Duties, resources and disabled facilities grants

Feature

posted 1 May 1999 in Volume 4 Issue 4

Duties, resources and disabled facilities grants

R v Birmingham City Council ex parte Taj Mohammed

In R v Birmingham City Council ex parte Taj Mohammed1, the question whether a local authority can lawfully take resources into account in discharging a statutory duty was raised yet again, this time in the context of disabled facilities grants (DFGs) under the Housing Grants, Construction and Regeneration Act 1996. The decision that local authorities are not so entitled is an important one for disabled older people, as they are the prime beneficiaries of such grants2. It is also the first reported case in the lower courts where the judge was referred to the two House of Lords cases relating to resources and duties in the social welfare field.

In 1997 in R v Gloucestershire CC ex parte Barry3, the House of Lords by a 3:2 majority decision ruled that local authorities can take their available resources into account when deciding whether or not a person has a 'need' for services under s.2 of the Chronically Sick and Disabled Persons Act 1970. Some eighteen months later a differently constituted House of Lords unanimously decided in R v East Sussex ex parte Tandy4 that there was no scope under s.298 of the Education Act 1993 to import anything other than educational considerations in determining the scope of the local authority's duty to make arrangements for the provision of 'suitable education' for children receiving home tuition. Not only was Barry was distinguished in Tandy, but Lord Browne-Wilkinson gave new emphasis to the significance of the gradation between duties and powers: 'Parliament has chosen to impose a statutory duty, as opposed to a power, requiring the local authority to do certain things. In my judgement the courts should be slow to downgrade such duties into what are, in effect, mere discretions over which the courts would have very little real control.'5

The outcome in Mohammed suggests that the post-Tandy speculation that 'future attempts by local authorities to introduce the issue of scarce resources into social welfare decisions... made under statutory duties owed to individuals are very likely to fail'6 seems, for the moment at least, to be an accurate prediction of the response of the courts.

The context

Disabled facilities grants are the main vehicle of state assistance with costs for those undertaking adaptations to their homes. There are two factors which explain the reliance on DFGs by the elderly disabled. The first is the prevalence of disability in the older population. It is well known that more than two-thirds of disabled adults are aged over 60, and it has been estimated that approximately one quarter of people over 60 are seriously mobility impaired. The second factor is the level of poverty in old age: more than 50% of all pensioners live either in or on the margins of poverty and one-third live at income support level. The importance of financial assistance towards the costs of adaptations which will allow older disabled people to remain living independently is clear.

The legislative framework

Disabled facilities grants have evolved as an integral part of the private sector housing renewal and renovation programmes. The current grant regime is to be found in Part I of the Housing Grants, Construction and Regeneration Act 1996, which came into force in December 1996, and the accompanying guidance issued by the Department of the Environment, Circular 17/96, 'Private Sector Renewal: a Strategic Approach'. The 1996 reforms were driven by resource pressures on local authorities. The experience of local authorities under Part VIII of the Local Government and Housing Act 1989 was that the demand for mandatory renovation and disabled facilities grants led to resources being 'pepper-potted' and this prevented strategic approaches being implemented. The response was to abolish mandatory renovation grants and leave DFGs as the only remaining mandatory grant. The justification for the retention of the mandatory status for DFGs was recognition of the part played by DFGs in the context of community care policies.

Anyone who is either disabled themselves or needs the grant to allow them to adapt the house for a disabled occupant, is eligible to apply for a DFG. Disability is broadly defined in s.100 of the 1996 Act. The 1996 Act maintains the distinction between grant aid being mandatory for some works and discretionary for others. The purposes for which mandatory DFGs may be given are set out in s.23(1). The focus is on works which provide better mobility in and around the home, more suitable kitchen and bathroom facilities, accessible heating and lighting controls, better heating and items relating to safety.

Discretionary DFGs can be awarded for works qualifying for mandatory grant that exceed the ceiling of £20,000 for England and £24,000 for Wales7, as well for adaptations to make the disabled occupant's home suitable for their 'accommodation, welfare or employment' (s.23(2)).

Even if the works fit into the prescribed categories, an application cannot be approved unless the housing authority is satisfied that the works are 'necessary and appropriate to meet the needs of the disabled occupant, and that it is reasonable and practicable to carry out the relevant works having regard to the age and condition of the dwelling or building.'8 Section 24 places a duty on housing authorities to consult social services authorities over whether the works are 'necessary and appropriate'9. Assessments are usually carried out by an occupational therapist. The final decision lies with the housing authority as to what action to take on the basis of social services' advice and the level of adaptations for which grant is approved.

Social services have a separate legal obligation under s.2(1)(e) of the Chronically Sick and Disabled Persons Act 1970 to provide assistance to disabled people needing home adaptations and other facilities designed to secure their greater safety, comfort and convenience. Since the introduction of DFGs in 1990, the practice has been that less costly adaptations and equipment are funded by the social services authority under the 1970 Act, with housing authorities being the main funders for works costing more than £350, typically larger adaptations requiring structural modification of the property. The source of the funding is also linked to the tenure of the applicant, and the overall picture is complex.

