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Legal action threat over council tax benefit schemes

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Three London boroughs face judicial reviews over their council tax benefit schemes.

They are the first of a potential raft of legal cases as benefit claimants digest the impact of schemes.

Law firm Irwin Mitchell plans to challenge Camden, Hackney and Haringey LBCs over equalities issues and alleged defects in their consultations.

The move comes ahead of the localisation of council tax benefit in April, when councils can set their own rules on who receives support; many who previously paid nothing could be charged.

Councils must implement their schemes within a 10% cut in overall spending on the benefits and with pensioners exempt from any tax rise.

Irwin Mitchell associate solicitor Alex Rook said Haringey planned to charge every adult, other than pensioners and disabled people, nearly 20% of the council tax level “even if they have little or no income or capital”.

He said: “The council’s own papers recognise that there will be very high levels of non-payments where the poorest people simply will not be able to pay this charge. 

“Our clients are devastated at the thought of this additional burden when they are already struggling to pay for basics such as food and heating.”

Councils can claim transitional relief if they limit increases for those who previously paid nothing to 8.5% of the tax level.

Mr Rook said it was “irrational” that Haringey had chosen to forgo this relief by opting for the 20% rate.

A Haringey spokesperson said: “We considered various options for our scheme and consulted widely with residents – including writing to the 36,000 households directly affected.

“We took on board the views of residents, which is why those households that include claimants in receipt of certain benefits recognising significant disability have been shielded from the change.” 

Mr Rook’s case against Hackney is similar, as it opted for a 15% rate making it ineligible for some £500,000 of relief.

Camden is eligible for the relief, having opted for 8.5%, but Mr Rook said it had wrongly decided to charge disabled adults.

“We will argue that the consultation was flawed and the council breached its equality duty by not having due regard to disabled people,” he said.

A Camden spokeswoman said it had received Irwin Mitchell’s letter before action and would respond “in due course”, while Hackney said it had not yet been told of the challenge.

Paul McDermott, a partner at law firm Trowers and Hamlins, said he expected a number of other challenges, but pointed out: “To win a judicial review, there has to have been some mistake.

“You could argue there were faults in a consultation or that a council has breached its equality duty.

“But it’s quite difficult to see how one could win a judicial review unless a council had done something improper for party political reasons, like saying ‘these people don’t vote for us so we’ll cut their benefit’, or if it did something clearly irrational.”

Meanwhile, the Welsh Government is to provide extra £22m for local authorities in 2013-14 to cushion the impact of the 10% cut, raised from its reserves and departmental surpluses.

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