R M and S v London Borough of Haringey
| Jurisdiction | England & Wales |
| Judge | Lord Justice Sullivan,Lord Justice Pitchford |
| Judgment Date | 22 February 2013 |
| Neutral Citation | [2013] EWCA Civ 116 |
| Docket Number | Case No: C1/2013/0290 |
| Court | Court of Appeal (Civil Division) |
| Date | 22 February 2013 |
[2013] EWCA Civ 116
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
MR JUSTICE UNDERHILL
CO/832/2013
Royal Courts of Justice
Strand, London, WC2A 2LL
The Chancellor of the High Court
Lord Justice Sullivan
and
Lord Justice Pitchford
Case No: C1/2013/0290
Ian Wise QC and Jamie Burton (instructed by Irwin Mitchell) for the Appellant
Clive Sheldon QC and Heather Emmerson (instructed by LSTET Solicitor) for the Respondent
Hearing date: 12 th February 2013
Introduction
On the 12 th February we dismissed the Appellant's appeal against the order dated 7 th February 2013 of Underhill J dismissing her claim for judicial review of the Respondent's decision on 17 th January to make its Council Tax Reduction Scheme ("the Scheme") under section 13A of and Schedule 1A to the Local Government Finance Act 1992, (as amended by the Local Government Finance Act 2012) ("the 1992 Act"). We were told that there were a number of judicial review challenges to the Council Tax Reduction Schemes that have been adopted by other local authorities. We said that we would give the reasons for our decision as soon as possible. These are my reasons for dismissing the appeal.
The new statutory scheme
Council Tax Benefit was abolished by section 33 of the Welfare Reform Act 2012. As from 1 st April 2013 it will be replaced by Council Tax Reduction Schemes locally determined by each billing authority under section 13A of the 1992 Act. Paragraph 2 of Schedule 1A sets out the matters which must be included in a scheme. Paragraph 3 prescribes the procedure which a billing authority must follow when preparing its scheme:
"3(1) Before making a scheme, the authority must (in the following order) –
(a) consult any major precepting authority which has power to issue a precept to it,
(b) publish a draft scheme in such manner as it thinks fit, and
(c) consult such other persons as it considers are likely to have an interest in the operation of the scheme……
(3) Having made a scheme, the authority must publish it in such manner as the authority think fit."
If an authority has failed to make a scheme by 31 st January 2013 a default scheme will take effect in its area: see paragraph 4(6) of Schedule 1A.
Billing authorities had to prepare their Council Tax Reduction Schemes in a difficult economic climate. Council Tax Benefit was funded by Central Government. The Government announced that there would be a 10% reduction in the funding given by Central Government to local authorities for Council Tax support under the new arrangements for Council Tax Reduction Schemes. The default scheme follows the former Council Tax Benefit scheme, but it does not make any provision for the cut in funding from Central Government. Where the default scheme takes effect the authority will have to make good the shortfall in funding.
Preparation of the Scheme
Having considered a number of options the Council's Cabinet on the 10 th July 2012 approved its officers' recommendation that it consult with the Greater London Authority (the relevant "major precepting authority" for the purpose of paragraph 3(1) (a) of Schedule 1A) on a proposal to adopt a scheme
"…that will reduce Council Tax Benefit payments for all claimants in line with the reduction in government grant. In real terms [because of increased demand for benefits and because benefit payments must be maintained for pensioners], this will mean a reduction in benefit payments of between 18% and 22% [for all claimants of working age]."
It was also proposed that changes would be made to the existing Council Tax Benefit rules to mitigate the loss to the Council.
On 29 th August 2012 the Council published its draft scheme and commenced a consultation exercise which ran until 19 th November 2012. A document with the title "The Government is abolishing Council Tax Benefit — Find out more about its replacement inside" was hand delivered to all 36,000 current Council Tax Benefit claimant households in Haringey, was published on the Council's website, and prominently displayed at the Council's main offices and other locations such as libraries and Citizen Advice Bureaus. It was also discussed at various forums. I refer to the consultation document below (paragraph 11). Its contents are set out in the judgment of Underhill J.
