Child Poverty Action Group v Secretary of State for Work & Pensions

Part VII deals with income-related benefits. By s.123(1)

“Prescribed schemes shall provide for the following benefits (in this Act referred to as ‘income-related benefits’)—

(d)

housing benefit.”

By s.130(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 sub-section (3)(b) below provides is made.”

S.130(3) provides that

“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.”

S. 130A deals with the appropriate maximum housing benefit. By s.130A

“(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.

(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.”

Regulations, orders and schemes for the purposes of SSCBA are made under section 175. By s.175(3)

“… any power under this Act to make regulations or an order may be exercised—

(a)

either in relation to all cases to which the power extends, or in relation to those cases subject to specified exceptions, or in relation to any specified cases or classes of case;

(b)

so as to make, as respects the cases in relation to which it is exercised—

(i)

the full provision to which the power extends or any less provision (whether by way of exception or otherwise),

(ii)

the same provision for all cases in relation to which the power is exercised, or different provision for different cases or different classes of case or different provision as respects the same case or class of case for different purposes of this Act,

(iii)

any such provision either unconditionally or subject to any specified condition; …”

Section 175(6) provides that:

“any power conferred by this Act to make orders or regulations relating to housing benefit … shall include power to make different provisions for different areas.”

Part VIII of the Social Security Administration Act 1992 (“SSAA”) deals with, inter alia, arrangements for housing benefit. By s.134(1)

“Housing benefit provided by virtue of a scheme under section 123 of the Social Security Contributions and Benefits Act 1992 (in this Part referred to as ‘the housing benefit scheme’) shall be funded and administered by the appropriate housing authority or local authority.”

S.134(1A) deals with rent rebates for the council’s own stock. By s.134(1B)

“In any other case housing benefit shall take the form of a rent allowance, funded and administered by the local authority for the area in which the dwelling is situated or by such other local authority as is specified by an order made by the Secretary of State.”

By s.191 “local authority” means “(a) in relation to England…, the council of a district or London borough, the Common Council of the City of London or the Council of the Isles of Scilly”. In relation to Wales it means the council of a county or county borough (s.191(aa)).

Section 122(1) provides:

“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 and rent allowance subsidy.”

By s.122(6) an order under this section:

“(a)

shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament;

(b)

may make different provision for different cases or classes of case and for different areas;”

The Regulations contain detailed provisions for the determination of the AMHB. Regulations 12B, 12C and 12D cover three groups of claimants. The present claim relates to cases falling within Reg.12D where the eligible rent is restricted to the LHA (12D(2)(a)). This applies to almost all private rented sector cases where the claim was made on or after 7 April 2008.

Regulation 13D provides for the determination of a maximum rent (LHA). Regulation 13D(1) states:

“Subject to paragraphs (3) to (11), the maximum rent (LHA) shall be the local housing allowance determined by the rent officer by virtue of article 4B(2A) or (4) of the Rent Officer’s 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 in accordance with paragraph (2).”

Reg.13D(2) and (3) specifies the category of dwelling identified in Schedule 3B to the Rent Officers Order applicable to the household size of the claimant.

Article 4B requires rent officers to determine one or more broad rental market areas within a local authority area, and to determine, in accordance with the provisions of Schedule 3B, a local housing allowance each month for each category of dwelling within a broad rental market area.

Schedule 3B requires the rent officer to determine a LHA for each of six categories of dwelling being shared accommodation and accommodation with each of one to five bedrooms (para 1). For each category the rent officer is required to compile a list of rents payable for that category of property within the same broad rental market area (BRMA) (para 2). BRMA means “an area within which a person could reasonably be expected to live having regard to facilities and services for the purposes of health, education, recreation, personal banking and shopping, taking account of the distance of travel, by public and private transport to and from those facilities and services” (para 4). A BRMA must contain “(a) residential premises of a variety of types, including such premises held on a variety of tenures; and (b) sufficient privately rented residential premises to ensure that, in the rent officer’s opinion, the local housing allowance for the categories of dwelling in the area for which the rent officer is required to determine a local housing allowance is representative of the rents that a landlord might reasonably be expected to obtain in that area.” (Para 5).

Subject to the new weekly caps introduced by the RO Amendment Order, the LHA is the amount of rent of the 30^th percentile in a list of rents compiled by the rent officer for the relevant category of dwelling in the relevant BRMA. Prior to the housing benefit reforms, the LHA was the median rent in the same list of rents. There is no challenge to the introduction of the 30^th percentile.

Mr Westgate submits that the introduction of national caps on the amount of LHA for accommodation of a given size is unlawful. Housing benefit is a means tested benefit intended to provide assistance with the costs of renting accommodation. He submits that the statutory purpose of the housing benefit scheme is to contribute to rental costs in such a way that claimants are not made homeless through inability to pay their rent. It follows that the amounts of housing benefit fixed under the scheme must be set at levels that enable the statutory purpose to be met. Since rents vary across the country it also follows that the levels of benefit must be set by reference to local rents so that claimants can actually retain or secure accommodation that is or ought to be reasonably available to them.

The absolute caps imposed by the changes to the RO Order are, Mr Westgate submits, ultra vires for three reasons. First, they are not framed with a view to the purpose identified, but instead have been set having regard to the overall affordability of housing benefit. Second, in some areas in central London the caps actually do have the effect of excluding claimants from access to housing benefit and so are inconsistent with the purpose identified. Third, the national caps are inconsistent with the statutory scheme that has been maintained in the amended RO. The new scheme purports to retain the principles applicable to the area based approach in that it retains the notion of BRMAs and the setting of LHAs by reference to them. However it subverts that approach in any area where the figures so produced are higher than a cap amount set by the Defendant according to different principles. In such a case, Mr Westgate submits, the capped amounts are not “representative of the rents that a landlord might reasonably be expected to obtain in that [BRMA]” (see para 21 above).

