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	England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> B v London Borough of Lewisham & Anor [2008] EWHC 738 (Admin) (17 April 2008) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2008/738.html Cite as: [2008] EWHC 738 (Admin)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		17/04/2008

Black J:

1. These proceedings concern the provision of financial support for a special guardian under sections 14A – F of the Children Act 1989 and the Special Guardianship Regulations 2005.
2. The Claimant ("the grandmother") seeks judicial review of the decision of the Defendant ("the local authority") as to the level of financial support that they will pay to her as the special guardian of her granddaughter, Mary, and of the legality of their Special Guardianship Allowance Scheme generally. Mary is the Interested Party in the judicial review proceedings. She appears through her litigation friend who was her guardian in the care proceedings which were commenced not long after Mary's birth.
3. Burton J considered the papers in October 2007 and ordered that the application for permission to commence judicial review proceedings should be adjourned into open court to be heard inter partes with the application for judicial review to follow immediately if permission was granted. By the time of that consolidated hearing in front of me, it was clear that there was an arguable case which merited full investigation and accordingly I granted permission at the outset. This judgment deals with the substantive judicial review.

The facts

4. Mary was born on 11 May 2005 and is just under 3 years old. She has lived with the grandmother since she was 6 months old. Also living with the grandmother are the grandmother's 18 year old son and her 12 year old grandson, P, who is Mary's half brother. Mary's mother is unable to look after her children herself because of her personal problems, including drug and alcohol misuse.
5. P has lived with the grandmother since she was a baby. There is a residence order securing the arrangement. The local authority made an initial grant of £3,000 which the grandmother used to improve her home when P came to live with her but have provided no further financial support in relation to him.
6. Mary was born very prematurely and had to stay in hospital for some months as a result of her medical condition. The local authority obtained the first of a series of interim care orders on 28 July 2005. In October 2005, Mary left hospital and was placed in the care of a specialist foster carer. On 1 December 2005, she moved to live with the grandmother. The grandmother was given an initial payment of £839.33 so she could buy essential equipment and furniture and £70 per week which was half the weekly amount that the local authority would normally pay by way of kinship allowance. At the beginning of April 2006, the figure was increased to a full kinship allowance of £141.38 per week.
7. By the time of the final hearing in the care proceedings on 8 November 2006, it was clear that the grandmother was providing Mary with an extremely high level of care. The guardian said in her report of September 2006 that Mary had made "truly incredible progress with her grandmother". It was agreed between all parties that Mary should remain living with her under the auspices of a special guardianship order.
8. The grandmother cannot work whilst looking after Mary. She relies on income support and other benefits and plainly needs a special guardianship allowance. Considerable discussion therefore took place prior to 8 November 2006 about the financial support package that the local authority would provide to her as a special guardian to enable her to care for Mary. The grandmother was looking for a weekly income payment and also requested financial assistance to build a loft extension to her home so as to accommodate all the children properly.
9. By 8 November 2006, the local authority were offering £114.61 per week in addition to the state benefits that the grandmother would receive. Their figure was made up of a basic allowance of £82.27 plus 15% to reflect the high level of physical care that Mary needed and £20 for taxis. The figures were calculated in line with the local authority's newly devised Special Guardianship Allowance Scheme which allied special guardianship allowances to the authority's adoption allowances. Assistance with the loft extension was not to be forthcoming.
10. Both the grandmother and the guardian considered that the local authority were offering insufficient financial support. They argued, in particular, that it was wrong for the local authority to peg special guardianship allowances to adoption allowances. Deadlock was, however, reached.
11. It would have been open to the grandmother to withdraw her application for special guardianship at that stage in the light of the financial provision proposed by the local authority with the result that Mary would have remained in the care of the local authority. Given the quality of the care offered by the grandmother, in all probability Mary would have continued to be placed with her as a kinship placement and, assuming the grandmother received at least the full kinship allowance, the family would have been significantly better off. She did not take this course. She recognised that it was in Mary's best interests for her to become her special guardian and decided to invite the court to make a special guardianship order and then to commence judicial review proceedings in relation to the financial issues. Accordingly, on 8 November 2006, District Judge Crichton made a special guardianship order on the express understanding that the grandmother would commence these proceedings for judicial review in relation to the issue of financial support.
12. Despite the good progress Mary has made in her grandmother's care, she continues to have medical, sleep and developmental problems and she needs dedicated care. The grandmother has given up any hopes she had of a career. By the time Mary has grown up, she will have reached retirement age. Her income is likely therefore always to be restricted to income support, child benefit and whatever the local authority pay her by way of financial support. Following a review last year, the local authority currently pay £86.38 per week. This brings the grandmother's total income to £247.86 per week. Her expenditure on basic items exceeds this. It is £265.91 per week.

