I am aware of a number of comms and UT decisions relating to the old reg 11 and the question of "restricted/unrestricted" rents, but seems to me that this area is not settled law.


I have a case where a large number of "tenants" have claimed HB and been refused under the old reg 11/new reg 6 HB(CP) Regs 06..(also refused on "contrived tenancy" grounds, to boot)

Story is that the occupiers (we'll call them) were receiving HB (reference rents) and also a package of care delivered by a single care provider funded under contract to the Local Authority. The care provider at that time was also accommodation provider.

Under the Care Standards Act, the provider was forced to split its activities into accommodation and care provision (2 companies).

They did so and carried on....they were then informed that for several years they should have claimed HB under reg 11 and could have obtained far more than the reference rent. In any event, they chalked their "losses" to experience, set up as described and then claimed HB under (old) reg 11.

the Accom provider is a CIC (NFP) company and built into the new tenancy agreements that substantial care and support was still part of its function and that the Care provider arm of the operation would continue to provide the other care services..ie no change to the service users' care and accom.

HB now refused in each case (interestingly after initially allowing one claim in isolation)...reasons that tenancies created to take advantage of HB scheme (reg 9(1) (L)) and - furthermore - that accommodation falls NOT to be exempt in any event as alternative suitable accom is available.

The FACT is that suitable alt accom is NOT available (the LA concerned comes to this organisation as a last resort when it cannot place them anywhere else, for one thing). I think that HB have taken the more common route of alternative suitable accom in the market, whereas my understanding of the test is that for vulnerable tenants the LA has to show such alternatives are actually available, not simply within normal local marketplace conditions.

I consider that the HB DM has also construed "taking advantage" (reg 9) in a very narrow sense which does not sit with Jacobs' decision in CH/0039/2007

NB HB were paying (albeit only ref rents) on all these prior to the splitting of the two companies

I also consider that the argument on whether the accom is exempt is flawed in that the accom provider both:-

a) provides care beyond minimal care, support or supervision (old reg 13)

and

b) has a contractual relationship with the care providing company which effectively meets the threshold of the providing care "on behalf of" (the accom provider) (R(H) 2/07), as Turnbull would have it.

I therefore have (I think) a way forward....

Does anyone have any experience of such cases out there??

It seems to me that this is an example of the local authority HB section making a political (and economic) stance around whether it should pay for care. Such situations must occur all the time...indeed this same situation has been dealt with by the same two organisations in other boroughs with no problems and on the same facts!!

Some of these clients (the majority) are under s117MHA83 aftercare provisions, so another argument re funding accommodation is to be raised with the LA on this point...however, the HB challenge remains, as certain clients are not under s117 (but may alternatively I suppose fall under s21 NAA48), but the s117s could be reviewed at any time leaving them again reliant on HB.

Any thoughts welcome

Wed 17-Mar-10 07:57 PM by Kevin D

From the outset, you should be aware I have advised a number of LAs in relation to exempt accommodation cases, and continue to do so. By LAs, I mean the Benefits sections / teams of those LAs. Accordingly, make of this post as you will....

It is far from unprecedented for LAs to rely on "contrived". It is also not unprecendented for some LAs to rely on multiple alternatives - this approach is entirely appropriate so long as the evidence and info merits it.

I note your reference to CH/0039/2007, but any "contrived" case law et al cited in isolation is a dangerous approach. For example, see CH/136/2007 where "contrived" was upheld (for transparency, I assisted the LA in CH/136). I am fortunate to know a bit of background to CH/0039/2007 and, suffice to say, it holds no fear for me if it is ever produced at a Tribunal on behalf of a tenant. I am also aware of CH/577/2009 which was found in favour of the claimants. My personal view is that the decision could easily have gone the other way. In my opinion, neither CH/0039 or CH/577 change the interpretation of HBR 9(1)(l), nor is any new legal principle introduced.

If the LL has deliberately changed its arrangements in order to secure large increases in benefit, the LA *may* be justified in finding as it has. BUT, it will depend on the evidence as a whole.

In order for it to be "exempt accommodation", care or support or supervision must be provided by either the landlord or on behalf of the landlord. In my experience, there have been all too many occasions where "agreements" have been produced that contain terms that are not necessarily to be taken at face value - this may be a factor in the LA's decision. Bear in mind that exempt accommodation is an exception and therefore, if it is finely balanced, the onus is on those seeking the exception to show they meet it.

Based on the info given, I take it as read that, at least at first glance, the LL is a "voluntary organisation" - although this may be arguable if large sums of monies are changing hands. Especially if there is serious profiteering by any of the companies involved.

As for "suitable alternative accommodation", the onus is on LAs for "suitability" (doesn't have to be identical, nor similar). However, a LA is not required to identify individual addresses (Gibson). Further, it is for a claimant (or rep) to show that accom is not available (availability being another exception) - this was confirmed in CH/3528/2006 which followed an earlier High Court judgement on the same issue (R v Oadby and Wigston DC ex p Dickman (1995) 28 HLR 806 QBD).