By reference to the primary legislation Mr Westgate submits that the SSCBA, and the relevant parts of the Housing Act and the SSAA must be read together. He submits that certain matters are clear about the nature and purpose of housing benefit from the description of it in primary legislation. First it is mandatory for the Defendant to introduce a housing benefit scheme (s.123(1)). Second, the scheme is intended to be a comprehensive one to be administered by any local authority in which a relevant dwelling falls. Third, housing benefit is an income related benefit expressly designed to allow those with no or low income to afford housing they could not otherwise afford. However there is no upper income limit in principle. Accordingly many individuals who are in work are able to claim and housing benefit allows them to secure rental accommodation that they would not otherwise be able to afford even though they are not eligible for and do not claim any other income related benefits. Fourth, the benefit operates by way of subsidy for housing costs that the claimant actually incurs. This follows from the basic condition of entitlement that a person is liable to make payments in respect of a dwelling. This is subject to the appropriate maximum housing benefit but the intention is to enable those who are entitled to the benefit to meet the costs of accommodation that is available in the market. Fifth, it follows that housing benefit must be set at such a level as to enable individual claimants actually to retain or acquire accommodation taking account of any ability they have to contribute from their own resources. Sixth, since the benefit applies in principle throughout the country it cannot be intended that claimants will be required to uproot themselves unreasonably in order to take advantage of the subsidy required to be provided by the Act. The Act requires a balance to be struck between the extent to which claimants can reasonably be expected to move and the amounts that should be paid by way of subsidy. Finally as a matter of practice in history this balance has been struck pursuant to Regulations by either the local authority or rent officers. But whoever is responsible for undertaking it, the primary legislation necessarily implies that a balancing exercise must be undertaken and this involves some evaluation of the reasonable availability of accommodation to housing benefit claimants.

Mr Westgate submits that Regulations made under the SSCBA and the Housing Act support this approach. The Regulations are relevant in that they reflect limitations on the exercise of the powers in primary legislation that are implicit in those provisions when read in context. Further the Regulations form part of a comprehensive Code and are intended to work together with and build on the primary legislation. At the very least, Mr Westgate submits that they are a reliable guide to the meaning of the parent Act (see Hanlon v Law Society [1981] AC 124 per Lord Lowry; R v Secretary of State ex p. Mehari [1994] QB 474 at 486). In the present case the Claimant seeks to rely on the underlying purpose of the parent Act. This is reinforced by the fact that Parliament has chosen to re-enact enabling powers in the same terms in the light of a consistent pattern of subordinate legislation. In any case, even where subordinate legislation is not an aid to the construction of primary legislation it is relevant and will shape the exercise of powers under that legislation (see R (Machi) v LSC [2002] 1 WLR 983, per Sedley LJ at para 21). In Machi the general powers of the primary legislation were limited by the terms of the existing Regulations. However Mr Westgate submits that in the present case even if the primary legislation extended to allow the Defendant to impose national caps it would not be open to the Defendant to do so given the regulatory structure that had been left in place and which implicitly limits the Defendant’s freedom of action. The Defendant has maintained the structure of the existing Regulations establishing the use of the BRMA to calculate the LHA independently for each area. Given that he has done so he cannot at the same time undermine that framework by the use of national caps that render the exercise of calculating the LHA an empty one.

The schemes in force from time to time show a consistent loyalty to the area-based approach, the underlying concept being that the level of housing benefit payable, and the extent to which the scheme should intervene in the market, must be set by reference to local conditions. It is not suggested that housing benefit must meet the full amount of the claimant’s actual housing costs. What it does mean, Mr Westgate submits, is that housing benefit cannot be set at levels that are so low as to require the claimant to move beyond the area where it would be reasonable for them to live. It does not follow that recipients should be able to live in every property, street or even neighbourhood in a particular BRMA. Pockets of above average accommodation would remain unaffordable.

Mr Westgate submits that this approach is also consistent with the cases that have been decided under the schemes that have been in force from time to time. The case law demonstrates, he submits, the constant underlying principles on which the Regulations have been based.

R (Saadat) v Rent Service [2002] HLR 32 concerned the matters that were required to be taken into account in determining the local reference rent (LRR) applying the RO. At the time the LRR was the median of rents payable in the “locality” but that term was undefined. In each of the cases under review rent officers had considered properties within the whole of the administrative area of Stockport MBC. The Court of Appeal quashed the decision holding that the term “locality” signified an area “no greater than will enable the rent officer reliably to make the specified calculations and judgments” (para 16). Sedley LJ described at paragraphs 12 and 13 the object of the scheme. At paragraph 13 he said:

“… it offends the purposes of the Order to take as the relevant locality an area so large that the poorer dwellings in it will inexorably bring the median, and with it the cap, down to a level which drives out or pauperises otherwise eligible housing benefit claimants. The fundamental purpose of the housing benefit scheme is the very opposite: it 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.”

(See also R (Heffernan) v Rent Service [2008] 1 WLR 1702, HL).

By reference to these authorities Mr Westgate submits that in order to be lawful the national caps must be set by reference to the area-based approach.

Mr Eadie makes five points. First, he submits that an analysis of the powers contained in the relevant primary legislation demonstrates that the Defendant’s powers under the Housing Act are very broad, and permit him to impose maximum caps on LHA rates. The RO Amendment Order, which imposes the maximum caps, is made under sections 122(1) and (6) of the Housing Act.

Second, to the extent that the SSCBA is relevant to the challenge to the vires of an order made under the Housing Act, the breadth of the Defendant’s powers is confirmed by the SSCBA. Section 175(3)(b) of the SSCBA empowers the Defendant to exercise his regulation-making power so as to make the full provision to which the power extends or any lesser provision.

