One could also tell a rather different story to the self-laudatory comments in the strategy about the affordable rent scheme (es paras 23-49, ch 3) – higher housing benefit, worse benefit/poverty traps etc.  It is also interesting to read about the focus on the local etc (it’s all a bit nauseous by now tbh) while at the same time appreciating that the effect of the value for money driver in social housing provision/regulation is to drive mergers/agglomerations in the sector to achieve economies of scale (para 41, ch 3) – localism or nationalism?

The strategy is also interesting for what it doesn’t say.  More of that in a moment.

Let’s start with what seems to be new in the paper, although much has been pre-announced:

i) The 95% mortgage: This has been heavily trailed in the media.  It comes in a chapter entitled “Increasing supply: more homes, stable growth” (ch 2), which I have to say is slightly worrying given the likely outcome of some households which take up this apparently enticing offer.  It is basically an indemnity scheme being run by the Home Builders Federation and CML.  The builder puts in 3.5% of the sale price and the government puts in “additional security for the loan in the form of a guarantee” (para 20).  100,000 households will be supported through this scheme.  Frankly, I’d worry about taking on a 95% mortgage in the current economy but so be it.

ii)Re-negotiation of section 106 agreements (ch 2, paras 28-31) – expect a new consultation on this shortly but the priority is to “encourage action on stalled development”, which may worry a few.

iii) Right to buy discounts: There will be a further consultation on effectively doubling the percentage cap on RTB discounts.  This was heavily trailed at the party conferences of course.  It is combined with a commitment that “every additional home sold under Right to Buy is replaced by a new home, and receipts from sales will be recycled towards the cost of replacement” (ch 3, para 63).  Of course, they do not say by what type of organisation at this stage but it will either be through “local delivery”, “national delivery” or a “combined approach” (para 67).  The devil will be in the detail.

iv) Can’t resist the chocolate teapot treatment again for the reprise on ASB: “We are proposing therefore to widen the grounds on which landlords can seek to evict tenants, to include where they or members of their household have been convicted of the sort of criminality seen in the recent rioting, wherever that took place” (ch 3, para 77).

v) Tenancy abuse (an interesting construction this, which I will leave to the discourse analysts amongst you): a “pay to stay” for those abusing social housing by earning £100k or more pa and still living in social housing; and the government is “looking closely at the case for strengthening powers in existing legislation on tenancy fraud” (para 81).

vi) Promoting further real estate investment trusts to invest in the private rental sector (yawn, yawn – this has been a theme of government housing policy since 1986, and continually unsuccessful).

vii) Giving service families in urgent need additional priority for an allocation as well as priority in the shared ownership/homebuy process (ch 6, paras 56-62).  I don’t know how I feel about that – it’s not really to do with my pacifism but about whether the case for their additional priority is necessarily made out over those other serious needs.

vii) And then there’s a raft of other stuff which is much less sexy (to me) – more on empty homes (snore – see my previous comment on the previous announcements); the green deal; the co-ordination of debt advice by Money Advice Service; a new deal for older people’s housing which seems to me to be the old deal, just with a certain degree of ring-fencing.

What’s really interesting is what’s not there and that is about regulation of the private rented sector.  They are apparently “looking at measures to deal with rogue landlords and encouraging local authorities to make full use of the robust powers they already have to tackle dangerous and poorly maintained homes” (ch 4, para 19).  But that’s as good as it gets about regulating the sector beyond stuff about the Energy Act (erm, New Labour’s, I think) and the amazing provision of factsheets that Shapps sometimes tweets about.

All-in-all, nothing to shout about, I’d say, Shapps et al.

Forgive the length of this note, but this seems to be a significant case with potentially far-reaching ramifications.  The judgment of Cranston J (in my view) is mostly spot-on and hugely learned (see well below for an appreciation).  It will be interesting to see whether this case goes further – my insider information is less than clear on the prospects of an appeal.  For what it’s worth, my view is that an appeal would likely be unsuccessful but important in providing clearer lines about the fiduciary duty and capacity issues discussed below, as well as about the housing revenue account.

Background

LSVT of an entire stock poses many problems for local authorities and the transfer association after the transfer has taken place.  What seemed perfectly reasonable at the time of transfer can dissipate into acrimony.  There are many practical questions once transfer has taken place, not least of which is the mechanism and/or provider through which accommodation can be offered to vulnerable homeless applicants in satisfaction of duties under Part 7, Housing Act 1996.  In 2002/3, that problem was exacerbated by central government edicts about the use (or non-use) of bed and breakfast accommodation for families.  This is what faced Penwith DC and Restormel BC, in which anybody who has been to Penzance, St Austell or the Eden Project will know has a plenitude of b&b accommodation.  (As regards the former, I remember articles in the late, much lamented Roof magazine back in the early 1990s about problems between the LA and transfer HA.)

