Jed Meers examines the lessons for local authorities on a key ruling in relation to discretionary housing payment policies.
The facts in R (on the application of Halvai) v London Borough of Hammersmith and Fulham  EWHC 802 (Admin) aptly demonstrate two problems in the current welfare reform agenda: the increasing reliance of households claiming housing benefit on discretionary housing payments (DHPs) for long-term support, and the difficulties faced (and in this case, errors committed) by local authorities in exercising their discretion to carve up this pot. The central importance of key documents in this process – particularly Local Authority DHP policies and the application forms themselves – are both underscored by the Court’s reasoning in Halvai. Our focus here is not on outlining the scope of the DHP scheme – that has been done in detail elsewhere – instead, this article provides an outline of the decision and the key implications of the judgment.
The claimant in this case, Miss Halvai, “suffers from severe autistic spectrum disorder, learning difficulties, as well as related serious behavioural difficulties” (para.2) and in particular “has very limited understanding of [her] risk or safety” (para.3). Consequently, she “requires one-to-one care twenty-four hours a day on a permanent basis” (para.2) and has particularly acute housing needs. No suitable social housing, or indeed private rental housing, could be found within the borough. Until 2010, Miss Halvai had always lived with her mother (Mrs Halvai) and sister, however, as a result of her “complex portfolio of needs” (para.5), her mother – following some contact with the defendant local authority – decided it would be in her daughter’s best interest for her to live independently, albeit with continuing close support from family members.
Given the lack of availability of suitable accommodation, Mrs Halvai re-mortgaged her home and built an extension to the property, with some important adaptations for Miss Halvai’s safety being paid for by the local authority (para.6). The capacity of this dwelling to meet the requirements for claiming Local Housing Allowance was the subject of a First-Tier Tribunal decision, but these arguments are not at issue here. For our purposes, what matters is that this is a separate dwelling and Mrs Halvai charges her daughter a rent of £450 per week. At the time of the appeal, Miss Halvai received £302.33 a week in Local Housing Allowance; the maximum two-bedroom rate.
What transpires, therefore, is a sizable shortfall of £147.67 per week between the LHA available and the ongoing rental liability. This shortfall was the basis of an application to the London Borough of Hammersmith and Fulham for a full discretionary housing payment top-up to the claimant’s housing benefit. This was refused at first instance and following a review under Reg.8 Discretionary Financial Assistance Regulations 2001, was refused again on review (para.11). It is this decision not to award any DHP which is the focus of this case.
The Local Authority Policy on DHP Awards
Before outlining the reasons for the decision, it is important to visit Hammersmith and Fulham’s own DHP policy and key passages of the general guidance issued by the Department of Work and Pensions. There are three key issues here: the references made within the council’s DHP policy to (i) considering cases on their own merits with reference to a broad range of factors – particularly where disabled adaptions have been made to the property - and (ii) the policy’s introduction of indicative maximum DHP awards, and (iii) material in the Department for Work and Pensions’ DHP guidance which complements (i).
On the first, Hammersmith and Fulham’s own DHP policy (available in full online) states each application will be considered “on its own merits rather than on a set of rigid pre-defined criteria”, and that they will have regard to “the consequences of not making the award and the possible costs to the council if the tenants then declare as homeless” and to help “vulnerable people live more independent lives.” The policy also refers to the importance of properties which have been “adapted for disabled usage” and supporting those with a disability “that can demonstrate reasons for not being able to move to affordable accommodation” (para.17).
On the second, importantly, the document provides some cut-offs and indicative figures for viable DHP awards. It states “if the shortfall is greater than £150 per week, then normally the gap is too large for a DHP to provide a long term solution” and “we will not award a DHP for more than a year…where entitlement is continued we will need a new application” (para.18).
Third, the claimants drew particular attention to the emphasis within the DWP guidance that “there is no limit to the length of time over which a DHP decision can be made” (para.15) and that “you may wish to assist certain groups to stay in their home…Disabled people who need, or have had, significant adaptations made to their property, or where they are living in a property particularly suited to their needs” (para.16).
The local authority decision
The decision letter is produced in full in the judgment (para.11), which refers to two factors as the basis of the decision: (i) the amount of DHP asked for (an ongoing payment of £147.67 per week), and (ii) the (lack of) threat to the tenancy, and therefore the unlikelihood of homelessness.
