TT, R (on the application of) v London Borough of Merton

A local authority adopting a general policy for special guardianship allowances must assess the allowance by reference to the hypothetical typical case and follow the statutory guidance unless it has cogent, locally appropriate reasons to depart from it. The fostering allowance that would have been payable must be used as a starting point. The authority may make a reasoned adjustment for differences between fostering and special guardianship, but it cannot ignore or assess at nil the ordinary additional costs of caring for a child who was not born into the household. A suggested means-test model carries less weight than statutory guidance. Departures from that model are lawful if rational and fair, particularly given the authority’s wide discretion in allocating resources.

The claimant was the special guardian of C and challenged the London Borough of Merton’s policy for calculating special guardianship financial support under the Children Act 1989 and the Special Guardianship Regulations 2005. Merton’s policy set the core allowance at two thirds of the National Fostering Network’s recommended minimum allowance, on the basis that the additional costs associated with fostered children did not apply to special guardianship. The claimant also challenged Merton’s means test, including its treatment of benefits, tax credits and expenditure relating to children in the household.

The central issues were whether the allowance policy complied with paragraph 65 of the Special Guardianship Guidance and whether the means-test methodology was unlawful.

1. The application was allowed. The court declared unlawful the provisions of Merton’s August 2010 policy setting the special guardianship allowance at two thirds of the Fostering Network’s minimum allowance, and directed Merton to reconsider the policy and produce a fresh policy.
2. Under the Special Guardianship Regulations 2005, a local authority may determine core support by a general policy or on a case-by-case basis. If it adopts a general policy, it must consider the hypothetical typical case rather than justify the level of support by reference to the particular child before the court.
3. Paragraph 65 of the Special Guardianship Guidance does not require adoption of the Fostering Network’s minimum allowances as the final allowance. It requires the authority to consider them as a starting point and to make appropriate adjustments reflecting the lower costs which may arise in special guardianship. The court adopted the approach in R (on the application of B) v Lewisham London Borough Council [2008] EWHC 738 (Admin).
4. The authority cannot comply with paragraph 65 by wholly disregarding the additional costs identified in the Fostering Network’s research or treating them as nil. Those costs include the aggregate of numerous small expenses associated with caring for a child who was not born into the household. They are distinct from exceptional additional expenditure arising from disability or serious, long-term behavioural or emotional difficulties, which may be addressed separately under the Regulations.
5. Merton had given rational reasons for departing from the Department for Education and Skills’ suggested means-test model. The departures were not so unreasonable that no reasonable local authority could have adopted them. Applying the more intensive scrutiny said to arise where Convention rights are engaged, the court found a rational connection and no unfair balance. Local authorities have a wide margin in allocating limited resources.
6. The means test lawfully included the child tax credit while excluding expenditure on the child, because regulation 13(3)(b) required reasonable outgoings and commitments to be assessed excluding outgoings in respect of the child. In the particular assessment, expenditure on both C and J was properly excluded because the allowance was assessed for both children.

First-instance judicial review. The application was allowed and the impugned policy provisions were declared unlawful.