Judgments - R (on the application of Ahmad) (Respondent) v Mayor and Burgesses of London Borough of Newham (Appellants)

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27.  Section 159(1) of the Housing Act 1996 requires a local housing authority to comply with Part 6 of the Act (sections 159 to 174) in allocating housing accommodation. Section 159(7) provides that “[s]ubject to the provisions of this Part, a local housing authority may allocate housing accommodation in such manner as they consider appropriate.” Section 169 provides that, when exercising their functions under Part 6 of the 1996 Act, local housing authorities “shall have regard to such guidance as may …be given by the Secretary of State".

28.  Section 166 is concerned with applications for housing accommodation. The centrally relevant provision for present purposes is section 167, which in its current form provides:

“(1)  Every local housing authority shall have a scheme … for determining priorities, and as to the procedure to be followed, in allocating housing accommodation.

… .

(1A)  The scheme shall include a statement of the authority’s policy …

… .

(2)  As regards priorities, the scheme shall be framed so as to secure that reasonable preference is given to -

(a)  people who are homeless (within the meaning of Part 7);

(b)  people who are owed a duty by any local housing authority under section 190(2), 193(2) or 195(2) (or under section 65(2) or 68(2) of the Housing Act 1985) or who are occupying accommodation secured by any such authority under section 192(3);

(c)  people occupying insanitary or overcrowded housing or otherwise living in unsatisfactory housing conditions;

(d)  people who need to move on medical or welfare grounds (including grounds relating to a disability); and

(e)  people who need to move to a particular locality in the district of the authority, where failure to meet that need would cause hardship (to themselves or to others).

The scheme may also be framed so as to give additional preference to particular descriptions of people within this subsection (being descriptions of people with urgent housing needs).

(2A)  The scheme may contain provision for determining priorities in allocating housing accommodation to people within subsection (2); and the factors which the scheme may allow to be taken into account include -

(a)  the financial resources available to a person to meet his housing costs;

(b)  any behaviour of a person (or of a member of his household) which affects his suitability to be a tenant;

(c)  any local connection (within the meaning of section 199) which exists between a person and the authority’s district.

(4) The Secretary of State may by regulations specify factors which a local housing authority shall not take into account in allocating housing accommodation.

….

(6)  Subject to the above provisions, and to any regulations made under them, the authority may decide on what principles the scheme is to be framed.

…..

(8)  A local housing authority shall not allocate housing accommodation except in accordance with their allocation scheme.”

Newham’s housing allocation scheme

29.  Newham introduced their current allocation scheme (“the Scheme”) in September 2002, and described it as involving a move from a “needs based points scheme” to a “choice based scheme". Since its introduction in 2002, the Scheme has been changed from time to time, most notably in February 2005, pursuant to an undertaking following a judicial review challenge in 2003. The detailed terms of the Scheme in its current form run to over 110 pages together with appendices, but its essential features, at least for present purposes are as follows.

30.  The Scheme involves two different methods of offering properties, which are intended to reflect two different types of need. There is the choice based letting arrangement (known as “CBL”), which accounts for around 75% of all properties let, and there is the direct offer arrangement (known as “Direct Offers”), which accounts for the remaining 25% or so. Applicants subject to Direct Offers effectively take priority over those subject to CBL, so that, when a property becomes vacant, it is only if it is not wanted by any applicant in the Direct Offers group that it will be offered under the CBL.

31.  Applicants admitted to the CBL are placed in one of three categories. They are

(1) “Priority Homeseekers", being those whose households contain at least one person who satisfies one or more of the criteria in section 167(2); this category accounts for the great majority of CBL applicants;

(2) “Tenants Seeking a Transfer” being those who are already Newham tenants, and are applying for a transfer, but do not fall within category (1); and

(3) “Homeseekers", being those who do not fall within category (1) or (2), i.e. they are not tenants of Newham and do not satisfy any of the section 167(2) criteria.

