which is a condition on which the right to occupy the dwelling depends'.

Regulation 12(8) contains the relevant definitions:

'(8) In this regulation and Schedule 1 (ineligible service charges)-

"service charges" means periodical payments for services, whether or not under the same agreement as that under which the dwelling is occupied, or whether or not such a charge is specified as separate from or separately identified within other payments made by the occupier in respect of the dwelling; and

"services" means services performed or facilities (including the use of furniture) provided for, or rights made available to, the occupier of a dwelling.

8. Schedule 1 identifies ineligible service charges. Paragraph 1(g) is a longstop provision that conveys the essence of the whole paragraph:

'(1) The following service charges shall not be eligible to be met by housing benefit-

…

(g) charges in respect of any services not specified in sub-paragraph (a) to (f) which are not connected with the provision of adequate accommodation.'

9. Paragraph 4 of Schedule 1 deals with service charges that are too high:

'Excessive service costs

4. Subject to paragraph 2, where the relevant authority considers that the amount of a service charge to which regulation 12(1)(e) (rent) applies is excessive in relation to the service provided for the claimant or his family, having regard to the cost of comparable services, it shall make a deduction from that charge of the excess and the amount so deducted shall be ineligible to be met by housing benefit.'

10. Finally, regulation 12(3) is relevant:

'(3) Subject to paragraphs (4), (5) and (7), the amount of a person's eligible rent shall be-

(a) the maximum rent …; or

(b) except where sub-paragraph (a) applies, the aggregate of such payments specified in paragraph (1) as that person is liable to pay less-

…

(ii) where payments include service charges which are wholly or partly ineligible, an amount in respect of the ineligible charges determined in accordance with Schedule 1'.

What the tribunal did

11. The chairman dealt with the law on service charges in general terms in Appendix 3 to her decision notice and then in some detail in her full statement of the tribunal's decision. her reasoning was sound in law except in respect of payments for voids and long-term maintenance.

Voids

12. These are payments to allow for times when premises are not let. The chairman decided:

'The definition of services means that "voids" cannot be a service charge: it is neither a service provided nor a facility provided for or made available to an occupier of a dwelling.'

That is correct. I note that she was quoting from the definition in what is now regulation 12(8). The claimant had argued that this charge should be added to the rent. The chairman rejected this argument on the ground that: 'The rent is the rent which was due contractually.' That statement is correct, but it begs the question: what is the rent due contractually?

13. In some cases, it may be appropriate to take the terms of the tenancy as they stand and treat the amount of the rent for the purposes of regulation 12(1)(a) as the amount specified in the tenancy as rent. However, in this case the chairman commented:

'In relation to service charges, the evidence before me in the oral hearings has been that the [landlord] was "finding its way". I think it now acknowledges that it put together its service charges in a way which has paid scant attention to Schedule 1 …'

In those circumstances, I consider that the chairman should have looked at the substance rather than the form of the tenancy. Having done so, she should have included the charge for voids in the rent for the purposes of regulation 12(1)(a). As the chairman acknowledged in Appendix 3, landlords do take this into account as an element in fixing a rent, albeit along with other factors.

14. The local authority has now conceded that the charge for voids should be included as part of the contractual rent.
15. Notice that regulation 12(3)(b) does not prevent this approach. That provision only applies to ineligible service charges under Schedule 1. The chairman did not decide that the charge for voids was an ineligible service charge under that Schedule. She decided that it was not a service charge at all as it fell outside the definition in regulation 12(8). Schedule 1 never became relevant to her reasoning.
16. I do not want my decision to be misunderstood. I have not said that any payment that does not qualify as an eligible service charge must be taken into account as rent. The first question is: is this payment a 'service charge' as defined in regulation 12(8)? If it is not, Schedule 1 does not arise and the charge may be taken into account as part of the rent under regulation 12(1)(a) if it relates to a matter that is properly considered in setting the rent. If the payment is a service charge, the second question is: is the charge ineligible under Schedule 1? If it is ineligible, it must be disregarded under regulation 12(3)(b) and cannot be treated as part of the contractual rent.

