Birmingham City Council v SS & Ors

Under regulation 13(3)(b) of the Housing Benefit Regulations 2006, the authority must make an objective, realistic and complete comparison between the claimant’s rent and rents payable for suitable alternative accommodation in the relevant active market.

The comparison must not be distorted by excluding accommodation because of its landlord’s funding, or by making hypothetical adjustments for subsidy, costs or business arrangements. If the rent is unreasonably high, the authority retains a broad discretion over the reduction, taking account in particular of the cost of suitable alternative accommodation and the claimant’s housing circumstances.

These conjoined appeals concerned housing benefit for two claimants living in exempt accommodation at a women’s refuge operated by Roshni, a registered charity. The First-tier Tribunal dismissed their appeals against Birmingham City Council’s restriction of their eligible rents.

The Upper Tribunal allowed the claimants’ appeals in an interim decision, [2013] UKUT 418 (AAC), and in its final decision, [2014] UKUT 0137 (AAC), concluded that the full rents were payable. It treated the availability and effect of public funding received by comparator landlords as relevant to the comparison under regulation 13(3)(b). The central issue was whether that approach was lawful.

1. Appeals allowed and remitted. Lord Justice Lindblom gave the judgment, with Lord Justice Beatson and Lady Justice Black agreeing. The Upper Tribunal’s approach was erroneous. The appeals were to be determined again by the Upper Tribunal.
2. Regulation 13(3)(b) of the Housing Benefit Regulations 2006 requires a comparative exercise between the rent payable for the claimant’s dwelling and the rent payable for suitable alternative accommodation elsewhere. The comparison must be based on reliable evidence of an active and ascertainable market rent for accommodation of the relevant type, tenure and general location. The authority need not identify particular available properties. The approach in ex parte Gibson and ex parte Holder supported that construction: (1993) 25 H.L.R. 487 and (1997) 29 H.L.R. 71.
3. Suitability is principally assessed by reference to the nature of the accommodation, its facilities, the relevant household’s age and health, and security of tenure under regulation 13(9). Geographical considerations are not excluded. Financial considerations, other than the rent itself, which make parts of the market inaccessible need not be considered.
4. The regulation is claimant-focused. It does not require an inquiry into the landlord’s circumstances, funding, costs, efficiency or hypothetical business arrangements. It was therefore wrong to adjust the comparator’s actual rent upwards to reflect a supposed loss of subsidy, or to exclude otherwise relevant public-sector or subsidised accommodation. The court did not need to decide that ex parte Morgan was wrongly decided, but the Upper Tribunal’s intermediate approach was not lawful.
5. If a rent is found to be unreasonably high, the authority must reduce the eligible rent by such amount as it considers appropriate, having particular regard to the cost of suitable alternative accommodation. The reduction need not equal the full difference. The discretion may take account of personal and financial circumstances relevant to the claimant’s housing situation, including hardship and the risk of homelessness, as explained in the Court of Appeal and House of Lords decisions in Mehanne: [2000] 1 W.L.R. 16 and [2001] 1 W.L.R. 539.
6. The Court of Appeal would not itself reassess the evidence or exercise the regulation 13(3) discretion. The appeals were remitted to the Upper Tribunal to decide afresh whether the rents were unreasonably high and, if so, the appropriate reduction.

• Court of Appeal (Civil Division) — allowed the appeals and remitted the matters to the Upper Tribunal for redetermination.
• Upper Tribunal (Administrative Appeals Chamber) — allowed the claimants’ appeals in an interim decision, [2013] UKUT 418 (AAC), and in the final decision, [2014] UKUT 0137 (AAC), determined that their full eligible rents were payable.
• First-tier Tribunal (Social Entitlement Chamber) — dismissed the claimants’ appeals against the Council’s restriction of eligible rent.