32.  Once a property is available to be let on the CBL, it is offered to those registered on that part of the Scheme, and they are free to bid. The CBL provides that no more than 5% of lettings can be to Tenants seeking a Transfer, and in practice it appears that CBL lettings to such applicants account for a total of between 4 and 5% of the total CBL lettings every year. The number of lettings to those applicants in the Homeseekers group is tiny. Accordingly, around 95% of the CBL properties are allocated to applicants who are Priority Homeseekers. When (as almost always happens) more than one applicant in the Priority Homeseekers group bids for a property, the property is awarded to the applicant who has been a Priority Homeseeker for the longest - i.e. Priority Homeseekers are effectively ranked by reference to the date on which they were registered as such.

33.  So far as the Direct Offers are concerned, it includes a number of categories of applicant, namely “Additional Preference", “Multiple Needs", “Under Occupation Transfers", “Decants” and “Special Schemes". The first two categories, which are the relevant ones for present purposes, are intended to include applicants who would be Priority Homeseekers under the CBL, but who have especially pressing needs for rehousing. The Additional Preference group consist of those who are judged by Newham’s housing officers to represent particularly acute cases under some of the paragraphs of section 167(2). Its criteria are very stringent. For example, a medical condition will not assist unless it renders it “impossible” for the sufferer to continue to occupy his or her present accommodation. Similarly, although a person can also qualify if subject to harassment or “social/welfare need", the harassment or the need must be severe, such as physical or sexual abuse, or a need for residential care. The Multiple Needs group includes those who can attain a specified score, by reference to the number of people in the applicant’s household requiring to move on the ground of statutory overcrowding, or Environmental Health abatement action or medical grounds: if 2 or 3 points are scored, one offer will be made; if 4 or more points, then there will be more offers. The criteria for qualifying for Multiple Needs are also very tight: the statutory test for overcrowding or abatement action requires exceptional facts; and medical reasons only count if they are very serious and apply to more than one member of the household.

34.  For completeness, I should add that the Scheme also contains a provision whereby housing officers can allocate housing in “special cases not covered by normal allocation rules, which warrant special priority". This sensible provision was (rightly in my opinion) not relied on by either party as having any relevance to this appeal, and I say no more about it.

The view of the courts below

35.  There were two reasons why the courts below considered that the Scheme was unlawful. The first, and principal, reason was well summarised in the Court of Appeal by Richards LJ (who gave the only reasoned judgment), at [2008] EWCA Civ 140, para 69. He said that the CBL “places all those who qualify for reasonable preference under section 167(2) in a single group, that of Priority Homeseeker, and … their relative priority in bidding for available accommodation is determined not by relative need, but by the length of time they have been registered on the housing list". In agreement with the Deputy Judge, he said that this was “plainly an insufficient mechanism for identifying those in greatest need and giving them priority". At [2008] EWCA Civ 140, para 70, again in line with the views expressed by the Deputy Judge, he rejected the argument that the existence of the Additional Preference and Multiple Needs groups within the Direct Offers “ma[d]e good the deficiency of the [CBL]", because of the “highly restrictive” criteria which have to be satisfied in order to qualify for those groups.

36.  The second reason why the Scheme was held to be unlawful was due to the fact that the CBL involved allocating a significant (if small) proportion of housing to a class of applicants who did not satisfy any of the requirements in paras (a) to (e) of section 167(2), namely the Tenants Seeking a Transfer. As Baroness Hale explains, this opinion deals with the first issue, whereas her opinion concentrates on the second issue.

The statutory requirements

37.  It is clear from section 167(6) that, subject to complying with the other provisions of section 167, and subject to rationality and compliance with any other relevant legislation, the terms of any allocation scheme are a matter for the local housing authority (“the authority”). Paras (a) to (e) of section 167(2) requires every scheme to give “reasonable preference” to those applicants whose households include at least one person falling within one or more of those paragraphs. The primary issue on this appeal is whether, as the courts below held, section 167 requires an authority to go further and accord priority as between reasonable preference applicants by reference to the relative gravity of their needs, and, if so, the extent to which such according of priority is required.