On the total DHP amount, the authority considered that:
“Whilst our DHP policy refers to DHPs of up to £150 per week, this would generally be in the context of short term awards to prevent the immediate risk of homelessness.” (para.22).
The claimants argued that the defendant had not followed their own policy. As set out above, the policy expressly refers to shortfalls “greater than £150” (para.18) being problematic as a long-term solution. Here, the amount requested was £147.67 – so could be considered for a long-term award. Moreover, the DWP guidance directs authorities to consider long-term DHP awards: a policy to make short-term awards pegged to an arbitrary cut-off figure would evidently not have regard to this guidance in any event.
The local authority’s position was to “unashamedly” (para.27) state that this understanding of the policy was misconceived. Under the true construction, the position is simply that it is not the policy of Hammersmith and Fulham to provide long-term assistance by way of DHPs (para.27). They argued that consideration as to the amount and the length of awards was to be taken together: the maximum period is one year and this is more likely to be granted in the context of smaller awards (para.28). The court determined that the local authority did misapply their policy by “essentially failing to understand that DHP can be regarded as a long-term solution at any level” (para.31).
Second, the claimants argued that the authority had failed to take account of all the relevant factors, specifically the council’s priorities outlined in their DHP policy to support those in properties with disabled adaptations who are unable to move to affordable accommodation (para.32). Here, the claimant argued she fell clearly into these two categories, with adaptions having been made to her current dwelling and the clear lack of any readily available alternative.
Interestingly, the Court here places particular emphasis on the DHP application form submitted by Miss Halvai to the Hammersmith and Fulham in the first instance. The form itself – available online here – directly asks about the extent of any disability adaptions (see question 7.2) and any difficulties faced finding alternative accommodation (see question 7.5). Miss Halvai’s responses to these questions are partially reproduced in the judgment itself (paras. 34-35).
The Court considered that there was “no evidence these matters” had been considered (para.37), and that consequently Hammersmith and Fulham had “also erred in failing to take account of all the relevant factors and, specifically, these identified features of its own policy” (para.44).
The claimant’s second ground was broader. Notwithstanding whether Miss Halvai fell into a group identified in the internal DHP policy – for instance, if the figure specified had been £140 per week as opposed to £150 – the discretion to make an award nevertheless remained and should have been considered (para.45). This is effectively the embodiment of the repeated mantra made in relation to DHPs that considerations will be made on a “case-by-case basis” (para.15).
The DWP guidance states itself that “a policy that is too rigid will prevent you from exercising your discretion properly in individual cases” (para.46). The claimant argued that there must be some indication, more than “a throwaway reference” (para.50), to indicate that this broader discretion has been exercised. The decision letter, given its focus entirely on two elements of their DHP policy, appears to take a very different tack. Hammersmith and Fulham argued that the particular circumstances had been considered, even if not detailed within the decision letter (para.52).
The Court determined that the DHP decision was “predicated on an assumption that DHPs were only for short-term cases” and the decision letter was nothing more than “an application of the policy” (para.53). Consequently, this ground was successful.
The final ground argued by the claimants was that the council’s decision that Miss Halvai was not under a threat of being made homeless was irrational, chiefly by failing to have regard to relevant factors, particularly those identified in the FTT appeal considering her eligibility for Local Housing Allowance (para.58). The Court considered that, although the “decision in this respect is not admirably phrased” (para.69), the risk of homelessness was “very much a consideration” (para.70) and there was not “an error of reasoning which robs the decision of logic” (para.71). Consequently, it was a decision they were lawfully entitled to reach.
Given their success on the first two grounds, the Court considered that the appropriate order was to quash the decision and remit the matter to the London Borough of Hammersmith and Fulham for reconsideration in light of the judgment (para.77).
The decision of the Court serves as a reminder of two key things. First, the over-arching duty to exercise discretion in individual cases which is so integral to the justification of the DHP scheme. Fettering discretion by introducing arbitrary cut-offs – especially where even a partial award is not considered – clearly do not accord with this broader public law duty and the Department for Work and Pensions’ DHP guidance. Second, if DHP application forms ask for specific information and internal policies point to relevant considerations, this information needs to be considered as part of the DHP award decision – responses cannot be ignored. As the role played by DHPs increases, especially in the face of the LHA rate freeze until 2020, we can expect to see more challenges to DHP award decisions making it to the administrative courts.