Long-term maintenance

17. The chairman decided that: 'While such a charge is in a broad sense connected with the provision of adequate accommodation, it is not a "service" to tenants and not an eligible service charge.' Despite the reference to eligibility, which arises under Schedule 1, I am satisfied that she was deciding this issue under the definition in regulation 12(8). That issue arises logically before the application of Schedule 1 can be considered. That Schedule only applies to service charges. If the charge is not a service charge, it is outside the scope of regulation 12(1)(e) and Schedule 1 never becomes relevant.
18. On that basis, I am prepared to accept the chairman's reasoning for the sake of argument and without commenting, one way or the other, on whether it is correct. I can do so because her reasoning is not sufficient to exclude the amount of the payment from the scope of regulation 12(1)(a). For the reasons given in respect of payments for voids, the charge for long-term maintenance should be included as part of the contractual rent. Again, the local authority has now conceded this.

Conclusion on charges

19. As the local authority as conceded, the claimant's rent for the purposes of regulation 12(1)(a) includes payments for voids and long-term maintenance.
20. As I pointed out when granting leave and as the local authority repeats, this conclusion cannot assist the claimant if the eligible rent is restricted. Indeed, it may make matters worse for the claimant, because it increases the amount of the rent in respect of which housing benefit is payable. But those consequences cannot prevent the proper operation of the legislation.
REASONS – RENT AND ALTERNATIVE ACCOMMODATION

The legislation

21. This case is governed by transitional protection that has been in force since 2 January 1996. The original regulation 11 of the Housing Benefit (General) Regulations 1987 was amended by the Housing Benefit (General) Amendment Regulations 1995. Regulation 10 of those Regulations contained a savings provision that preserved the operation of the original regulation 11 in certain cases. They were always known as 'old regulation 11 cases'.
22. Following the 2006 consolidation, those provisions have been incorporated into Schedule 3 to the Housing Benefit and Council Tax Benefit (Consequential Provisions) Regulations 2006. Regulation 10 (the savings provision) is now consolidated by paragraph 4. Regulation 11 is consolidated by paragraph 5(2) as an alternative version of regulation 13 of the Housing Benefit Regulations 2006. For that reason, I shall refer to the 'alternative regulation 13'.
23. The savings provision applies in this case, because the accommodation occupied as the claimant's home is exempt accommodation: paragraph 4(1)(b) and (10) of Schedule 3. That is not in dispute.
24. The alternative regulation 13 can be analysed into three parts – conditions, consequences and considerations.
25. The regulation applies if one of two conditions is satisfied: (a) the claimant 'occupies a dwelling larger than is reasonably required' or (b) 'the rent payable is unreasonably high by comparison with the rent payable in respect of suitable alternative accommodation elsewhere': regulation 13(3). In this case, it is (b) that is in issue.
26. If either condition is satisfied, the consequence is that the local authority must 'treat the claimant's eligible rent as reduced by such amount as it considers appropriate having regard in particular to the cost of suitable alternative accommodation elsewhere': regulation 13(3).
27. The regulation also sets out some of the considerations that have to be taken into account in applying these provisions.
28. Regulation 13(9)(a) lists some of the factors that the local authority must take into account in identifying suitable alternative accommodation:

'in deciding what is suitable alternative accommodation, the relevant authority shall take account of the nature of the alternative accommodation and the facilities provided having regard to the age and state of health of all the persons to whom paragraph (10) applies and, in particular, where a claimant's present dwelling is occupied with security of tenure, accommodation shall not be treated as suitable alternative accommodation unless that accommodation will be occupied on terms which will afford security of tenure reasonably equivalent to that presently enjoyed by the claimant'.

29. For some claimants, there is are additional considerations. If regulation 13(4) applies,

'no deduction shall be made under paragraph (3) unless suitable cheaper alternative accommodation is available and the authority considers that, taking into account the relevant factors, it is reasonable to expect the claimant to move from his present accommodation.'

The 'relevant factors' are listed in regulation 13(9)(b):

'the relevant factors in paragraph (4) are the effects of a move to alternative accommodation on—

(i) the claimant's prospects of retaining his employment; and

(ii) the education of any child or young person referred to in paragraph (4)(d) if such a move were to result in a change of school.'

30. The claimant comes within regulation 13(4) by virtue of age. Neither of the relevant factors applies in this case. However, suitable cheaper alternative accommodation must be available. It is for the claimant to show that accommodation identified by the local authority that would otherwise be suitable would not, for some reason, be available: R v Oadby and Wigston Borough Council, ex parte Dickman (1996) 28 HLR 806 at 816.

