Local authority’s section 17 subsistence rates policy found to be unlawful 

29 July 2014

A local authority’s  NRPF policy of basing section 17 Children Act 1989 subsistence rates on Child Benefit rates has been found to be unlawful in the case of PO v London Borough of Newham [2014] EWHC 2561 (Admin).

Facts of the case 
The family of Nigerian nationals, a mother and three children, were overstayers. The local authority’s support began in March 2013, when the family were provided with a two bedroom flat, plus payment of council tax and utilities at a cost of £1302 per month. In April 2013 the local authority provided £50 per week subsistence funding, and later, a bus pass for the mother worth £19.60 per week in order to take the children to school. Subsistence was only paid after the family’s legal representative intervened on their behalf. 

The family sought to challenge the amount of subsistence they received by way of judicial review. However the family were granted leave to remain in January 2014, shortly after permission was granted. The local authority continued to support the family with subsistence payments until May 2014 and accommodation until June, whilst they were waiting to receive mainstream benefits. The local authority admitted to making mistakes when dealing with the case, and offered to reconsider the adequacy of the payments made to the family. The Court therefore only determined whether any such decision made in accordance with the council’s policy would be unlawful. 

In October 2013, LB Newham implemented an NRPF policy which covered the rates of subsistence that would be paid to families. The local authority stated that the rates were based on those for Child Benefit, and, in the policy, amounts were set for specified family groups, with extra payments for each additional child in the family. These extra payments were significantly lower than the amount that child benefit is paid for additional children, and varied according to the number of parents in the family group. The policy allowed for time-limited additional financial support to be provided in exceptional circumstances, and for the subsistence amount to be reviewed on written request of the service user, should they not be satisfied with the payments they are receiving. In this instance the policy was only made available to the service user when served to the Court as part of the Judicial Review proceedings.

The Court's findings​
The Judge clearly set out that the local authority is responsible for deciding what level of services are appropriate to be able to meet the child​ren’s needs in order to safeguard and promote their welfare, in line with it's duties under section 17 Children Act 1989. However, this decision may be challenged if it is irrational, or incompatible with the human or EU rights of those affected by the policy.

At paragraph 43, the Judge outlines what a local authority must consider in setting subsistence rates:

“A local authority making payments in respect of the subsistence needs of child, who is in need simply because his family is destitute, and those of his family must inevitably have some conception of how much is normally 'appropriate to those children’s needs' in order 'to safeguard and promote their welfare'.”

The Judge categorically found that child benefit is not designed to meet the subsistence needs of children, stating at paragraph 46:

 “..faced with that sheer scale of difference in the [asylum support] rates payable for “essential living needs” and for “child benefit”, in my judgment no reasonable authority could have based its assessment of what was appropriate to meet the subsistence needs of a destitute child on the amounts payable in respect of child benefit”.

On considering the standard payments that LB Newham had set in their policy, the Judge found that even if it had been reasonable to use Child Benefit rates as a measure of what is required for the purposes of meeting the needs of the children, Newham paid different rates depending on the types of families supported. These were not the equivalent of child benefit and therefore there was no rational explanation of how these had been derived from the child benefit rates.

The Judge also considered lack of payments for the adults in supported families and found that it made no sense to leave the adults to starve. Payments to adults should be additional to those considered appropriate to meet the needs of the children, but may not exceed what is necessary to avoid a breach of the human rights of those involved.

The Court also found that it is not unlawful to prescribe standard rates of payment to meet subsistence needs, provided that these rates are “lawfully determined” and that the policy allows for exceptions to be made.
Additional points made by the Court are that:

  • Failure to make a local authority’s NRPF policy available to those who might be affected by its application would be unlawful.
  • Lack of complaint from a family does not mean that the local authority can be satisfied that they are making payments appropriate to the children’s needs
What this means for local authorities
This is the first judgment that considers subsistence rates following the Refugee Action challenge, regards the setting of asylum support rates, which we reported in news bulletin no. 44. Although, in PO v LB Newham, there is acknowledgement that there may be some difference between a child’s “essential living needs” and their “subsistence needs,” as conceived by LB Newham, this matter was not explored further. The Judge does reiterate throughout the case that in considering appropriate rates of subsistence, a local authority must have “..some conception of how much is normally ‘appropriate to those children’s needs’ in order ‘to safeguard and promote their welfare’.”​

In light of this judgment, local authorities, in setting or reviewing their subsistence policies, need to consider:

  • If the policy sets out standard rates, how have the standard rates been reached, and what was the rationale behind this.
  • Is there provision for different amounts to be paid in exceptional circumstances.
  • Are additional payments made for the adults in the family group.
  • When/how is the policy made available to service users.​
Update: please see our news items about further case law developments in this area: Mensah v Salford City Council (2014) and C, T, M & U v LB Southwark (2014), as well as our Factsheet: Subsistence support for families under section 17 Children Act 1989.