38.  In my view, there are a number of reasons for doubting whether there is such a requirement on an authority. The first three reasons turn on the wording of the section; the fourth and fifth reasons rely on policy considerations.

39.  First, the opening words of section 167(2), when read together with the ensuing five paragraphs, as a matter of ordinary language, require an authority to accord reasonable priority to people who fall within one or more of those paragraphs over people who do not. To read the opening words as additionally requiring an authority to assess the degree to which a particular person or household satisfies the requirements of any of the five paragraphs, and to accord priority accordingly, involves those opening words performing, as it were, a double duty, and therefore places more weight on those words than, in my view, they naturally bear.

40.  Secondly, there is the closing sentence of section 167(2). By using the word “may", it gives a discretion to authorities, as opposed to imposing a duty on them. The closing sentence appears to me to permit, and therefore impliedly not to require, an authority to carry out the very exercise which, on the respondent’s case, it is their duty to do. In this connection, it was suggested by Mr Jan Luba QC, in the course of his characteristically clear and impressive argument, that the reference to “urgent housing needs” meant that the closing sentence had very limited application, and therefore was not inconsistent with the conclusion reached by the Court of Appeal at [2008] EWCA Civ 140, para 69 (namely, that it is “plainly an insufficient mechanism” if all those applicants who satisfy at least one of paras (a) to (e) of section 167(2) are ranked equally, and are then selected by reference to the time they have been on the authority’s waiting list.)

41.  I do not agree. First, as my noble and learned friend Lord Walker of Gestingthorpe pointed out, the whole exercise with which section 167 is concerned involves applicants who wish to be rehoused as quickly as possible: the stronger the case under the paragraphs of section 167(2), the more urgent the housing need. Secondly, even if the closing words only apply to some applicants falling within paras (a) to (e), the notion that an authority may accord such urgent cases extra priority over other reasonable preference applicants seems quite inconsistent with the notion that the authority is statutorily obliged to rank all reasonable preference applicants by reference to the strength of their respective cases.

42.  Thirdly, there is the first phrase of section 167(2A): it states that a scheme “may contain provision for determining priorities … to people within subsection (2)". As a matter of language, it appears to me that perhaps even more clearly than the closing words of section 167(2), this provision is again inconsistent with the conclusion expressed by Richards LJ at [2008] EWCA Civ 140, para 69. The opening part of section 167(2A), again by using the crucial word “may", makes it clear that authorities can have priority rules as between reasonable preference applicants, which strongly suggests that they are not required to do so. The subsection then goes on to permit authorities, which take such a course, to take certain factors into account. Mr Luba argued that the opening words of the subsection were directed only to those factors, but that does not attribute their natural meaning to them, and the only reason for departing from the natural meaning is because it might add nothing to the closing sentence of section 167(2), in which case that closing sentence is clearly inconsistent with an argument that there is a statutory duty to do that which the courts below held that the Scheme should have done.

43.  (It should be pointed out that it is not illegitimate to invoke section 167(2A), which was obviously added by way of amendment to the 1996 Act, as an aid to interpreting section 167(2). This is because the present section 167(2) was inserted by way of replacement for the original subsection by section 16 of the 2002 Act, which also introduced section 167(2A) into the 1996 Act.)

44.  Fourthly, the Green Paper which introduced the 2002 Act, “Quality and Choice: A Decent Home for All” (April 2000), contains some relevant observations. At para 9.18, it expresses the view that “points-based assessment systems” are not “an ideal way of ensuring that social housing lettings meet need in a sustainable way", and suggests moving away from such systems to “more broad-brush ‘banding’ systems". It then says that

“The banding could be as simple as:

people with an urgent need for social housing;

those in non-urgent need of social housing; and

those with no particular need for it.”

In para 9.23, the Green Paper states that particularly “in areas of high demand", authorities “may decide to introduce additional bands to differentiate between demand priorities". (The Government paper published in December 2000 replying to responses to the Green Paper contains nothing to add to or detract from these observations).