The law

13. The concept of special guardianship was introduced by the Adoption and Children Act 2002 which inserted sections 14A-F into the Children Act 1989.
14. By virtue of s 14F itself and the Special Guardianship Regulations 2005 ("the regulations") made under s 14A-F, each local authority must make arrangements for the provision within their area of special guardianship support services which include counselling, advice and information, and financial support.
15. S 14F Children Act 1989 provides:

S 14F (1) Each local authority must make arrangements for the provision within their area of special guardianship support services, which means–

(a) counselling, advice and information; and

(b) such other services as are prescribed,

in relation to special guardianship.

(2) The power to make regulations under subsection (1)(b) is to be exercised so as to secure that local authorities provide financial support.

(3) At the request of any of the following persons–

(a) a child with respect to whom a special guardianship order is in force;

(b) a special guardian;

(c) a parent;

(d) any other person who falls within a prescribed description,

a local authority may carry out an assessment of that person's needs for special guardianship support services (but, if the Secretary of State so provides in regulations, they must do so if he is a person of a prescribed description, or if his case falls within a prescribed description, or if both he and his case fall within prescribed descriptions).

(4) A local authority may, at the request of any other person, carry out an assessment of that person's needs for special guardianship support services.

(5) Where, as a result of an assessment, a local authority decide that a person has needs for special guardianship support services, they must then decide whether to provide any such services to that person.

(6) If–

(a) a local authority decide to provide any special guardianship support services to a person, and

(b) the circumstances fall within a prescribed description,

the local authority must prepare a plan in accordance with which special guardianship support services are to be provided to him, and keep the plan under review.

(7) The Secretary of State may by regulations make provision about assessments, preparing and reviewing plans, the provision of special guardianship support services in accordance with plans and reviewing the provision of special guardianship support services.

(8) The regulations may in particular make provision–

(a) about the type of assessment which is to be carried out, or the way in which an assessment is to be carried out;

(b) about the way in which a plan is to be prepared;

(c) about the way in which, and the time at which, a plan or the provision of special guardianship support services is to be reviewed;

(d) about the considerations to which a local authority are to have regard in carrying out an assessment or review or preparing a plan;

(e) as to the circumstances in which a local authority may provide special guardianship support services subject to conditions (including conditions as to payment for the support or the repayment of financial support);

(f) as to the consequences of conditions imposed by virtue of paragraph (e) not being met (including the recovery of any financial support provided);

(g) as to the circumstances in which this section may apply to a local authority in respect of persons who are outside that local authority's area;

(h) as to the circumstances in which a local authority may recover from another local authority the expenses of providing special guardianship support services to any person.

(9) A local authority may provide special guardianship support services (or any part of them) by securing their provision by–

(a) another local authority; or

(b) a person within a description prescribed in regulations of persons who may provide special guardianship support services,

and may also arrange with any such authority or person for that other authority or that person to carry out the local authority's functions in relation to assessments under this section.

(10) A local authority may carry out an assessment of the needs of any person for the purposes of this section at the same time as an assessment of his needs is made under any other provision of this Act or under any other enactment.

(11) Section 27 (co-operation between authorities) applies in relation to the exercise of functions of a local authority under this section as it applies in relation to the exercise of functions of a local authority under Part 3.

16. Part 2 of the regulations deals with special guardianship support services and Chapter 2 of that Part concerns the provision of financial support. Regulation 6 sets out the circumstances in which financial support is payable:


     6.  (1) Financial support is payable under this Chapter to a special guardian or prospective special guardian -

(a) to facilitate arrangements for a person to become the special guardian of a child where the local authority consider such arrangements to be beneficial to the child's welfare; or

(b) to support the continuation of such arrangements after a special guardianship order is made.

