Judge dismisses judicial review over charging policy at Birmingham for providing services to disabled adults unable to work

Birmingham City Council’s disastrous financial situation gives a justification for its policy on charging for care for severely disabled adults who are unable to do paid work, the High Court has found.

The council has had commissioners imposed by the Government after issuing a s114 notice effectively declaring bankruptcy and now has a £300m budget gap and equal pay liabilities put at £750m.

YVR, a protected party, brought the unsuccessful case for judicial review through his mother and litigation friend YUL.

Mrs Justice Collins Rice heard YVR is in his mid-twenties, lives with his family and is profoundly autistic, has epilepsy, severe learning disabilities and other mental ill-health diagnoses.

Birmingham provides care and support including attendance at a day centre.

The judge said YVR “does not so much complain of the calculation of his own bill, at any rate in these proceedings; he challenges the whole policy under which the council charges for the provision of adult social care in the community to individuals like himself.

“He says it treats unfairly and discriminates against people who, like him, are so disabled they cannot, and will never be able to, do any paid work.”

YVR receives the Universal Credit standard allowance and 'limited capability for work-related activity' allowance, and is entitled to the Personal Independence Payment, part of which contributes to the cost of help with everyday activities and part to the cost of help with physically moving around.

These benefit levels are set nationally but section 14 of the Care Act 2014 gives local authorities the power to charge an adult for meeting their 'eligible needs’.

To do so they must assess the person’s financial resources and follow Government guidance.

Authorities may not make a charge if the income of the individual would, after this, fall below an amount to be specified in regulations.

“In other words, authorities cannot charge at all unless an individual's income is over a certain amount, and that amount is then protected from being taken in charges. This is the minimum income guaranteed amount (MIG),” Collins Rice J said.

She noted the cost to the council of meeting YVR’s needs “vastly exceeds the amount of his unprotected income available to be recovered by it in charges”.

The judge said the regulations expressly confer powers for a council to charge less, but not more, than the statutory scheme sets out.

“It is the council's exercise of – or failure to exercise – these powers which is the focus of the present challenge,” she said.

Applying its charging policy in YVR’s case meant he was charged the maximum amount envisaged by the statutory scheme with the council taking all his benefits except those excluded by the scheme or protected by MIG.

Birmingham told the court it considered this approach to be consistent with the law, Government guidance and its own policy.

YVR applied for judicial review of the council's decision to introduce the 2023 charging policy without removing or revising the aspects of the policy claimed to have given rise to discrimination.

His first ground of challenge was that Birmingham’s policy contravenes Article 14 of the European Convention, because it discriminates against those who are severely disabled and cannot work by reason of their disability, as compared to disabled people who are able to work.

Other grounds were that the policy indirectly discriminates contrary to the Equality Act 2010 and that Birmingham breached the Public Sector Equality Duty.

Giving judgment in YVR, R (On the Application Of) v Birmingham City Council [2024] EWHC 701 (Admin), Collins Rice J said YVR argued that Birmingham did not properly consider its discretion to take less in charges than the statutory mechanism automatically restricts and there was no justification other than maximising revenue, which was not a good reason capable of justifying discrimination.

The council, argued the claimant, should have followed the decision in R (SH) v Norfolk County Council [2020] EWHC 3436 (Admin), in which a 24-year-old woman with Down Syndrome won a judicial review claim over the decision by the county council to change the basis on which it calculated the charges made to her for council-provided care. That was a decision counsel for Birmingham claimed had caused national "consternation" among local authorities.

Birmingham argued it had, carefully and demonstrably, considered its discretionary options and treating differently people who earn from people who do not was part of the fundamental structure of the statutory scheme.

That scheme – the benefits system, the assessment and provision of care, and the charging mechanism that connects them up – had to be considered as a whole, and it was a system bounded by concepts of need, the council suggested [emphasis in judgment]. Looked at in that way, there was no relevant difference of treatment. 

Birmingham said its present budgetary predicament took its financial situation far beyond the considerations of simply saving money and it had to weigh the interests of its taxpayers overwhelmingly in the balance at the present time.

In her judgment Collins Rice J said this was a challenge “which essentially relies on identifying a 'problem' in the statutory scheme, and a missed opportunity for the council to address it.

“The 'problem' in the scheme is a statable failure to treat people who can work differently from people who, because of severe disability, cannot. It is an arguable 'failure' because that default situation is arguably irrational and unfair. Its arguable irrationality is that it is an incentivisation system applied to individuals who cannot be incentivised to do that which they are incapable of doing.”

This was not “an asymmetry of the council's making” but local authorities had powers under the charging regime to do something about it. “The power under Regulation 15(2) is specific and commodious. Government guidance encourages the protection of income and discourages an unconsidered default assumption that all unprotected benefit income is available to be taken in charges. That would not, it says, be consistent with the principles of promoting social inclusion, independence, choice and control. The guidance positively encourages consideration of a protected 'disposable income' uplift to the MIG (which already includes a 25% 'buffer' in the calculation). Its headline principle is affordability.

“So, the argument goes, the Council's policy of refusing to use its charging power in this way, so as to relieve those who cannot work (or perhaps even just those who are permanently excluded from the workplace and who have no income other than benefits) from the unmitigated consequences of the statutory privileging of earned income, can properly be called discriminatory for the purposes of an Art.14 challenge,” the judge said.