Third, section 130 of the SSCBA does not support the submission that a person is entitled to housing benefit reflecting the cost of any dwelling in any area of Great Britain.

Fourth, the history and purpose of the legislative aim are relevant. In Saadat at paragraph 9 Sedley LJ described the concept of the LRR as an “additional cap”, which could depress a claimant’s benefit below a level to which he or she was otherwise entitled under the legislation, and which had the “avowed purpose… to bring the global housing benefit bill down”.

Finally, the Claimant’s concept of “area-based determinations” is based solely on secondary regulations. Enabling legislation does not state that its purpose is to ensure that claimants can live in the area of their choice, regardless of the consequences for the public purse. The courts have never approved such an interpretation.

The starting point for the Claimant’s case is Mr Westgate’s description of the statutory purpose of the housing benefit scheme. He submits it is to contribute to rental costs in such a way that claimants are not made homeless through inability to pay their rent. In my view this is not correct. The purpose of the scheme is to assist claimants with rent, while also protecting the public purse. The authorities to which I have been referred make clear that the scheme is designed to enable the Defendant to strike an appropriate balance between the interests of claimants and of taxpayers.

The basic purpose of the scheme remains the same as that which Sir Thomas Bingham MR described in Gibson (see Heffernan per Lord Hope at para 4). The appeal in Heffernan concerned the meaning and effect of the Rent Officers (Housing Benefit Functions) Order 1997 as amended. Lord Neuberger said at paragraph 42:

“The Schedule reflects a balancing exercise which has to be carried out where a person claims housing benefit. On the one hand, it would be a waste of public funds to pay for accommodation which is inappropriately expensive or extensive for that person. On the other hand, it would be unduly harsh to require a radical deterioration in such a person’s residential circumstances. Sir Thomas Bingham MR said, in relation to predecessor regulations, in R v Housing Benefit Review Board for East Devon District Council, ex p Gibson and Gibson (1993) 25 HLR 487, 493:

‘[T]his whole scheme is directed to mitigate the demand on public funds where recipients of Housing Benefit are paying rent above the market level or living in accommodation which is larger than reasonably necessary to meet their needs, or living in accommodation which is unreasonably expensive. The key to the operation of the reduction mechanism is the finding that recipients of housing benefit are paying a rent which is, for one reason or another, unreasonably high.

It is plain that the procedure is designed to protect the public purse. But it is fair, I think, to infer that the procedure is not designed to produce homelessness, which would be the result if a beneficiary’s rent were restricted, so that he could not afford to stay where he was but was unable to find any other accommodation to which he could be expected to move at the level of rent payable.’ ”

I accept Mr Eadie’s submission that in terms of the balance struck in the present case where claimants entitled to the four bedroom rate may still receive £400 a week in LHA, it cannot realistically be claimed that the reformed scheme is “designed to produce homelessness”, or that it will “require a radical deterioration in … a person’s residential circumstances”.

Mr Westgate submits that it follows from the statutory purpose he has identified and from the fact that rents vary across the country that LHA rates must be set by reference to local conditions, with rent officers exercising independent judgment to make area-based determinations. The primary legislation does not however support this submission. The Defendant’s powers under the Housing Act are very broad. Section 122(1) empowers the Defendant to require rent officers to carry out any functions specified in the order in connection with housing benefit. The Defendant is not required to confer on rent officers powers to set LHA rates without limitation.

Section 122(6) does not limit the power in section 122(1). It merely provides that an order made under section 122 may make different provision for different cases or classes of case and for different areas. Mr Eadie submits that provision in this context means rules, not provision of housing benefit. It follows that s.122 does not require, as the Claimant contends, that there must be substantive provision of housing benefit in every area of the country. Mr Westgate points to the corresponding general rule making power in s.175(3) of the SSCBA which he submits shows that that is not the case. Provision there, he submits, is clearly used in the sense of actual provision. I prefer Mr Eadie’s construction of s.122(6) of the Housing Act. However if I am wrong about that, Mr Eadie is plainly correct in his submission that there is no express requirement for housing benefit to be set at a level that fully covers any given claimant’s actual housing costs in any given area.

Section 130 of the SSCBA does not in my view assist the Claimant’s case. S.130(1)(a) is a territorial provision. A person is entitled to housing benefit if he is liable to make payments in respect of a dwelling in Great Britain which he occupies as his home. S.130(1)(b) imposes a further condition of entitlement, namely that there must be “an appropriate maximum housing benefit in his case”. There is no indication in s.130 that the “maximum” may not be set at a level that puts some areas beyond a claimant’s reach.

There is no reference in the primary legislation to the Claimant’s concept of “area-based determinations” or to the concept of a BRMA. Mr Eadie explains that the concept of a BRMA was created in order to give effect to the Defendant’s previous decision that rent officers should use area-based methodologies in calculating maximum rents. The Defendant has now decided, with Parliament’s approval, to amend that system, by introducing maximum caps in addition to the area-based calculation. In my judgment there is nothing in the primary legislation that prevents him doing this.

Mr Westgate referred to the observation of Sedley LJ at paragraph 12 in Saadat that the object of the local reference rent (LRR) system (which preceded the LHA regime) was “not to drive people who have had to fall back on housing benefit out of more affluent areas where the benefit rules would otherwise have enabled them to remain and into poorer areas”. Sedley LJ added, “if that were desired, it would require clear provision – for example by a recasting of paragraph 3, which is designed to avoid subsidising market-priced but excessively comfortable accommodation. It cannot fairly be deduced from the terms of paragraph 4”. However those observations related to the purpose of the provision to be found in Schedule 1 to the RO Order that introduced the LRR regime. The observations made by Sedley LJ concerned this secondary legislation, not the primary legislation. With regard to the secondary legislation under challenge Mr Eadie submits 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 Claimant’s case is that the Defendant failed to comply with his general equality duties under the Race Relations Act 1976 and the Sex Discrimination Act 1975 both in relation to the reduction in the maximum category of dwelling from five to four bedrooms (Ground 2) and in relation to the imposition of maximum weekly caps (Ground 3).

