The largely disability focused social media bedroom tax groups have been wrongly celebrating what they call a bedroom tax victory in the High Court over DHPs in the case of Hardy, R (on the application of) v Sandwell Metropolitan Borough Council  EWHC 890 or the Sandwell case.
The reaction on social media sites has been hyperbolic yet this case will not change a thing and is not even a pyrrhic victory as the disabled bedroom tax households will be WORSE OFF because of this case!
NOTE TOO – This blog has a very significant update at the end as the Sandwell case means ALL councils right across the country will be spending less and significantly less on bedroom tax DHP – Social Landlords note well!!
Sandwell, and all of the other 78% of LAs who did count DLA as income for a DHP now can be asked to reconsider those decisions. Yet because DHP is not a benefit but a mere discretionary pot there is no right of appeal as there would be for a benefit.
So, Sandwell et al, will have to review each decision if asked BUT can then say either (a) you still do not qualify for a DHP according to our criteria; or (b) you would qualify but there is no money left in the DHP pot.
Either way this is a pyrrhic victory and no more and the only likely result of this is that every LA tightens up its DHP criteria.
The issue why this case will not see any more DHP paid to disabled bedroom tax households is the numbers.
- There are 464,551 bedroom tax affected households who collectively have had £362 million per year cut from their housing benefit – the bedroom tax.
- The original DWP impact assessment said 63% of all bedroom tax households contained a disability and that figures has never been challenged.
- So the total bedroom tax cut of £362 million sees the disabled bedroom tax households have 63% of that cut or circa £228 million per year.
- The total amount of bedroom tax DHP allocated to local councils this year is £60m
Hence local councils have got £60m of bedroom tax DHP to meet a £228 million disabled bedroom tax need.
So even if DHP is ONLY awarded to the disabled bedroom tax households then 3 in 4 disabled households will NOT get a bedroom tax DHP.
The Sandwell case does not change that one bit and there is still only enough bedroom tax DHP to pay for just 1 in 4 disabled bedroom tax households – There is no extra money.
What will happen is that EVERY council will now do is tighten their DHP criteria that will probably result in FEWER disabled households getting a DHP to mitigate the bedroom tax as those hardened criteria will deny some disabled households who may have got a DHP before the Sandwell case.
As absurd as it sounds, taking a council to the High Court and the court finding that individual council has acted unlawfully could, and I strongly suspect WILL result in LESS DHP being paid to disabled households right across the country.
Cue disabled lobbies and anti bedroom tax lobbies across social media and beyond being outraged at this (and probably at me too) for relating these facts; Yet once again we need to see this for what this case was, just another vanity project of the lawyers.
THERE IS NO EXTRA MONEY AND THERE NEVER WAS GOING TO BE ANY EXTRA MONEY – excuse the big shouty capitals but the lawyers must have known that before they started. The fact that this would lead to a tightening up of the DHP criteria if this case won was and must have been bloody obvious to the lawyers!! The lawyers have scored brownie points and legal kudos yet in doing so the disabled bedroom tax household now has LESS chance of a DHP to mitigate the pernicious bedroom tax.
What this case only proves is that when you look again at the NUMBERS with regard to DHP the miserly amounts allocated by central government of £30 million initially in 2013 that has now increased to £60 million were NEVER a mitigation for the policy itself. The High Court and Court of Appeal both made perverse decisions in the MA & Ors case as you can’t make a silk purse out of a sow’s ear and the DWP putting in £30 million of bedroom tax DHP for an anticipated £480 million per year cut is not mitigation, it is whatever the legal name is for a wing and a prayer and nothing more.
Whether I am right or wrong that this tiny nuance may help MA & Ors when it is finally heard by the Supreme Court is little comfort to the 293.000 or so disabled bedroom tax households who though this Sandwell case helped as that case is not even being heard under March 2016 and so the disabled bedroom tax household has another year of suffering and even worse suffering now – all due to the vanity and ego of the lawyers.
Giles Peaker (Nearly Legal) responded that LAs cannot simply tighten their DHP criteria. I responded to that on his post on the Sandwell case which I restate here (and because it has added complications for all bedroom tax tenants and for social landlords too)
My reasons WHY LAs will tighten and can:
Giles, I agree there is and has to be an argument for a decision to be reviewed in light of the Sandwell decision. Yet that does NOT mean that there will be a backpayment as so many believe, it simply means a review.