“The Council could, but has deliberately chosen not to, address a systemic and discriminatory problem with the statutory default; as a result, the problem is unmitigated and discrimination thereby results, or persists.

“Put that way, this is a discrimination challenge where the discrimination can fairly be called 'obvious', which is capable of clear articulation in accordance with the authorities, which proceeds directly from the Claimant's 'other status' in comparison to all other recipients of social care, which captures what I understand to be the essence of the present case (and indeed the Norfolk case), and to which the Council's proposed justification was appositely addressed.”

The judge noted that in Norfolk, the aims identified by the local authority, and accepted as legitimate by the Court, were apportioning public resources fairly, encouraging independence, maintaining a sustainable charging regime and following the statutory scheme.

Birmingham’s  statement of the legitimate aim being pursued in this instance was simpler and much more fundamental, she said. “It is not just to operate a charging policy which is 'sustainable for local authorities in the long term', as the guidance puts it. In its current budgetary crisis, and constrained as it is at present to implement emergency financial measures, it is the imperative to cut spending and maximise revenue so as to balance the budget.” [judge’s emphasis]

The judge said care was needed with an aim of this sort. “It must avoid circularity: it is not an answer to a challenge of unlawful discrimination to say it is cheaper to discriminate than not to. The authorities speak with one voice on that fundamental point, not least in the equal pay context. But at the same time, both as a matter of principle and as a matter of practice, this is a context-sensitive issue.”

Mrs Justice Collins Rice said she had “no hesitation” in accepting here that Birmingham’s declared aim of getting itself back on track towards a balanced budget was a 'legitimate aim' of considerable importance.

“It is much more fundamental than a proposition about saving money. It is a proposition about disaster recovery, and one which does engage 'the economic well-being of the country': national Government and national finances are involved in regularising the Council's position over the coming two years.”

She added: “In Bank Mellat terms, the objective of the Council's non-interventionist charging policy at present – and it is its most recent maintenance of that position which is under challenge – is to make a substantial contribution to the programme of radical savings to which it is constrained, and I am satisfied that is a measure of 'sufficient importance' to be at least capable of justifying its laissez-faire 'discriminatory' impact. And the rational connection between the objective and the policy is plain from the very substantial proportion of the Council's total spend which is accounted for by funding including charging for adult social care to the statutory maximum.”

Turning to the question as to 'whether a less intrusive measure could have been used without unacceptably compromising the achievement of the objective', the judge said that this was a fact-sensitive evaluation.

“The choices available to one local authority may not be available to another. The evidence from the Council in the present case is that it has nowhere else to go to achieve the same balance, and that indeed is the plain logic of defaulting to the statutory maximum take. It cannot enable those who cannot work to be charged less for having their care needs met without either reducing further an already insufficient adult social care budget, or subsidising the adult social care budget from somewhere else external to it. But in reality there is nowhere else. All the Council's other heads of revenue and expenditure are fully accounted for. 'There are no other choices.'”

Mrs Justice Collins Rice suggeted that the answer to any 'consternation' of local authorities considering whether, and if so how, to charge people excluded from the workforce by disability less for their care than the scheme allows, was that, on ordinary public law principles, the power to do so has to be exercised for the purposes for which it was created.

"That has to be tailored to the local context and kept under review, and guidance on how to do so has been provided. It does not need to be exercised by reference to some unattainable ideal of equalisation, but a default to doing nothing on an unconsidered basis is plainly inconsistent with the guidance."

She said local authorities needed to think about their options in between, and in doing so be aware of the particular circumstances of those excluded from the workplace, in some cases permanently so, by reason of severe disability and without any income other than their benefits.

"It is not necessarily an onerous duty: the guidance confirms it is in the nature of a duty to consider. That is anyway a necessary and ordinary part of the responsible stewarding of statutory powers and public money," she said.

Mrs Justice Collins Rice said some local authorities might have more choices about 'less intrusive measures' than others. "Apparently Norfolk was, at least historically, in a relatively favourable position in that regard. I am satisfied, on the evidence of recent history before me in the present case, that Birmingham is not."

The judge said the case concerned “the council's political and administrative judgments of social and economic policy in the field of welfare benefits, in exceptional financial circumstances the effects of which are being felt across the city and at national level…its position is not manifestly without reasonable foundation. It falls to be respected.”

Collins Rice J meanwhile said that she was unpersuaded, on the basis that the substance of the decision challenged was justified, she had been given a sufficient basis for regarding it as nevertheless vitiated by reason of procedural failure including in relation to the Public Sector Equality Duty, or that failure to discharge the PSED in a way relevant to this claim was made out on the facts here. 

She said Birmingham considered the substantive aspects of the PSED “with real focus and anxiety…even given the overwhelming nature of its financial predicament.

“It cannot in all the circumstances fairly be criticised for not thinking more imaginatively or in any more structured way about doing something else. And if ever there were a case for accepting an argument that no further degree of procedural rigour would in any event have produced a different outcome it is surely the present one.”

She concluded that Birmingham’s situation was exceptional and “other local authorities, of course, are in different circumstances”.

Mark Smulian