Section 71 of the RRA and section 76A of the SDA both require the Defendant to have due regard to the need to eliminate discrimination and to promote equality. Section 71(1) of the RRA provides:

“(1)

Every body or other person specified… shall, in carrying out its functions, have due regard to the need—

(a)

to eliminate unlawful racial discrimination; and

(b)

to promote equality of opportunity and good relations between persons of different racial groups.”

Section 76A of the SDA provides:

“(1)

A public authority shall in carrying out its functions have due regard to the need—

(a)

to eliminate unlawful discrimination and harassment; and

(b)

to promote equality of opportunity between men and women.”

Section 49A of the Disability Discrimination Act 1995 (“DDA”) contains similar provisions. These duties under the RRA, SDA and DDA were replaced with effect from 5 April 2011 with a single duty under the Equality Act 2010, s.149.

In R (Domb) v London Borough of Hammersmith & Fulham [2009] EWCA Civ 941 the Court of Appeal reviewed the jurisprudence on the need to have due regard to equality duties. Rix LJ at paragraph 52 said:

“Our attention has been drawn to a number of authorities on the need to have due regard to equality duties, in particular R (Elias) v Secretary of State for Defence [2005] EWHC 1435 (Admin) (Elias J), [2006] EWCA Civ 1293, [2006] 1 WLR 3213, R (Chavda) v London Borough of Harrow [2007] EWHC 3064 (Admin) (HHJ Mackie QC), R (Baker) v Secretary of State for Communities & Local Government [2008] EWCA Civ 141, [2008] LGR 239, R (Brown) v Secretary of State for Work & Pensions [2008] EWHC 3158 (Admin), and R (Meany, Glynn and Sanders) v Harlow District Council [2009] EWHC 559 (Admin) (Davis J). I find the greatest help in the judgments of Dyson LJ in Baker (dealing with the RRA) at paras 30ff and of Scott Baker LJ in Brown (dealing with the DDA) at paras 89/96, where each of them summarises what is involved in the duty to have ‘due regard’. For present purposes I take from those summaries in particular the observations that there is no statutory duty to carry out a formal impact assessment; that the duty is to have due regard, not to achieve results or to refer in terms to the duty; that due regard does not exclude paying regard to countervailing factors, but is ‘the regard that is appropriate in all the circumstances’; that the test of whether a decision maker has had due regard is a test of the substance of the matter, not of mere form or box-ticking, and that the duty must be performed with vigour and with an open mind; and that it is a non-delegable duty.”

In Baker Dyson LJ at paragraph 31 emphasised

“…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. …”

In Brown Aikens LJ said at paragraph 82:

“…the weight to be given to the countervailing factors is a matter for the public authority concerned, rather than the court, unless the assessment by the public authority is unreasonable or irrational: see Dyson LJ’s judgment in Baker at paragraph 34.” (See also Rix LJ in Domb at para 72).

The “due regard” duty must be fulfilled before and at the time that a particular policy that will or may have a discriminatory effect on persons is being considered by the public authority in question. (Brown, per Aikens LJ at para 91 and R (Elias) v Secretary of State for Defence [2006] 1 WLR 3213 per Arden LJ at para 274).

On 23 July 2010 the Defendant sent the draft regulations for reforming Housing Benefit and associated documentation to the Social Security Advisory Committee (“SSAC”) as required by section 172 of SSAA. The documents included an Equality Impact Assessment (“EIA”) published on 23 July 2010.

The “equality impacts conclusion” in the July 2010 EIA was as follows:

“The cumulative impacts of these measures do not appear to disadvantage one group more disproportionately than another. However, working age groups are likely to be more affected as they contribute a larger proportion of the Local Housing Allowance caseload relative to the other groups.

The assessment of the impact by individual measures shows that families are likely to be affected disproportionately by the overall caps in Local Housing Allowance rates and the removal of the five bedroom rate. As some ethnic minority groups tend to have a higher proportion of large families, these measures may impact on them disproportionately. However, limitations in current data prevent the scope to draw on quantitative evidence to establish the scale of this potential effect.”

On 4 August 2010 the draft regulations were discussed with DWP officials at the SSAC regular monthly meeting. SSAC decided to “formally consult” on these measures. The SSAC consultation process began on 10 August 2010 and ended on 30 September 2010. The SSAC report to the Defendant recommended that, with the exception of the modifications to the size criteria to provide additional support for people with non-resident carers and the removal of the £15 weekly excess, the package of measures should not proceed. SSAC also made a number of smaller recommendations that they believed would reduce the risks relating to these changes, should the Defendant choose to proceed.

A statement by the Defendant in accordance with section 174(2) of SSAA set out the reasons why the Government did not feel it appropriate to accept the Committee’s recommendations “in full on this occasion” (para 11). The material part of paragraph 38 of the Statement containing the Committee’s recommendations and the Government’s response states:

“(4)

The restriction of the LHA to the four bedroom rate should not proceed until a full race equality impact assessment has been carried out:

Response—

The Government has already undertaken extensive analysis of the measures outlined in these proposals and published an assessment of the impacts and an Equality Impact Assessment in July 2010. This research has shown that the cumulative impacts of these measures do not appear to disadvantage one group more disproportionately than another. The assessment of the impact by individual measures shows that families are likely to be affected disproportionately by the overall caps in Local Housing Allowance rates and the removal of the five bedroom rate. However the Government has a range of measures in place to mitigate the impacts of these changes including substantial increases in the Discretionary Housing Payment budget. In addition, the Department for Work & Pensions is considering the scope for commissioning primary research into the impact of the change on particular groups such as large families and ethnic minority groups.

