King’s Bench Division
Rex (YVR) v Birmingham City Council
[2024] EWHC 701 (Admin)
2024 Feb 28, 29; March 26
Collins Rice J
Local governmentCommunity care servicesPersons in need of “care and support”Severely disabled claimant unable to work and having no income apart from state benefitsLocal authority effectively declaring itself bankruptLocal authority charging claimant for care and support services in accordance with charging policyWhether policy unlawfully discriminating against severely disabled persons unable to work Local Government Finance Act 1988 (c 41), s 114 Human Rights Act 1998 (c 42), Sch 1, Pt I, art 14, Pt II, art 1 Care Act 2014 (c 23), s 14 Care and Support (Charging and Assessment of Resources) Regulations 2014 (SI 2014/2672), regs 7, 15(2)

The claimant, an adult in his mid-20s, was profoundly autistic, had epilepsy, severe learning difficulties and other mental ill-health diagnoses. He lived at home with his family but the local authority provided care and support, including attendance at a day centre all day on weekdays, where he received one-to-one support. He received universal credit standard allowance, “limited capability for work-related activity” allowance, and was entitled to the personal independence payment, part of which contributed to the cost of getting help with everyday activities, and part to getting help with physically moving around. The level of those benefits was set nationally and assessed by the relevant government agency, but section 14 of the Care Act 2014 gave local authorities the power to charge an individual for meeting their “eligible needs”. In order to do so, a local authority had to make an assessment of an individual’s financial resources and follow non-statutory guidance issued on behalf of the Secretary of State. By section 14(7) an authority could not make a charge if the income of the individual would, after deduction of the amount of the charge, fall below an amount to be specified in regulation 7 of the Care and Support (Charging and Assessment of Resources) Regulations 2014. In practice, that meant that authorities could not charge at all unless an individual’s income was over a certain amount, the “minimum income guaranteed amount”, which was protected from being taken in charges. The local authority issued a notice under section 114 of the Local Government Finance Act 1988, effectively declaring itself bankrupt, and the Secretary of State intervened and nominated commissioners to oversee the local authority. As the cost to the authority of meeting the claimant’s needs vastly exceeded the amount of his unprotected income available to be recovered by it in charges, the authority applied its charging policy to the claimant with the result that he was charged the maximum amount envisaged by the statutory scheme. The claimant sought judicial review contending that the authority’s charging policy was discriminatory, contrary to the Equality Act 2010 and article 14 of the Convention for the Protection of Human Rights and Fundamental Freedoms, read with article 1 of the First Protocol to the Convention, because it discriminated against those who were severely disabled and could not work by reason of their disability, and that the authority had also failed to comply with the public sector equality duty in section 149 of the 2010 Act.

On the claim—

Held, claim dismissed. (1) The claimant’s discrimination challenge essentially relied on identifying a “problem” in the statutory scheme, and a missed opportunity for the authority to address it. The “problem” in the scheme was a failure to treat people who could work differently from people who, because of severe disability, could not, which default situation was arguably irrational and unfair because it amounted to an incentivisation system which was applied to individuals who could not be incentivised to do that which they were incapable of doing. Although that was not itself an asymmetry of the authority’s making, local authorities had powers under the charging regime to do something about it and, in particular, the power under regulation 15(2) of the Care and Support (Charging and Assessment of Resources) Regulations 2014 to “disregard such other sums the adult may receive as the authority considers appropriate” was specific and commodious. Government guidance encouraged the protection of income and discouraged an unconsidered default assumption that all unprotected benefit income was available to be taken in charges, instead positively encouraging consideration of a protected “disposable income” uplift to the minimum income guaranteed amount (which already included a 25% “buffer” in the calculation), and its headline principle was affordability. The authority could, but had deliberately chosen not to, address a systemic and discriminatory problem with the statutory default and, as a result, the problem was unmitigated and discrimination thereby resulted or persisted. The discrimination could fairly be called “obvious”, was capable of clear articulation in accordance with the relevant authorities, and proceeded directly from the claimant’s “other status” in comparison to all other recipients of social care (paras 20, 77, 78, 83, 84).

