Haringey Council Tax Benefit consultation unlawful, Supreme Court rules

The Supreme Court has ruled that Haringey's consultation on proposed changes to its Council Tax Benefit scheme was unlawful as it failed to outline alternative methods of dealing with cuts to funding.

The Supreme Court did not, however, order that the consultation should be re-run, ruling that to do so would be disproportionate.

In R (on the application of Moseley (in substitution of Stirling Deceased)) (Appellant) v London Borough of Haringey (Respondent) [2014] UKSC 56, the Supreme Court said that the council's consultation on changes to its council benefit  scheme should have included details of alternative methods of compensating for the shortfall created from 2013-14, when the central government reimbursement to local authorities was reduced from 100% to 90% of the benefit.

Ahead of the reimbursement changes, each local authority was required to devise its own Council Tax Reduction Scheme (CTRS) to provide relief from council tax to those whom it considered to be in financial need.

Haringey proposed that the funding shortfall would be met by a reduction in council tax relief of between 18% and 22% for all CTB claimants in Haringey other than pensioners. The consultation document for Haringey residents explained the reduction in funding, and stated “That means that the introduction of a local CTRS in Haringey will directly affect the assistance provided to everyone below pensionable age that currently receives [CTB]."

However, there was no reference in the consultation to other options for meeting the shortfall, for example by raising council tax, reducing funding to council services or deploying capital reserves.

Following the consultation exercise, Haringey decided to adopt a CTRS under which the level of council tax relief was reduced by 19.8% from 2012-2013 levels for all claimants other than pensioners and the disabled.

In the main judgment, Lord Wilson (with Lord Kerr's agreement) ruled that where a public authority has a duty to consult before taking a decision, whether such duty is generated by statute, as in this case, or arises as a matter of common law, the same common law requirements of procedural fairness will inform the manner in which the consultation should be conducted. Fairness, he ruled, may require that interested persons be consulted not only upon the preferred option but also upon discarded options.

Haringey's consultation, he said, was premised on the assumption that the shortfall would be met by a reduction in council tax relief and no other option was presented. Consequently, a very small number of responses to the consultation (approximately 20 out of 1287 responses) alluded to other ways of meeting the shortfall. Therefore, the consultation exercise was unfair and unlawful.

In his concurring judgment, Lord Reed allowed the appeal but drew a distinction between statutory and common law consultations. Where the duty to consult is imposed by statute, the scope of the duty varies according to the statutory context, he said. The purpose of this particular statutory duty was to ensure public participation in the local authority’s decision-making process; it was not to ensure procedural fairness as under the common law. Meaningful participation in these circumstances required that those consulted be provided with an outline of the realistic alternatives. In the absence of specific statutory provision, reference to alternative options will be required where this is necessary in order for the consultees to express meaningful views on the proposals. Lady Hale and Lord Clarke agreed with both judgments.

However, Lord Wilson rejected the appellants' other argument that it was unlawful to consult on the possible adoption of a Transitional Grant Scheme announced by central government only 5 weeks before the completion of the draft CTRS consultation.

The Appellant is a resident of Haringey who until 1 April 2013 had been in receipt of full CTB, and thereafter had to pay 19.8% of full council tax. She was not originally a claimant in the judicial review proceedings which were brought by two other similarly-circumstanced Haringey residents to challenge the Respondent’s consultation process, application for which was dismissed on 7 February 2013. One claimant, Ms Stirling, appealed to the Court of Appeal and that appeal was dismissed on 22 February 2013. Ms Stirling subsequently became ill and the Appellant was by consent substituted for the purposes of this appeal. Ms Stirling has since died.

The full judgment can be downloaded from the following link: http://www.supremecourt.uk/decided-cases/docs/UKSC_2013_0116_Judgment.pdf