…

(6)

The Department urgently re-examines the potential for restructuring the national caps in order to more accurately and realistically reflect the position of London and other high cost areas:

Response—

The Government does not accept the Local Housing Allowance caps should be reconsidered. These weekly caps affect very few local authority areas, and all but three Broad Rental Market Areas have at least 30% of properties that are affordable within the new Local Housing Allowance rates.”

The Defendant decided to proceed with a package of measures to reduce LHA rates and made amendments to the HB Regulations and the RO Order on 30 November 2010. A written Ministerial statement was laid in Parliament. The Defendant stated:

“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. The Government has listened to advice from the Social Security Advisory Committee and from key stakeholders in relation to the implementation of these measures and, clearly, it is essential that existing customers have sufficient time to adjust to their new circumstances. In order to ensure a smooth transition for the changes in 2011, the measures will come into force [on the given dates].”

The EIA was updated in November 2010. The “Equality impacts conclusion” in the November 2010 EIA was written in the same terms as in the earlier EIA, with the following addition:

“We are doing more work to identify data that might help provide a clearer picture of the impact on ethnic minority groups. The Department is considering the scope for commissioning primary research into the impacts of the changes on particular groups, such as large families and Black Minority Ethnic households and in particular areas, such as London.”

Paragraphs 58-69 of Ms Higgins’ first witness statement summarise the concluding parts of the legislative process:

“Once amendments to the HB Regulations and the RO Order were laid on 30 November 2010, a motion to annul them was tabled. The House of Commons Second Delegated Legislation Committee considered the HB Regulations and the RO Order on 20 December 2010. The Committee rejected this motion on a majority vote. On 26 January 2011, a motion to annul these Regulations was also debated in the House of Lords. The motion to annul was withdrawn following the debate.

59.

A separate motion was tabled in the House of Lords to require the Secretary of State to undertake a comprehensive review of the amendments to the LHA rules. This was debated together with the annulment motion but was agreed by DWP ministers. The content of the review of these measures was set out by Lord Freud, the Parliamentary Under-Secretary of State in his response to the debate on 26 January 2011.

60.

The Secretary of State has now formally commissioned this review and a programme of independent primary research on the impact of recent changes to Housing Benefit across Great Britain.

61.

The review will cover the impact of the measures on [inter alia]:

•

Homelessness and numbers moving

•

Black and Minority Ethnic households

•

Families with children, particularly large families or those with multiple risk factors.”

Mr Westgate submits that at least since 2009 it has been recognised that a change in the reduction of a maximum number of bedrooms is liable to have a disproportionate impact on black and ethnic minority groups. In his response to the SSAC at the time of the change reducing the maximum to five bedrooms the then Secretary of State said at paragraph 3.7:

“These changes may disproportionately impact black and minority ethnic groups due to the relatively high percentage of these customers entitled to larger properties.”

In relation to the present changes the Defendant used the Family Resources Survey (“FRS”) to provide an indication of the impact on the measures on ethnic minority groups. However, Mr Westgate submits, no explanation was given in the EIAs as to what efforts had been made to attempt to capture the relevant data other than to say that the FRS had been used. Inadequate information, submits Mr Westgate, in effect prevented the Defendant from giving due regard to the issue. He submits there is a duty to carry out proper enquiries in order to satisfy s.71. Impact assessments must contain sufficient information to enable a public authority to show it has paid due regard to the duty and identify methods for mitigating or avoiding adverse impact. Dyson LJ in Baker described the s.71 RRA obligation as

“the regard that is appropriate in the all the circumstances. These include on the one hand the importance of the areas of life of the members of the disadvantaged racial group that are affected by the inequality of opportunity and the extent of the inequality; and on the other hand, such countervailing factors as are relevant to the function which the decision maker is performing” (para 31).

The second witness statement of Ms Farthing dated 1 July 2011 on behalf of the Claimant exhibits a report from the New Policy Institute (“NPI”), commissioned by the Claimant. This uses the Annual Population Survey (“APS”) to reach a firm conclusion about the impact and scale of the disproportionate impact of the four bedroom cap. This is that 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. As Ms Farthing explains at paragraphs 4-9 of her witness statement:

“4.

Analysis conducted by the New Policy Institute commissioned by CPAG and funded by a donation from Lambeth Council, suggests that it is possible to combine data from the Annual Populations Surveys, from 2007-2009, to unpack the ethnicity of housing benefit claimants, especially with regards to family size. The Annual Population Survey was used, rather than the Family Resources Survey as the sample size was larger and allowed analysis of smaller groups within the population (ethnic minorities). The Annual Population Survey is a large reliable survey that is produced by the ONS [Office of National Statistics]. It took seven hours of a researcher’s time at NPI to make these calculations. There is now produced and shown to me marked ‘Exhibit LF 3’ a report into ethnicity of Housing Benefit recipients by family size.

5.

Their analysis and report suggest that while only 14% of all households are from an ethnic minority group (that is, a group other than White British), of all large households (with four or more dependent children) receiving housing benefit, 30% are from an ethnic minority background. This means that ethnic minority households in receipt of Housing Benefit are twice as likely as White British households in receipt of Housing Benefit to be large.

6.

In short this shows that any reforms to housing benefits that affect only large families with four or more children are therefore twice as likely to affect ethnic minority households than white British households.

7.

It also shows that even if you correct for the over representation of ethnic minorities in the housing benefit claimant population (ethnic minorities make up 19% of households claiming housing benefit but are 14% of households at large), they are still more likely to be affected by the proposed 4 bedroom cap than White British households. Ethnic minorities make up 19% of households claiming housing benefit, but 30% of households claimants with four or more children, who will most likely be affected by the cap. Ethnic minority households claiming housing benefit are 1.6 times more likely than White British households who are claiming housing benefit to be affected by this cap.

