Sheila Winder and Others v Sandwell Metropolitan and Another The Equality and Human Rights Commission (Intervener)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Hickinbottom |
| Judgment Date | 30 July 2014 |
| Neutral Citation | [2014] EWHC 2617 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No: CO/633/2014 |
| Date | 30 July 2014 |
[2014] EWHC 2617 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT IN BIRMINGHAM
Birmingham Civil Justice Centre
Priory Courts, 33 Bull Street
Birmingham
Mr Justice Hickinbottom
Case No: CO/633/2014
The Queen on the application of
and
Richard Drabble QC and Tom Royston (instructed by Child Poverty Action Group) for the Claimant
Kelvin Rutledge QC and Sian Davies (instructed by Legal and Governance Services, Sandwell Metropolitan Borough Council) for the Defendant
Chris Buttler (instructed by Keith Ashcroft, Senior Lawyer, Equality and Human Rights Commission) for the Intervener
Hearing date: 22 July 2014
Further written submissions: 25 July 2014
Introduction
Council tax is a tax, administered by local authorities and levied to assist in funding local government services.
Until April 2013, people on low income were provided with financial help in paying the tax by way of council tax benefit ("CTB"), a means-tested benefit that effectively rebated the tax in whole or in part, depending upon the taxpayer's level of income and capital. The benefit was funded by central government, but administered locally.
From 1 April 2013, CTB was abolished in favour of a new system, which required each local authority in England to make a Council Tax Reduction Scheme ("CTR Scheme") which, instead of providing for those in need with a welfare benefit to pay the tax, reduced their liability it.
The Defendant Council ("the Council") adopted a CTR Scheme that, for working age taxpayers, was restricted to those who have lived in the borough for the previous two years ("the residence requirement"). Since April 2013, about 3,600 people, including the three Claimants, have been refused a council tax reduction because they have not met the residence requirement. In this claim, the Claimants contend that that requirement is unlawful.
By an Order of Master Gidden, and by consent, on 21 March 2014 it was directed that the application for permission to proceed be adjourned to an oral hearing, with the substantive hearing to follow on immediately if permission be granted; and I heard that rolled-up hearing on 22 July 2014. At that hearing, Richard Drabble QC with Tom Royston appeared for the Claimants; Kelvin Rutledge QC and Sian Davies for the Council; and Chris Buttler for the Equality and Human Rights Commission which intervenes in the claim by permission dated 11 July 2014. I thank them all for their considerable assistance.
The Statutory Scheme
The Local Government Finance Act 1992 ("the 1992 Act") made new provision for local government finance by abolishing the community charge, and establishing a new tax, namely council tax. Section 1(1) provided that each billing authority (which, for Sandwell, is the Council) is under a duty to levy and collect council tax in respect of dwellings situated in its area. The person liable to pay the tax is dealt with in section 6: any resident or owner of the dwelling on any day is liable, jointly and severally. Section 10 sets out the amount payable, by reference to a formula. Sections 11, 11A and 11B provide for discounts of 50% where there is no resident of the dwelling, and 25% for a sole resident, subject to the power of prescribing a class of dwellings where a lower percentage will apply. By section 13, the Secretary of State may provide a reduced amount of council tax where prescribed conditions are fulfilled.
Sections 123 and 131 of the Social Security Contributions and Benefits Act 1992 gave those on low income assistance with payment of the tax, in the form of an entitlement to a national, means-tested and tapered, social security benefit, i.e. CTB.
In its first Spending Review in 2010, the Coalition Government announced that it would localise support for council tax from 2013–14, reducing expenditure by 10%. On 17 February 2011, the Government published the Welfare Reform Bill as a vehicle for these changes. In July 2011, the Department for Communities and Local Government ("the DCLG") published a consultation paper, "Localising Support for Council Tax in England", which, amongst other things, confirmed the Government's commitment "to ensuring that local authorities continue to provide support for council tax for the most vulnerable in society…"; and emphasising that "the localisation of support for council tax is taking place within a wider programme of welfare reform which is intended to help people back into work" (paragraph 1.3), localised schemes being expected to support positive work incentives (paragraphs 1.3, 3.2 and 6.9–6.12). The new scheme was to "continue to provide support to households as a reduction in the amount of council tax payable, rather than a cash payment" (paragraph 3.2). A minimum level of consistency between schemes was also identified as being desirable (paragraphs 9.9–9.10).