Funding

It is important to note that even where the application is for a mandatory DFG, private sector tenants and owner-occupiers will be subject to a means-test (s.30). The means-test is prescribed by central government and local housing authorities do not have the power to vary it, in particular to award it at a lower level10. The means-test for DFGs only applies to the disabled occupant, and their spouse or partner. This change to the regulations in 1996 exempts adult children from the means-test, both where they are living in the home of the disabled older person, and where the older person has moved in with them and they are the owner-occupier or tenant. The regulations mirror the housing benefit rules and the amount awarded will therefore be dependent on the income and savings of the disabled occupant and their spouse or partner. The test of resources determines a notional amount which the individual could afford to make as loan repayments and this then reduces the amount of grant. 100% grant is automatically available where the disabled older person and any spouse or partner are on income support. The survey carried out for the Department of the Environment in 1996 found that 83% of all successful applicants for mandatory DFGs make no contribution to the cost of the works11.

Local authorities annually bid for resources from central government for DFGs as part of the Housing Investment Programme. The Department of the Environment, Transport and the Regions (DETR) determines individual HIP allocations with half on the basis of need, calculated on estimates of the number of elderly and disabled people in need of adaptations, and half on a judgement of the quality of each authority's strategy and performance. The subsidy towards DFGs, both mandatory and discretionary, is paid as Specified General Grant at a rate of 60% of eligible expenditure12. SCG is not cash-limited as it is claimed on 60% of whatever the authority actually spends, with the remaining 40% being funded from the authority's own resources. Local authorities can spend at a level which means they claim in excess of their HIP allocation, provided that they can do so within the overall borrowing limits set under the local authority capital control system. The HIP allocation for DFGs in 1998/99 is set at £59 million, which will support local authority expenditure of £98 million13. Although demand for DFGs has risen by over 50% since 1991, this has not been matched by increases in the HIP allocation which has increased by a mere £9 million. The Audit Commission have quantified the imbalance of capital allocation with demand, claiming that current funding levels provide for only 25,000 grants annually, while DETR research identifies 650,000 potentially eligible households in the private sector14.

As noted above the current system of funding is tenure based, and central government funding on the model explained above does not apply to council tenants. Although a council tenant may apply for a DFG, the work is normally funded by the housing department as part of its landlord role through its housing revenue account or its capital programme. Reductions in local authority capital programmes in recent years have therefore particularly impacted on access to adaptations by older tenants. Overall, less money is spent on adaptations for council tenants than on DFGs for the private sector,15 although DETR research confirms that the need for adaptations is likely to be higher in the former group, given the high proportion of older people in council housing.

Registered social landlords (RSLs) also have a high proportion of older tenants so funding of adaptations is important for this group as well. Although such tenants can apply for DFGs subject to the same means test and funding system as the private sector, in recent years many RSLs have chosen to fund adaptation works themselves and claimed an additional grant from the Housing Corporation. There are competing pressures on individual RSLs in relation to funding adaptations. On the one side the Housing Corporation has altered its policies, restricting reimbursements to work exceeding £500, and to RSLs which do not have high levels of reserves. On the other side, Circular 17/96 draws the attention of local authorities to 'the option' of RSLs funding adaptations for their own tenants, and RSLs may not be willing to put their relationship with the local authority in jeopardy by refusing.

Managing the budget before Mohammed

Before the 1996 reforms, pressure on resources led to local authorities taking a number of measures to 'manage demand' and keep within their budget. One consequence was that two-thirds of authorities provided only mandatory grants16. A raft of rationing and delaying strategies were revealed in a survey by the Local Government Management Board17. One particular tactic, delaying payment, has now received statutory sanction in s.36 HGCRA 1996, which gives local authorities a discretion to delay payment of mandatory DFGs of up to twelve months from the date of application, thus enabling authorities to schedule payments across financial years. Prioritising demand for DFGs also meets with approval in Circular 17/96. although the guidance does sets its face against the use of pre-application tests (a practice of dubious legality anyway).18 The most recent evidence as to how local authorities are managing their budgets comes from the Audit Commission. Their report concluded that authorities could use existing resources more effectively and highlighted three particular problems: resources are not always prioritised to meet need; systems for processing applications are often inefficient; and parochialism in budget management is impeding value for money.19

The facts in Mohammed

Mr. Mohammed applied to Birmingham City Council for a mandatory disabled facilities grant. As he suffered from arthritis, anxiety and depression, he qualified as 'disabled' within the s.100 definition. It also appears that there had been an assessment of his adaptation needs as there was an occupational therapist's report that his health would benefit from the installation of central heating, insulation and draught-free windows. On 15 April 1997 Birmingham housing authority refused his application on the grounds that he did not meet the criteria which it had adopted to determine such applications.