8.

I understand that there is exhibited to the first witness statement of Sarah Clarke … an earlier Equality Impact Assessment dating from around December 2008 prepared by the Department of Work and Pensions in respect of previous changes to housing benefit; when the local housing allowance was capped at 5 bedrooms. I have seen this Equality Impact Assessment, and I confirm that it shows that:

a.

Despite making up only 10% of housing benefit claimants, ethnic minorities made up 37% of claimants in houses with 5 or more bedrooms and 20% of claimants of 4 bedroom properties. This suggests that changes to the room rates – from 2004/05 to 2006/07 would have disproportionately impacted on ethnic minorities, and that

b.

Combining three years of data to explore the ethnicity of housing benefit claimants and family size has been done previously by the DWP.

9.

At paragraph 29 of the December 2008 EIA referred to above … the DWP accepts that of fewer than 5,000 larger properties affected by the 5 bedroom LHA cap, under about 2,000 would be non-white claimants. We know from the statistics provided by the DWP in its impact assessment that there are 8,100 households nationally in receipt of benefit for 5 bedroom accommodation …. Although the correlation will not be exact because some households with 4 or more children will not be entitled to 5 bedrooms currently, depending on the age and gender of children, (there is also no reason to suspect that the age and gender of children will differ across ethnicities) NPI’s report shows that we can expect that roughly a third of this affected caseload will be from BME groups – or 2,400 ethnic minority households. We know from NPI’s calculations that 14% of the population belong to these ethnic minorities claimants. If there was no racial impact of these reforms, therefore only 14% of households would be from ethnic minorities – or 1,100 households.”

Mr Westgate submits that had the Defendant undertaken a similar exercise the conclusion in the EIA would have necessarily been that the removal of the five bedroom cap will (as opposed to “may”) have a significantly disproportionate effect on BME groups in that ethnic minority households are roughly twice as likely as non-BME households to be affected adversely. Indeed the likely extent of that impact (roughly 2,400 BME households) would also have been known. Mr Westgate submits that the Defendant should have obtained this information in the first instance or otherwise agreed to the recommendation made by the SSAC to conduct a further and better informed EIA, and that a reasonably accurate estimate as to the likely extent of the disproportionate impact was readily discernible. A public authority cannot have “due regard” to its equality duties unless it has sufficient information for it.

The response of the Defendant to the Claimant’s case that the APS provides an accessible and reliable source of data on ethnicity in the housing benefit caseload is set out in Ms Higgins’ second witness statement dated 14 July 2011. In summary, she says, the Labour Force Survey (on which the APS is based) is not designed for collecting information on claimants whose Housing Benefit is assessed according to LHA rates, and does not contain relevant information on benefit receipt or household composition that is not available from the FRS. For those reasons the Defendant relied on the FRS data rather than APS data in determining as far as he could the race equality impacts of the proposed measures. For the reasons stated in paragraphs 8 and 9 of her statement Ms Higgins concludes that:

“For the purpose of analysing and evaluating benefit reforms, the Family Resources Survey is superior to the Annual Population Survey as the former captures a significant amount of detailed information on benefits.”

Ms Higgins continues at paragraph 10:

“Whilst DWP acknowledge in its November 2010 Equality Impact Assessment that some ethnic minority groups tend to have a higher proportion of large families and that the April 2001 Local Housing Allowance measures may impact on them disproportionately, DWP do not accept the conclusion of the analysis undertaken by the Claimant that ‘Ethnic minority households claiming Housing Benefit are 1.6 times more likely than white British households who are claiming Housing Benefit to be affected by [the four bedroom] cap. This is because the Claimant’s analysis fails to isolate the relevant specific group, namely, Housing Benefit tenants whose benefit is assessed according to Local Housing Allowance rates, and who, until the regulations were amended in April 2011, were entitled to 5 bedrooms. Therefore, it is not possible on the basis of the APS figures accurately to quantify the effect of the reduction from 5 to 4 bedrooms on families from an ethnic minority background.”

Commenting on Ms Farthing’s references to the EIA undertaken by DWP in 2009, Ms Higgins says:

“11.

… At the time this assessment was undertaken, the Single Housing Benefit Extract data set was not available for use so the analytical approach taken by DWP necessarily relied solely on the Family Resources Survey. The limitations of this data were highlighted in that assessment… In summary, the EIA conducted in 2009 was unable to isolate Local Housing Allowance cases in the private rented sector and as such did not provide an accurate estimate of the impacts of the reduction by ethnicity.

12.

The Equality Impact Assessments DWP undertook in July and November 2010 … in relation to the Local Housing Allowance measures contained more reliable data than the 2009 Equality Impact Assessment. This is because DWP were able to draw on administrative data specifically covering the group of affected cases by using the Single Housing Benefit Extract data set. By contrast the 2009 Equality Impact Assessment necessarily relied on survey data covering a wider group than those who would be affected by the changes and used this as a proxy for those affected. On ethnicity, both Equality Impact Assessments had to rely on proxy measures from survey data.”

Responding to paragraphs 10 and 11 of Ms Farthing’s statement that the maximum weekly caps on LHA rates will have a disproportionate impact on ethnic minority households, as such households live disproportionately in London, Ms Higgins says:

“13.

…It is of course true that the weekly caps on LHA rates have most impact in some parts of London. It is also true that many ethnic minority households live in London. However the weekly caps affect only a very few areas. As I stated in my first witness statement only 11 of 960 LHA rates are affected and many areas of London, including areas with high concentrations of ethnic minority households, are untouched by the weekly caps. It is not possible to say whether the areas of London affected by the caps are areas with the highest concentrations of ethnic minority households receiving Housing Benefit under Local Housing Allowance rules. Moreover, the weekly caps have most impact (in terms of numbers) on one and two bedroom properties so, in this context, the size of the household is not a relevant factor.

