Mr Justice Hickinbottom:
Introduction
- The Claimants are Romani Gypsies, who live in caravans on a private site.
- Although the legislative scheme is complex – and this case inevitably involves some consideration of its detail – in short, the Claimants' complaint is that the occupier of a caravan who is entitled to full Housing Benefit ("HB") and who is on a site owned by a local housing authority receives an HB rent rebate of the whole of the rent charged; but, if the caravan is on a private site, then the rent on which HB can be claimed is subject to determination by a rent officer, and that is normally substantially less than the full contractual rent charged. It is said that that scheme therefore fails to meet the essential housing needs of Gypsies on private sites, who have particular site infrastructure and management needs – which result in additional costs, and hence a legitimately higher rent, not reflected in the HB awarded. Consequently, in the medium to long term, they are placed in a position whereby they will be unable to remain on the site, and will be unable to carry on their traditional way of life. It is contended that the scheme, and decisions affecting the Claimants made under the scheme, are therefore discriminatory, and in breach of article 14 of the European Convention on Human Rights, when read with article 1 of the First Protocol 1 (the right to property) and article 8 of the substantive Convention (the right to respect for family and private life).
- After some considerable fluctuations during the course of these proceedings, that human rights claim is the only ground the Claimants now pursue.
- At the substantive hearing of the application for judicial review before me, Marc Willers and Desmond Rutledge, both of Counsel, appeared for the Claimants; and James Strachan of Counsel for the Secretary of State. I am grateful to them all for their assistance.
Gypsies and Travellers
- Romani Gypsies are descended from migrants who travelled to Europe from India several hundred years ago, with a preference for self-employment, mobility and an unorthodox lifestyle. They have from time-to-time been the subject of persecution and public hostility, which encouraged a nomadism that also took advantage of seasonal work. For the last 25 years (since Commission for Racial Equality v Dutton [1989] QB 783), they have been recognised as a distinct ethnic group; as have, subsequently, other nomadic minorities including Irish Travellers (O'Leary v Allied Domecq (2000) Case No CL 950275-79). As a matter of domestic law, Gypsies and Travellers are recognised as having a protected characteristic under the Equality Act 2010; and it is now well-established that, by virtue of the European Convention on Human Rights, the state has a duty to "facilitate the gypsy way of life" for ethnic Gypsies and Travellers (Chapman v United Kingdom (2001) EHRR 18, especially at paragraph 96), which way of life requires "special protection" (DH v Czech Republic (2008) 47 EHRR 3, especially at paragraph 182).
- At common law, it was lawful for these nomadic peoples to stop and stay on common land. However, the Caravan Sites and Control of Development Act 1960 gave local authorities power to close commons to Gypsies and Travellers (section 23), with a concomitant power to open sites to cater for caravans so displaced (section 24). In practice, authorities exercised the former power, but not the latter; with a resulting lack of lawful sites. The Caravan Sites Act 1968 sought to address this problem by imposing a duty on councils to make adequate provision for Gypsies and Travellers in their area. In rural areas, that duty fell on county councils rather than district councils. About 300 council sites were established as a result, including a site owned and operated by Lancaster City Council ("the Council") at Mellishaw Lane, Morecambe.
- However, that duty was abolished by the Criminal Justice and Public Order Act 1994, which, driven by a policy of privatisation, sought to encourage Gypsies and Travellers to make provision for themselves. Planning Policy Guidance and Circular 1/94: Gypsy Sites and Planning and 18/94: Gypsy Sites Policy and Unauthorised Camping, issued under the Town and Country Planning Act 1990, imposed an obligation on local authorities to carry out a quantitative assessment as to how many sites were required in their area and then identify land to meet that assessed need. But, that too was ineffective: as I understand it, no local authority made the required assessment of need, let alone identified land that might meet any such need. Some Gypsies and Travellers applied for planning permission for their own sites; but, generally, no further site provision was made, and the number of Gypsies and Travellers having no legal place where they could lawfully pitch their caravans increased.
- With a view to making the scheme effective, Circular 01/2006: Planning for Gypsy and Traveller Sites required local planning authorities to assess the need for sites in their area and report that need to regional planning bodies, which were to dictate how many pitches each local authority should site and identify sufficient land to meet that need. That regional strategy worked, at least to an extent: every local authority assessed their respective need for sites, and reported accordingly to their relevant regional body.
- However, on 29 August 2010, the Secretary of State for Communities and Local Government announced the Government's intention to withdraw that Circular, and replace it with "a new, short, light-touch, single Planning Policy Statement for traveller sites… to provide a fair deal for traveller communities and settled communities" (Planning for Traveller Sites: Consultation Paper (April 2011), paragraphs 1.2 and 1.3). The Localism Act 2011 swept away the regional tier, and gave control of assessment of need in terms of number of pitches, and identification of land to meet that need, to local authorities themselves. The April 2011 Consultation Paper did nevertheless recognise a number of specific problems faced by Gypsies and Travellers, including "unmet accommodation needs (with insufficient appropriate authorised public site provision) …" (paragraph 2.15); and said that, "Private development and ownership of traveller sites is a key component in meeting requirements…" (paragraph 2.13).
- The Consultation Paper (at paragraph 2.4) also noted the changing nature of living for Gypsies and Travellers. They are culturally averse to living in bricks-and-mortar, wanting to live in a caravan or mobile home, but most now live on permanent residential sites:
"Although some Gypsies and Travellers travel for some of the year, the vast majority do not now travel on a daily basis all year round. Increasingly, as traditional seasonal work has declined, Gypsies and Travellers have adapted to permanent residential sites where they can more easily access a doctor, schools and other services and employment while maintaining the cultural traditions of being a Gypsy or Traveller…".
- Those characteristics are reflected in the definition of "gypsies and travellers" in the HB scheme. Paragraph 3(4) of Schedule 2 to the 2006 Regulations (as defined below) defines that term as follows:
"(a) persons with a cultural tradition of nomadism or of living in a caravan; and
(b) all other persons of a nomadic habit of life, whatever their race or origin, including –
(i) such persons who, on grounds only of their own or their family's or dependant's educational or health needs or old age, have ceased to travel temporarily or permanently; and
(ii) members of an organised group of travelling show people or circus people (whether or not travelling together as such)"
Housing Benefit: The Statutory Scheme
- HB is a non-contributory, earnings-related benefit, designed to assist those with low incomes with rent and analogous payments that they are liable to pay on the dwelling they occupy as their home.
- The rationale for the benefit is set out thus in paragraph 1.9 of "Retrospective Equality Impact Assessment for Housing Benefit and Council Tax Benefit", a document published in 2010 by the Welfare and Wellbeing Group of the Department for Work and Pensions:
"Since its introduction in 1983, [HB] has provided vital help to enable families on low incomes to afford decent housing. It is a stand-alone benefit, designed and administered separately from other benefits and is paid to people on low income to help them meet the costs of their rent. It is available to tenants renting their homes but does not provide help with mortgage costs or non-rent related housing costs. Eligibility for [HB] may be determined by receipt of certain qualifying benefits or may be paid to people with some limited amount of savings or who work but have a low income. [HB] performs three important functions:
- it provides a safety net to ensure that a customer's income does not fall below a certain level after rent payments have been taken into account;
- it improves the affordability of housing whilst not subsidising unreasonably high rents; and
- it provides personal subsidies for rental costs, shifting responsibility away from 'bricks and mortar' housing subsidies."
It is worthy of note at the outset that, as made clear in that extract, the benefit is not intended to assist at all with any "non-rent related housing costs": it is exclusively focused on the cost of rent of accommodation.
- HB is established by section 123(1)(d) of the Social Security Contributions and Benefits Act 1992 ("the Act": all statutory references in this judgment are to the Act, unless otherwise indicated). That requires an HB scheme to be set up, which is largely prescribed by provisions in the Act itself, the Social Security Administration Act 1992 ("the Administration Act"), and two sets of regulations: the Housing Benefit Regulations 2006 (SI 2006 No 213) and the Housing Benefit (Persons who have Attained the Qualifying Age for State Pension Credit) Regulations 2006 (SI 2006 No 214). Those regulations apply to those under 60 years of age, and those over that age, respectively. They are materially the same and, unless the context requires otherwise, I shall simply refer to them as "the 2006 Regulations". The 2006 Regulations were amended from 6 November 2008 by the Housing Benefit and Council Tax Benefit (Amendment) (No 2) Regulations 2008 (SI 2008 No 2824) ("the 2008 Regulations").
- Before I come to the discrete condition of entitlement with regard to "appropriate maximum housing benefit" ("AMHB") with which this claim is primarily concerned, it would be helpful to set out some introductory points concerning the benefit.
- First, in contrast to other social security benefits, HB is administered and paid by the relevant local housing authority, although the Secretary of State for Work and Pensions is responsible for matters of policy and the scheme (including the qualifying conditions and how the benefit is calculated), and also for reimbursing local authorities for the payments they make and their costs of administering the scheme.
- Second, HB is granted in two forms. Where a claimant has a local housing authority as landlord, it is given by way of rent rebate, i.e. it is credited against the claimant's rent account with that authority (section 134(1A) of the Administration Act). All other claimants have their HB paid by way of rent allowance, either to themselves or directly to their landlord (section 134(1B) of the Administration Act). Whilst some provisions are common, the scheme draws a clear line between HB claims where the landlord is the very local housing authority responsible for payment of HB on the one hand, and claims where the landlord is not that authority on the other; and makes distinct provisions for each.