In relation to the provision of heating under s.23(1)(i) HGCRA 1996, the criteria were that the applicant must either:

'(a) receive home kidney dialysis and his/her treatment room is inadequately heated, or

(b) have a medical condition which makes it necessary to be in a constant temperature 24 hours per day and existing heating is unable to maintain this ... or

(c) have been assessed by social services as requiring extended bedroom/bathroom facilities in his or her home, which also require heating.'

Mr. Mohammed then sought judicial review of the refusal. Before the final hearing in June 1998, Birmingham housing authority conceded that its criteria were unlawfully rigid in the context of the statutory scheme, but indicated that when it adopted replacement criteria and/or made a further decision in relation to Mr. Mohammed it would do so on the basis that it was obliged or alternatively entitled, to have regard to its financial resources. Dyson J. was prepared to decide the point, as he accepted that it was of considerable general importance to Birmingham20 and other local housing authorities.

The reasoning

Dyson J. approached the process of statutory construction of ss.23 and 24 of the HGCRA 1996 by using the legislative history, the contrast between mandatory and discretionary grants, the inclusion of resource considerations in s.24(3)(b) and (4) as well as elsewhere in the Act, and the involvement of social services in the assessment process, to conclude that housing authorities are not entitled to take into account their financial resources when deciding whether or not to approve a mandatory DFG. He further held that the question of whether the works will achieve a purpose which comes within s.23(1) is an 'objective' or 'technical' question, having regard to the nature of the applicant's needs and the proposed works. He went on to distinguish Barry despite the similarity in the wording of s.2(1) of the Chronically Sick and Disabled Persons Act 1970 ('necessary in order to meet the needs ....') and s.24(3)(a) of the 1996 Act ('necessary and appropriate to meet the needs ....'). In doing so he relied on the distinction between 'real' needs and 'desirable benefits' advanced by Lord Browne-Wilkinson in Tandy. In language echoing that of Lord Browne-Wilkinson in Tandy, he declared 'Parliament has chosen to impose a statutory duty in relation to DFGs within s.23(1) purposes. The court should be slow to downgrade such a duty into a mere discretion over which the court would have little control. If Parliament wishes to redirect public expenditure on meeting the needs of disabled occupants of buildings, then it is for Parliament so to decide.'21

Conclusion

The overlapping duties of social services and housing authorities in relation to adaptations does not simply give rise to legal complexity but has provided opportunities for 'cost-shunting' to the detriment of older disabled people in need of adaptations. To argue that Mohammed suggests Barry will increasingly be confined to its particular statutory context overlooks the existence of these overlaps. Indeed the interaction of Barry and Mohammed adds a further layer of complexity in this area. Given the convention that low cost adaptations are dealt with by social services and high cost by housing authorities, it may seem strange that social services can take their financial position into account in determining the applicant's 'need' for low cost assistance but housing authorities are not entitled to have regard to their financial resources in relation to whether high cost adaptations are 'necessary and appropriate'.

Norma Martin Clement, Faculty of Law, University of Leeds

1 [1998] 3 All ER 788, [1998] 1 CCLR 441.

2 A survey in 1993 found that 70% of people in receipt of DFGs were aged over 60, ('An Evaluation of the Disabled Facilities Grants System', report by Pieda plc to Department of Environment, 1996).

3 [1997] AC 584.

4 [1998] 2 All ER 769.

5 At p. 777.

6 Cragg, 'Resources and duties', Legal Action July 1998, p.10

7 Disabled Facilities Grants and Home Repair Assistance (Maximum Amounts) Order (S.I. 1996/2888). Initially there was no ceiling on grants but in 1993 it was fixed at £50,000. Reduction to the current levels came in January 1994. In real terms, the ceiling has, of course, declined over the last five years.

8 S.24(3)(a) and (b).

9 In unitary authorities, the social services department should be consulted.

10 See R v Sunderland CC ex parte Redezeus Ltd [1994] 27 HLR 477.

11 Pieda plc, 'An evaluation of the disabled facilities grants system' (DoE, 1996), para. 5.27.

12 The rate of subsidy was 75% prior to April 1993.

13 HIP allocations set out in DETR Annual Report 1998, http://www.detr.gov.uk/annual98.

14 Audit Commission, 'Home Alone; the role of housing in community care' (1998), para.51, citing DoE, 'Providing Indicators of Elderly and Disabled People at District Level' (1996).

15 £85 million in 1996/97, Appendix 5, Audit Commission (supra).

16 Pieda plc (supra), at para.3.19.

17 Association of County Councils, Association of Directors of Social Services, Association of Metropolitan Authorities and Local Government Management Board, 'Survey of disabled facilities grants 1995' (1996) LGMB.

18 'Private Sector Renewal: a Strategic Approach', Appendix I, para.46.

19 Supra note 14 at para. 51.

20 Birmingham is the largest local authority in England, and while housing analysts view it as an innovative authority in the field of private sector housing renewal, it also attracted notoriety in 1995 for maintaining pre-application waiting lists in relation to mandatory renovation grants.

21 [1998] 3 All ER 788 at 797f-g; [1998] 1 CCLR 441 at 450D-E