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HB Changes: Lawful but what impact?

By Dave

We have previously covered the changes to housing benefit (HB) introduced by the Con-Dems and the DCLG’s concerns over them as well as those of certain London boroughs.  In truth, nobody really quite knows what the “impact” of those changes will be, but we can pretty likely surmise that some rents will become unaffordable, certain areas will be “cleansed” of HB applicants, landlords may become (even more) wary of letting to HB applicants, there may be a knock-on effect on homelessness applications.  One thing which also may be guaranteed is that there will be unintended effects – as socio-legal scholars describe it, there will be a gap between the intended effects of the formal law and everyday life.

In R(CPAG) v Secretary of State for Work and Pensions [2011] EWHC 2616 (Admin), CPAG challenged two of the new rules – relating to the maximum weekly caps, and the reduction of the maximum size in accommodation eligible for hb (from five to four bedrooms) – on the grounds that the first was ultra vires; the second that DWP had failed to fulfil his general equality obligations under the Race Relations Act 1976 and Sex Discrimination Act 1975; and third, that as regards both, the DWP had failed to comply with its general equality duty under the 1976 Act.  CPAG was unsuccessful on all grounds.

The evidence of the DWP was that the aim of the changes was to reduce public expenditure and to stem the tide in expenditure on HB, caused in part by increases in private sector rents (ed note – remember John Patten in 1987 saying that HB could “take the strain”?).  The particular reason for the changes was to reduce private sector HB cases and “remove some of the very high rates that have been payable in London”.  It was accepted that the measures under challenge were exclusively directed at London.

As regards the first ground, the basis for the challenge was that the caps were ultra vires because they countered the purposes of HB.    The purposes were set out by CPAG’s counsel in rather over-blown form, if I’m honest (which was in part the undoing of this ground), as “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” ([23]).  It was said that the new regs were against that purpose because the cap was set with regard to the overall affordability of HB; in some areas of central London, claimants are priced out; and national caps are inconsistent with the Broad Rental Market Area/Local Housing Allowance rules.  The caps were inconsistent with the statutory schemes.

Supperstone J disagreed fundamentally with the description of purpose: “The purpose of the scheme is to assist claimants with rent, while also protecting the public purse.” ([36])  The balance struck by the rules are not “designed to produce homelessness” and nor will ” require a radical deterioration in … a person’s residential circumstances” ([38]).  Section 122, Housing Act 1996 enables an order to be made which makes different provision for different/ areas/classes of case/cases but there is no requirement for such differences, and no express requirement for HB to be set at a level that fully covers any claimant’s actual housing costs in any area.

Grounds 2 and 3 were taken together as in sum they concern the (well-travelled) territory of “due regard” to the need to eliminate discrimination and promote equality on which we have commented previously (see, in particular, R(Baker) v SoS for Work and Pensions [2008] EWCA Civ 141 and R(Brown) and SoS for Work and Pensions [2008] EWHC 3158 (Admin), esp the six factors at [89]-[96]).  There then followed a discussion of the legislative process, including the original Equality Impact Assessment conducted by DWP, the Social Security Advisory Committee’s (condemnatory) consideration of the draft SIs and the government’s response, and noted that research has been commissioned on the impact of the measures with specific reference to the homeless, BME households, and families with children.

The key point made by CPAG was that the EIA was based on the Family resources Survey without explanation and that “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” ([57]).  CPAG’s own assessment was based on a different dataset – the Annual Population Survey, which had a larger sample size and was more pinpoint in analysis of smaller groups within the population (ethnic minorities).  This dataset (and I make no apologies for the lengthy summary of the conclusions drawn from CPAG’s witness statement):

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.

The DWP disagreed that this dataset was better than the one it used because CPAG’s dataset was not designed with HB claimants in mind but was part of the labour force survey.  Their response to CPAG’s survey was that only 11 out 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.

They note that there was no robust data regarding BME claimants and neither CPAG nor their assessment “… has been able to quantify accurately the level of impact on ethnic minority groups”.  That seems to me to be a quite stunning concession of the adequacy of the data underpinning any form of impact assessment concerning equalities.  But they argued that there were mitigation tools, such as discretionary housing payments, support and advice, as well as a “stakeholder strategy and communications plan” ([67]).  As regards the discretionary housing payments, Counsel for CPAG (Martin Westgate, who did a really fantastic job here and overall) argued that Westminster Council had already commented that such payments would only cover a small number of affected households.

Supperstone J rejected these grounds as well.  In essence, the SoS “was well aware of his equality duties and paid specific regard to them”.  It was not the role of the court to decide between different datasets, which were technical decisions unless they were “unreasonable or perverse”.  Even so, DWP had proper regard to the relevant datasets and the equality impact assessment had sufficient information to discharge the duties ([75]).  Further the SoS had considered and responded to criticisms during the legislative process and did enough to have regard to the information in the assessments ([76]).   Supperstone J was “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” ([76]).

This may be one not to appeal (strategically) but it will be interesting to see whether CPAG do.  What the case does demonstrate is that, to the extent that the effects of the changes can be predicted, they are likely to have a disproportionate impact in certain areas and on certain groups in those areas, and all for a saving of £1 billion from a £22 billion hb bill.  Personally, I think it’s a disgrace, but the process doesn’t seem impeachable.




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