- Third, where appropriate properties are available, an HB claimant can choose whether to live in a dwelling provided by the local housing authority or other public authority, or a private landlord. Where he chooses a private landlord and the contractual rent is in excess of his HB as assessed, then the claimant has a number of options. He may (i) seek a revaluation of his local reference rent, upon which HB is usually based (see paragraph 38 and following below), (ii) seek to negotiate his contractual rent downwards, (iii) pay the shortfall from other income or (iv) move to a property owned by the local housing authority, or to another private property with no or a smaller shortfall.
- Fourth, whilst HB is a stand-alone benefit, it is just one part of an overall benefits system. It concerns housing costs: as I have indicated, it is designed to assist those with low incomes with rent and analogous payments that they are liable to pay on the dwelling they occupy as their home. Other, non-housing related costs are not covered by the scheme. They are covered, if at all, by other parts of the benefits system.
- Fifth, reflecting the focus of the benefit upon the rental cost of accommodation, HB is calculated by reference to specified "periodical payments which a person is liable for in respect of a dwelling which he occupies as his home" (regulation 12(1) of the 2006 Regulations), as calculated in accordance with Part 3 of the 2006 Regulations. Those payments include "where the home is a caravan or mobile home, payments in respect of the site on which it stands" (regulation 12(1)(g)). "Eligible rent" for HB purposes includes such payments in respect of a pitch for a caravan; but generally excludes charges for other services or facilities (including charges for water) because they are not truly rental costs of accommodation (regulation 12B(2)). Where a claimant's only income is benefits, then those other costs have to be funded from benefits other than HB, even if the services etc are provided by the landlord.
- Sixth and finally, in addition to the discrete condition relating to AMHB, there are two other conditions of entitlement to HB which are, for the purposes of this claim, uncontroversial:
i) The claimant must be liable to make payments in respect of a dwelling which he occupies as his home (section 130(1)(a)). It is common ground that the Claimants' caravans were and are dwellings occupied as their home.
ii) The claimant must satisfy a means-test (sections 130(1)(c), and 134-136). However, if someone is in receipt of income support or income-based job seekers allowance, that automatically satisfies the income and capital limits for HB; and hence that claimant qualifies for full HB, receiving the maximum support towards the eligible rent (paragraph 12 of schedule 4, and paragraph 5 of schedule 5, to the 2006 Regulations). Again, it is not in dispute that the Claimants were each on gateway benefits that automatically satisfied the income and capital limits for HB; and, therefore, they each qualified for full HB.
- The final condition of eligibility, with which this claim is primarily concerned, is that "there is an [AMHB] in [the claimant's] case" (section 130(1)(b)). Where a claimant meets the other criteria, and has no income above the means-tested applicable amount, then his HB "shall be the amount which is the [AMHB] in his case" (section 130(3)).
- By section 130A(2), regulations are required by which the AMHB in a particular case is to be determined; and those regulations may require the AMHB to be ascertained by reference to an assessment of rent determined by a rent officer. Thus, the Secretary of State is empowered to make regulations that:
i) provide for the AMHB to be ascertained by reference to a determination of a rent officer in exercise of his functions under section 122 of the Housing Act 1996 (section 130A(3) and (7)): section 122(1) of the 1996 Act empowers the Secretary of State to require rent officers by order to carry out specific functions in relation to HB;
ii) require the authority administering HB to apply for a rent officer determination (section 130A(4));
iii) provide that, for the purposes of the determination of the AMHB, the amount of liability for rent under section 130(1)(a) be the amount of the rent officer determination instead of the actual amount of that liability (section 130A(5)); and
iv) may provide for specified exceptions to or limitations on any power exercised (section 175(3)).
- The reference to rent officers' determinations, specifically in the context of those, such as Gypsies and Travellers, who live in caravans, requires a word of historical explanation.
- Where rented accommodation is owned by the local housing authority which administers HB, then HB has always been in the form of a full rent rebate, which is simply credited against the rent due. The landlord and the paying authority are one and the same: and, as Mr Strachan submitted, consistent with the principle of restraint inherent in the exercise of public powers, there is a general expectation that rents charged will be reasonable and proportionate having regard to the public interest, including the public purse.
- There are broadly two categories of landlord other than the local housing authority, where the position is less straightforward. First, the landlord may be a private operator: hence, the contractual rent is likely to include an element of profit and the inherent restraint of public obligation is not present. As a result, some mechanism of control over reimbursable rent is required, to protect the public purse. Second, there are landlords who are not the local housing authority, but which may have no profit-making function and some public law obligations, such as county councils and housing associations. Whilst they may be subject to similar general public obligations of restraint, they are not the authority responsible for paying HB. The authority that is responsible for paying HB may therefore wish to monitor the rents charged, to ensure that it bears no more than the appropriate burden for relevant rent by way of HB.
- The HB scheme initially catered for all claims where the landlord was not the local housing authority in the same way, by giving the local housing authority power to restrict the amount of rent payable where it considered that the contractual rent was "unreasonably high" (regulation 11 of the Housing Benefit (General) Regulations 1987 (SI 1987 No 1971)).
- However, from January 1996, regulation 11 was replaced for all tenancies, except those where the landlord was a housing association (which continued to be subject to a rent officer's assessment only if the housing authority considered the contractual rent "unreasonably high"). The new version capped the maximum rent eligible for HB to that determined by a rent officer, under criteria set out in the Rent Officers (Housing Benefit Functions) Order 1997 (SI 1997 No 1984) ("the Rent Officers Order").
- Those criteria have changed from time-to-time. Until 2008, they involved an individual assessment of a reasonable rent, in the operating market. Two changes occurred in 2008.
- First, from April 2008, the individual assessment process I have described was generally replaced by Local Housing Allowance ("LHA") rates, i.e. flat rates set locally by the Valuation Office Agency, based upon the location and size of the dwelling. However, amongst the exemptions from the new scheme were particular types of accommodation where the rental market was considered too small to be able to collect sufficient evidence of rents representative of that market. Those markets included houseboats, mobile homes and caravans. Being exempt from assessment by the LHA method, they still fell (and still fall) to be dealt with under the pre-April 2008 provisions, i.e. they are subject to individual assessment of a reasonable rent for the dwelling, in the operating market. For the sake of completeness, I should say that, in October 2013, Housing Benefit is due to be replaced by Universal Credit, under which, even for caravan sites, individual assessments will be replaced by assessment using the LHA method, the assessment being limited to the appropriate LHA rate ascertained by reference to the number of bedrooms needed by the household. However, at the time of all of the rent officers' determinations in this case, the relevant Rent Officers Order required an individual assessment of a reasonable rent for the dwelling, in the operating market, in accordance with the detailed provisions of the Order that are still current. I shall return to how the Rent Officers Order applies to caravans and mobile homes in due course (see paragraphs 35 and following below).
- Second (and far more importantly for the purposes of this claim), following research commissioned by the Department for Work and Pensions into how the HB rules operated for Gypsy and Traveller site rents and options for improving the scheme (the results of which were set out in a report produced by Michael Wagstaff of SPARK Research, "A Single Housing Benefit Control for Gypsy and Traveller Sites" (Department for Work and Pensions Research Report No 379, October 2006) ("the Wagstaff Report")), sites owned or operated by county councils were put on the same footing as housing association sites. Whereas previously, any application for HB in respect of a caravan on such a site was automatically subject to an assessment by a rent officer, the 2008 Regulations provided that such an assessment should be conducted only if the housing authority considered the contractual rent "unreasonably high" (regulation 2(3) of the 2008 Regulations, replacing paragraph 3 of Schedule 2 to the 2006 Regulations). After 6 April 2009 (when the 2008 Regulations came into force), only Gypsy and Traveller private sites have been subject to rent officer assessment in respect of every HB claim.
- The relevant regulations for the purposes of section 130A are the 2006 Regulations as amended by the 2008 Regulations. Reflecting the results of the historical process outlined above, under the heading "Requirement to refer to rent officers", regulation 14 provides:
"(1) Subject to the following provisions of this regulation, a relevant authority shall apply to a rent officer for a determination to be made in pursuance of the Housing Act functions where –
(a) it has received a claim on which rent allowance may be awarded…
(b) …
(2) An application shall not be required under paragraph (1) where a claim… relates to either -
(a) …
(b) an "excluded tenancy" within the meaning of Schedule 2 (excluded tenancies)."
Schedule 2 to the 2006 Regulations (as amended by the 2008 Regulation) defines "excluded tenancies" for these purposes. By paragraph 3(1), excluded tenancies include those where the landlord is:
"(a) a registered housing association;
(b) a county council, with regard to gypsies' and travellers' caravan or mobile home sites and caravans or mobile homes provided on those sites; or
(c) … ".
However, by paragraph 3(2), the exclusion provided by paragraph 3(1):
"…does not apply where the local authority considers that –
(a) …
(b) the rent payable for that dwelling is unreasonably high."
"Gypsies and travellers", as used in the exemption, is a term defined in paragraph 3(4) of that same schedule (see paragraph 11 above). "Unreasonably high" is, of course, a concept left over from the original scheme (see paragraph 27 above).
