R (Knowles and Knowles) v Secretary of State Work and Pensions

The claim was that the Housing Benefit (HB) scheme discriminated against Romani Gypsies living on private caravan sites because rent recoverable through HB is limited by a rent officer determination (notably the local reference rent, "LRR"), which fails to reflect additional site management and infrastructure costs particular to Gypsy and Traveller sites. The court considered the statutory framework (section 123 and related provisions of the Social Security Contributions and Benefits Act 1992; the Housing Benefit Regulations 2006 as amended; the Rent Officers (Housing Benefit Functions) Order 1997) and domestic and Convention law, notably article 14 ECHR read with article 1 of Protocol No. 1 and article 8.

The judge found that most of the additional costs relied on (site management, dealing with anti-social behaviour, certain services) fell outside the statutory definition of "eligible rent" for HB and therefore were not properly part of the rent assessment; the items that might arguably be housing costs were, on the evidence, modest and unquantified. Even assuming some additional accommodation-related costs were significant, the Secretary of State had an objectively justified policy: (i) the contested distinctions involve economic and social policy choices to which the state enjoys a wide margin of appreciation; (ii) the Minister considered alternatives (including the Wagstaff report) and declined to extend full rebate to private sites principally for cost and policy reasons; and (iii) the differential treatment was not shown to be "manifestly without reasonable foundation."

Result: the human rights claim under article 14 (read with article 1 of Protocol No.1 and article 8) was dismissed. The court emphasised the limited scope of HB to meet rent costs and the legal distinction between accommodation costs and other support/services costs.

Background and parties. The claimants are Romani Gypsies who moved from a council-owned caravan site (where rent was fully rebated by HB) to a privately owned year-round caravan site. Their contractual rent exceeded the HB allowance assessed following rent officer determinations (notably the LRR). They challenged the October 2011 HB determinations, advancing an article 14 ECHR complaint that the HB scheme discriminated against Gypsies on private sites because the rent-assessment method failed to reflect additional site costs.

Nature of the application. Judicial review of the Secretary of State's implementation of HB rules and of the rent officer determinations, seeking a declaration that the regime and the decisions were discriminatory under article 14 ECHR read with article 1 of Protocol No. 1 and/or article 8. The earlier multi-ground challenge was narrowed so that only the article 14 human-rights complaint remained for determination.

Procedural posture. Permission was initially refused in this court but subsequently granted by the Court of Appeal on 15 June 2012 (Maurice Kay LJ). The matter proceeded for substantive hearing before Hickinbottom J. King J refused a stay pending possible appeal of Burnip on 6 August 2012.

Issues framed by the court. (i) Whether the HB scheme’s treatment of Gypsies on private sites amounted to discrimination under article 14 (either by treating differently persons in analogous situations or by treating alike persons in significantly different situations — a Thlimmenos-type argument); (ii) whether the additional costs of Gypsy and Traveller sites were properly part of "eligible rent" and sufficiently substantial to found a discriminatory effect; and (iii) if a prima facie discrimination existed, whether it was objectively and reasonably justified having regard to the state’s margin of appreciation in social and economic policy.

Court’s reasoning and conclusions. The court analysed the statutory framework (section 130 and section 130A mechanics, the 2006 Regulations as amended in 2008, and the Rent Officers Order) and the rent officer methodology for determining LRR. It accepted that some management and infrastructure costs associated with Gypsy and Traveller sites exist and that the Wagstaff report identified higher management intensity. However the judge concluded that most of those costs constituted services outside the HB definition of "eligible rent" and so could not properly be captured in the rent officer LRR assessment. The costs that arguably fell within eligible rent were modest, variable and not demonstrated in the Claimants' case to be significant. The court applied the established principle that social and economic policy measures attract a wide margin of appreciation, accepted the Minister had considered alternatives and costs (and had a rational basis for the choice), and held the policy was not "manifestly without reasonable foundation." The article 14 complaint therefore failed and the claim was dismissed.

The claim is dismissed. The court held that (i) most additional site costs relied upon fall outside the statutory concept of "eligible rent" and where housing-related costs exist they were not shown to be substantial in this case; (ii) the impugned distinctions involve social and economic policy choices to which the State is entitled to a wide margin of appreciation; and (iii) the Secretary of State’s policy and legislative implementation were not "manifestly without reasonable foundation" and were objectively justified.

Permission was initially refused by the Administrative Court but subsequently granted by the Court of Appeal on 15 June 2012 (Maurice Kay LJ) (see paragraph 61(i) of the judgment). King J refused an application to stay the proceedings on 6 August 2012 (see paragraph 61(ii)).