R (YVR) v Birmingham City Council [2024] EWHC 701 (Admin)
26 March 2024 – Collins Rice J
Summary – This case concerned Birmingham City Council’s charging policy which the claimant YVR contended discriminated “against people who, like him, are so disabled they cannot, and will never be able to, do any paid work.” Click on the above link for free access to the full judgment.
The Council acknowledged the policy may have a greater impact on some people than others, but highlighted a need for a consistent, easy to administer policy and that it needed to save money and recoup costs due to its significant financial difficulties.
The Administrative Court accepted that ‘permanently unable to work’ constituted a relevant status for the purposes of Article 14. It accepted that such considerations as cited by Birmingham could constitute legitimate aims and did not find the resultant difference in treatment to be unjustified including in the further context of the deference that the public law court needs to apply to decision-makers within the spheres of “social and economic policy in the field of welfare benefits”. The claim was dismissed.
Context – Mrs Justice Collins Rice heard that Birmingham City Council provides care and support to YVR, a man with significant disabilities, living with his family. YVR was challenging the policy under which the council charges for adult social care which he said discriminated against people like himself whose disabilities prevent them from engaging in paid work.
This position may have been an attempt to take the Norfolk case further. There, the Court had found unlawful discrimination under article 14, against seriously disabled people as a result of Norfolk’s application of the rules, but no challenge to the ‘positive’ feature of the regulations underpinning the charging system, that earnings are excluded from means assessment.
Section 14 of the Care Act 2014 provides local authorities with a power to charge for meeting eligible needs, having assessed the person’s financial resources. YVR received welfare benefits at nationally set levels. Regulations specify that authorities may not make a charge unless an individual’s assessed income is over a protected amount called the ‘minimum income guarantee’ (MIG).
The cost to the council of meeting YVR’s needs was significantly greater than the unprotected portion of his benefits income. The regulations confer powers for a council to charge less, but not more, than the statutory scheme sets out. The Judge noted: “It is the council’s exercise of – or failure to exercise – these powers which is the focus of the present challenge.”
In YVR’s case, Birmingham had charged the maximum amount permitted by the statutory scheme thereby taking all of his benefits except the MIG protected amount. Birmingham considered this to be consistent with the law, Government guidance and its own policy.
YVR contended the council’s decision to introduce the charging policy without revising aspects of it which gave rise to discrimination against those who could not work by reason of the severity of their disability, as compared to those less severely disabled people who could work, and who would thus keep their disregarded earnings, contravened Article 14 of the European Convention.
YVR argued Birmingham had not properly considered its discretion to take less in charges than the maximum amount permitted with no other justification than maximising revenue, which was not a reason capable of justifying discrimination.
Furthermore, it was contended that the council should have followed the decision in R (SH) v Norfolk County Council [2020] EWHC 3436 (Admin) concerning the basis on which Norfolk calculated charges for council-provided care.
Birmingham argued that it had, demonstrably, considered its discretionary options; also, that treating people who do, or do not earn differently, was a fundamental part of the needs-based care, benefits and charging statutory scheme which – considered as a whole – created no relevant difference of treatment.
Furthermore, Birmingham said its present budgetary predicament (following a s114 notice effectively declaring bankruptcy) placed its situation beyond mere money -saving considerations, requiring it instead to choose explicitly to weigh the interests of its taxpayers in the balance and give that interest significant weight.
Collins Rice J identified this as a challenge reliant upon identifying a ‘problem’ in the statutory scheme, and a missed opportunity for the council to address it. The ‘problem’ was – given the system allowing for the earnings disregard – a failure to treat those who due to the severity of their disability could not work, differently from those who could. This was an irrational and unfair default situation and an arguable ‘failure’.
“Its arguable irrationality is that it is an incentivisation system applied to individuals who cannot be incentivised to do that which they are incapable of doing.”
However, local authorities had powers to address this. “The power under Regulation 15(2) … discourages an unconsidered default assumption that all unprotected benefit income is available to be taken in charges. That would not, it says, be consistent with the principles of promoting social inclusion, independence, choice and control.”
Therefore, the argument was that Birmingham’s policy “of refusing to use its charging power in this way …can properly be called discriminatory for the purposes of an Art.14 challenge… The Council could, but has deliberately chosen not to, address a systemic and discriminatory problem with the statutory default; as a result, the problem is unmitigated and discrimination thereby results, or persists.”