- Paragraph 3(1)(b) was added by the 2008 Regulations (see paragraph 31 above). Mr Willers submitted that that amendment is instructive: he submitted that, following the Wagstaff Report, private sites should in effect be treated the same as county council sites have been treated following that amendment, i.e. a claim for HB should only be referred to a Rent Officer for rent assessment if the contractual rent is "unreasonably high".
- For the purposes of this claim, and reflecting the three categories of landlord identified above (paragraphs 25-6 above), the relevant effect of these various provisions is therefore as follows:
i) Where the landlord of a Gypsy and Traveller site is the local housing authority, a county council or a housing trust, then HB is claimed as rent rebate, and can be claimed in the full amount of the rent due.
ii) However, where the landlord is a county council or a housing association, and the local authority considers the rent "unreasonably high", then the rent is referred to a rent officer for determination.
iii) Where the landlord is a private landlord, the rent allowance for HB purposes is always referred to a rent officer for determination.
- Where a rent officer has to make a determination, he must do so in accordance with the Rent Officers Order which, by paragraph 7, specifically applies to "payments made in respect of the site on which a caravan or mobile home stands". These provisions are highly technical, and their detail does not bear upon the issues I have to determine. However, briefly, in respect of each case, the rent officer is required to perform the following calculations.
- As "rent" is defined as meaning the periodical payments referred to in regulation 12(1) of the 2006 Regulations (paragraph 2(1)), he must first determine the eligible contractual rent, by excluding ineligible periodic payments (e.g. payments for water, or other such services and facilities provided and charged for by or on behalf of the landlord).
- He must then make three determinations in accordance with part 1 of schedule 1 to the Order, and in compliance with the assumptions set out in part 2 of schedule 1. (In respect of caravans and mobile homes, he is discharged from making a fourth determination, based on size criteria: paragraph 2(4) of schedule 2). Each of these determinations has to be made on the statutory assumption that no one seeking the tenancy would have been entitled to HB, an assumption designed to avoid the rent officer's calculations being artificially skewed by the existence of HB claimants, by preventing the benefit itself directly leading the rental market.
- The three determinations required of the rent officer are as follows:
i) Significantly High Rents (paragraph 1 of schedule 1 to the Order): If the rent officer considers that the contractual rent is significantly higher than the rent which the landlord might reasonably have been expected to obtain, he must determine the rent which the landlord might reasonably have been expected to obtain, having regard to the level of rent under similar tenancies of similar dwellings in the area immediately surrounding the dwelling (or, in the absence of comparative dwellings in the area, the area nearest to the dwelling where there is such a dwelling).
ii) Exceptionally High Rents (paragraph 3 of schedule 1 to the Order): If the rent officer considers that, having regard to the levels of rent of dwellings in the same neighbourhood, the contractual rent is exceptionally high, he must determine the highest rent which is not exceptionally high and which a landlord might reasonably have been expected to obtain at the relevant time from a tenancy of a dwelling in the same neighbourhood in a reasonable state of repair.
iii) Local Reference Rent (paragraph 4 of schedule 1 to the Order): The rent officer in any event has to make a determination of "local reference rent" ("LRR") in accordance with a specified formula and specified criteria.
- The HB rent allowance to which a claimant is entitled is the lowest of the figures derived from these calculations. For the purposes of this claim, as the determination of LRR is likely to result in a figure lower than the eligible contractual rent or the determinations in (i) and (ii) above – and it is uncontroversial that it is the lowest figure for each of the Claimants – the relevant figure for the purposes of comparison with the figure for a local authority site is the LRR. It is that figure upon which I shall concentrate.
- Paragraph 4 of schedule 1 to the Order sets out the prescribed methodology the rent officer must follow in determining the LRR:
"(1) The rent officer shall make a determination of a local reference rent in accordance with the formula –
R = (H+L) / 2
where –
R is the local reference rent;
H is the highest rent, in the rent officer's opinion-
(a) which a landlord might reasonably have been expected to obtain, at the relevant time, for an assured tenancy of a dwelling which meets the criteria in sub-paragraph (2); and
(b) which is not exceptionally high rent; and
L is the lowest rent, in the rent officer's opinion –
(a) which a landlord might reasonably have been expected to obtain, at the relevant time, for an assured tenancy of a dwelling which meets the criteria in sub-paragraph (2); and
(b) which is not exceptionally low rent."
- The relevant criteria for a comparator dwelling are set out in sub-paragraph (2), as follows:
"(2) The criteria are –
(a) that the dwelling under the assured tenancy-
(i) is in the same broad rental market area (local reference rent) as the dwelling;
(ii) is in a reasonable state of repair;
(iii) has the same number of bedrooms and rooms suitable for living in as a dwelling…"
It is common ground that, in assessing the LRR for a Gypsy and Traveller caravan site, a rent officer is required to consider data from the appropriate geographical area for all caravan sites that are open all year, whether they are Gypsy and Traveller sites or not. As I understand it, in practice, any particular site is used by Gypsies and Travellers or non-Gypsies and Travellers, but not usually both.
- The sub-paragraphs which follow provide for assumptions, exclusions and definitions to be applied in making the LRR calculation under paragraph 4, as follows (so far as material):
"(3) Where ascertaining H and L under sub-paragraph (1), the rent officer:
(a) shall assume that no one who would have been entitled to housing benefit had sought or is seeking the tenancy; and
(b) shall exclude the amount of any rent which, in the rent officer's opinion, is fairly attributable to the provision of services which are ineligible to be met by housing benefit…
(4) …
(5) In sub-paragraph (3), "services" means services performed or facilities (including the use of furniture) provided for, or rights made available to, the tenant, but not in the case of a tenancy where a substantial part of the rent under the tenancy is fairly attributable to board and attendance, the provision of meals (including the preparation of meals or provision of unprepared food).
(6) For the purposes of this paragraph and paragraph 5 "broad rental market area (local reference rent)" means the area within which a tenant of the dwelling could reasonably be expected to live having regard to facilities and services for the purposes of health, education, recreation, personal banking and shopping, taking account of the distance of travel, by public and private transport, to and from those facilities and services.
(7) A broad rental market area (local reference rent) must contain –
(a) residential premises of a variety of types, including such premises held on a variety of tenures; and
(b) sufficient privately rented residential premises, to ensure that, in the rent officer's opinion, the local reference rents for tenancies in the area are representative of the rents that a landlord might reasonably be expected to obtain in that area."
Again, those provisions emphasise the focus on the costs of rent of accommodation to the exclusion of the costs of other services or facilities that might be provided by the landlord to the tenant: paragraph 4(3)(b) requires the rent officer to exclude "the amount of any rent which, in the rent officer's opinion, is fairly attributable to the provision of services which are ineligible to be met by housing benefit…". Furthermore, so far as caravans and mobile homes are concerned, in paragraph 7(3) and (4) there are specific provisions relating to inclusion within HB of the costs of landlord's "general counselling" and other support services in the limited scope of supported accommodation, a provision that is specifically required because otherwise the costs of such services could not fall within the benefit. It is also noteworthy that the data collected by a rent officer must exclude rents supported by HB (paragraph 4(3)(a)).
- Once the rent officer has made his determination, that is notified to the authority, which makes an award of HB accordingly. There is no appeal against the assessed valuation of rent (paragraph 6(2)(c) of schedule 7 to the Child Support, Pensions and Social Security Act 2000). However, the claimant may seek a redetermination by a rent officer, in which case the valuation is redetermined on the same principles and in accordance with the same provisions. Two such redeterminations may be sought (i.e. on any application, a claimant may seek three determinations in all).
- Where a claimant is entitled to HB, and he faces a shortfall between his contractual rent and assessed HB, then discretionary financial assistance is available from the local housing authority in the form of Discretionary Housing Payments.
The Claimants' Applications for Housing Benefit
- Both of the Claimants are Romani Gypsies, and have spent all of their lives living in caravans in the Lancaster area, as part of the Romani community.
- The First Claimant Amadine Knowles is 37 years of age, and is a lone parent. She lives with her four children aged between 7 and 14, in two caravans. All of her children attend school: the elder two are at a senior school in Lancaster, and the younger two at a local junior school. Excluding HB, Ms Knowles is in receipt of £321 per week benefits: £107 Income Support every fortnight, £207 Child Tax Credit every week and £242 Child Benefit every four weeks. She has no other income.
- The Second Claimant John Knowles is the father-in-law of Ms Knowles. He is 66 years old, and lives with his wife of 40 years. Their only income (apart from HB) is State Pension Credit of £209.70 per week. After paying the rent in the HB shortfall, gas, electricity and the TV licence, he and his wife have £105 per week for food, clothing and household items.
- For about 13 years, both Claimants lived on a site owned and operated by the Council at Mellishaw Lane, Morecambe. Each had a double pitch, i.e. a pitch sufficient in size for two caravans. The relevant housing local authority for HB purposes was also the Council. The site rent for each of them was £60 per week; and, as the housing authority was also the landlord, for the reasons set out above (paragraph 25), that was automatically reimbursed in its entirety by way of HB rent rebate.
- In 2009, they decided to move, because of concerns about anti-social behaviour on the site. Ms Knowles was particularly concerned for the safety and welfare of her children. She said (paragraph 6 and 7 of her 4 January 2012 Statement):
"I was forced to leave the [site at Mellishaw Lane] due to lawlessness prevalent on the site. It became impossible for me to live there with my 4 young children. I had moved onto the site in 1996 so I was there for some 13 years. The events that caused me to leave were the complete lack of on-site security, new residents moving on without permission causing no end of trouble, open drug dealing, partying and playing of loud music until 4am. There was constant fighting and young children running around without any control over them.
