M, R (on the application of) v Birmingham City Council

A local authority’s discretionary power to pay a residence order allowance must be exercised to further the statutory purpose of promoting children’s welfare. A policy may take account of the circumstances of the residence order, the child’s and carers’ means and needs, the authority’s resources, and the savings that a family placement may produce. A policy trigger creates an opportunity for consideration, not an automatic entitlement. Where a case falls short of a trigger, the authority must still apply the policy’s exceptional-case provisions realistically, using a “but for” and “what if” assessment. The policy was lawful, but the decisions were unlawful because they failed to apply that approach and relied on an impermissibly generalised assessment.

The claimant, who cared for his niece under a residence order, challenged Birmingham City Council’s refusal of a residence order allowance. He challenged both the lawfulness of the Council’s policy under paragraph 15 of Schedule 1 to the Children Act 1989 and its application to his case.

The Council maintained that the policy lawfully restricted consideration to specified categories, including cases involving care proceedings or exceptional circumstances. The central issues were the meaning of the policy, whether its criteria created an entitlement, whether it lawfully permitted consideration of means and needs, and whether the refusal decisions applied the policy correctly.

1. Public-law framework. The statutory discretion had to be exercised to advance its underlying purpose: supporting children and promoting their welfare. The decision-maker had to identify that purpose, take account of all legally relevant matters and exclude irrelevant matters. Even where that approach was adopted, a decision could be unlawful if irrational or outside the range open to a reasonable decision-maker. This applied both to policy-making and to policy application.
2. Lawful scope of the policy. The Council could take account of the circumstances and background of the residence order, the needs and means of the child and carers, the Council’s resources, what it would otherwise have had to do for the child, and the effect of the policy on family placements. The allowance was discretionary and distinct from the benefits system. Satisfaction of one of the first three triggers in paragraph 2.2 did not create an entitlement to payment.
3. Exceptional cases and near misses. The policy’s examples of exceptional cases were non-exhaustive. A case falling short of a trigger had to be assessed by reference to how close it was to the stated examples and triggers, considering why the residence order was made and what would probably have happened without it. Means, needs and resources could be considered, but the authority should not use technical or internal procedural distinctions to discourage a family placement. The “direct alternative” criterion did not require proof that the Council had completed its internal formal decision-making process for care proceedings. It could be satisfied where the realistic alternatives had become care proceedings or an application for a residence order.
4. Application and relief. The refusal and internal appeal failed to apply the examples, the near-miss approach and the “but for” and “what if” analysis. They instead adopted a generalised view of the position of sole carers and failed to engage with the likely consequences for the Council had the claimant not intervened. The policy was therefore lawful, but the decisions were unlawful and were quashed. The application was remitted for redetermination. The damages claim was adjourned with liberty to restore.

First-instance judicial review. No prior appellate decision is stated in the judgment.