A charity that runs an old people’s home in Brighton will have its funding restored by the local council after it promised to ask future residents about their sexual orientation.

Pilgrim Homes, a Christian care home which runs 10 projects for elderly people in the UK, claimed it was going to sue the council for religious discrimination.

As part of its fair access and diversity policy, put in place to comply with the Equality Act 2006 and Equality Act (Sexual Orientation) Regulations 2007, Brighton and Hove Council required residents at Pilgrim Homes to fill in a questionnaire asking if they are gay, lesbian, bisexual, transgender or unsure of their sexuality.

When respondents, all aged over 80, refused to answer the question about sexuality, the council accused the charity of “institutionalised homophobia”, and subsequentially cut a £13,000 grant.

The council said that as the care home had a Christian ethos, gay people were deterred from applying to live there, and that there had not been enough progress towards LGBT equality to warrant the grant.

The home argued that its residents should be protected from questions about their sexual orientation, even though they are free to refuse to answer, because of their religious views.

Now an agreement has been reached with the council.

Pilgrim Homes’ Chief Executive Andrew Jessop said:

“I am delighted that we have been able to reach an amicable solution with Brighton and Hove Council and that our lost funding is to be restored.

“We will be receiving a letter from Brighton removing the allegation of ‘institutional homophobia’; together with the requirement that we should ask our residents about their ‘sexual orientation’ four times a year.

“We are willing to ask potential residents about their sexual orientation when they apply for a place at our home, on the understanding that they have the right to refuse, and that we will not be required to act in a way which goes against our doctrinal beliefs.

“We would like to thank Brighton and Hove City Council for resolving this matter amicably out of court.”

The compromise has been claimed as a victory by activist group The Christian Institute, who backed Pilgrim Homes’ case.

“Christians pay their taxes too and they should have equal access to public grants without being required to drop their Christian ethos. I hope other councils take note,” said institute spokesperson Mike Judge.

“There have been a number of recent cases where Christians are being treated less favourably than others.

“But Christians are beginning to find their voice and discovering that a lot of people – Christian or otherwise – are agreeing with them.”

Employment tribunals do not appear to agree.

Recent cases backed by the Christian Institute and defeated at tribunal include an Islington registrar who claimed she should be allowed to opt-out of performing civil partnerships because of her religious beliefs and a sex counsellor who claimed he should be allowed to turn down gay couples because it would be “encouraging sin.”