Further, there were cars being driven around the estate at high speed and without any concerns for the young children living and playing in and around the caravans. The new anti-social residents also would demand money and were constantly pestering myself and my in-laws for money. There was thieving from us both as well. Fly tipping became a constant menace as well without the authorities taking action to prevent it or clean it up. In short, it became impossible for me to continue to live there with my 4 young children."
She says that she regularly complained to the Council, but to no effect (paragraph 9 of her statement).
- The Claimants spent about three months in the summer of 2009 trying to find an alternative site, and went to see a number of private sites, but they were all seasonal, being closed for several weeks in the winter. They eventually found a site with two double pitches, big enough for both their families, at the rear of 282 Oxcliffe Road, Heaton-with-Oxcliffe, Morecambe. Ms Knowles explained (paragraph 11 of her Statement):
"This was the only one we could find where there was availability all year round and where there were all the facilities needed, e.g. personal washing room with toilet, shower, washing machine and dryer. There is also a shower block on the site. There is an electric barrier to keep off unwanted visitors. The owners live in the house at the front so they are constantly looking after the site. It was the only site that was well secured and was quiet and peaceful. We could not find any sites that were open all year round where there were vacancies. The seasonal sites have mostly static caravans which have been purchased or rented from site owners. At Mellishaw and on this site we have our own washing facilities which we have not been able to find on any other site."
- They each moved to the new site in August 2009. The rent was £85 per week each, including £5 for water.
- They each applied to the Council (which was still the relevant authority) for HB which, as the site was privately owned, was determined on the basis of a rent assessment by a rent officer in accordance with the procedure I have set out above. On 29 November 2010, the rent allowance was determined to be £50 per week. They twice sought redeterminations, which in the event resulted in a reduction of the allowance to £42.91 on 13 May 2011, and then to £36.13 on 6 October 2011 effective from October 2012.
- On each determination, the decision in respect of each Claimant was, in substance, identical. In the October 2011 decisions, the rent officer found that the water charge of £5 per week was ineligible as rent. The Claimants do not dispute that. However, he went on to determine that the contractual rent was significantly high, i.e. that it was significantly higher than the rent which the landlord might reasonably have been expected to obtain. A reasonable rent, he determined, would be £60. In respect of the LRR he said:
"The [LRR] is the general level of rent of a charge for siting a home with the same number of rooms as yours. The general level is the mid-point of a range of reasonable charges for siting this size of home in the BRMA (LRR) [i.e. the broad rental market area (local reference rent)]. The range is from £26.06 to £46.20 every week in an area covering your BRMA (LRR) and I have decided that your [LRR] is £36.13 every week."
- That median rent was calculated on the basis of the rents of 18 all-year residential caravan sites for the broad rental market area (namely, Lancaster), one of which was disregarded by the rent officer as unreasonably low. Because the data were relatively few, the officer also considered data available from an adjacent broad rental market area, namely Fylde. That area (he considered) had coastline, resort towns and areas of prosperity etc similar to Lancaster. There he found 35 rents in the relevant market. Disregarding the rents he considered were exceptionally high and exceptionally low, the spread of figures was broadly similar, giving a median figure very close to that he had calculated for Lancaster. As a result, he considered the data available for Lancaster were sufficient to establish the LRR, at £36.13.
- On the basis of that valuation, the local authority revised the HB rent allowance to that sum, effective from October 2012.
- Those determinations have left a considerable shortfall between the contractual rent that they are paying (excluding water, £80 per week) and the rent allowance paid by way of HB (initially £50, now £36.13). For four months (December 2010 to April 2011), the Council paid the Claimants a Discretionary Housing Payment in respect of the shortfall; but, since April 2011, further applications for such payments have been refused, and the shortfall has had to be found out of their other income, which comprises only other benefits.
- As a result, the Claimants say that, in practice, they each find it difficult to fund the shortfall. Ms Knowles says (paragraph 15 of her 4 January 2012 Statement) that she pays £60 per week for heating, £130 per week on food and household items, £30 per week for school travel costs and £6 per week to a catalogue in respect of her washing machine. The rest of her income (about £100 per week) goes on clothes, shoes and other things for her children; and items such as bedding and furnishings. She says that, as a result of having to pay the shortfall out of her other benefits, she has had to cut back on food for her children; and Mr Knowles says that, to pay the rent and other necessary expenses, is a struggle (paragraphs 7 and 8 of his 4 January 2012 Statement). Although neither has fallen behind with rent yet, they each say that it is inevitable that they will eventually do so. That can only result in their eviction from this site, and ending up on the roadside; with the inevitably disruptive effect that that will have, particularly on Ms Knowles' children, who would be unable to retain the stability of their schools.
The Claim
- In this claim, the Claimants each challenge the HB decision of 6 October 2011.
- The original claim was brought against the Valuation Office Agency and the Council, as well as the Secretary of State, on the grounds that the broad rental market area (local reference rent) chosen by the rent officer was unrepresentative and a wider area should have been chosen, and the "rent restriction" provisions of the HB scheme as they applied to Gypsies and Travellers on private sites (and to the Claimants) were irrational and ultra vires as well as discriminatory in terms of article 14 of the Convention.
- However, as I have already indicated, none of those grounds is now pursued, except the claim against the Secretary of State based on article 14. The Claimants do not contend that the HB scheme as a whole in unlawful, or that that scheme (or any part of it, such as the provisions applying to Gypsies and Travellers on private sites) is in breach of the domestic discrimination laws (e.g. under the Equality Act 2010) or is ultra vires, irrational or otherwise unlawful, save for the human rights claim. That claim is narrow. No claim is made that any provisions of the scheme are in breach of article 1 of the First Protocol of the Convention or article 8. The only remaining claim is that the scheme as it applies to Gypsies and Travellers on private sites (including, of course, the Claimants themselves) is discriminatory in terms of article 14, when read with article 1 of the First Protocol or article 8.
- With regard to that claim, I need not rehearse its procedural course, except to say that:
i) Permission to proceed having been refused by this court at an oral hearing, it was granted by the Court of Appeal on 15 June 2012, with Maurice Kay LJ there observing:
"Notwithstanding the cogent judgment refusing permission in the Administrative Court, I consider that the application now merits substantive consideration in the light of [Burnip v Birmingham City Council [2012] EWCA Civ 629], which is not on all fours but which provides some support for some of the [Applicant's] arguments."
ii) On 6 August 2012, King J refused an application by the Secretary of State to stay this claim pending an application for permission to appeal the decision in Burnip to the Supreme Court.
iii) The Claimants now pursue a case based upon a comparison of their situation with the situation of Gypsies and Travellers on local housing authority sites or county council/housing association sites (see paragraph 68(vi)(b) below). This alternative was not pursued before the substantive hearing, but was fully argued at that hearing, Mr Strachan being in a position to do so. I formally give permission to amend to include this sub-ground, and permission to proceed on it.
Article 14: Introduction
- Article 14 provides:
"The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status".
- In most cases brought under article 14, it is alleged that like cases have not been treated alike; but, logically and in practice, article 14 can also be invoked "when states without an objective and reasonable justification fail to treat differently persons whose situations are significantly different" (Thlimmenos v Greece (2000) 31 EHRR 411 at paragraph 44). Where there is such a failure, the state may have a positive obligation to allocate a greater share of public resources to a particular person or group to ameliorate that difference (Burnip at [17]-[18]).
- Similarly, most article 14 cases concern direct discrimination, i.e. the domestic provisions on their face afford adversely different treatment to a group to which the complainant belongs. However, indirect discrimination has now been recognised by the European Court of Human Rights. In DH v Czech Republic (2008) 47 EHRR 3 (a case concerning the disproportionate placement of Romani children into special schools, designed to assist the socially and educationally disadvantaged, but in practice the poor relation of main stream schools), the Grand Chamber said (at paragraph 184):
"… [T]he court has already accepted in previous cases that a difference in treatment may take the form of disproportionately prejudicial effects of a general policy or measure which, though couched in neutral terms, discriminates against a group…. [S]uch a situation may amount to 'indirect discrimination' which does not necessarily require a discriminatory intent."
Whilst it has been doubted whether the discrimination in DH was in fact indirect rather than direct (see AM (Somalia) v Secretary of State for the Home Department [2009] EWCA 634 at [40] per Maurice Kay LJ), the principle is now well-recognised: article 14 covers indirect discrimination in the form of a rule, policy or practice which, whilst in neutral form, in practice adversely affects a particular group (see AM at [41]).
- Therefore, discrimination under article 14 occurs when, in terms of enjoyment of other Convention rights, there is, directly or indirectly, adversely differential treatment of individuals in analogous or "relevantly similar" situations (or, in a Thlimmenos-type case, similar treatment of individuals whose situations are relevantly and significantly different); and there is no objective and reasonable justification for the distinction in treatment (or, in a Thlimmenos-type case, for the application of similar treatment).
