The Queen (on the Application of Zacchaeus 2000 Trust) v Secretary of State for Work and Pensions
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr Justice Underhill |
| Judgment Date | 15 February 2013 |
| Neutral Citation | [2013] EWHC 233 (Admin) |
| Date | 15 February 2013 |
| Docket Number | Case No: CO/5916/2012 |
| Court | Queen's Bench Division (Administrative Court) |
[2013] EWHC 233 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Underhill
Case No: CO/5916/2012
Elisabeth Laing QC and Christopher Knight (instructed by Leigh Day & Co.) for the Claimant
Martin Chamberlain (instructed by the Department for Work and Pensions/Department of Health Legal Services) for the Defendant
Hearing dates: 19 and 20 December 2012
INTRODUCTION
This application for judicial review concerns recent changes in the provisions relating to housing benefit purportedly effected by the Rent Officers (Housing Benefit Functions) (Amendment) Order 2012 (2012 SI no. 646) ("the 2012 Order"), which was made by the Defendant, the Secretary of State for Work and Pensions, on 29 February 2012 and came into force on 2 April. In summary — I give more details later — the nature of the changes in question is as follows:
(1) Housing benefit for private-sector tenants is calculated by reference to an "appropriate maximum housing benefit" ("AMHB"): see section 130 (1) and (3) of the Social Security Contributions and Benefits Act 1992 ("the 1992 Act"). The amount of benefit payable is the lower of the actual rent paid by the claimant and the AMHB.
(2) Section 130A of the 1992 Act provides for AMHB to be determined by regulations, which may provide for it to be ascertained "by reference to rent officer determinations": see sub-sections (2) and (3).
(3) The relevant regulations — most recently the Rent Officers (Housing Benefit Functions) Order 1997 ("the 1997 Order") — provide for rent officers to determine, for each "broad rental market area" ("BRMA"), a "local housing allowance" ("LHA") for each of a series of categories of dwellings, defined by the number of bedrooms: see article 4B.
(4) Until the changes challenged in these proceedings the nature of the exercise performed by the rent officer under the 1997 Order was that he would ascertain the range of actual levels of rent being charged in the BRMA for each category in that month, using information gathered locally, and would fix the LHA at a prescribed point in that range. Originally the prescribed point was the median of the rents in question. The LHA so determined constituted the AMHB. With effect from April 2011 changes were introduced which (a) substituted for the median the thirtieth percentile point in the range, (b) introduced an overall monetary cap for the LHA in each category and (c) removed the previous five-bedroom category, so that the maximum rate of housing benefit would relate only to four-bedroom houses. These changes were effected by the Rent Officers (Housing Benefit Functions) Amendment Order 2010 ("the 2010 Order"). The introduction of the cap was unsuccessfully challenged in R (Child Poverty Action Group) v Secretary of State for Work and Pensions [2011] EWHC 2616 (Admin) ("the CPAG case").
(5) The effect of the 2012 Order is to substitute for that regime a system under which the LHAs in force as at 2 April 2012 are frozen until April 2013 and are thereafter to be uprated annually to the lower of (a) the figure produced by a determination using the method described at (4) above and (b) the current figure as uprated by the percentage annual increase in the Consumer Price Index ("the CPI"). In crude terms, the effect is that any increases in housing benefit will be capped at the level of general inflation, even if inflation in the rental market has been higher.
These particular changes are concerned only with housing benefit paid to private sector tenants.
It is not inevitable that those changes will mean that less is paid by way of housing benefit, either generally or to particular claimants, than would have been the case under the previous regime. If levels of rent in every part of the country remain stable during the current year and only increase thereafter by the amount of the CPI the effect will be neutral; and it is the Government's expressed hope that the changes may themselves exert a downward pressure on rental levels. But, to put it no higher, it cannot be certain that that will be the case. To the extent that, this year, rental levels do in fact rise, generally or in particular areas, or, next year, rise above the level of general inflation as measured by the CPI, there will be an adverse effect on claimants because it is more likely that there will be a gap between the rent which they have to pay and the benefit payable (or, if there is already a gap, that it will increase). If that occurs it will be more difficult for claimants to remain in their current homes; and if they do have to move it may have to be to an entirely new area, since — in this scenario — properties where the rent is within current housing benefit limits will be scarcer.
The Claimant, which is a charity concerned with the relief of poverty, believes that those consequences are likely to arise in many cases, and that many poorer tenants will have to move to more deprived areas, which will both be disruptive and will affect their quality of life for the worse. That would not of course in itself be a ground of legal challenge, but the Claimant contends that the 2012 Order is unlawful on two specific bases: (A) that it is ultra vires; and (B) that the Secretary of State in making it failed to comply with his duties under section 149 of the Equality Act 2010.
The Secretary of State contends that both grounds of challenge are unfounded; but he also argues that relief should be refused in any event because the claim was filed out of time. I consider the substantive issues first.
The case has been well argued, with conspicuously helpful skeleton arguments, by Ms Elisabeth Laing QC and Mr Christopher Knight (acting pro bono) for the Claimant and Mr Martin Chamberlain for the Secretary of State.
A. THE VIRES CHALLENGE
The Statutory Provisions
The statutory scheme can only be understood by piecing together a peculiarly intricate jigsaw puzzle. But the essential pieces for present purposes are as follows.
The 1992 Act. Section 123 (1) (d) of the 1992 Act provides that a prescribed scheme "shall provide for … housing benefit". The scheme in question is contained in the Housing Benefit Regulations 2006, as to which see paragraph 10 below. Section 130 sets out the conditions of entitlement under such a scheme. So far as material for present purposes, it reads:
"(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 subsection (3) (b) below provides is made.
(2) In subsection (1) above "payments in respect of a dwelling" means such payments as may be prescribed, …
(2A) …
(3) 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.
(4)–(5) …"
Section 130A, which was introduced by the Welfare Reform Act 2007, reads (so far as material):
"(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.
(4) —(6) …
(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."
Section 122 (1) of the 1996 Act. The key concept for the purpose of the issues in the present case is that of a "rent officer determination". As appears from the previous paragraph, that term is defined in section 130A (7) by reference to section 122 of the Housing Act 1996 ("the 1996 Act"). That section falls under Part IV of the Act. The only relevant provision for present purposes is sub-section (1), which reads (so far as material):
"(1) 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 …."
(Sub-section (7) provides that "housing benefit" has the same meaning as in part VIII of the Social Security Administration Act 1992, which in turn refers back to section 122 of the other 1992 Act.)
The 1997 Order. The current order made under section 122 (1) specifying the functions of rent officers in connection with housing benefit is the 1997 Order. Article 4B of that Order (as it stood immediately prior to 2 April 2012, i.e. incorporating the changes made by the 2010 Order: see paragraph 1 (4) above) reads, so far as material:
"(1A) On 20th March 2008 and so often thereafter as a rent officer considers appropriate, a rent officer shall, in relation to each local authority, —
(a)...
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