45.  A points-based assessment system is one which ranks each applicant by the number of points he is awarded, the points being attributed to various categories of need on the basis of gravity. Once one departs from a points system, it is difficult to conceive of a scheme which is very subtle in terms of assessing relative need as between applicants who establish urgent need, or as between those who establish a real, albeit not urgent, need. Even more significantly, the specific example of the “simple” banding system in para 9.18 seems very close to that adopted by the Scheme. As I see it, the Scheme has a top band within Direct Offers of Additional Preference and Multiple Need (i.e. urgent need), a second band within CBL of Priority Homeseeker (i.e. non-urgent need) and a third band within CBL of Homeseeker (i.e. no particular need). The use of the word “may” in para 9.23 speaks for itself.

46.  Fifthly, as a general proposition, it is undesirable for the courts to get involved in questions of how priorities are accorded in housing allocation policies. Of course, there will be cases where the court has a duty to interfere, for instance if a policy does not comply with statutory requirements, or if it is plainly irrational. However, it seems unlikely that the legislature can have intended that Judges should embark on the exercise of telling authorities how to decide on priorities as between applicants in need of rehousing, save in relatively rare and extreme circumstances. Housing allocation policy is a difficult exercise which requires not only social and political sensitivity and judgment, but also local expertise and knowledge.

47.  In relation to the provision of accommodation under the National Assistance Act 1948, my noble and learned friend, Baroness Hale of Richmond, then Hale LJ, said in R (Wahid) v Tower Hamlets London Borough Council [2002] EWCA Civ 287 [2003] HLR 13, para 33, “[n]eed is a relative concept, which trained and experienced social workers are much better equipped to assess than are lawyers and courts, provided that they act rationally". Precisely the same is true of relative housing needs under Part 6 of the 1996 Act, and trained and experienced local authority housing officers.

48.  If section 167 carries with it the sort of requirements which can be said to be implied by the decisions of the Court of Appeal and the Deputy Judge in this case, then Judges would become involved in considering details of housing allocation schemes in a way which would be both unrealistic and undesirable. Because of the multifarious factors involved, the large number of applicants, and the relatively small number of available properties at any one time, any scheme would be open to attack, and it would be a difficult and very time-consuming exercise for a Judge to decide whether the scheme before him was acceptable. If it was not, then the consequences would also often be unsatisfactory: either the authority would be in a state of some uncertainty as to how to reformulate the scheme, or the Judge would have to carry out the even more difficult and time-consuming (and indeed inappropriate) exercise of deciding how the scheme should be reformulated to render it acceptable. As Baroness Hale said, that point is well made by looking at the Deputy Judge’s order in this case, which requires the Scheme to be reconsidered “in accordance with the law set out in this judgment".

The irrationality argument

49.  Accordingly, particularly in the light of the discretion accorded to housing authorities under section 159(7), it seems to me to be impossible to argue that an authority’s allocation scheme is unlawful unless the basis on which it accords priority as between those applicants who satisfy one or more of paras (a) to (e) of section 167(2) is irrational. In particular, it appears to me that it could only be said that a scheme must have more than one band for those applicants who satisfy one or more of paras (a) to (e) of section 167(2), if it would be irrational not to have more than one band. Irrationality is indeed at least part of the basis of the respondent’s attack on Newham’s Scheme.

50.  Given the five statutory and policy factors discussed above, I find it very difficult to accept that the Scheme can be characterised as irrational on the grounds given by Richards LJ at [2008] EWCA Civ 140, paras 69 and 70. It is worth briefly re-emphasising the point that the Scheme plainly satisfies the express statutory requirements. Indeed, in the light of the preference given to the Additional Preference and Multiple Needs groups, the Scheme exceeds the minimum statutory requirements when it comes to banding those applicants falling within section 167(2)(a) to (e). Further, if an authority is statutorily entitled, but not bound, to have, as it were, “additional preference” sub-bands, according to the closing sentence of section 167(2), the Scheme cannot be statutorily required to do so, and anyway, with the Additional Preference and Multiple Needs groups, it does so. Also, in accordance with the first phrase of section 167(2A), the Scheme makes “provision for determining priorities” between the Priority Homeseekers, namely by reference to the time they have been in that category. It is also worth adding that the Scheme appears to satisfy what was envisaged in para 9.18 of the Green Paper. In addition, if the Scheme distinguished between the Priority Homeseekers with any degree of subtlety, it would come close to adopting a points-based assessment system, which was rather deprecated in the Green Paper.