What the tribunal did

Bricks and mortar

31. The claimant relied on the judicial review decision in R v East Devon Housing Benefit Review Board, ex parte Preston (1998) 31 Housing Law Reports 936. The relevance of the case is that the local authority's social services department had identified the level of support and counselling that the claimant required.
32. The tribunal in this case decided that Preston did not apply, because it related to counselling and support services, which were then eligible service charges under the housing benefit scheme. The chairman commented: 'That is no longer the case and it is only the bricks and mortar element of suitability that can be taken into account in the present cases.'
33. I do not agree that Preston can be distinguished on the ground that the legislation has changed since that case was decided. It is correct that it has, but that does not undermine the principle for which the case is authority. As with all judicial review cases, the court did not make a final decision on the application of the housing benefit legislation. It did not, therefore, provide an authority on the appropriate outcome in that case. All it did was to decide that the Housing Benefit Review Board had failed to deal with the claimant's evidence that the accommodation she occupied was particularly suitable for her needs.
34. Having identified the principle for which the case is authority, I do not see how it supports the chairman's comment that only bricks and mortar are relevant. I suspect that she did not intend this to be taken completely literally. I can see no reason to limit suitability to those factors, although they will be important considerations. Take these examples. A claimant has severely restricted mobility and lives in the centre of town close to all amenities. The local authority identifies identical accommodation at a much lower rent in an isolated hamlet which has no facilities and no public transport. Would that accommodation be suitable, despite being identical? I think not. Or assume that a claimant has severe asthma and requires a ground floor flat. The local authority identifies a number of ground floor flats, but they are all located on an estate at the top of long, steep hill. Again, I do not think that that would be suitable for the claimant. There is nothing in the legislation that limits the factors relevant to whether the alternative accommodation is suitable. Regulation 13(4) and (9)(a) sets out factors to be taken into account, but they are not exhaustive and must be read against the background of a general, undefined requirement that the accommodation be suitable.
35. I do, though, agree with the chairman that a social services' assessment is not decisive on the claimant's needs for particular accommodation. That has to be decided by the tribunal on the whole of the evidence.

Legal and evidential burdens

36. There are two burdens of proof. The first is the legal burden. This determines which party wins on a particular issue if the tribunal is unable, on the evidence before it, to make a decision one way or the other on the balance of probabilities. That rarely occurs. In a decade of chairing tribunals, full-time and part-time, I met only one such case. The second burden is the evidential burden. This takes account of the practicalities of legal proceedings. Suppose that the legal burden on a particular issue is on party A. Party B is not required to do anything until A has made a case that requires an answer. If A does not produce the evidence necessary, B can simply argue that the issue must be decided against A. In practice, A must produce sufficient evidence to win in the absence of any evidence from B. When that happens, the legal burden remains on A, but for practical purposes B must produce other evidence or lose. In those circumstances, an evidential burden is said to pass to B. R(H) 2/05 provides an example of this in the context of an 'old regulation 11 case', now an alternative regulation 13 case. The Commissioner decided that the local authority's evidence was not sufficient to show that the rent could be restricted, regardless of any evidence produced by the claimant.
37. It is inherent in the operation of the legal and evidential burdens and in the nature of legal proceedings that, to prove a case, a party must adduce evidence that can be assessed by the tribunal and countered, if that is possible, by the other party. If it were otherwise, parties would have to answer cases that had not been made or litigation would have to be determined on the mere say so of a party or a witness.
38. In this case, the local authority produced newspaper advertisements of accommodation available in the area for rent at sums lower than the claimant was paying. The advertisements showed, at most, the number of rooms available and the rent payable. The claimant's response, put into legal terms, was that this was insufficient to give rise to an evidential burden, because the evidence was not sufficiently detailed and specific. The tribunal rejected both that argument and the further argument that the claimant's existing accommodation was more suitable. It found that the local authority's evidence was sufficient to place an evidential burden on the claimant, which the claimant had not discharged.
39. I consider that the claimant was correct to argue that the local authority had not produced a case that required an answer. The tribunal was wrong to reject that argument. I now explain why.