14.

In paragraphs 12 to 18, the Claimant asserts that Exhibit LF4 (which attempts to show a relationship by local authority between the proportion of the population from an ethnic minority background and the number of 5 bedroom households affected by the cap) suggests a disproportionate impact on people from BME groups. The Claimant admits a fundamental weakness in this analysis, namely that it includes all affected people without identifying those from an ethnic minority background.

16.

… It is important to note that the Equality Impact Assessments undertaken by DWP considered the Local Housing Allowance measures as a whole. To understand the impact of any particular group of individuals they must also be assessed jointly, and to do so robustly requires administrative Housing Benefit data. To provide additional information, DWP then went further in the Equality Impact Assessment by isolating the effects of the individual measures, where these could be robustly quantified. This was possible for the diversity groups that are accurately recorded in administrative data. But it was not possible with respect to ethnicity.

17.

Neither the assessment conducted by the Claimant nor that conducted by DWP has been able to quantify accurately the level of impact on ethnic minority groups.”

Mr Eadie submits that the Defendant was not obliged to use APS data when carrying out the EIAs, nor does he accept that there was other material available to him, which would have enabled firmer conclusions to have been drawn.

The EIAs used information from the Single Housing Benefit Extract (“SHBE”) in relation to gender. The July 2010 EIA concluded that the reduction from five to four bedrooms was likely to affect females slightly more than the LHA caseload as a whole (see Annex D). Similarly, the November 2010 EIA concluded that women were only slightly more likely to be affected by the reduction to four bedrooms than the LHA caseload as a whole (Annex D). However Mr Eadie submits it was not possible to rely on the SHBE in terms of ethnicity data, because insufficient data on race (which is irrelevant to determining housing benefit claims and therefore which claimants are not obliged to provide) is recorded by local authorities. The Defendant therefore relied on an alternative source of information, the FRS. That data indicated the proportion of ethnic minority housing benefit claimants living in the private rented sector, but could not provide a breakdown of cases assessed according to LHA rules.

Mr Westgate submits that the Defendant, having acknowledged that the measure would have a disproportionate impact, failed to have due regard to the need to eliminate unlawful discrimination, harassment and victimisation, and to promote equality of opportunity between men and women, or any alternative ways of achieving the same goals.

In relation to the third ground of challenge Mr Westgate submits that the analysis conducted by NPI also confirms that BME households are far more likely to be affected by the caps, which are principally directed at those living in London (see Ms Farthing’s second witness statement, paras 10 and 11). Mr Westgate submits that the EIA does not in any way address this and therefore the Defendant did not have due regard to the requirements of the RRA in relation to the overall caps. The caps are almost exclusively directed towards London. Of the 21,000 households likely to be affected by the caps 17,410 will be in London, roughly eleven per cent of the entire London housing benefit caseload (see July 2010 EIA, Appendix D, section 4). Ms Clarke, solicitor for the Claimant, in her first witness statement dated 24 February 2011 says at paragraph 32:

“It is clear that this relatively small group of London families will have to bear the vast majority of the £255m that the Government anticipates saving as a result of the cap and the reduction to four bedrooms. The striking result is that around 1% of the claimant population will shoulder approximately 8% of the savings. No other group has been targeted in this way.”

Mr Westgate submits that in fact this figure is based on the estimated savings in the EIA of over £3bn. The revised anticipated saving of £1bn means that this small group are actually shouldering roughly twenty-five per cent of the burden. The effect of the caps for these families, Mr Westgate submits, may well be homelessness.

Mr Eadie submits that the July and November 2010 EIAs assess the impact of imposing maximum weekly caps on race equality and families, and assess the cumulative impact of all of the measures on race equality and families. It had particular regard to the impact of the policies on households in central London. However, given the limitations in data, it was not possible to provide the specific impact of the proposed weekly caps on race equality or families. Both EIAs acknowledge the upheaval that some households may face and under the heading “Mitigation” considered “Discretionary Housing Payments”, “Support and advice” and “Stakeholder strategy and communications plan”. The November 2010 EIAs stated under the heading “Discretionary Housing Payments”:

“Local authorities can make Discretionary Housing Payments from a cash limited fund to tenants who face a shortfall in their rent. The central Government funding allocation for this fund has been £20m per annum since 2002. The Government has recognised that some customers may need targeted support as a result of the changes and announced an increase in the allocation of £10m in 2011/12 and £40m a year from 2012/13 onwards increasing the Government contribution to £60m overall. This additional funding will give local authorities flexibility to provide support where it is most needed. …”

(The July 2010 EIA was in similar terms).

Ms Higgins in her first witness statement at paragraph 46 noted that the Defendant recognised that some claimants will have to move although it is difficult to estimate precisely the distance that a claimant will generally need to move to find accommodation below the capped LHA rates as this depends on the precise location of affordable accommodation, the size of the household, and the whereabouts of the claimant’s current home. At paragraph 48 Ms Higgins outlined the range of measures to mitigate the impact of the change to customers referred to in the EIAs. In addition she notes that the Government has provided a further £49m to support the transition of the LHA measures. The aim of this funding is to provide further support to meet the housing needs of tenants who are affected by these changes. Further, following the advice from the SSAC, the Government is providing time limited transitional protection for customers who claim prior to 31 March 2011. Finally the DWP has modified the safeguard arrangements for direct payments of Housing Benefit customers.