R (SH) v Norfolk County Council [2021] PTSR 969 considered.

(2) The legitimate aim on which the authority relied to justify its charging policy was not just the operation of a policy which was “sustainable for local authorities in the long term”, in the words of the guidance, but also, in the authority’s current budgetary crisis where it was constrained to implement emergency financial measures, the imperative to cut spending and maximise revenue so as to balance the budget. Care was needed with an aim of that sort, circularity had to be avoided, and it was not an answer to a challenge of unlawful discrimination to say it was cheaper to discriminate than not. However, at the same time, as a matter of both principle of practice, it was a context-sensitive issue. The authority’s declared aim of getting itself back on track towards a balanced budget was a “legitimate aim” of considerable importance. It was far more fundamental than a proposition about saving money and was instead a proposition about disaster recovery, which engaged “the economic well-being of the country”, as national Government and national finances were involved in regularising the authority’s position over the coming years. The objective of the authority’s non-interventionist charging policy, as presently implemented, was to make a substantial contribution to the programme of radical savings to which it was constrained and, in the circumstances, that was a measure of “sufficient importance” to be at least capable of justifying its laissez-faire “discriminatory” impact. The rational connection between the objective and the policy was plain from the very substantial proportion of the authority’s total spend which was accounted for by funding including charging for adult social care to the statutory maximum (paras 83, 84, 85).

Bank Mellat v HM Treasury (No 2) [2014] AC 700, SC(E) considered.

(3) The question of “whether a less intrusive measure could have been used without unacceptably compromising the achievement of the objective” was an entirely fact-sensitive evaluation and the choices available to one local authority might not be available to another. Where the evidence from the authority indicated that it had nowhere else to go to achieve the same balance, that being the plain logic of defaulting to the statutory maximum take, the authority could not enable those who could not work to be charged less for having their care needs met without either reducing further an already insufficient adult social care budget, or subsidising the adult social care budget from somewhere else external to it. In reality, where the authority’s other heads of revenue and expenditure were fully accounted for, there were no other choices available. The charging power had to be exercised for the purposes for which it was created, and its exercise had to be tailored to the local context and kept under review having regard to the guidance provided. While it did not need to be exercised by reference to some unattainable ideal of equalisation, a default to doing nothing on an unconsidered basis was plainly inconsistent with the relevant guidance. Local authorities had to think about their options in between, and in doing so had to be aware of the particular circumstances of those excluded from the workplace, in some cases permanently, by reason of severe disability and without any income other than their benefits. That was not necessarily an onerous duty, being in the nature of a duty to consider, which was in any event a necessary and ordinary part of the responsible stewarding of statutory powers and public money. The decision under challenge in the present case, which concerned the authority’s political and administrative judgments of social and economic policy in the field of welfare benefits, in exceptional financial circumstances the effects of which were being felt across the city and at national level, was not manifestly without reasonable foundation and, as such, fell to be respected and was not unlawful (paras 86, 87, 94).

(4) The authority had considered the substantive aspects of the public sector equality duty with real focus and anxiety, even given the overwhelming nature of its financial predicament. It could not, in all the circumstances, be fairly be criticised for not thinking more imaginatively or in any more structured way about doing something else. In any event, if ever there were a case for accepting an argument that no further degree of procedural rigour would in any event have produced a different outcome, it was surely the present one. The authority’s situation was exceptional, and other local authorities, of course, were in different circumstances (paras 101, 102, 103)

Dan Squires KC and Aidan Wills (instructed by Central England Law Centre, Birmingham) for the claimant.

Joanne Clement KC and John Bethell (instructed by Director of Legal Services, Birmingham City Council, Birmingham) for the local authority.

Benjamin Weaver, Barrister

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