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Mr Heffernan, who is 51 years old, blind and registered with various physical and medical complaints, does not work and is dependent on welfare benefits. In March 2004, he was granted an assured (private sector) tenancy of an apartment in Sheffield at a rent of £745 per month. In April 2004, he applied to Sheffield City Council for housing benefit in respect of the whole of the rent, and the Council referred the question of his maximum allowable housing benefit to the Rent Service. After four determinations, there were two subsequent re-determinations.

In December 2004, the Rent Service re-determined that the local reference rent (“LRR”) was £433.34 per month.  A second re-determination was made in May 2005 by which time the contractual rent had been reduced to £695 per month, because the parking space had been consensually removed from the tenancy. This re-determination came to the conclusion that the LRR was £455 per month.

The two re-determinations were each carried out on the basis that the “neighbourhood” of the apartment was “Sheffield Central", and the “locality” for assessing the LRR was “the whole of the city of Sheffield and some of its surroundings” (“the Sheffield area”).  In each of the two re-determinations, the rent officer stated that he was proceeding on the basis that the meaning of “locality” was:

“a broad geographical area made up of a number of neighbourhoods with a mix of property types and tenure where a tenant could, as an alternative to the property in question, reasonably be expected to live and benefit from similar amenities".

This formula was taken from a circular distributed by the Rent Service to rent officers nationally in June 2001. 

The sole relevant ground upon which Mr Heffernan sought judicial review of the two re-determinations was that it was impermissible to have taken the whole of the Sheffield area as the “locality”.

The judge at first instance quashed the two re-determinations as he considered that the two rent officers had each wrongly followed the guidance in the circular that “locality” involved a “broad geographic area” and had not properly examined each of the twelve neighbourhoods.  The Court of Appeal allowed the Rent Service’s appeal concluding that the view that the Sheffield area was the appropriate “locality” for the apartment was one which each of the rent officers was entitled to reach on the evidence.

The House, by a majority of 3:2 allowed Heffernan’s appeal and quashed the two re-determinations.  The rent officers had simply adopted an approach which was generally taken by the Rent Service when assessing LRR for dwellings in that area, which in turn was based on the guidance in the circular.  Whilst this guidance was helpful, it could not avoid the need for rent officers determining LRR in any particular case to consider the issues raised by the Rent Officers (Housing Benefit Functions) Order 1997 para 4(6)(a) to (c) by reference to the facts of that case.   These sub-paras (a) to (c) defined what was meant by “locality”.  In many cases, what might be the right locality for one dwelling may not be the right locality for a dwelling in an adjoining neighbourhood.