On the 16 th October 2012 the Government announced a transitional grant scheme ("the TGS") in a written statement to Parliament by the Parliamentary Under-Secretary of State at the Department for Communities and Local Government. On the 18 th October 2012 the Department issued a circular – "Localising support for Council Tax: Transitional grant scheme" — which explained the TGS in more detail. Details of the TGS were also published on the DCLG's website. In summary, an additional £100 million of funding from Central Government was made available to those billing authorities whose Council Tax Reduction Schemes met three criteria as follows:
"(i) Those who would be entitled to 100% support under current council tax benefit arrangements pay between zero and no more than 8.5% of their net council tax liability;
(ii) The taper rate does not increase above 25%;
(iii) There is no sharp reduction in support for those entering work. The taper should continue to operate as under current council tax benefit regulations……."
Annex A to the Circular set out the amounts that would be available to each eligible authority. If Haringey's scheme met the three criteria it would receive £706,021. Applications for the TGS had to be made after 31 st January 2013 and the deadline for applications was 15 th February 2013.
The consultation exercise closed on 19 th November 2012, the responses were collated and analysed, and a report to Council set out a detailed analysis of the responses to the consultation exercise. The Council received over 1400 responses or enquiries relating to the consultation including 1251 questionnaires, 36 letters and emails and 209 enquiries to its customer contact centres and call centre. A large number of those responding felt that disabled people should be protected from the reduction in funding and corresponding increase in payments towards Council Tax. The full Council was due to finalise the content of the Scheme at an extraordinary meeting on 17 th January 2013. By letter dated the 11 th January Irwin Mitchell, the Solicitors who now act for the Appellant, contended (inter alia) that the consultation process had been unfair and unlawful because consultees (i) would have been left with the impression that there was no alternative to the Council's draft scheme, (ii) had not been provided with sufficient reasons in support of the draft scheme to enable them to make an intelligent response to the consultation, and (iii) had not been informed of the existence of the TGS. It was contended that the Council should have explained in the consultation document why it had not decided to meet the shortfall in government funding by (a) raising the level of Council Tax for all council taxpayers, (b) reducing services, or (c) utilising part of the Council's reserves. It was also contended that the Council should have carried out additional consultation on the question whether the proposed scheme should be revised so as to comply with the three TGS criteria, thereby making the Council eligible for its share of the transitional grant from Central Government, £706,021.
At its meeting on 17 th January the Council considered a Report dated 9 th January and an Addendum Report dated 16 th January from the Director of Corporate Resources. The latter responded to the letter from Irwin Mitchell. The two reports explained why the officers recommended the Scheme (which differed from the draft scheme by the inclusion of protection for disabled claimants), and did not recommend adopting either the default scheme or some other scheme that would comply with the three TGS criteria. The reports also explained why the officers did not consider that it would be appropriate to meet the shortfall in funding from Central Government by (a) raising the level of Council Tax, (b) reducing services or (c) using the Council's reserves. Paragraph 10.1 of the Addendum Report summarised the cost burdens on the Council of the different options (making no allowance for non-collection) as follows:
The Council accepted the recommendations in officers' reports and made the Scheme which is challenged in these proceedings.
Discussion
| • Council to absorb the cost (with default scheme): | £3.846 m |
| • If eligible for the transitional grant this would reduce to: | £3.14 m |
| • Passing on 8.5% (net of Transitional Grant): | £1.489 m |
| • Passing on 19.8% | £0 |
It is not necessary to set out the content of the two reports because the Appellant's challenge to the Council's decision on the ground of irrationality was not pursued before Underhill J. The challenge was confined to the consultation process. Before the Judge it was submitted that the consultation process was unfair, and therefore unlawful, for three reasons:
(a) that consultees were not provided with sufficient information to enable them to appreciate that there were alternatives to the draft scheme;
(b) that the information provided in the consultation document, as to the shortfall that would have to be met by the Council, was not accurately and fairly presented; and
(c) that the Council should have told consultees about the TGS and asked them if they wished to...
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