The Claimants' Case
- The issue in the claim is set out in the preamble to the Claimants' Skeleton Argument, as follows:
"[W]hether the [HB] scheme as it relates to Gypsies and Travellers who rent pitches on privately owned caravan sites is discriminatory and contrary to article 14 of the European Convention on Human Rights taken together with article 8 and/or article 1 of the First Protocol because it fails to make any or any proper allowance for the fact that the costs of providing caravan sites for Gypsies and Travellers is higher than the costs of providing similar sites for those who are not members of the Gypsy and Traveller community."
- In that same Skeleton Argument, the Claimants' case on that issue is put shortly thus:
"5. It is the Claimants' essential case that the [HB] scheme as applied to them as members of the Gypsy and Traveller Community renting a pitch on a caravan site that is privately owned fails to make sufficient provision to meet their essential housing needs, because it does not take account of the additional costs required to cover the infrastructure and management necessary to meet their accommodation needs.
6. The Claimants' complaint is that this places them, in the medium to long term, in a position whereby, in effect, they will be unable to remain at the site and be unable to carry on the traditional way of life they wish to pursue. Moreover, the requirement that their [HB] claims must be referred to a rent officer when the site is privately owned, has a disproportionate effect of them as members of the Romani Community, who are less able to move to another site as official sites are scarce and who have a cultural aversion to bricks and mortar."
- The Claimants' case is therefore based upon the following propositions.
i) Discrimination under article 14 occurs when, in terms of enjoyment of other Convention rights within the scope of which the circumstances of the case fall, there is discriminatory treatment of individuals in analogous or "relevantly similar" situations, and there is no objective and reasonable justification for the distinction in treatment; or where individuals in relevantly different situations are, without justification, treated the same. That proposition is uncontroversial (see paragraph 65 above).
ii) HB is "property" for the purposes of article 1 of the First Protocol to the Convention, which guarantees peaceful enjoyment of property. The circumstances of this case therefore fall within the scope of that article. Further, given the potential consequences of the HB scheme for Gypsies and Travellers on private sites (including eviction, and a roadside life without the stability of regular schools and health services etc for, amongst others, children) the circumstances of this claim are also within the scope of article 8 of the substantive Convention, which grants a right to respect for private and family life.
iii) The costs of a Gypsy and Traveller site are higher than other sites. The rent for such a site can and should take account of those additional costs, and consequently such rent will be legitimately higher than for an otherwise identical non-Gypsy and Traveller site.
iv) The determinative calculation for HB purposes for most Gypsy and Traveller sites will be that for the LRR. Although other rents might amount to supporting evidence, LRR is calculated as a median figure of transactional rents obtained for all sites, whether Gypsy and Traveller or not; and excluding rents that are rebated by HB (see paragraph (iv) above). As most Gypsies and Travellers will be HB claimants, the median figure used for the LRR for a Gypsy and Traveller site is overwhelmingly calculated on the basis of the rents for sites which are not Gypsy and Traveller sites, and which therefore do not have the additional site management costs to which those sites give rise. That is reflected in the Rent Officer Handbook, which says:
"But again, the LRR determination will include evidence of all site rents, not just Gypsy sites. The 'H' and 'L' must be linked to actual transactions of site rents in the non-HB market, whatever the circumstances."
v) For those Gypsies and Travellers on private sites (including the Claimants), the true accommodation costs of their site are therefore not reflected in the LRR: there is a statistical bias in the calculation the rent officer is bound to make, which lowers the LRR for their sites. The result is that, under the provisions of the scheme, they do not obtain the level of HB they should (and, but for that bias, would) obtain. In short, the calculation of HB rent allowance under the scheme fails properly to take into account the true accommodation costs of Gypsies and Travellers on private sites; and the result is that the HB received by such claimants is less than it would otherwise be.
vi) In respect of article 14, the situation of Gypsies and Travellers on private sites (whose HB is assessed without account being taken of the additional costs of their sites) is adversely differential and prima facie discriminatory, when that situation is compared with the following analogous situations:
a) The situation of non-Gypsies and Travellers on private sites (who do not have such additional costs, and therefore, even on the basis of a calculation which does not takes such costs into account, obtain full or higher HB reimbursement of their rent). These situations are relevantly similar, but treated differently and discriminatorily; because, unlike non-Gypsies and Travellers on private sites, the rental costs of Gypsies and Travellers on such sites are not met in full or are met at a lower level of reimbursement. Alternatively, on the basis of Thlimmenos, the scheme treats Gypsies and Travellers on private sites and non-Gypsies and Travellers on private sites the same, in circumstances in which they are in significantly different situations; the former having additional management costs, and the latter not. I deal with these alternative bases of claim below (at paragraphs 72-3). Any discrimination on this basis is on the ground of ethnicity.
b) The situation of Gypsies and Travellers on local housing authority sites (who recover full HB reimbursement of their rent, including the rent attributable to the additional costs), and the situation of Gypsies and Travellers on county council/housing association sites (who recover full HB reimbursement of their rent, including the rent attributable to the additional costs, except where that rent is "unreasonably high"). This discrimination is on the ground of "property status" or "other status", i.e. on the ground that the HB claimant is treated differently on the basis that he is the tenant of a private individual rather than a tenant of a local authority.
vii) However these situations are viewed and whichever comparator(s) chosen, Mr Willers did not suggest that the discrimination was direct: any discrimination is indirect, the rules on their face being neutral and applying generally across the board but (Mr Willers submitted) having disproportionately prejudicial effects on Gypsies and Travellers on private sites.
viii) In any event, that difference in treatment (or, in respect of the alternative case based on Thlimmenos, similarity in treatment in circumstances in which there is a relevant difference in situation) is not objectively justifiable: although some control over the extent to which commercial rents are reimbursed by the public purse is justifiable, and indeed necessary, the current HB scheme whereby the rent of every private caravan site is subject to assessment by a rent officer in accordance with the Rent Officers Order, is unjustifiable and disproportionate. In 2008, the Departmental Policy Team's advice to the Minister was that, in relation to all sites that were not owned/operated by the housing authority, HB should be reimbursed in full except where the authority considered the rent "unreasonably high" (in which event, Mr Willers accepted there could and should properly and lawfully be an assessment by a rent officer). That recommendation was already in place for housing association sites, and was implemented in respect of caravans on county council sites. Private sites could (and should) be brought in line with housing association county council sites. That would be justifiable, and would be an appropriate and proportionate step to ensure a proper balance was maintained between the rights and interests of Gypsies and Travellers on private sites and the public interest.
- I can deal shortly with two potential issues arising from those submissions.
- First, the second comparison relied upon is based upon the premise that a difference in treatment on the basis of the nature of the complainant's landlord is by virtue of "property status" or "other status" in terms of article 14.
- Mr Strachan did not strenuously argue to the contrary. Given the broad European approach to personal characteristics that may amount to status for the purposes of article 14 (see Humphreys v Revenue and Customs Commissioners [2012] UKSC 18 at [20] per Baroness Hale, the specific cases which suggest that the type of tenancy may lead to a sufficient "property status" (e.g. Larkos v Cyprus (1999) 30 EHRR 597 and Chassagnou v France (1999) EHRR 615), the urging of the authorities that in any event "a generous meaning should be given to the words 'other status'" (see R (Clift) v Secretary of State for the Home Department [2006] UKHL 52 at [48] per Lord Hope, and R (RJM) v Secretary of State for Work and Pensions [2008] UKHL 63 at [42] and following per Lord Neuberger), for the purposes of this case I accept that the Claimants' status as the tenants of a private landlord is sufficient to found a claim for discrimination under article 14.
- Second, Mr Willers put his first ground in relation to comparators, in which the situation of Gypsies and Travellers on private sites is compared with the situation of non-Gypsies and Travellers on such sites, on alternative bases: on the conventional basis that the situations are relevantly similar, but treated differently and discriminatorily; or, alternatively, on the basis of Thlimmenos, that the scheme treats Gypsies and Travellers on private sites and non-Gypsies and Travellers on private sites the same, in circumstances in which they are in significantly different situations.
- Whilst the way in which this first ground is put may not be crucial in this claim, it seems to me that, on the assumption that, because of their mode of living, Gypsies and Travellers have increased accommodation costs, then this claim is properly put on the basis of Thlimmenos: the situations are relevantly and significantly different (because, on the basis of that assumption, Gypsies and Travellers have greater accommodation needs and hence costs), which (subject of course to justification) imposes a positive obligation on the State to make provision to cater for that difference. Although very different on its facts, conceptually, this case appears to me indistinguishable from Burnip, in which the analysis was made in Thlimmenos terms (see [14]-[18]). Following Burnip, there is of course no conceptual or jurisdictional difficulty in finding a prima facie positive obligation on the state to allocate resources to remedy such a difference; and then proceeding to consider the reasons for the difference and whether they amount to an objective and reasonable justification (Burnip at [18], following the emphasis on justification in AL (Serbia) v Secretary of State for the Home Department [2008] 1 WLR 1434 at [42] per Baroness Hale).
Article 14: The Defendant's Case
- Mr Strachan for the Secretary of State submitted:
i) there is no substantial relevant difference in treatment (or, on the basis of Thlimmenos, substantial relevant difference in situations) as alleged, and hence no prima facie discrimination under article 14 that requires justification; and
ii) in any event, any such difference (or, on the basis of Thlimmenos, similarity) is reasonably and objectively justified.