In Norfolk there was no reasonable relationship of proportionality between the means employed and the aim sought to be realised. The aims outlined by the authority and accepted by the Court related to a functioning council, at least, in economic terms, and in theory, the legitimate aims referenced in the Guidance, namely, a sustainable charging regime, the fair apportioning of public resources, encouragement of independence, and compliance with the statutory scheme.
The judge regarded Birmingham’s statement of its legitimate aim as far more fundamental and simpler, noting it was “not just to operate a charging policy which is ‘sustainable for local authorities in the long term’, as the Guidance puts it. In its current budgetary crisis, and constrained as it is at present to implement emergency financial measures, it is the imperative to cut spending and maximise revenue so as to balance the budget” (with the caveat that “it is not an answer to a challenge of unlawful discrimination to say it is cheaper to discriminate than not to.”)
Therefore, the Judge accepted Birmingham’s declared aim to get back on track towards a balanced budget was an important and ‘legitimate aim’ relating to “disaster recovery, and one which engaged ‘the economic well-being of the country’: national Government and national finances are involved in regularising the Council’s position over the coming two years.”
She added: “the objective of the Council’s non-interventionist charging policy at present – and it is its most recent maintenance of that position which is under challenge – is to make a substantial contribution to the programme of radical savings to which it is constrained, and I am satisfied that is 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 is plain from the very substantial proportion of the Council’s total spend which is accounted for by funding including charging for adult social care to the statutory maximum.”
Further, that “The choices available to one local authority may not be available to another. The evidence from the Council in the present case is that it has nowhere else to go to achieve the same balance, and that indeed is the plain logic of defaulting to the statutory maximum take. It cannot enable those who cannot 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. But in reality there is nowhere else… ‘There are no other choices.”
Collins Rice J also noted the answer to the ‘consternation’ of local authorities considering whether, and how to implement lesser charges to those excluded from the workforce by disability, was to consider that on ordinary public law principles, the power to do so must merely be exercised for the purposes for which it was created.
“It does not need to be exercised by reference to some unattainable ideal of equalisation, but a default to doing nothing on an unconsidered basis is plainly inconsistent with the guidance.”
“… Local authorities need to think about their options in between, and in doing so be aware of the particular circumstances of those excluded from the workplace, in some cases permanently so, by reason of severe disability and without any income other than their benefits. It is not necessarily an onerous duty: the guidance confirms it is in the nature of ‘a duty to consider’. That is anyway a necessary and ordinary part of the responsible stewarding of statutory powers and public money.”
In summing up, Collins Rice J noted that “Norfolk was, at least historically, in a relatively favourable position in that regard. I am satisfied, on the evidence of recent history before me in the present case, that Birmingham is not.”
Collins Rice J therefore concluded that Birmingham’s was an “exceptional”situation but that “other local authorities, of course, are in different circumstances”.
She concluded thus:
“The Council’s decision in these circumstances is that the needs of its most vulnerable service users in the position of the present Claimant having been sufficiently safeguarded by detailed statutory minima, other measures addressed to mitigating their exclusion from the workplace must take their place for the time being along with the sacrifices demanded of all its citizens. That cannot fairly be regarded as disproportionate to the point where the courts should be expected to intervene to force a different outcome.
The present case concerns the Council’s political and administrative judgments of social and economic policy in the field of welfare benefits, in exceptional financial circumstances the effects of which are being felt across the city and at national level. Its position is not manifestly without reasonable foundation. It falls to be respected.”
CASCAIDr CIC’s commentary
Councils might have been hoping that the Norfolk approach would be doubted or overruled as wrongly decided, in this case, by a Court of equal precedent weight. The Norfolk case was not overruled, but Birmingham’s successful defence of its stance was not wholly on account of its exceptional financial situation.
The Norfolk case could certainly be regarded as undermined, as long as other councils go through the process, and not just disingenuously, of considering their options, if they all continue to get poorer, as is possible, regardless of the forthcoming election.
It is worth noting that ultimately, after much work and reconsideration, Birmingham Council’s substantive position in this policy had not changed since 2016.