Creating an evidential burden

40. The tribunal had to decide whether the claimant bore an evidential burden in the light of its findings on the claimant's needs.
41. The tribunal decided that 'any ordinary unadapted housing would suffice' for the claimant. Its analysis of the evidence supported its finding that the claimant did not need adapted premises. However, it did not support its finding that 'any ordinary … housing' would be suitable. The evidence was that the claimant had mobility difficulties and used a stick or a frame indoors. Accordingly, he would need more space to manoeuvre than someone who was independently mobile. Terraced housing to which the tribunal referred is likely to be relatively cramped. Evidence that there were properties available with a particular number of rooms did not show that that property was suitable for someone with mobility difficulties. The local authority has now produced detailed particulars of three properties that are for sale. The particulars include the size of the rooms. That evidence is relevant to how I dispose of the case and I will take it into account when I reach that stage. However, it cannot affect the incidence of the evidential burden at the hearing.
42. The tribunal accepted that it might be necessary to convert rooms from living to sleeping accommodation in order to make a property suitable for the claimant's needs. It also envisaged that three tenants might share a typical terraced house. That sort of property would have one of two layouts.
43. As originally designed, it would have two rooms plus a kitchen downstairs with perhaps a bathroom or toilet. If one of those rooms was converted to a bedroom for the claimant, the downstairs living area for the tenants would be reduced to one small room. It would be possible to use one of the bedrooms as a living room, but the claimant would be excluded from that if stairs were a problem.
44. Many terraced houses have been altered to create an open plan living area downstairs. Sometimes that incorporates the kitchen, sometimes not. The local authority has now produced to me the plans for one such property. It would be possible for the claimant to use part of the open plan area as a bedroom. But the other tenants and their visitors would be denied use of the front door and access to the stairs, unless partitions were installed. Landlords would not necessarily be agreeable to that. Far from satisfying me that the local authority has made out its case, this evidence has reinforced my initial impression that a closer examination of the available property market was necessary for an evidential burden to arise on the claimant.
45. My conclusion is that the claimant's representative could not be expected to respond to the local authority's argument without having individual knowledge of the particular properties and their internal layout and dimensions or general knowledge of the types of dimensions and layouts that such properties might have. The local authority's case was not presented in a state that gave rise to an evidential burden for the claimant to satisfy.
46. Finally, there was evidence that the claimant could be difficult or behave in ways that some might find inappropriate or threatening. I asked in my grant of leave whether that was not a relevant factor in deciding whether there was suitable accommodation that would actually be available to this claimant. (I have already said that the burden is on a claimant who argues this.) The local authority has argued that landlords must not breach the Disability Discrimination Act 1995 and referred me to the decision of the Court of Appeal in Council of the City of Manchester v Romano and Samari [2004] EWCA Civ 834. I accept, of course, the authority of that decision. However, a close reading shows that it is not impossible for landlords to remove tenants whose behaviour is affecting others and that the first question to consider is whether the behaviour is a manifestation of a disability. In view of my disposal of this case, I need say no more on this issue.
OVERALL CONCLUSION AND DISPOSAL
47. In December 2007, the claimant's representative asked for time to refer the cases to a solicitor, who would not be able to consider the cases until March 2008. I refused that request. The representative has known the nature of the issues since I gave leave to appeal to the Commissioner. And deferring the cases would have led to inordinate and unknown delay. The solicitor would not begin to consider the cases until March and had given no indication of how long it would take to deal with so many individual cases. I gave the representative until 7 January 2008 to make observations. When no observations were received by that date, the file was referred to me for decision. I did assure the representative that I would take account of his request when deciding how to dispose of the cases. As this case has been decided entirely in the claimant's favour, I see no reason to delay for the representative to obtain legal assistance.
48. The tribunal went wrong in law in respect of the claimant's rent and suitable alternative accommodation. A rehearing is not necessary on the charges issue. I have substituted the decision that the tribunal should have given, deciding that the claimant's eligible rent should be increased to include the charge for voids and long-term maintenance. As to the rent restriction issue, a rehearing is not appropriate. The local authority did not put sufficient evidence to the tribunal to justify restricting the rent. The tribunal should have decided that the eligible rent should not be restricted on the evidence available. The evidence now produced is not sufficient to remedy the deficiencies in the case originally put by the local authority and, in view of the passage of time, I do not consider that it would be appropriate to direct a rehearing in order for the local authority to construct a wholly new case from scratch. The more appropriate disposal is to make a decision on the evidence available. That is what I have done.
49. The effect of my decision is favourable to the claimant, at least for the time being. But I have not decided that the local authority could not make a case for restricting the rent. In order to do so, it would have to produce evidence that was sufficiently general to show that there is alternative accommodation available at a lower rent while giving sufficient detail to show that is suitable to the claimant's needs. And it would have to take account of the fact that the tribunal might make a different assessment of those needs from the local authority. Those difficulties are inherent in the nature of the legislation and the legal burden of proof that the local authority has to discharge. But they can be overcome with a little ingenuity in the gathering and presentation of the appropriate evidence. It is for the local authority to decide if it wishes to undertake that exercise.

Signed on original on 05 February 2008

Edward Jacobs Commissioner