Article 14: Difference in Treatment: The Additional Costs of Gypsy and Traveller Sites
- The foundation of the claim is that the landlord of a Gypsy and Traveller site has costs that a landlord of a non-Gypsy and Traveller site does not, and that that additional expenditure is properly attributable to accommodation or housing rather than other services or facilities that a landlord may provide; so that those costs may properly be included as part of the "eligible rent" for HB purposes (see paragraph 20 above).
- In support of those propositions, Mr Willers relied upon "Rent Officer Handbook: Caravan Site Fees", a publication by the Valuation Office Agency to assist rent officers. It states:
"Gypsy and traveller sites often include many extra facilities and services, which are expensive to provide. These may include additional site management, maintenance, clearance costs, fencing and security. Additional services will frequently include education facilities for children, resolving disputes on site and with neighbours, and personal support (help with claiming HB for example)."
- The additional costs of Gypsy and Traveller sites were considered in some detail in the Wagstaff Report (see paragraph 31 above). It was a key finding of the report that managing a Gypsy and Traveller site "… is considered to be a management intensive task due to the high incidence of disputes, vandalism and illiteracy on sites" (page 2). The report concluded (at page 35):
"There are two main sources of expenditure on Gypsy and Traveller sites. These are repairs and maintenance and dealing with tenants on a day-to-day basis. It is this latter element of expenditure that is considered by most landlords to be a factor that differentiates the managing of Gypsy and Traveller sites from other caravan and mobile sites. An analysis of expenditure suggests that about one-third of all costs is attributed to this factor".
- Section 4.2 of the report suggests that that level of expenditure on "dealing with tenants on a day-to-day basis" is fairly consistent between different landlord types (such as housing authority, county council and private). Section 4.1, under the heading "Site management", explains how that high proportion of costs might in practice arise:
"Landlords have adopted a number of different models of site management….
The way in which a landlord runs its site is also different. The case studies showed that some landlords have an on-site manager, usually a member of a Gypsy family from the site. Others do not have a manager on site but have [Gypsy Liaison Officers ("GLOs")] who look after all the sites within the local area. These typically will spend one day a week at a particular site, often being out on different sites four days out of five.
In case studies the predominant style of management was to use GLOs to visit sites at various times of the week. A typical GLO visit will involve
- dealing with problems that have arisen particularly neighbour disputes;
- bringing in and dealing with site contractors;
- helping to fill in forms and read letters;
- arranging for clearance of rubbish and removal of abandoned vehicles;
- dealing with visits to the doctor and hospital;
- liaising with Social Services, Sure Start and other agencies that visit the site;
- liaising with schools over non-attendance;
- administering water tokens."
- The report assessed the costs of this day-to-day management of the site at £12-15 per week for a single pitch, and £13-17 for a double pitch; and consequently suggested that, in recognition of the extra management costs of Gypsy and Traveller sites, one option for reform – an option which the Government in the event decided not to pursue – would be to redefine "eligible rent" in the case of Gypsy and Traveller pitches to include an enhancement of £15 per week per pitch, but link that enhancement to quality standards in relation to on-site visits, site management and health and safety standards.
- However, the important point to note here is that the report correctly accepts that the vast majority of these costs, if not all of them, do not fall within the current definition of "eligible rent" because they do not relate to the costs of accommodation at all, but the costs of other services and facilities. These are therefore not costs which can be taken into account in the rent assessment, because they fall outside the HB scheme altogether. The HB scheme is not intended to, and does not, cater for such non-housing costs of this type. That is why the recommendation required the redefinition of "eligible rent".
- The other costs identified in the Wagstaff Report as being higher for Gypsy and Traveller sites than other sites, are those for repairs and maintenance. However, as the report itself points out (at page 11), additional costs for such items as (i) maintenance of fences, (ii) refuse disposal, (iii) scrap metal removal, (iv) environmental health issues, (v) health and safety and (vi) general security are again ineligible for housing benefit purposes, being services outside accommodation/housing. Further, the report indicates that the substantial if not overwhelming proportion of the costs that might possibly be otherwise eligible derive from the anti-social behaviour of the caravan tenants themselves. In its key findings, over and above the day-to-day dealing with tenants to which I have referred, the report refers to the incidence of vandalism being a main factor in raising the management costs of Gypsy and Traveller sites (see paragraph 77 above), which is supported to an extent by the evidence of the Claimants themselves who left the Mellishaw Lane site because of the anti-social behaviour of the tenants of other caravans on that site (see paragraph 49 above). As Mr Strachan said, there are other means of dealing with such behaviour rather than public paying for such consequences through HB, e.g. injunction or eviction of the offenders. There is no reason why such additional costs should routinely be paid through the HB scheme.
- As I have indicated, the adverse difference in treatment (or, on the basis of Thlimmenos, difference in situations) upon which the Claimants rely is founded upon the premise that Gypsy and Traveller sites have management and infrastructure costs which are properly housing or accommodation costs within the terms of the HB scheme. However, for the reasons I have given, I consider the submission of Mr Strachan that the additional costs of a Gypsy and Traveller caravan site fall outside the scope of the HB scheme has considerable force. It is no response to suggest, as Mr Willers did, that, in assessing the rent for their Gypsy and Traveller caravan pitches, local housing authorities may in fact to an extent take into account these non-housing costs (which results in the automatic reimbursement of such costs by way of HB); because the inclusion of such costs by a housing authority, knowing that they would be reimbursed in full by HB (and, ultimately, by central government), would be unlawful; and any such "generosity" by a housing authority could not make lawful the inclusion of such costs in respect of non-housing authority sites.
- On the evidence before me, there are very few heads of costs arguably attributable to accommodation/housing in HB terms, and very little cost which might arguably fall within the eligibility criteria for HB: although the additional costs of greater wear and tear on roads, as a result of the use of larger vehicles by Gypsies and Travellers, may possibly be one. However, although I heed the call to avoid any requirement for statistical evidence in support of an article 14 claim and the legalism that has affected domestic discrimination law (see Burnip at [13]), in my view such costs, generally in relation to Gypsy and Traveller sites or in this particular case, are not only unparticularised and unquantified, but in any event appear (i) very modest in absolute terms, (ii) very modest relative to the contractual rent and (iii) very modest relative to the discrete additional costs.
- On the evidence, I am entirely unconvinced that the additional costs upon which this claim is based are significant. That finding in itself is sufficient to dispose of this claim, by dismissing it. However, in the event that that firm conclusion is wrong, in favour of the Claimants I shall proceed on the assumption that the additional costs that are attributable to accommodation (and hence fall within the scope of eligible rent), if small, are significant.
- On that assumption, for the purposes of this claim I am prepared to accept that the circumstances call for the state to show that there is objective justification for requiring Gypsies and Travellers on private sites to bear the additional costs of accommodation which their sites incur, rather than the state bearing such costs through HB – in circumstances in which neither non-Gypsies and Travellers on private sites, nor Gypsies and Travellers on publicly owned sites (save where the landlord is a county council or a housing association, and the contractual rent is considered "unreasonably high") are required to bear such costs. The burden of showing justification is of course on the Secretary of State.
Justification: Margin of Appreciation
- Before me, there was some debate about the margin of appreciation allowed to the state in the circumstances of this case.
- Where the legislature or executive is engaged in making decisions and choices in the general field of economic or social policy, such as in this case, they are required to impose rules which are administratively workable. Such rules necessarily require lines to be drawn somewhere (Huang v Secretary of State for the Home Department [2007] UKHL 11 at [6] per Lord Bingham).
- In respect of where those lines are drawn, it is well-established that the state has a considerable discretion or wide margin of appreciation: because it is in the best position to judge what is in the public interest on social and economic grounds (see, e.g., Stec v United Kingdom (2006) 43 EHRR 1017 at paragraph 52, applied by the Grand Chamber to social security benefits in Carson v United Kingdom (2010) 51 EHRR 369 at paragraph 61; and to the domestic courts in R (Carson) v Secretary of State for Work and Pension [2005] UKHL 37 (see [16] per Lord Hoffman) and in the recent case of R (S) v Secretary of State for Justice [2012] EWHC 1810 (Admin)). In the field of benefits, in our own jurisdiction, it has thus been said (in R (RJM) v Secretary of State for Work and Pensions [2008] UKHL 63 at [56]-[57] per Lord Neuberger:
"This is an area where the court should be very slow to substitute its view for that of the executive….
The fact that there are grounds for criticising, or disagreeing with, these views does not mean that they must be rejected. Equally, the fact that the line may have been drawn imperfectly does not mean that the policy cannot be justified. Of course, there will come a point where the justification for a policy is so weak, or the line has been drawn in such an arbitrary position, that, even with the broad margin of appreciation accorded to the state the court will conclude that the policy is unjustifiable. However, this is not such a case, in my judgment."
- However, Mr Willers submitted that, in this case, the principle that the state has a wide margin of appreciation in policy decisions concerning welfare benefits does not apply, or does not apply with full force. He conceded that, on the authorities, it would fully apply to a claim based on article 14 read solely with article 1 of the First Protocol, within the scope of which it is common ground this claim falls. However, he submitted that, given the potential consequences of the HB scheme for Gypsies and Travellers on private sites (including eviction, and a roadside life without the stability of regular schools and health services etc for, amongst others, children), the circumstances of this claim are also within the scope of article 8 of the substantive Convention, which grants a right to respect for private and family life. Whether cases such as this are covered by article 14 read with article 8 was (he submitted) left open by the Court of Appeal in Burnip. However, he contended that it is important in this claim, because the subject matter of a case dictates the extent to which the court will interfere in policy matters such as the incidence of benefits (Burnip at [64], per Henderson J). As a result, as I understand the submission, Mr Willers contends that the court's approach to the margin of appreciation for the state is or may be different if the substantive Convention right tagged by an article 14 claim is article 8 rather than article 1 of the First Protocol, the right to family life being more compelling than the right to enjoyment of property.
