X, R (on the application of) v London Borough of Tower Hamlets

A local authority has wide discretion to set payments for foster carers, but its policies must comply with statutory guidance issued under section 7 of the Local Authority Social Services Act 1970. The guidance required equal treatment of family and unrelated foster carers in calculating fostering fees and allowances, subject only to variations based on criteria used for all carers. A policy paying family carers less because of their relationship with the child was therefore a departure from the guidance. Such a departure is unlawful unless supported by cogent reasons, and the more substantial the departure, the more compelling the justification required. Recruitment, retention and financial pressures may in principle justify a departure, but the authority had not considered reasonable alternative fee structures. A challenge to an individual enhanced allowance was dismissed because the statutory complaints procedure was the more suitable remedy.

The claimant was the registered foster mother of three highly demanding children related to her. The defendant local authority paid family foster carers lower payments than unrelated foster carers, including by withholding fostering fees and the reward or fee element of disability-related payments. The claimant challenged the policies under ordinary public law principles and article 14 of the Convention, and alleged that the authority had unlawfully fettered its discretion by never granting an enhanced allowance in exceptional circumstances.

The claim concerned whether the differential payment policies complied with the statutory scheme and statutory guidance, whether any departure from that guidance was justified, and whether judicial review was an appropriate remedy for the individual allowance issue.

1. Domestic public law. The statutory scheme left the local authority discretion to determine the terms, including payment terms, on which fostering services were provided. That discretion was constrained by Parliament’s preference for family placements and by the requirement to comply with statutory guidance unless there were cogent reasons for departure.
2. Guidance issued under section 7 of the Local Authority Social Services Act 1970 was not equivalent to secondary legislation. An authority could depart from it, even substantially, but the departure would be unlawful without cogent reasons. The greater the departure, the more compelling the reasons had to be. The court would scrutinise those reasons carefully.
3. The Family Care Guidance and related guidance required equality of treatment between family and unrelated foster carers in fees and allowances, while recognising that services and training might be delivered differently. A payment differential based simply on the carer’s pre-existing relationship with the child was contrary to that principle. The express allowance for variations based on the child’s needs, the carer’s skills or another criterion used for all carers did not permit a criterion applicable only to unrelated carers.
4. The authority’s need to recruit and retain unrelated carers, its financial pressures and the different typical roles of the two groups could be cogent considerations in principle. They were insufficient on the evidence because the authority had not considered reasonable alternatives, such as fee criteria based on qualifications, training or availability, from which family carers were not excluded.
5. Birthday and festival payments were governed more flexibly by the applicable minimum standard. A policy of assessing whether such payments were necessary in individual cases was lawful, although an absolute refusal to make them would not have been.
6. The policies were declared unlawful insofar as they discriminated between family and unrelated carers in payment of the £171 weekly fostering fee and the disability-related reward or fee element. The authority was required to reconsider its policies, with liberty to apply if a new policy was not issued within three months.
7. The challenge concerning an enhanced allowance in exceptional circumstances was dismissed. Its determination required detailed assessment of the claimant’s overall financial position and was better pursued through the local authority’s review and statutory complaints procedures.
8. The court did not need to decide whether the fee fell within the ambit of article 8. It considered that, applying the approach in Burnip v Birmingham City Council, the absence of sufficiently cogent reasons for departing from the guidance would also prevent justification under article 14.

First-instance judicial review in the Administrative Court. The court declared the differential payment policies unlawful in specified respects and dismissed the challenge to the individual enhanced allowance.