    (2) Such support is payable only in the following circumstances -

(a) where the local authority consider that it is necessary to ensure that the special guardian or prospective special guardian can look after the child;

(b) where the local authority consider that the child needs special care which requires a greater expenditure of resources than would otherwise be the case because of his illness, disability, emotional or behavioural difficulties or the consequences of his past abuse or neglect;

(c) where the local authority consider that it is appropriate to contribute to any legal costs, including court fees, of a special guardian or prospective special guardian, as the case may be, associated with -

(i) the making of a special guardianship order or any application to vary or discharge such an order;

(ii) an application for an order under section 8 of the Act;

(iii) an order for financial provision to be made to or for the benefit of the child; or

(d) where the local authority consider that it is appropriate to contribute to the expenditure necessary for the purposes of accommodating and maintaining the child, including the provision of furniture and domestic equipment, alterations to and adaptations of the home, provision of means of transport and provision of clothing, toys and other items necessary for the purpose of looking after the child.

17. Regulation 8 deals with the ways in which financial support may be paid and provides:

    8. Financial support under this Chapter may be paid -

(a) periodically, if it is provided to meet a need which is likely to give rise to recurring expenditure; or

(b) in any other case by a single payment or, if the local authority and the special guardian or prospective special guardian agree, by instalments.

18. Chapter 3 of Part 2 of the regulations concerns the carrying out of an assessment of a person's need for support services and the preparation of a plan for the delivery of support services. Regulation 12 of that Chapter sets out the procedure for assessment and the non-financial considerations to which the local authority must have regard. It reads:

     12.  - (1) Where the local authority carry out an assessment of a person's needs for special guardianship support services they must have regard to such of the following considerations as are relevant to the assessment -

(a) the developmental needs of the child;

(b) the parenting capacity of the special guardian or prospective special guardian, as the case may be;

(c) the family and environmental factors that have shaped the life of the child;

(d) what the life of the child might be like with the person falling within sub-paragraph (b);

(e) any previous assessments undertaken in relation to the child or a person falling within sub-paragraph (b);

(f) the needs of a person falling within sub-paragraph (b) and of that person's family;

(g) where it appears to the local authority that there is a pre-existing relationship between a person falling within sub-paragraph (b) and the parent of the child, the likely impact of the special guardianship order on the relationships between that person, that child and that parent.

    (2) The local authority must, where they consider it appropriate to do so -

(a) interview the person whose needs for special guardianship support services are being assessed;

(b) where the person falling within sub-paragraph (a) is a child, interview -

(i) any special guardian or prospective special guardian, as the case may be, of the child; or

(ii) any adult the local authority consider it appropriate to interview.

    (3) Where it appears to the local authority that the person may have a need for services from a Local Health Board, Primary Care Trust or local education authority, they must, as part of the assessment, consult that Local Health Board, Primary Care Trust or local education authority.

    (4) After undertaking an assessment, the local authority must prepare a written report of the assessment.

19. Regulation 13 sets out the financial considerations that the local authority must take into account. It reads:

(1) This regulation applies where the local authority carry out an assessment of a person's need for financial support.

   (2) In determining the amount of financial support, the local authority must take account of any other grant, benefit, allowance or resource which is available to the person in respect of his needs as a result of becoming a special guardian of the child.

    (3) Subject to paragraphs (4) and (5) the local authority must also take account of the following considerations -

(a) the person's financial resources, including any tax credit or benefit, which would be available to him if the child lived with him;

(b) the amount required by the person in respect of his reasonable outgoings and commitments (excluding outgoings in respect of the child);

(c) the financial needs and resources of the child.

    (4) The local authority must disregard the considerations in paragraph (3) where they are considering providing financial support in respect of legal costs, including court fees, in a case where a special guardianship order is applied for in respect of a child who is looked after by the local authority and the authority support the making of the order or an application is made to vary or discharge a special guardianship order in respect of such a child.

    (5) The local authority may disregard any of the considerations in paragraph (3) -

(a) where they are considering providing financial support in respect of -

(i) initial costs of accommodating a child who has been looked after by the local authority;

(ii) recurring costs in respect of travel for the purpose of visits between the child and a related person; or

(iii) any special care referred to in regulation 6(2)(b) in relation to a child who has been looked after by the local authority; or

(b) where they are considering including an element of remuneration under regulation 7.

    (6) In paragraph (5)(a)(ii) "related person" means a relative of the child or any other person with whom the child has a relationship which appears to the local authority to be beneficial to the welfare of the child having regard to the factors specified in section 1(3) of the Act.

