Following the recent ‘bedroom tax’ hearing in the UK Supreme Court, Jed Meers from the University of York considers the potential implications of the upcoming judgment for policies relying on elements of conditionality

The much litigated Removal of the Spare Room Subsidy – more commonly known as the ‘bedroom tax’ – has limped its way to the UK Supreme Court.* Many will understandably assume the case has few consequences beyond the claimants involved. The policy is fairly narrow in scope and to some extent has been superseded by the upcoming lowering of the benefit cap and changes to Local Housing Allowance (not to mention the ever-imminent Godot of social policy, Universal Credit). There is, however, more here than immediately meets the eye.

The court recognised the importance of the case by assigning seven justices (instead of the usual five) and the Department for Work and Pensions wheeled out its “star at the bar” James Eadie QC to defend the claims. This is because the case is far from hermetically sealed within the confines of the amended Housing Benefit Regulations 2006. Rather it has the potential to address the viability of discretionary-based schemes of benefit provision, the associated standard of review adopted by the Courts, and the role (or lack) of international conventions in reaching these decisions.

This short blog post seeks to squish these wider issues into the confines of a discussion on the space for conditionality in lawful policy-making. First, it is worth briefly outlining the nature of the challenges before the court.

This hearing was a series of three joined appeals – MA, Rutherford and A – each dealing with a different class of claimant: a wider category of those who require an ‘extra’ bedroom by reason of a disability (most of the MA claimants), the narrower sub-categories of adults who cannot share a room by reason of disability and children who require overnight care (the Rutherford and Carmichael MA claimants), and those who need to remain in their property because it has been adapted as part of their inclusion in a domestic violence sanctuary scheme (the A claimant). The key issue was the lack of statutory exemption for these populations from the ‘bedroom tax’ and their consequent reliance on a locally administered Discretionary Housing Payment scheme.

The legal arguments focused, among other things, on alleged discrimination on the grounds of sex and disability under Article 14 of the European Convention on Human Rights, particularly instances of so-called Thlimmenos discrimination – the failure to treat differently those whose situation warrants it, without an objective and reasonable justification. The main thrust of attack by the claimants was that the ‘bedroom tax’ regulations, in not offering a statutory exemption to these groups while providing one for others, were unlawfully discriminatory.

Thinking about conditionality, the judgment will be important for three key reasons. First, it will have implications on the ability of the government to operate its hybrid ‘cut-and-devolve’ approach to welfare reform. Flagship policies like the benefit cap, the removal of council tax benefit and the closure of the independent living fund have all relied on local discretionary pots to pick up the pieces (an issue picked up previously on this blog by Deven Ghelani), with a small number of statutory-based exemptions. This allows the government to avoid delineating where the boundaries of a reform lie, and puts local government in a difficult position of dealing with widespread impacts with tight, centrally determined (and often, not ring-fenced) budgets.

We have seen this lead to the local imposition of conditionality. The Court was directed to Harrogate Borough Council’s DHP application form as an illustration of how different applications to these discretionary schemes can be when compared to the standard housing benefit means test. This structural point is of particular importance. The appeals – and Thlimmenos discrimination challenges more generally – are focused on the structural discrimination within the scheme, not just the impact on the individual claimants. In other words, the fact a claimant is receiving a discretionary payment may not be good enough. These hybrid models – by ‘exempting’ some and leaving others to the mercy of a discretionary power – are inherently systemically discriminatory, so a finding against the government could imply a positive duty on the state to design schemes without such internal differential treatment in similar contexts.

Secondly, the case will have implications for the standard of review adopted in social security appeals. In short, the lower judgments determined that an indirectly discriminatory scheme would be justified – and therefore lawful – unless it is ‘manifestly without reasonable foundation’. This sets the bar high, and gives the Secretary of State a sizable degree of manoeuvre. Indeed, it was held by the Master of the Rolls that the ‘stringent nature of the test requires the court to be satisfied that there is a serious flaw in the scheme’ to determine it lacks justification. This test is explicitly under challenge for the first time in these appeals, and the Supreme Court will have to come to a position on its applicability in the social security context. By potentially opening the way for a higher standard of review, this could have far reaching consequences for further appeals to measures which reduce entitlements in favour of more conditional arrangements. In other words, the government may have to advance stronger reasons than ‘localism’ and ‘budget discipline’ to justify the differential treatment.

Thirdly, the court will consider the extent to which the UK’s international obligations – specifically the United Nations Convention on the Rights of the Child (UNCRC) and the United Nations Convention on the Rights of Persons with Disabilities (UNCRPD) – apply in interpreting the justification of discrimination in this context. Both of these international conventions pose particular obligations, such as the requirement to ensure ‘the best interests of the child shall be a primary consideration’ in policymaking. Should international obligations play a particularly central role in the judgment (as was the case in the dissenting decisions on the benefit cap) this will have implications for other welfare reforms where conditionality adversely affects either disabled individuals, children, or –as in Rutherford – children with disabilities.

To summarise, the decision of the Supreme Court in these joined ‘bedroom tax’ appeals has implications far outside the confines of the policy. It will directly affect the ability of the government to maintain a hybrid system where some get statutory entitlements and others rely on parallel conditional schemes. More broadly, it may clarify the public law standards to which these structures can be held to account by the court. The decision is unlikely to come quickly; perhaps May at the earliest. Its effects, however, will define how ongoing litigation tackles a raft of other reforms: the lowering of benefit cap, changes to Local Housing Allowance, and various elements of Universal Credit, amongst others.

*For those struggling to fill their evenings, the hearing – all three days of it – is available to view online at your leisure here.

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