Heffernan, R (on the application of) v The Rent Service

The statutory definition of “locality” for calculating a local reference rent must be applied as written. It requires consideration of adjoining neighbourhoods, the relevant facilities and services, their type, similar standard and accessibility, and the variety of residential premises and tenancies. Rent levels, the availability of market evidence and the anticipated effect on the local reference rent are not statutory criteria for defining the locality.

A rent officer must make a genuine, reasoned assessment of the criteria. The court reviews whether the correct criteria and relevant information were used, but does not substitute its own professional judgment. A redetermination based on an erroneous definition or immaterial considerations is unlawful and may be quashed.

The claimant, a disabled tenant, challenged two housing benefit redeterminations made by the Rent Service on 20 December 2004 and 25 May 2005 under regulation 12CA of the Housing Benefit (General Regulations) 1987. The determinations capped the claimant’s housing benefit by reference to a local reference rent calculated using Sheffield as the relevant “locality”.

The claim concerned whether the Rent Service had defined the locality in accordance with paragraph 4(6) of Schedule 1 to the Rent Officers (Housing Benefit Functions) Order 1997, as amended, and whether it had unlawfully excluded certain higher rental evidence from the calculation.

1. The claim succeeded in material part. Both housing benefit redeterminations were quashed because the Rent Service had not determined the locality in accordance with paragraph 4(6) of Schedule 1 to the Rent Officers (Housing Benefit Functions) Order 1997, as amended.
2. The amended Order required a consideration of three matters: adjoining neighbourhoods; the facilities and services available from the dwelling, including their type, similar standard and accessibility by public and private transport; and a variety of residential premises and tenancies. “Standard” required a qualitative assessment. It was insufficient merely to recite the statutory language or to state that access was broadly the same.
3. The statutory criteria did not require a particular geographical or administrative size, a number of rental markets, a sufficient range of rental evidence, or consideration of the likely effect of the selected locality on the local reference rent. The Rent Service’s internal guidance wrongly introduced those matters and wrongly treated “locality” as a broad geographical area.
4. The court was not required to decide whether Sheffield could properly constitute a locality. The Rent Service could adopt consistent area-wide judgments, but each determination had to be based on the statutory criteria and properly supported information. The court’s role was supervisory: to check legality and relevance, not to substitute its own professional assessment.
5. The Rent Service’s exclusion of certain higher rents as exceptionally high was not shown to be unlawful. The officer had relied on circumstances explaining why the particular rents were exceptional, rather than merely treating their level or frequency as decisive.
6. The Rent Service’s argument that a narrower locality might disadvantage poorer tenants was irrelevant. The statutory formula necessarily meant that different locality choices could produce different local reference rents. The claimant had shown a real possibility of prejudice, so relief was not withheld.
7. The defendant was ordered to pay 80 per cent of the claimant’s costs. Permission to appeal was refused under CPR rule 52.3(6).

First-instance judicial review proceedings. Permission to apply was granted by Collins J. The High Court (Administrative Court) quashed the two Rent Service redeterminations.