20. Special Guardianship Guidance ("the Guidance") has been issued under s 7 of the Local Authority Social Services Act 1970 by the Department for Education and Skills. That section provides that "local authorities shall, in the exercise of their social services functions, including the exercise of any discretion conferred by any relevant enactment, act under the general guidance of the Secretary of State." It is well established that, as Sedley J said in R v Islington LBC ex p Rixon (1997-8) 1 CCLR 119 at 123, local authorities are required by s 7 "to follow the path charted by the Secretary of State's guidance, with liberty to deviate from it where the local authority judges on admissible grounds that there is good reason to do so, but without freedom to take a substantially different course." Similar points were made by the House of Lords in Munjaz v Ashworth Hospital [2005] UKHL 58. Paragraph 2 of the Guidance therefore explains that, whilst the document does not have the full force of statute, it should be complied with unless local circumstances indicate exceptional reasons which justify a variation. It has not been argued that there are any such local circumstances in this case.
21. Paragraphs 25 and 26 of the Guidance set special guardianship support services in context. They provide:

"25. The local authority should take into account the similar services already being delivered in their area, such as adoption support services, and plan the provision of special guardianship support services accordingly.

26. Special guardianship support services should not be seen in isolation from mainstream services. It is vital to ensure that children and families involved in special guardianship arrangements are assisted in accessing mainstream services and are aware of their entitlement to social security benefits and tax credits as appropriate."

22. At paragraph 37, the Guidance says that financial issues should not be the sole reason for a special guardianship arrangement failing to survive. It says that "The central principle is that financial support should be payable in accordance with the Regulations to help secure a suitable special guardianship arrangement where such an arrangement cannot be readily made because of a financial obstacle."
23. Paragraphs 64 – 66 deal with the assessment of financial support under regulation 13. Paragraph 64 assists with the local authority's consideration of the special guardian's means. Paragraphs 65 and 66 are central to the debate in this case. They provide:

"65. In determining the amount of any ongoing financial support, the local authority should have regard to the amount of fostering allowance which would have been payable if the child were fostered. The local authority's core allowance plus any enhancement that would be payable in respect of the particular child, will make up the maximum payment the local authority could consider paying the family. Any means test carried out as appropriate to the circumstances would use this maximum payment as a base.

66. There is a suggested means test on the Department for Education and Skills website (www.dfes.gov.uk/adoption), which local authorities may wish to use."

24. The DfES means test is designed for both adoption and special guardianship financial support cases. As the notes that go with it say, it is a suggested model only and there is no statutory requirement that local authorities use it. However, the DfES notes recommend its use as they believe "that the model is fair and that adoptive or special guardian families would benefit from a consistent approach by local authorities." The proforma and notes enable the family's projected income and expenditure to be established. On the final page, the payment that will be made to the adopters or special guardians is calculated with reference to the "Local Authority Maximum Payment".
25. Where the family is in receipt of income support, the DfES recommend in the notes (note 8) that the local authority pay the family "the applicable maximum payment" without assessing their income/expenditure by the means test. This would be the situation of the grandmother in this case.
26. Paragraph 44 of the notes to the model means test records the understanding of the DfES that many local authorities determine payments to adopters or special guardians based on the allowances they pay foster carers, and then deduct child benefit from the final amount to reflect the fact that foster carers cannot claim child benefit but adopters and special guardians can. Although the purpose of the note is to point out that when using the means test form, the maximum payment used to calculate the payment to be made to adopters or special guardians should not deduct child benefit because the spreadsheet provides for that to be deducted later, the information as to the DfES' understanding of the practice of many local authorities is noteworthy.