It knew it was courting a challenge in not making a change, but it was the only option that it regarded as conceivably open to it. And it did, as far as the judge was concerned, go through all the balancing of the pros and cons of different ways of charging, which was helpful to the justification argument, even thought this was no more a rationality challenge than it had been in the Norfolk case.
In argument, the council’s barrister said this:
“the Norfolk judgment had caused national ‘consternation’ among local authorities, not only because of its potential financial impact but also because local authorities were said to be at a loss to understand how, consistently with the statutory scheme, they could eliminate the objectionable discriminatory effect identified in Norfolk (and indeed what exactly it had been about Norfolk’s previous policy that had protected it from the same objection).”
Birmingham’s position was summarised by the judge, as follows:
“The Council’s post-Norfolk review process identified a limited number of options available to it to increase the proportion of income a severely disabled individual unable to work could be enabled to keep.
It could increase the MIG above the statutory minimum. It could disregard more of the PIP. It could, in other words, adopt a policy rather like the one Norfolk County Council had previously been pursuing.
But either or both of these measures would impact the social care budget to the tune of millions. And neither could be said confidently to eliminate the differential impact criticised in Norfolk.
A third option – not to charge at all – was not easy to reconcile with the clear, detailed statutory power to do so, and with the Council’s wider financial duties.
The fourth option was, in terms, to await the outcome of this litigation, and to use it to challenge the logic of the Norfolk decision or at any rate its application to Birmingham’s and the present Claimant’s specific situations.”
And this was its ultimate choice.
It is worth noting that in this case, despite the way in which the application had been made, the judge restated it (we think rightly) as a challenge about failing to treat different people differently, rather than treating people who were in the same situation, differently. She phrased it thus: it boiled down to Birmingham refusing to use its charging power so as to relieve those who cannot work (or perhaps even just those who are permanently excluded from the workplace and who have no income other than benefits) from the unmitigated consequences of the statutory ‘privileging’ of earned income for those disabled people who ARE able to work, and do.
Once she turned to justification for that refusal, it was clear that the council HAD very carefully considered the pros and cons of all of its options, which is more than Norfolk had done.
That previouschallenge was a human rights one, not a rationality challenge, and because it was a human rights case, and ONLY a human rights case, counsel made the deliberate decision not to mount any attack on the regulations, which contain the earnings disregard.
We think that the applicants in Birmingham were trying to use the limitation of a challenge to the human rights sphere, to take the Norfolk decision further than it could ever have been properly taken, at least not without contending that the rules themselves allowing for an earnings disregard, or the rules regarding the different elements of the MIG, which differentiate between different sorts of people’s ages and living situations, are themselves illegal, as in breach of human rights, which would be a non-starter, in ECtHR terms.
It is that earnings disregard that makes people on higher levels of benefit, very significantly worse off than those on lower levels, in practice, because of the correlation (in theory at least) between being on a lower level of benefit, and yet still being able to work.
However, Norfolk was not about the earnings disregard; it was about the rules themselves.
One can work out, that taking everything other than the MIG, inevitably means that a different proportion of a person’s income – less – is left to a person if they were on a higher rate of benefit than a person on a lower level of benefit, even if neither were able to work or were working – without (our point, not the court’s point) it being able to be said that people on higher rates of benefit will automatically be getting much more care at what would be a higher cost to the council.
Here, it seems that the case was being brought on the basis that failing to do anything about the theoretical difference between someone with earnings and someone who could not work, was itself discrimination, without acknowledging that the regulations are the source of a significant increase in the extent of that disproportionate effect.
That seems to us to be something that one cannot hope to challenge without attacking the regulations themselves, which is patently unlikely ever to happen, because the earnings disregard is a good thing for anyone with a disability that is not so severe as to stop them working. It is also something that the European Court would be almost bound to reject as an inadmissible claim and well within the State’s margin of appreciation, in relation to fiscal strategy.
From the whole council sector’s perspective, however, the challenge gave it the ideal chance the sector has been waiting for, to say this:
“Individuals like the present Claimant, who are severely disabled, economically inactive and wholly benefits-dependent, are likely to have needs which are being met at a cost which disproportionately exceeds the maximum recoverable amount in any event. To put it another way, they are receiving far more than any other group in kind – that is, in the way of adult social care which is not, and cannot be, charged for at all. Charging as a proportion of income, if relevant, has to be seen in the context of charging as a proportion of cost.”
