Council acted outside its powers on council tax reduction scheme: High Court

A local authority did not have power to impose a two-year residence requirement as part of its council tax reduction scheme for 2013/14 or 2014/15, a High Court judge has ruled.

In Winder & Ors, R (on the application of) v Sandwell MBC [2014] EWHC 2617 Mr Justice Hickinbottom said that even if the council did have that power, he would have found the requirement unlawful.

The background to the case was the Government's abolition of council tax benefit from April 2013. Councils were instead required to introduce a council tax reduction scheme. Funding for council tax support was also cut by 10%.

Sandwell adopted a scheme that, for working age taxpayers, was restricted to those who had lived in the borough for the previous two years.

Since April last year, around 3,600 people have been refused a reduction because they have not met the requirement.

The claimants – three women who had moved into the area recently – brought legal proceedings, contending that the requirement was unlawful.

Mr Justice Hickinbottom said it was his “firm view” that, on the true construction of section 13A of the Local Government Finance Act 1992, the council had no power to define a class for the purposes of section 13A(2)(b) by reference to non-financial need criteria, as it had purported to have done.

“[T]he imposition of the residence requirement in both the 2013-14 and 2014-15 CTR Schemes was ultra vires and thus unlawful,” he concluded.

The High Court judge ruled that the requirements were irrational and unlawfully discriminatory, both on domestic and EU grounds.

Sandwell had also failed to consult properly on the residence requirement, Mr Justice Hickinbottom found. “Indeed, had the council consulted on this requirement as it ought, it might have resulted in feedback which may have prevented it from plunging into the unlawfulness into which it did plunge by adopting a CTR Scheme with a residence requirement.”

Nor had Sandwell complied with the public sector equality duty under s. 149 of the Equality Act 2010, Mr Justice Hickinbottom ruled. “That duty is important; and, had the council been rigorous in satisfying its obligation to have due regard to the relevant characteristics, then, again, it may not have proceeded with the unlawful course that it followed.”

The Child Poverty Action Group, which acted for the claimants, said other councils which had adopted minimum residence rules would have to review their policies.

Cllr Darren Cooper, Sandwell’s leader, described the ruling as “extremely disappointing”, claiming it put at risk the council’s ability to protect local people’s interests and public services.

He said: “With significantly reduced Government funding of around £3.2m, we wanted to make sure our local council tax reduction scheme would protect vulnerable residents without increasing council tax, which we haven’t increased in Sandwell for four years.

“We considered the borough’s future needs and wanted to minimise the number of people affected by a reduction in support compared to what they would have received under the old council tax benefit scheme.”

Cllr Cooper continued: “We only have so much money to help people pay their council tax, so we’ve had to make tough choices. Our aim was to prioritise support to vulnerable people who’ve lived here continuously for two years or more at the point of making a claim and discourage people from other parts of the country moving here to take advantage of cheaper housing and adding further demands to our reduction scheme.

“Continuing to provide council tax support at the same level as the previous benefit scheme would have meant more cuts to public services for Sandwell residents as well as potential council tax increases and vulnerable people having a higher minimum payment.”

Sandwell’s leader said the council would assess the impact of the judgment and was considering whether to appeal.

“We are also writing to the Government’s Department for Communities and Local Government. We share the Department’s vision for greater local decision-making and are seeking clarification on their policy intentions,” he said.

“We are asking how we determine who is and who is not eligible for council tax reduction when the Local Government Finance Act requires every council to design and implement a local scheme.”

The High Court judgment was, however, welcomed by the Equality and Human Rights Commission, which intervened in the case.

The Commission’s Chief Legal Officer, Rebecca Hilsenrath, said: “This is an important ruling which shows that public authorities must comply with equality law when developing policies. In particular they must consider the impact these will have on particular groups of people. The Public Sector Equality Duty is there to help public bodies make fair and lawful decisions.


“In this case the council failed to consider the effect its residence requirement would have on women, particularly those escaping from domestic violence. Had it done so, it would not have put in place a scheme which has been shown to be unlawful in that it indirectly discriminates against women by putting them at a particular disadvantage when compared to others.”

The EHRC told the court, amongst other things, that the council’s fears about people moving from more expensive parts of Britain to the area appeared to have been speculative, and that there were other less discriminatory ways the council could have achieved its aims, such as making exceptions for victims of domestic violence or reducing the length of residence required.