Yet even when that review finds a DHP would have been paid if DLA had not been counted as income, it does not follow that a backpayment will be made – the scheme is 100% discretionary and is not a benefit.
This is a case of at best Sandwell being a pyrrhic victory and I suspect and strongly it will lead to LAs naturally revising their criteria for DHP payments in light of Sandwell and ‘revising’ here is an euphemism for tightening as LAs know they wil now receive more applications from disabled households because of Sandwell.
As long as the criteria are consistent in each case (or at least can be argued to be) then there is no doubt LAs will tighten criteria and are legally able to do so. If that means in practical terms only allowing £11 for Gas per week as reasonable expenditure instead of £12 they had previously and so on, then the practical means to do this are simple for every LA and the result will be do, even discounting DLA as income, that the claimant has enough money to pay the bedroom tax.
LAs also will have to spend far more on the benefit cap if it reduces to £23k or even less in the provinces and so that will also see a reduced % of total DHPs being spent on bedroom tax in any case.
In summary it is so easy for every LA to tighten its criteria and even easier to pay a high % for other alleged ‘reforms’ – the upshot is Sandwell WILL lead to less bedroom tax DHPs for disabled households
The other issue this links into is the Benefit Cap proposals of the Tories which if they re not voted out means a reduction in the overall benefit cap to £23k per year in London and (estimated but highly likely) £20,700 overall benefit cap in every place outside of the capital.
What this means is that councils will HAVE to spend more of the total DHP they receive on the benefit cap cases than they did before. That of course means that a lower percentage and lower amount of DHP will be spent on bedroom tax cases.
My three posts on the horrific implications of the benefit cap cut here, here and here focused on social housing as social landlords stupidly believe the benefit cap only affects higher rent private cases in high rent areas when the 2 parent 3 child household size and anything larger than this will be hit by the benefit cap in the cheapest council housing propery in a low rent area.
YET because private rent levels are higher than social rent levels and because a private landlord can and WILL evict the tenant far more easily than a social tenant, then councils will be diverting huge amounts of bedroom tax DHPs to benefit cap DHPs for private tenants who are at threat of immediate eviction which WILL be the case.
Local councils if they do NOT pay private tenant benefit cap DHPs will see a huge increase in their OWN costs of much higher homeless applications and much higher temporary homeless accommodation provision. This is precisely what happened in for example the LB of Westminster and for obvious reasons.
Perversely LB Westminster was allocated 165% of its bedroom tax cut in bedroom tax DHP yet chose to spend that for private tenants instead (benefit cap and LHA cap) and the official DWP figures show this.
Social landlords in low rent areas need to be aware that as the benefit cap IS and WILL impact in your low rent area and to social tenants that the amount of bedroom tax DHPs their tenants receive (with a disability or not) will inevitably fall and so there will undoubtedly be higher bedroom tax arrears right across the country and particularly in the North which has to date been largely unaffected by the benefit cap.
I can even predict with some reliability which areas of ‘oop North’ will see significantly less bedroom tax DHP and significantly increased bedroom tax arrears because of that. It is obvious – those areas of ‘oop North’ that have a higher percentage of private tenants claiming HB than the national average of 33%.
For example, Blackpool is an outlier in this and has 73% of all HB claimants living in the PRS, so the chance of a bedroom tax DHP for social tenants there will fall dramatically. At the other extreme or outlier, Copeland with 88% of all HB claimants being in social housing and just 12% of them in the PRS will barely see a difference.
Sandwell was not just one council including DLA as income. 78% of all councils have done this. What the Sandwell high court decision WILL mean is that ALL 100% of local councils will review their DHP criteria. They will find as I replied above to Giles that they need to revise their entire DHP strategy, indeed it can be argued that the Sandwell case gives them the opportunity to revise their total DHP strategy. It is perfectly logical they do so too!
The total DHP nationally reduced from £165 million to £125 million and of that £125 million the amount of £60 million (48%) was allocated to them for bedroom tax and £25 million (25%) for benefit cap. I would not be surprised if all local authorities decided, as they can, to spend 48% on benefit cap and just 25% on bedroom tax or go even further than this which is what LB Westminster and many other London councils did last year.
In other words the Sandwell DHP case will see a significantly lower amount of bedroom tax DHPs received by ALL social landlords.
Now what was that I was saying about the ego and vanity of lawyers!!!