In the event of you arguing other cases have been paid in similar circs, there is an obvious double-edged sword. I am aware of a LA where precisely this happened. The LA promptly revised all those cases on the grounds there was no entitlement - in excess of 100. Unsurprisingly, appeals were made and the outcome is still awaited.

The commentary and analysis in the CPAG, on "old" reg 11/13 may help in relation to that issue. But, there is now a veritable shedload of case law on most aspects of exempt accommodation and the CPAG can only address so much.

If my post conveys a degree of scepticism about the genuineness of arrangements in EA cases, it is born of experience in too many cases where all has been far from what has been presented to the LA.

Just one note on whether decisions are political. On occasion, yes. However, perhaps surprisingly, they tend to go in favour of the claimants (at least in my experience). I know of more than one LA that has deliberately avoided making "hard" decisions because it "...would look bad...". This was despite overwhelming evidence of what might loosely be called the "rip-off" element.... I have also heard delegates on training courses openly state their LA would never refuse benefit under HBR 9(1)(l), no matter what the evidence.

Thanks, most enlightening!!

Still a minefield, as you say!!

I have reasonable confidence that the organisation(s) concerned are not "profiteering"....they basically provide accom and care for those who (lets say) the LA's in question won't touch with a bargepole....it seems they have basically subsidised the accom side of their operation (when "together") by finding monies from the care budget for many years already.

The Care Standards Act requirements to separate functions out between care and accom has left this situation to evolve and fester.

My clients are the tenants, whose own evidence (and all objective evidence including that of the LA social services and local pct) demonstrates that the quality and scope of care and accom provided in the package is very high indeed.....they simply want their homes and their packages of care to continue.

The apparent reality for the accom provider is that unless exempt accom is allowed, they will fold, as the costs of providing accom to persons with severe MH problems, arsonists, sex offenders, violent ex-offenders etc is simply beyond that covered by reference rent....

upshot would seem to be that if that happens, then the (same) LA who could not house/accommodate them in the first place (hence referral) will have nowhere to go!!

That is why I believe that the decision is potentially political, in my view.

I have already considered the dangers of arguing in terms of the precedent of successful claims in other LA's...and indeed raising the fact that the same LA allowed a previous claim with the exact same circs....the fact that the LAHB is now asked to exempt 30+ claims, is I think the real reason behind the decisions...hence the political angle.

I agree with the vast majority of Kevin's response, but as usual I'm a little reticent to raise the 'rip off' issue whenever EA is an issue.

I have recent experience of several unincorporated (but clearly 'social' landlords) forming CICs (community interest companies). These bodies are regulated by Companies House and must submit an annual report proving that no profits have been made. If any profits are actually made then one of the conditions of operating as a CIC is that those profits are reinvested for the benefit of the 'community' that the CIC was set up to benefit.

I think that the 'not for profit' issue should be less problematic here than actually showing that the housing wing of the operation actually provides (or sub contracts) more than minimal support which is distinct from the care/support provided by the main support provider at the property and which also goes beyond ordinary housing management. Latest case law here would be R(H) 4/09 and CH/200/2009.

Kevin helpfully mentions CH/577/2009, and I would definitely recommend looking at this case too. Not pre-judging the terms of the lease between the property owners and the newly formed CIC, the more reasonable the costs then clearly the less likely are suggestions of a scam whereby the property owners siphon off profits. As Kevin rightly said, that decision could have gone the other way but for the difficulty of showing that an arrangement 'deliberately seeks to take advantage of...'. You'll find lots of useful commentary in this decision on those issues.

I work in Local Authority Commissioning so fully understand the context here - 'Alternative Futures' Moore v. Care Standards produced new guidance from CSCI (CQC) on separation of the provision of accommodation and care, and also useful commentary on the need for there to be an ethos that supports independence. If this particular accommodation is a care home in all but name then it is in dodgy ground, but if it is operating in a way that deliberatley promotes independence with meaningful tenancy support services (ideally funded via the Supporting People programme, or at least supported by the LA if all available SP grant is pre-allocated to other services) then I can't see how the tenancies could possibly be said to be contrived.

Useful commentary is also found in many of the recent Commissioners Decisions around the changes in commissioning practices post April 2003, and these also go a long way towards explaining why separation of accommodation and support services is desirable. HB officers can't really be expected to be experts in this specialist field, and in many ways the current problems and controversies stem as much from that fact as from the small number of wide boys exploiting what they consider to be a loophole. That's why I still think that closer working between Rev Bens and Social Services commissioners could clear a lot of the fog...

Thanks very much for the pointers...I am aware of much of the caselaw...but - as both contributors seem to imply - there are "knife-edge" issues in terms of the facts in any case...the landlord/care providers here are not a care home at all but provide widespread accommodation in independent housing across several boroughs...in simple terms, to be fair, their concern seems as much to do with the contrivance aspect (which is debarring them from even reference rents) as with the EA issue.

Will bat on....

thanks again