Mr Westgate submits that the additional funding for discretionary housing payments is insufficient to mitigate the effect of these changes. He refers to a briefing note prepared by Ms Howe, Senior Policy Advisor to the Chairman of the Finance and Transformation Policy and Scrutiny Committee of the London Borough of Westminster, dated 9 June 2011. This says at paragraph 4 that Westminster has been allocated an additional £1.1m in discretionary housing payments for 2011/12. It comments that as it is estimated that housing benefit claimants in the London Borough of Westminster will collectively lose a total of £40m over a full year in housing benefit as a result of these changes, “only a small number can be assisted through [discretionary housing payments]”. Similarly it is said that in seeking to mitigate the effects of the changes to housing benefit the Defendant places too much reliance on the decision to offer a longer period of transition for existing claimants of nine months in the absence of any change in circumstances, as this was accompanied by the decision to bring the change from the median to the thirtieth percentile forward by six months to April 2011. Finally the promise of further research is inadequate because it will only happen after the event. By then the changes will already have had an impact on current claimants with consequent disruption to them.

Mr Westgate submits that the court must review whether “due regard” to the equality duties under the RRA and SDA has been paid, not merely consider whether the absence of due regard was Wednesbury unreasonable. In support of this submission Mr Westgate referred me to the decisions in R (Meany and others) v Harlow DC [2009] EWHC 559 (Admin), R (Boyejo) v Barnet LBC [2009] EWHC 3261 (Admin) and R (W, M and others) v Birmingham CC [2011] EWHC 1147 (Admin).

In Meany Davis J said at paragraph 72:

“Mr Holbrook submitted that Mr Wolfe either had to show that no regard was had to the statutory criteria or that the decision was irrational. Since Mr Wolfe disclaimed the latter, he was, said Mr Holbrook, left with the former. I do not agree with that submission of Mr Holbrook for two reasons. First, the statutes require that the public body has ‘due regard’ to the specified matters; and what is ‘due’ depends on what is proper and appropriate to the circumstances of the case. Therefore, if a challenge is made, the question of due regard requires a review by the court. It is not simply a question of determining whether no regard at all was had to the statutory criteria. Second, if the submission of Mr Holbrook were right it would be contrary to the authorities, which indicate that a tick-box approach may not necessarily in any given case give a complete answer. It is true that, as Baker and Brown make clear, how much weight is to be given to the countervailing factors is a matter for the decision maker. But that does not abrogate the obligation on the decision maker in substance first to have regard to the statutory criteria on discrimination.”

I accept this to be the correct approach.

It is clear that the Defendant was well aware of his equality duties and paid specific regard to them. Before reaching a decision to introduce any reforms to LHA arrangements (including reducing the maximum size dwelling from five to four bedrooms or imposing maximum caps on weekly LHA rates), the Defendant carried out two EIAs in July and November 2010 respectively.

The criticism made by the Claimant is essentially that the EIAs failed to make use of relevant data that was readily available. In considering this criticism I note Mr Eadie’s submission (at para 44 of his skeleton argument) that:

“It is not the role of the court to scrutinise with any degree of intensity individual technical decisions forming part of the impact assessment process (such as decisions about which data set to use, and precisely how to interpret it). Such technical decisions should only be interfered with if they are ‘unreasonable or perverse’: see Rix LJ in Domb at [72]. Moreover in R (W) v Birmingham CC [2011] EWHC 1147 (Admin), Walker J confirmed at [176] that: ‘It is not the role of the court to get involved in minute scrutiny of a mass of detail’.”

However I have considered with care the criticisms made by Ms Farthing in her second witness statement and the responses to those criticisms made by Ms Higgins in her second witness statement at paragraphs 8-17. I am satisfied that the Defendant had proper regard to the relevant data and that the EIAs contained sufficient information to enable the Defendant to discharge his general equality duties under the RRA and SDA. Ms Higgins was not cross-examined. I accept her evidence which, in summary, was that (1) there were good reasons for relying on the FRS alone; (2) there were good reasons for not relying on the APS; (3) the 2009 EIA did not provide an accurate estimate of the impacts of the reduction by ethnicity; (4) the July and November 2010 EIAs contained more reliable data than the 2009 EIA; (5) the Claimant’s analysis of the effect of the cap includes all affected people without identifying those from an ethnic minority background; and (6) neither the assessment conducted by the Claimant nor that conducted by DWP has been able to quantify accurately the level of impact on ethnic minority groups. For the reasons given by Ms Higgins I do not accept Mr Westgate’s submission that the Defendant should have concluded that the introduction of the measures was “likely” to impact on ethnic minority groups disproportionately (still less the Defendant could accurately have assessed the percentage amount of any such likely impact).

There is no duty to carry out a formal impact assessment. The Defendant carried out two EIAs, in July and November 2010. Further the Defendant considered and responded to criticisms levelled at him during the legislative process. In my view the Defendant was entitled in performing his equality duties to have regard to the EIAs that contained the information relied upon in those assessments. I am satisfied that the information gathered and considered by the Defendant was adequate for the purposes of performing his statutory duty. I am also satisfied that the Defendant was entitled on the basis of the information available to conclude that the measures “may” impact on ethnic minority groups disproportionately. I reach these conclusions having conducted a review of what Mr Westgate submits was the relevant data available. However if in relation to the use of data it is the Wednesbury test that should be applied, it was plainly not unreasonable or perverse for the EIAs, in relation to the measures under challenge, to be based on the FRS. The submission that the Defendant failed to have regard to adequate information and to carry out proper enquiries in order to fulfil his s.71 duty fails in my judgment for all the reasons I have given.

Mr Westgate disavowed a Wednesbury challenge. Plainly he was correct to do so. The weight to be given to the countervailing factors was a matter for the Defendant (see para 48 above). It could not be argued that the regard the Defendant paid to countervailing factors in all the circumstances was unreasonable or perverse. The measures were implemented in light of what Mr Eadie described as “the strong socio-economic imperatives in play” (Defendant’s skeleton argument at para 51.5 and see written Ministerial statement on 30 November 2010 at para 54 above).

In my judgment

Accordingly this claim fails.