51.  The main argument for the respondent is that it is indeed irrational to include every applicant who satisfies one or more of paras (a) to (e) of section 167(2) in the same band, and then to select successful applicants by how long they have satisfied this criterion. It is undoubtedly a rough and ready system. However, it has many advantages over a more nuanced system. Thus, it is very clear, relatively simple to administer, and highly transparent. Once an authority has a number of different bands based on degree of need, or the degree to which the section 167(2) factors are satisfied, the banding exercise will be much more expensive, much more time consuming, much more based on value judgment, much more open to argument, much more opaque, and, as Baroness Hale pointed out, it would require much more monitoring, as applicants’ circumstances will inevitably be liable to change.

52.  Further, the period a household has been waiting for accommodation is, to put it at its lowest, a factor which a reasonable authority could take into account; indeed, a scheme providing that it could never be a relevant factor would, I suspect, be susceptible to judicial review. It is not as if it was a factor which had been excluded by an order under section 167(4). Indeed, I find it impossible to see why an authority should not take the view that it is an important factor. The fact that an applicant whose household includes someone who satisfies one or more of the section 167(2) factors has had to wait in his present unsatisfactory accommodation for a long time appears to me to be a factor which a reasonable authority could regard as very significant. It also has the advantage of being quantifiable, transparent and hard to manipulate.

53.  Quite apart from this, it should not be overlooked that there are two privileged groups who occupy a small higher band, namely applicants whose households not only include people who satisfy one or more of paras (a) to (e) of section 167(2), but who do so to the extent of meeting the criteria of the Additional Preference or Multiple Needs groups.

54.  I accept that the Scheme distinguishes between those applicants who satisfy one or more of paras (a) to (e) of section 167(2) factors in a relatively crude way, and that the criteria which have to be met to be within the Additional Preference and Multiple Needs groups are very stringent. Indeed, Newham may well think it right to reconsider both the crudeness of the selection method under the CBL and the very strict criteria for admission to the Direct Offers. However, particularly bearing in mind the enormous difficulties faced by Newham because of the yawning chasm between the supply of social housing, and the demand for it from such a large number of households with pressing needs, any scheme for allocating Newham’s housing could be criticised. There is nothing inherently absurd or arbitrary about prioritising those who satisfy section 167(2) by reference to time on the waiting list, subject to having a very small preference group, and nothing in the evidence supports a contrary conclusion on the facts in this case.

55.  This is not to say that there could never be circumstances in which a scheme, which complies with the statutory requirements, could be susceptible to judicial review on grounds of irrationality. Such a suggestion would be unmaintainable not least because it would represent an abdication of judicial responsibility. However, what is important is to emphasise that once a housing allocation scheme complies with the requirements of section 167 and any other statutory requirements, the courts should be very slow to interfere on the ground of alleged irrationality. In this connection, it is right to say that I am in complete agreement with the views so well expressed by my noble and learned friend, Baroness Hale of Richmond in paras 11 to 16 of her opinion, which I have seen in draft.

The reasons which persuaded the courts below otherwise

56.  What was it which caused the Deputy Judge and the Court of Appeal to take a different view? I think that there were three main factors. First, there were a number of cases decided in the Administrative Court and the Court of Appeal; secondly, the courts below were, I suspect, influenced by the very sad plight of the respondent and his family; thirdly, there was the Code of Guidance (“the Code”) issued by the Secretary of State pursuant to section 169.

 
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