Housing benefit inflation cap upheld

Posted: 22nd February 2013

Tower BlockThe High Court has upheld the government’s controversial policy to pin housing benefit increases to the level of general inflation. In dismissing a judicial review challenge brought by a poverty relief charity, the court rejected arguments that Secretary of State for Work and Pensions had exceeded his statutory powers and that the changes to the benefit system fell foul of the Equality Act 2010.

The charity, Zacchaeus 2000 Trust, argued without success that the changes introduced by the Rent Officers (Housing Benefit Functions) (Amendment) Order 2012 fell outwith the powers to make statutory instruments conferred on the Secretary of State by the Housing Act 1996.

The court also dismissed submissions that, in introducing the cap, the Secretary of State had failed to comply with his duty under the 2010 Act to ensure that the changes did not have a disproportionate impact on protected groups, including the disabled, mentally ill and children of school age.

The charity had argued that, if inflation in the private rental market was higher than inflation within the general economy, the result would be substantive decreases in the value of benefits paid. This, it was argued, would have a severe impact on members of particularly vulnerable groups who would be likely to be forced to move to cheaper areas.

However, the court noted the government’s expressed hope that the changes will exert a downward pressure on private rental levels and that the value of housing benefit payments would only be reduced in real terms if prevailing rents rose faster than inflation. The court also heard evidence that the government, which had conducted an equality impact assessment prior to adoption of the policy, had allocated to local authorities a £130 million fund to enable them to target support where it is most needed as a result of the housing benefit reforms.