To that extent, Birmingham won an important statement from the judge who said that the Norfolk court
“did not seem to have been provided with a comprehensive account of how the charging system operates – either on its own terms or as the mechanism for connecting up the benefits system and the system for assessing and meeting care needs. The implications of the statutory controls on assessable income and the operation of the MIG are not fully addressed, and that may have led to assumptions about outcomes for whole classes of people that are not intuitive (much less obvious) outcomes of the underlying statutory system understood as a whole, or demonstrated in evidence or worked examples. And the relevance of the metric of charge as a proportion of total (including earned) income to identifying whether a charging policy is discriminatory is nowhere explained and not obvious at all.”
She went on to empathise with councils, too:
“complete parity or elimination of discrimination is an elusive concept in this space, and, short of that, how much mitigation is enough?”
But – and it is a big but – in turn, we feel compelled to point out that this judge was also left to overlook one very obvious feature of the social care system. It is this: one can be hugely disabled and dependent and eligible but NOT ACTUALLY RECEIVE significant care inputs, because of the fortunate situation of having informal carers willing and available to be doing the bulk of the care for free.
Every single person’s package is residual, after all assets and strengths have been taken into account. Two people can have similar conditions and types of need, BUT VERY DIFFERENT SIZED packages and budgets. Birmingham does not seem to have been drawn on that, or volunteered it as a perspective, in discussion with the judge.
This is the second case in which this particular judge could be said to be contributing to a body of thinking which treats people with disabilities as citizens first, and disabled, as only a very poor second.
The other case is Idolo (Bromley) which has been followed more recently in Campbell (Ealing). The effect of that line of case law is to make it impossible for local authority social services departments to provide ordinary accommodation to eligible nationals with disabilities so severe as to trigger accommodation ‘plus’ levels of dependency with regard to appropriate care planning. They are to be consigned to the ranks of the ordinary homeless, or those on the allocations register, given s23 Care Act, in her view.
That section has been interpreted to make Housing Act 1996 routes to ordinary accommodation into the only available routes, for those who are not in breach of immigration control and entitled through a human rights argument, or entitled to s117 aftercare where immigration status is a bar to Housing but not a bar to aftercare.
Postscript
For what it is worth, CASCAIDr CIC, and before it, CASCAIDr in its charitable iteration, came to the conclusion (when working on its ‘Reversing the Charges’ national project to get all councils through their statutory Monitoring Officers, to consider the Norfolk case) – that the only way the rules permit the smoothing out of that differential, is by way of banded DRE standard allowances; banded, that is, according to whether one is on a standard or enhanced/higher rate of PIP or DLA in the first place.
In this case, the judge said this, and we would have liked to have been able to glean more about the outcome, from the judgment than in fact appears there.
“It appears, for example, that the [specific] parties have been in historical dispute over the calculation of the Claimant’s DRE disregard – what counts as disability-related expenditure that should be netted off from his income before assessment for charging, and what he should be expected to pay for himself out of his residual benefits. That in itself is not a matter before me in these proceedings. In any event, as a matter of evidence, the items of discrete expenditure put forward as examples of what the Claimant must meet out of his own residual resources – café meals, swimming pool entrance, confectionery – are not said or evidenced either to fall within a framework of ‘eligible need’ or, in practice, to be unaffordable.”
[CASCAIDr CIC’s interjection: they would be, if their cost was not ultimately granted as DRE, unless his appointee or deputy wanted him to owe the council its charging money, instead, because charging law allows taking ALL of one’s available income, up to the full cost of the package, regardless of the package size!]
…And none of his personal living or assessed needs are said to be going unmet – including his disability-related needs for routine, social stimulation and interaction, and a high level of activity.”
Disability benefits are the route into the right to have deducted any accepted DRE from one’s means for charging purposes.
Of course, even if one allows for banded standard automatic DRE as a mitigation of the rules, there are some people eligible for social care who are not on disability benefits at all, or not on the higher rates, but who are still charged something, at least, under financial assessment.
We are not sure of the numbers, or whether the numbers would be relevant to justification in an Equality Act or human rights challenge, or to an ordinary rationality challenge in the Administrative Court.
But we do not think that councils can do nothing about the impact of the charging system. We looked in vain to find anything out about Birmingham Council’s approach to DRE, as it happens, online.