- I am however unpersuaded by that submission, in the terms it was put. Whilst I accept that the precise margin of appreciation will be dependent upon all the circumstances of a case (including the circumstances in which particular human rights might be engaged), I do not accept that the approach to the question of margin of appreciation varies for article 14 claims. The approach remains the same.
- In Stec, the European Court of Human Rights was concerned with Reduced Earnings Allowance, a benefit accruing to people who were forced to stop work because of an industrial injury. On reaching state pensionable age, that benefit froze or was reduced. That occurred at age 65 for men, but at age 60 for women. It was claimed that that difference in treatment breached article 14. In a well-quoted passage, the Grand Chamber said this of the margin of appreciation in such cases:
"The scope of this margin will vary according to the circumstances, the subject matter and the background. As a general rule, very weighty reasons would have to be put forward before the court could regard a difference in treatment based exclusively on the ground of sex as compatible with the Convention. On the other hand, a wide margin is usually allowed to the state under the Convention when it comes to general measures of economic or social strategy. Because of their direct knowledge of their society and its needs, the national authorities are in principle better placed than the international judge to appreciate what is in the public interest on social or economic grounds, and the court will generally respect the legislature's policy choice unless it is 'manifestly without foundation'".
- Stec was recently considered by the Supreme Court in Humphreys, which concerned regulation 3(1) of the Child Tax Credit Regulations 2002 under which entitlement to child tax credit lay exclusively with the person who had the main responsibility for the children. There was no power to split the benefit between the main and a substantial minority carer. It was contended by the minority carer father that the regulation was indirectly discriminatory, particularly as, where both parents are at subsistence level, the minority carer may be unable to provide for the child if and when in his care; and the minority carer is more likely to be father. The case was put on the basis of article 14 read with article 1 of the First Protocol, and the father did not argue for any other test than that established in Stec. The Court held that Stec established that even "the normally strict test for justification of sex discrimination in the enjoyment of the Convention rights gives way to the 'manifestly without reasonable foundation' test in the context of state benefits" (at [19] per Baroness Hale, giving the judgment of the court): in other words, where the legislature or executive make a decision in the field of economic and/or social strategy, which might discriminate on the grounds of a personal characteristic – even if the characteristic is core or so-called "suspect", and even if the discrimination is direct – the decision-maker will have a wide margin of appreciation such that the decision will be unlawful if and only if it is "manifestly without reasonable foundation".
- Two points arise from that important recent judgment. First, given that the failure to split the benefit may have resulted in the minority carer being unable in practice to care for a child, the circumstances of that case – if anything, more than this – clearly fell within the scope of article 8. If an article 14 claim tagged to article 8 required any difference in approach from such a claim tagged to article 1 of the First Protocol, it would be startling that no reference to that possibility was made in Humphreys particularly by Baroness Hale who is always properly sensitive to the effects of article 8. In my view, the reason why a discrete claim based upon article 14 read with article 8 was pursued to a conclusion in neither Humphreys nor Burnip is precisely because the relevant approach to the margin of appreciation would have been the same as with a claim based on article 14 read with article 1 of the First Protocol. That is why, in Burnip, Maurice Kay LJ said (at [8]) that, by finding that HB falls within the ambit of article 1 of the First Protocol, it was not necessary to consider the claimants' alternative claim based on article 14 read with article 8.
- Second, it is clear that none of these tests is formulaic or absolute. I (like Mr Strachan: see paragraph 61(b) of his Skeleton Argument,) accept that the scope of the margin of appreciation given to the state will depend upon all the circumstances of a particular case, including the nature of the personal characteristics of the complainant that are engaged and hence the nature of the discrimination he or she suffers, and the nature of the Convention rights engaged (Connors v United Kingdom (2005) 40 EHRR 9 at paragraph 82).
- However, I am satisfied that a relatively wide margin of appreciation is applicable in this case, whether article 14 is read with article 1 of the First Protocol and/or article 8. The provisions of the rental assessment within the HB scheme under review involve decisions and choices which are quintessentially in the field of economic and social policy in which it is well-established that the state generally has a particularly wide margin of appreciation. Insofar as (i) particular suspect categories of discrimination (notably, ethnicity) or particularly compelling human rights (notably, the right to respect for family life) are relied upon in this claim, and (ii) authorities suggest that the test for the margin of appreciation may be different if such categories of discrimination or human rights are involved then that suggestion (i) does not appear to survive Humphreys (see paragraph 92 above), and (ii) is in any event made only in relation to direct discrimination not indirect discrimination (see the illuminating discussion of the authorities and principles by Sales J in the recent case of S at [92]). The only discrimination alleged here is indirect. There is nothing in this case to suggest that the margin of appreciation should be other than relatively wide.
Justification: Merits
- In considering the merits of the Secretary of State's submission that the difference in treatment is objectively justified, I bear in mind the following:
i) It is the discriminatory effect of the measure which must be justified (AL (Serbia) at [38] per Baroness Hale).
ii) The overriding question is whether a fair balance has been struck between the rights of the claimant and the interests of society (Huang at [19] per Lord Bingham)
iii) Even where the state has a wide margin of appreciation, its reasons for the differential treatment nevertheless require careful scrutiny, to assess whether it "lacks a reasonable basis" (Humphreys at [22] per Baroness Hale), or is "arbitrary" (RJM at [57] per Lord Neuberger).
iv) The sorts of factors that bear upon this question, as helpfully illustrated in the judgment of Elias LJ in AM at [65] and following.
- Applying an appropriate wide margin of appreciation to the complaints the Claimants raise about the adverse differential treatment to which they have been subjected on the basis of the assumptions I have adopted, I am quite satisfied that that treatment is objectively satisfied. In coming to that conclusion, I have particularly taken into account the following. These of course have considerable overlap and interplay.
i) The legislature and executive in this field of economic and social policy have a particular width of the margin of appreciation, with which the courts are particularly cautious to interfere (see paragraphs 86-95 above).
ii) The courts have frequently recognised that this is a field in which "bright line" rules are generally acceptable (see, e.g., AM at [25] per Maurice Kay LJ, and at [66] per Henderson J); and indeed, for the reasons given above, they are sometimes necessary (see paragraph 87 above). Indeed, the Claimants propose a "bright line" test themselves, namely that rent assessment of Gypsies and Travellers on private sites is performed but only when the rent is considered "unreasonably high".
iii) In considering whether a difference in treatment can be justified, "Equality is not merely abstract justice" (A v Secretary of State for the Home Department [2005] UKHL 71 at [46] per Lord Bingham, quoting Jackson J in Railway Express Agency Inc v New York 336 US 106 (1949)), 112: the court must have regard to the effects in the individual case before it (Wessels-Bergervoet v Netherlands (1992) App No 34462/97). The claim before me is very different from Burnip on its facts. Burnip concerned the "objectively verifiable need [for] a flat with two bedrooms [rather than one]" for a person with a severe disability such that he needed overnight care (see [46] per Henderson J). The failure to allow for a second bedroom for the carer of such a person meant that HB could not fulfil its intended function in relation to anyone with such a severe disability, leaving them in a worse position than those without. In this claim, I have assumed that Gypsy and Traveller sites generally have some additional costs of management that might be classified as accommodation costs; but the additional costs that a Gypsy or Traveller may incur that might properly form part of "eligible rent", and hence potentially be covered by HB, are small, uncertain and highly variable. There is no evidence that the Claimant's site has any such additional costs or, if it does, what those costs might be. That, of course, is not fatal to the claim; but it is relevant that such costs ... and the effects that they have might on Gypsy and Traveller rents generally, and on the rent paid by the Claimants in particular) are uncertain but certainly small. I have taken that factor into account bearing carefully in mind that even modest sums may be significant to someone on basic benefits.
iv) Although this discrimination claim was originally based upon a comparison of the situation of Gypsies and Travellers on private sites and non-Gypsies and Travellers on such sites (i.e. on the grounds of ethnicity, a core or "suspect" ground of discrimination), the relief sought by the Claimants in this claim (i.e. that they be treated the same as Gypsy and Traveller tenants on a county council site) emphasises that the focus of the claim is in fact upon the treatment of the Claimants compared with Gypsy and Travellers on county council sites (i.e. on the grounds of "property status" or "other status").
v) In any event, Mr Willers submitted that, although two separate comparators situations were put forward, they should be seen as complimentary, and not discrete or competing. The matter should be looked at broadly (AL (Serbia) at [23]-[24] per Baroness Hale). Looked at broadly, the Claimants' claim is that they are treated differently as Gypsies and Travellers with a private landlord. This is not a case of intentional or direct discrimination. The absence of targeting is an important factor in ascertaining whether any discrimination is justified (AL (Serbia) at [10] per Lord Hope, AM at [70] per Elias LJ), particularly because of the difficulty in foreseeing such unintentional consequences (AM at [68], and S at [92] per Sales J).