From 1 April 2013, CTB was abolished by section 33(1)(e) of the Welfare Reform Act 2012; and was replaced by a new scheme provided for by section 10 of the Local Government Finance Act 2012 which inserted a new section 13A and schedule 1A into the 1992 Act.
Section 13A(1) provides:
"(1) The amount of council tax which a person is liable to pay in respect of any chargeable dwelling and any day (as determined in accordance with sections 10 to 13) –
(a) in the case of a dwelling situated in the area of a billing authority in England, is to be reduced to the extent, if any, required by the authority's reduction scheme (see subsection (2));
(b) …
(c) in any case, may be reduced to such extent (or, if the amount has been reduced under subparagraph (a)…, such further extent) as the billing authority for the area in which the dwelling is situated thinks fit."
Therefore, an authority must reduce an individual's council tax as required by a CTR Scheme (section 13A(1)(a)), and nevertheless has a residual discretion to do so outside the scheme (section 13A(1)(c)).
Section 13A(2), key to this claim, provides for the setting up of such a scheme.
"(2) Each billing authority in England must make a scheme specifying the reductions which are to apply to amounts of council tax payable, in respect of dwellings situated in its area, by –
(a) persons whom the authority considers to be in financial need, or
(b) persons in classes consisting of persons whom the authority considers to be, in general, in financial need."
Section 13A then continues, so far as relevant to this claim:
(3) Schedule 1A (which contains provisions about schemes under subsection (2)) has effect.
…
(7) The power under subsection (1)(c) may be exercised in relation to particular cases or by determining a class of case in which liability is to be reduced to an extent provided by the determination.
…
(9) In this Part 'council tax reduction scheme' means a scheme under subsection (2)…"
Section 16 gives a right to appeal to the Valuation Tribunal for England if a person is aggrieved by a decision that he is liable to pay council tax, or the calculation of the tax he is required to pay. However, the tribunal takes the view that it does not have jurisdiction to entertain a challenge to a residence requirement such as the Council's, and that such challenges can only be by way of judicial review ( SC v East Riding of Yorkshire Council [2014] EW Misc B46 (VT)).
Schedule 1A to the 1992 Act makes further provision for CTR Schemes, which it defines as schemes under section 13A(2) (paragraph 1). The schedule then provides as follows:
" 2. Matters to be included in schemes
(1) A scheme must state the classes of person who are to be entitled to a reduction under the scheme.
(2) The classes may be determined by reference to, in particular –
(a) the income of any person liable to pay council tax to the authority in respect of a dwelling;
(b) the capital of any such person;
(c) the income and capital of any other person who is a resident of the dwelling;
(d) the number of dependants of any person within paragraph (a) or (c);
(e) whether the person has made an application for the reduction.
(3) A scheme must set out the reduction to which persons in each class are to be entitled; and different reductions may be set out for different classes.
….
(8) The Secretary of State may by regulations prescribe other requirements for schemes.
(9) Regulations under sub-paragraph (8) may in particular –
(a) require other matters to be included in a scheme;
(b) prescribe classes of person which must or must not be included in a scheme;
(c) prescribe reductions, including minimum or maximum reductions, which must be applicable to persons in prescribed classes;
….
(10) Regulations under sub-paragraph (8) may in particular set out provision to be included in a scheme that is equivalent to –
(a) provision made by a relevant enactment, or
(b) provision that is capable of being made under a relevant enactment, with such modifications as the Secretary of State thinks fit.
(11) Subject to compliance with regulations under sub-paragraph (8), a scheme may make provision that is equivalent to –
(a) provision made by a relevant enactment, or
(b) provision that is capable of being made under a relevant enactment, with such modifications as the authority thinks fit.
….
3. Preparation of a scheme
(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)...
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