The claimants appealed against the refusal of judicial review of the Housing Benefit (Amendment) Regulations 2012 (“the 2012 Regulations”) and the introduction of the “bedroom criteria”. The 2012 Regulations had the effect of reducing the eligible rent, for the purpose of calculating housing benefit, where the number of bedrooms exceeds the number to which the claimant is entitled.
In addition, once an applicant’s deemed need has been assessed, the overall scheme then provides for an inquiry into any further case-specific actual need, which is carried out by the local authority decision-maker on receipt of an application for additional assistance. This is done by a consideration of individual circumstances in order to determine whether to make additional contributions by way of Discretionary Housing Payments. This is the scheme provided for by the Discretionary Financial Assistance Regulations 2001 (“the DFA Regulations”).
All the claimants had disabilities and were in receipt of housing benefit. They claimed that the reduction in eligible rent discriminated against disabled people and violated their rights under Article 14 of the European Convention on Human Rights 1950. They also argued that the Secretary of State had breached his public sector equality duty under the Equality Act 2010. Both challenges were rejected by the Divisional Court.
In the court’s view, if it is read in isolation, Regulation B13 does discriminate against disabled persons who have a need for an additional bedroom by reason of their disability as compared with non-disabled persons who do not have such a need. The bedroom criteria defines under-occupation by reference to the objective needs of non-disabled households, but not by reference to the objective needs of at least some disabled households. The court held however, that the Secretary of State has made it clear that the Regulation is part of a package for dealing with the problem of under-occupation, so the question before the court was whether the scheme as a whole discriminates against disabled persons.
It was held that the discrimination in this matter was best described as indirect discrimination of the kind recognised in Thlimmenos v Greece (34369/97) (2001) 31 E.H.R.R. But the central question was whether that discrimination was justified. The correct test was to ask whether any justification advanced by the Secretary of State was manifestly without reasonable foundation.
The court applied Burnip v Birmingham City Council  EWCA Civ 629,  P.T.S.R. 117 and Humphreys v Revenue and Customs Commissioners  UKSC 18,  1 W.L.R. 1545. This was a stringent test and the question was simply whether the discrimination had an objective and reasonable justification. The court had to exercise caution before interfering with a scheme approved by Parliament. While it had to scrutinise carefully any justification advanced by the Secretary of State, it was not sufficient to expose some flaws or to conclude that the justification was not particularly convincing. The court had to be satisfied that there was a serious flaw in the scheme which produced an unreasonable discriminatory effect. The Secretary of State had explained in detail his reasons for structuring the scheme in the way that he had. In particular, he explained why he had decided to provide for the disability-related needs of some disabled persons by means of housing benefit under the 2012 Regulations, and those of others by way of discretionary housing payments. In combination, his reasons were far from irrational. Central to his thinking was the idea that there were certain groups of persons whose need for help with their rent was better met by the making of discretionary housing payments than by providing for them within the housing benefit regime. His reasoning amounted to an objective and reasonable justification of the scheme, and the court was not bound to reach the same conclusion as had the Court of Appeal in Burnip.
The court held that in terms of his public sector equality duty, the Secretary of State had paid due regard to the relevant considerations. It was insufficient for a decision-maker to have a vague awareness of his legal duties; he had to have a focused awareness of each of his section 149 duties and their potential impact on the relevant group of disabled persons. In the instant case, there was no practical difference between what was required by the various duties, even though they were expressed in conceptually distinct terms. The evolution of the policy showed that the Secretary of State had understood that there were some disabled persons who, by reason of their disabilities, needed more space than was deemed to be required by their non-disabled peers. The question of how that need ought to be accommodated had been the subject of wide consultation and had been studied in great detail.
The court also held that the question of whether there would be sufficient money available for discretionary housing payments and whether the adequacy of the available funds should be kept under review had been considered at great length. It was obvious that the Secretary of State had been aware of the serious impact the bedroom criteria would have on disabled persons. The appeal was therefore dismissed.