The local authority's financial support scheme

27. The local authority in this case devised a financial support scheme for adopters and special guardians. The final version of this scheme is set out in a report which was approved by the local authority on 3 October 2007.
28. The basic weekly amount provided under the scheme for an adopted child aged 0-4 is £84.33 less child benefit. The allowance is means tested and reviewed annually. Enhancements can be paid where a child has special needs. The scheme for special guardians is linked with the adoption scheme. An explanation as to why this course was taken and why the option of linking special guardianship payments to fostering allowances was rejected can be found in the local authority's report at paragraphs 10.2 to 10.12.
29. The report says that consideration was given to the use of the model means test to which reference is made in the Guidance but this was not recommended because "when allowances were calculated using this scheme, they were found to be less generous than those of neighbouring authorities." The local authority therefore developed its own means test.
30. The local authority's rates for special guardians are said in the report to be "currently in the mid range of those authorities that have agreed rates". They are, however, very significantly below the "national minimum allowance" prescribed by the DfES for foster carers for 2007-8 and there is an even greater differential compared with the rather higher rates that the local authority in fact pay to their foster parents.
31. "National minimum allowance" is the term used to describe the basic core allowance that foster carers receive to cover the costs involved in looking after any fostered child. The national minimum allowance was calculated "taking account of extra costs associated with children in foster care". It reflects, for example, the fact that fostered children are less likely to have money spent on them by grandparents and other family members and that household bills can be significantly more costly for foster carers than for other parents. The calculation takes account of regular costs incurred by all foster carers. Some significant elements which apply to the majority of foster carers are not covered. These are the additional costs of birthdays, Christmas and other religious festivals, the cost of holidays, the start up costs of a child arriving in placement and other larger one off items required during the currency of the placement. In London, the national minimum allowance is £116 per week for babies and £119 for pre-school children.
32. This local authority's fostering rate for a child aged 0-7 who is not fostered with family or a friend is given in the report as £278.60 per week. This includes £190.06 for the core elements in the cost of bringing up a child which are broken down into maintenance (£172.20), pocket money (£4.23) and clothing (£13.63) plus £48.07 for training and £40.47 by way of reward. The local authority rate for family and friends who foster a child of 0 – 4 years old is said to be £147.66 per week following approval by the fostering panel and half of this sum during assessment.

The submissions

33. Mr Knafler on behalf of the grandmother advances two main arguments as to why the local authority's special guardianship scheme is unlawful, one based on a close analysis of the terms of the regulations and Guidance and one a rather broader argument based on the aims of the overall legislative scheme relating to the placement of children away from their own parents of which special guardianship is part.
34. I turn first to the analysis of the regulations and Guidance.
35. Mr Knafler argues that in fixing their special guardianship support rates, the local authority have misinterpreted the Guidance, in particular paragraph 65, and have failed to follow it. His submission is that the terms of paragraph 65 (set out above) make it clear that the amount of the fostering allowance that would have been paid if the child was fostered is central to the calculation of any ongoing special guardianship financial support and the local authority have wrongly abandoned it in favour of their much lower adoption allowance.
36. The local authority's report (see above) asserts that whilst paragraph 65 requires them to have regard to the cost of a fostering placement, it imposes no requirement to follow the fostering allowance scheme in establishing a special guardianship support scheme. In summary, the justifications in the report for choosing instead to follow the adoption allowance are:

i) The central principle for special guardianship allowances is that financial support should be payable to help secure a placement by overcoming a financial obstacle but payments need not be any greater than necessary to achieve this (paragraphs 10.3 and 10.4).

ii) The purpose of the payment is not to provide remuneration to the carer (paragraph 10.4) except that former foster carers can receive an enhanced rate for 2 years to ease them into their new status (paragraph 10.6).

iii) Paragraph 25 of the Guidance requires the local authority to take into account similar services being delivered in their area such as adoption support services and plan provision of special guardianship support services accordingly (paragraph 10.5 and 10.10).

iv) The regulations relating to the adoption support scheme are very similar to those applying to special guardianship (paragraph 10.9).

v) Special guardianship is a lifelong commitment much closer to adoption than fostering. To link the scheme to the fostering allowance scheme would imply the local authority were only seeking a professional caring service (paragraph 10.7 and 10.11).

37. The argument advanced by the local authority in front of me has followed similar lines. In so far as the specific terms of paragraph 65 are concerned, their argument is that as long as regard is had to the fostering allowances that the local authority pay, that is enough. They submit that fostering allowances are not in any way a "starting point" for the consideration of what should be paid to a special guardian. As for the maximum payment referred to in paragraph 65 of the Guidance, the local authority argue that that is simply there to ensure that an authority is not paying too much and in particular, that they do not pay special guardians more than foster carers. Mr McGuire was unable to help greatly as to what, in this context, the last sentence of paragraph 65 meant.
38. The local authority invite attention to regulation 6 (see above) which provides that the purpose of financial support is to facilitate arrangements for a person to become or continue to be the special guardian of a child and that it is only payable in certain circumstances, that relevant to the present argument being where the local authority consider it is necessary to ensure that the special guardian can look after the child. That is not, they say, a principle that warrants treating special guardianship as a species of foster caring for support purposes.
39. They are mindful of their duty to take into account similar services being delivered in the area. They see special guardianship as much more similar to adoption than to fostering, particularly pointing out that special guardianship is an alternative to provide permanence to children for whom adoption is not appropriate. This similarity is, they submit, a reason to align special guardianship allowances with adoption allowances.
40. They further argue that the minimum fostering allowance is tailored to the cost of providing for a foster child in relation to whom costs tend to be rather higher than a child who is not fostered. They submit that a child placed with a special guardian is more akin to a child living with its own parents (or an adopted child) than a foster child and not so expensive to bring up so that an allowance based on a fostering allowance would be more generous than necessary to facilitate the placement.
41. They stress that there must be no element of remuneration in the payment except to former foster parents in accordance with regulation 7 which provides:

Remuneration for former foster parents
     7.  - (1) Financial support under this Chapter may include an element of remuneration but only where the decision to include it is taken before the special guardianship order is made and the local authority consider it to be necessary in order to facilitate arrangements for a person to become a special guardian in a case where -

(a) the special guardian or prospective special guardian has been a local authority foster parent in respect of the child; and

(b) an element of remuneration was included in the payments made by the local authority to that person in relation to his fostering the child.

    (2) But that element of remuneration ceases to be payable after the expiry of the period of two years from the making of the special guardianship order unless the local authority consider its continuation to be necessary having regard to the exceptional needs of the child or any other exceptional circumstances.

42. Building on this, they submit that because there is no provision for remuneration for special guardians outside this class, it would be inappropriate for them to align special guardianship support with fostering allowances.
43. I cannot accept that the local authority's interpretation of paragraph 65 is correct. Read in the way they suggest, it is just an exceptionally contorted and unclear means of conveying the simple message that a local authority should never pay a special guardian more than they would pay a foster carer. If their approach to special guardianship allowances is correct, it is also a missed opportunity in that it says absolutely nothing to alert local authorities to the need to have regard to adoption payments when determining special guardianship payments, let alone to suggest that special guardianship payments should be aligned to adoption payments which is the principle that the local authority have chosen to espouse.
44. Paragraph 65 is not happily drafted and it is necessary to view it with a degree of imagination to make sense of it but, in my view, once one draws on the indicators elsewhere that help one to understand what it is really about, it is clear that its meaning is not that for which the local authority contend.
45. As the local authority concedes, the first sentence of paragraph 65 (see above) imposes an obligation on them to "have regard" to the fostering allowance that would have been payable. The second sentence says that the local authority's "core allowance" plus any enhancement that would be payable in respect of the particular child will "make up the maximum payment" the local authority could "consider" paying the family. The "core allowance" is obviously the core allowance paid by the local authority to their foster parents. "Maximum payment" is not defined anywhere in the Act, the regulations or the Guidance although, as I set out below, some pointers as to its meaning can be discovered. The third and final sentence of the paragraph says that "any means test carried out as appropriate would use this maximum payment as a base".
46. Just looking for a moment at the obligation to have regard to the fostering allowances, it would, in my view, be unlikely that those responsible for the Guidance intended that local authorities would go through the motions of reminding themselves of their fostering rates only to abandon them completely in all their subsequent considerations and to fasten instead on a quite different and much more stringent financial regime. The scheme this local authority have devised is so divorced from their fostering allowances as to suggest that whatever regard was given to the fostering allowances, it was allowed to have absolutely no impact on the calculations that followed except (as the local authority say) that it was a ceiling to whatever special guardianship payments the local authority might decide to pay.
47. It seems to me that it is much more likely that those giving the Guidance intended that the local authority's fostering allowances would serve as a ranging shot for the local authority's consideration of what their special guardianship provision should be or at least be held firmly in mind when fixing that provision. That is the natural import of the first sentence of paragraph 65 and it is an interpretation which allows the paragraph as a whole to have an integrity which is completely missing on the local authority's interpretation. One must be careful not to construe the Guidance as if it were a statute but it should, in my judgment, be viewed as if the first sentence of paragraph 65 were the introduction, making it clear that fostering allowances were relevant, which the second sentence refines by reference to the fostering core allowance.
48. One is then taken in the third sentence to the means test and paragraph 66 offers the suggested pro forma on the DfES website. I found it helpful to refer to the DfES means test and the notes supplied with it in interpreting paragraph 65. The term "maximum payment" must, in my view, have the same meaning in the notes to the means test and in paragraph 65 of the Guidance. Paragraphs 65 and 66 of the Guidance are so intimately connected with the question of means testing and the suggested DfES means test that it would not make sense for it to be otherwise. It seems to me that the recommendation in note 8 that the local authority pay the family "the applicable maximum payment" where they are on income support must therefore be a reference to the local authority's core fostering allowance plus any enhancement that would be payable in respect of the particular child as set out in the second sentence of paragraph 65. Neither paragraph 65 nor, even less, note 8 create an obligation on the local authority to pay precisely that sum but they do give an indication that those responsible for the Guidance were thinking in terms of a close association between fostering allowances and special guardianship allowances.
49. Also of assistance and pointing in the same direction is note 42. This speaks for itself and reads, with italics supplied by me:

"42. We understand that most local authorities will have a payment structure for fostering allowances consisting of a core allowance paid for all children, plus enhancements linked to, for example, special needs. This payment structure will be linked to local variations in the cost of living and individual local authority budgets. We recommend that adoption and special guardianship maximum payments are tied to these allowances. This would result in a different maximum payment in individual cases, determined by the needs of the child, against which amount the test is run."

50. A further pointer in the same direction can, in my view, be found at paragraph 43 of the Guidance. This is part of the Guidance on regulation 7 payments for former foster parents who become special guardians. Paragraph 43 provides:

"The purpose of the two year transitional provision is to enable local authorities to maintain payments to foster carers who become special guardians, at the same rate as they received when they were fostering the child. This should give the family time to adjust to their new circumstances."

The important feature of this paragraph is the reference to payments continuing "at the same rate as they received when they were fostering the child". All that is payable under regulation 7 for the transitional period is the remuneration element of the fostering allowance. Regulation 7 does not contain any provision designed to boost a former foster parent's ordinary special guardianship allowance above that which any other special guardian would receive. Remuneration apart therefore, the rate of special guardianship allowance for an ex-foster parent would be just the same as that paid to someone in the Claimant's position. It follows that under this local authority's scheme, albeit that they would receive remuneration for a transitional period, foster parents who became special guardians would still be significantly worse off than they had been as foster parents. They would not be receiving payments at the same rate as paragraph 43 anticipates. They would not have time to adjust to their new circumstances. If, however, they were to receive a special guardianship allowance at a rate allied to the core fostering allowance plus relevant enhancements for the particular child plus their remuneration, precisely that which paragraph 43 contemplates would be achieved.