vi) Not only is the discrimination not intentional or targeted, as I have indicated in (iii) above, those adversely affected are not the whole of Gypsies and Travellers as an ethnic group. Unlike Burnip (in which those adversely affected by the relevant treatment were all those who were so severely disabled that they required night time care), in this case the adverse effect only affects those Gypsies and Travellers who are on a private site.
vii) The distinction drawn in the scheme between claims brought in respect of rent of Gypsies and Travellers where the landlord is (i) the local housing authority, (ii) a county council or housing association and (iii) a private landlord, has an obviously sound basis: (i) and (ii) are non-profit bodies with public obligations of constraint, whilst (iii) is a commercial landlord without the constraints of any obligations to the public (see paragraph 26 above). The situation of tenants in each of these categories of landlord is therefore relevantly different. But these tenants are not treated similarly: they are subject to different mechanisms of control, which the state considers appropriate to their different circumstances. Again, the Claimants accept that Gypsies and Travellers on a private site must be subject to some degree of control in respect of rent that is recoverable through HB: they differ in only the nature and mechanism of that control. However, once the difference in circumstances is accepted, it is for the state to assess what benefit tenants in each category should receive and the mechanism of its calculation. Although I appreciate Thlimmenos has intervened, this chimes to an extent with Carson (see R (Carson) v Secretary of State for Work and Pensions [2005] UKHL 37 at [25] per Lord Hoffman).
viii) Furthermore, although detracting to an extent from the point concerning the unintended consequences of indirect discrimination made in (v) above, the differences in treatment of the tenants of such landlords was specifically considered by the relevant Minister of State in 2008. On the basis of the Wagstaff Report (see paragraphs 31 and 78 above), on 25 February 2008 a paper was sent by Departmental Officials to the Minister ("the Ministerial Paper"), recommending that Gypsy and Traveller county council sites and private sites should be treated in the same way as housing association sites were already treated, i.e. there would be a reference to a rent officer only if the local authority considered the rent unreasonably high. The estimated costs of this change was £2.5m, comprising just under £1m for county council site tenants and £1.5m for private site tenants. The paper recognised that HM Treasury might find the extra expenditure unpalatable; but noted that this option would simplify procedures, which might be helpful in the event of further reform in the future.
ix) The Minister did not accept that recommendation, rather choosing another option in the Ministerial Paper – to amend the scheme so that only county council sites would be treated as housing association sites had been treated; but leaving HB for private sites to be determined by a rent officer in every case. The evidence of David Jones (a policy official in the Strategy Group Working Age Benefits Division, Department of Work and Pensions) was that the extension to private sites was "ultimately rejected on grounds of cost" (paragraph 22 of his 21 September 2012 Statement), the option chosen saving about £1.5m compared with the recommendation in the Ministerial Paper. Mr Willers criticised this decision, as being purely cost-driven and failing to take into account the other relevant considerations, including the human rights of Gypsies and Travellers on private sites.
x) However, I do not consider that that criticism has force. Although Mr Jones says that the recommendation was "ultimately rejected [by the Minister] on grounds of cost", that does not mean that the Minister did not take into account other factors. Mr Willers submitted that the Ministerial Paper (and hence the Ministerial decision) was based only upon cost and "the risk of generating the view that Gypsy and Travellers are receiving preferential treatment compared with other mobile park/home sites who still have to be referred". He said that that risk was an irrelevant consideration. However, in my view, that is not a reference to a mere unfounded perception. Read in context, the paper is there addressing the possibility that, by treating Gypsies and Travellers in a particular way, that may lead to the claim that non-Gypsies and Travellers are being unfairly subjected to adverse treatment when compared with Gypsies and Travellers. The paper goes on to set out the reasons why such apparently preferential treatment of Gypsies and Travellers is justifiable. That was a perfectly proper consideration for the Minister.
xi) With regard to the contention that, otherwise, the Minister did not take into account any factors other than costs, I do not agree. The Ministerial Paper set out the full background, and set out the pros and cons of a number of options, including the one that the Minister eventually chose, i.e. "treat county council sites in the same way as housing association tenants, but leave private sites unchanged (a scaled down version of our recommended option…)". The paper made clear that that would leave Gypsies and Travellers on private sites with a shortfall between HB and their contractual rent. The Minister's decision incorporated the rejection of the suggestion that special services and facilities made available to Gypsies and Travellers on sites (at least many of which would fall outwith the principles of the HB scheme, with its limitation to assistance with accommodation/housing costs) should be included in the calculation for LRR, and hence HB, for these purposes. The rejection of the inclusion in LRR and hence HB of the costs of non-accommodation/housing services was obviously justified. The Ministerial Paper did not of course refer to any discriminatory effect of any proposal, because no such effects were foreseen. But, the "bright line" maintained by the Minister's decision is clearly justified, particularly at a time of financial stringency, by the cost savings that will ensue from it. It simply cannot be said, on the basis of the evidence I have seen, that the Minister failed to take into account factors other than cost; or that his decision is in any way perverse or irrational (a claim not now pursued by the Claimants) or "manifestly without reasonable foundation". As Mr Strachan submitted, to the contrary, it had a legitimate and reasonable basis founded upon a legitimate objective of acting in the public interest in respect of competing objectives.
xii) Whilst of limited weight in this context (because such payments are essentially discretionary and not intended for indefinite or long-term support of HB claimants), it is not irrelevant that the local housing authority has power to make Discretionary Housing Payments in respect of any shortfall, e.g. for a period to allow a tenant with a shortfall to find alternative accommodation with no or a lesser shortfall.
xiii) Even if the consequences of the HB scheme are that Gypsies and Travellers living on private sites may have to make up a shortfall from their other income, that does not mean that they will inevitably be made homeless nor does it prevent them continuing their traditional way of life.
xiv) Looking generally at Gypsies and Travellers on private sites, the evidence before me is that (a) two-thirds of Gypsies and Travellers tenants referred to a rent officer for assessment receive their contractual rent in full ("The Rent Service – Rent Officer Referrals Data 2006-7", quoted in the Ministerial Paper at paragraph 5 of Annex B: there is no evidence to suggest that that figure is significantly different now): and (b) there is no evidence that a single Gypsy or Traveller has been made evicted from a site and made "homeless" (in the sense of having to pitch by the roadside) because of the aspects of the HB scheme of which complaint is made by the Claimants.
xv) In the case of the Claimants, they each chose to move away from a local authority site where all of their rent was reimbursed by HB. I understand that they were not happy at Mellishaw Lane – on the basis of Ms Knowles evidence (see paragraph 49 above), with some good cause – but even assuming that no other local authority pitches were available to them, they each had a choice as to whether (i) they stayed at Mellishaw Lane, and made better attempts to improve the conditions on that site: the only evidence of any steps they took is that Ms Knowles said that she regularly complained to the Council who appeared uninterested (paragraph 9 of her statement); or (ii) moved into the private site market, to a better site or a site more to their liking, but without any assurance that they would recover their full rent through HB. Whilst I understand the evidence that there has been an historical shortage of local authority sites for Gypsies and Travellers, the Claimants chose to move out of such a site into the private market.
xvi) Even now, there is no evidence that the Claimants will be evicted and/or be required to live on a pitch at the road side in the short term. Neither suggests that that is the case. Indeed, it is their case that they will be driven to leave their current site "in the medium to long term" (see paragraph 6 of their Skeleton Argument, quoted at paragraph 67 above). The Claimants' way of life – and their children's stable schooling etc – is not currently in jeopardy. Without the benefit of additional discretionary payments, they have survived at their current site (with, I accept, some difficulties) for nearly two years. They appear to have done so by using their other income to make good the shortfall. I have set out that other income above (paragraphs 46-7), and it is clear that meeting the shortfall from that income may be challenging. Their evidence is that they consider that they cannot survive there indefinitely. But, in the medium to long term, it is open to them (e.g.) to apply for a renewed assessment, seek to reduce the contractual rent, look for another suitable site or apply again for a Discretionary Housing Payment whilst they make alternative arrangements. HB is of course in any event due to be abolished in October 2013 (see paragraph 30 above).
- In all of the circumstances, I am satisfied that the treatment of Gypsies and Travellers on private sites is objectively justified. It is very clear, in my judgment, that, even on the assumptions I have made in favour of the Claimants, the Secretary of State's policy choice is not "manifestly without reasonable foundation". Indeed, even if the test for the Secretary of State were considerably more onerous in terms of justification, I would still have been satisfied that the treatment is reasonable and proportionate.
Conclusion
- As I hope this judgment makes clear, I am not unsympathetic towards the Claimants. Like many others on basic benefits including HB, they find it difficult to make ends meet. I understand that they found it difficult to live in the accommodation in the form of a caravan site provided by the housing authority, with the high level of generally anti-social behaviour that that unfortunately entailed. I accept that, as a result, they have relocated to accommodation for which HB does not provide the full contractual rent, which puts severe pressure on their finances. However, although I bear heavily in mind that, on the assumptions I have made, Gypsies and Travellers have additional accommodation costs because of their properly protected manner of living – and I appreciate that their choice of accommodation is especially limited by that lifestyle to caravans – unfortunately, many on HB, whether living in mobile homes or bricks-and-mortar accommodation, live under similar pressure.
- Sympathetic as I am, for the reasons I have given, this claim fails.