51. A final pointer, of lesser weight probably because local authorities have discretion as to what precise arrangements they make in their areas but nonetheless relevant, is the indication in paragraph 44 of the notes that the DfES understand that many local authorities determine payments to special guardians based on foster allowances less child benefit.
52. I have considered the local authority's argument that it would be inappropriate to align special guardianship support with fostering allowances because special guardians are not normally entitled to remuneration and local authority foster parents are. This concentration on the issue of remuneration is, in my judgment, mistaken. Having introduced fostering allowances as a relevant consideration, paragraph 65 does not go on to require the local authority to take into account, in fixing special guardianship rates, the remuneration that some foster parents receive. The core allowance plus enhancements that forms the maximum special guardianship payment does not contain any element of remuneration. It relates to the core cost of bringing up a fostered child. Following it would not in any way introduce remuneration for special guardians. It would simply reflect the inescapable costs of bringing up a child which, if a special guardian had neither the private means nor the local authority funding to meet them, would stand in the way of a family caring for a child, however much they wished to do so.
53. As to the local authority's argument that fostering rates are an inappropriate reference tool because fostered children are more expensive to bring up than those who are not in local authority care, firstly I do not consider that the terms of paragraph 65 entitle them simply to disregard fostering rates on this basis although they could, of course, take into account differential expenses as a justification for making appropriate adjustments when fixing the precise rate payable to special guardians. Secondly, I am not sure whether it is wholly accurate to say as a generality that fostered children are more expensive although I have not got sufficient information to form a concluded view about this. I do accept that, as the local authority argue, there are specific aspects of caring for a fostered child which complicate the arrangement and which are not present with an adopted child or one who is with a special guardian, notably the requirement to participate with the local authority in its supervisory role over the placement. That apart, however, some children who are placed with special guardians are in situations which have derived from former fostering arrangements or other situations which have child protection aspects and the cost of bringing up these children may not be significantly less than the cost of bringing up fostered children.
54. Whilst I accept that the Guidance does not have statutory force, the local authority had a duty substantially to follow it unless there was good reason to do differently. Nothing that they have argued in these proceedings comes close to justifying a radical departure. It would appear that in reality they have failed to understand the central importance that paragraph 65 gives to the amount paid by way of fostering allowances and they cannot therefore have had regard to those allowances in the way in which they were required by that paragraph to do. They made, instead, a rigid link with adoption allowances which was not in accordance with the Guidance. It follows that their resulting scheme is unlawful.
55. I should say a word about the way in which the argument was presented to me concerning the validity of the local authority's scheme. There seemed to be a common acceptance at the start of the hearing that the local authority's adoption allowances were unimpeachable, albeit significantly lower than their fostering allowances. The thrust of the debate was whether it was lawful for the local authority to align special guardianship allowances with those adoption allowances. As the argument went on, it seemed to me that this was in some ways the wrong way to look at matters. When one considers the terms of the Adoption Guidance, which supplements the Adoption and Children Act 2002 and contains guidance on financial support in adoption cases, questions arise as to whether the adoption allowances fixed by this local authority are themselves lawful. Paragraph 52 of the Adoption Guidance is in very similar terms to paragraph 65 of the Special Guardianship Guidance save that the last sentence of paragraph 52 reads, "Any means test carried out as appropriate to the circumstances will calculate the proportion of this maximum payment to which the family are entitled." Counsel were in no position to argue the legality of this local authority's adoption support scheme in the light of this paragraph of the Adoption Guidance. In the event, I considered that the issue before me could be determined by reference to the detail of the provisions relating to special guardianship as a discrete entity rather than focussing upon the propriety or otherwise of links with adoption payments. In the circumstances, I have formed no concluded view about the local authority's adoption support scheme although I record that my impression is that it may have precisely the same flaws as I have found the special guardianship scheme to have. Accordingly, it is not beyond the bounds of possibility that it will ultimately turn out that adoption and special guardianship payments are in fact appropriate twins but that both need to be raised so that they bear a proper relationship to fostering allowances.
56. I turn to Mr Knafler's broader argument based on the aim of the legislative scheme. He submits that the purpose of the whole legislative scheme relating to the placement of children away from their own parents is to give a freedom to choose the type of placement that is in the best interests of the child without being constrained because some of the available orders produce a more favourable financial result than others and some might even place the carer in an unworkable financial position. He argues that this local authority's special guardianship support scheme sets financial support at a level which will inevitably render it impossible for a special guardianship order to be made in relation to some children whose best interests would be served by such an order. The consequence for these children may be, as it could have been for Mary, that they have to remain in local authority care. A scheme that confounds the purpose of the legislation in this way is, he argues, unlawful.
57. There can be little doubt that it was intended that there should be a range of placement options for children who are not living with their own parents. All major decisions in relation to the placement of children are made with the welfare of the child as the court's paramount consideration. Financial stringency can on occasions threaten to prevent decisions being made which would otherwise be in the best interests of a child. I accept that, as regulation 6 shows, the intention of the legislation and regulations about special guardians is that financial support should be made available to special guardians to ensure that financial obstacles do not prevent people from taking on this role. I do not go so far as to say that there must be uniform financial support to every type of carer. Different types of placement have different attributes, cost different amounts and require different schemes. To state the obvious, for example, by adopting a child, the adopters make the child their own which does not happen with any other form of alternative care. To give another example, children who are living with foster parents, or special guardians or with a non-parent who has a residence order are none of them living with their own parents but there is a manifest difference between special guardianship and a residence order to a non-parent on the one hand and local authority foster care on the other. However, putting it at its lowest, a local authority is not free, in my view, to devise a scheme which fails to do what is required by regulation 6 or which dictates that some types of placement for a child carry a significant financial disadvantage in comparison with others or, worse, would impose such a financial strain on a carer that they would be forced to choose another type of placement. This local authority's scheme does this in relation to the grandmother and for that reason and in the light of the local authority's failure to have proper regard to the regulations and Guidance is unlawful and must be quashed.
58. On behalf of Mary, Mr Bowen added arguments based on duties under Articles 8 and 14 of the ECHR to the arguments advanced by Mr Knafler for the grandmother. He argued that the local authority's scheme discriminated against those carers who wished to commit themselves to a child as special guardians rather than those who remained long term foster carers and discriminated against children who were being cared for by family members and might become the subject of a special guardianship order as opposed to those who were with professional foster parents. He argued that both groups have similar needs and the children cost the same to rear but family members and other special guardians and the children for whom they care are condemned to a more stringent financial regime than foster carers and children. There was no debate about the engagement of Article 8 on the facts of this case but it was not common ground that there was discrimination within Article 14. Given my clear decision on other grounds that the local authority's scheme is unlawful, it is not necessary for me to deal with this supplementary issue and I do not propose to do so.