The arrangements

Fortunately, those authorities were approached by a private company, Charles Terence Estates Ltd (CTE) and its sister company, Providers of Accommodation and Support Limited (PAS).  The companies were offering to take over and/or do up accommodation which would be leased back to the local authority for use as accommodation for such households on a 25 year term with a break clause after 10 years.   They were also offering to provide move-on accommodation (on which more below).  There were some differences in approach by the different local authorities, Restormel jumped into the arrangement; Penwith appeared more circumspect at the outset with a pilot but the “pilot” was soon followed by the full agreement being put into place.  CTE were also given £350k by each of the councils.  The mechanism through which that £350k was given is important.  Restormel appear to have used their general powers to make a grant of the money either for the purchase and rehabilitation of the temporary accommodation or for the purchase and provision of move-on accommodation, although that accommodation was never provided.  Penwith paid the money by way of loan from its private sector renewal fund under its published policy, “homesafe”, although the proper forms were never completed (and an attempt at retrospective changes to the policy to accommodate it never formally completed), and the money was used to provide the temporary accommodation.  In both cases, the £350k was to be repaid by CTE (Restormel) or written off (Penwith) if the agreements lasted more than 10 years.  Penwith also made a grant of £750k to CTE drawn from its second homes council tax fund.

Now this summary does little justice to the jejeune approach of the councils to the use of their formal powers.  This is laid bare in the forensic judgment of Cranston J and bears reading by any local authority officer and member concerned with their proper roles.  In very brief summary, it was shambolic (misinformation, incorrect appreciation of the effect of the agreements on the statutory obligations [my favourites is the report to Penwith's resource committee which mentioned the Housing Grants and Construction Act 1996 even though this had been repealed in 2003 - others will found much of delight in the wreckage of these reports], and one could go on; the critique particularly of Penwith is at [87]-[88])).  What was driving the councils, though, was the concern about the escalating costs of b&b as well as the government targets.

Penwith rather belatedly reviewed the scheme by way of risk assessment, the Audit Commission became involved – amazingly, the District Auditor said that he was satisfied with the council’s approach but that it should have been more explicit about why it didn’t tender, should have referred to the relevant financial regs, and should have explained these points to the Members but that the reports “have been transparent and sufficient enough for members to ask relevant questions of the scheme”. Penwith also asked a consultant to prepare a report after concerns were raised by Members and officers.  The consultant “conducted an internal, and to my mind cursory” review which lead to an email of less than a page (!).  More of this below.

In anticipation of the shift to unitary status – hence Cornwall Council’s involvement – a report was commissioned on the relationship between CTE/PAS and Restormel/Penwith.  The reporter noted that Bournemouth, another council which had entered into similar relationships, had a break clause of three months: “Surely, wrote [the reviewer], one of the two councils’ auditors or lawyers would have questioned the length of the leases?” ([51]).

And now, here’s the rub: the costs of the leases of the properties entered into by the council.  How did they work them out?  They appear to have worked out the maximum amount of housing benefit payable, deducted an amount of around £50 per week, and that was it.  Thus, CTE got £120 pw for each of the properties grossed up to an annual figure.  The Penwith consultant’s review noted as follows:

Regarding the discrepancy between the £120 per week rent paid to CTE, and the £175 per week the council charged residents in the single person accommodation, i.e. £55, Mr Lee concluded that this was relatively straightforward because it was comparable to the management fee of £52 the council charged on private sector leases.  It was based on the estimated cost of agent’s fees, voids, bad debts, repairs and general housing services and its legality was not in doubt.  [47]

The issues

After Cornwall took over, it stopped paying the rents on the basis of its reviewer’s report.  There was another rather crucial issue – changes to HB regulations meant that the calculations of the rent might be out of whack and what was to be done if a household were not entitled to HB?  Amazingly, little thought had been given to this risk when the agreements were entered into by Penwith (if the word “jejeune” covers anything, it covers this!), although Restormel did have a provision.

In this action, CTE claimed arrears and the council defended on both private (mistake) and public law grounds (practically all of them).

Mistake

The defence of mistake was clearly a non-starter.  Everybody knew what they were doing, but Cornwall had a rather interesting proposition.  Penwith and Restormel had no housing revenue accounts (“HRA”) after their LSVTs, and the mistake was said to be that the agreements with CTE should have been run through an HRA as well as the fact that the residents would be eligible for HB to meet the rents for which they were liable.  Cranston J dismissed this defence on the basis that CTE had no knowledge of the HRA requirement, and Penwith/Restormel had not made a mistake: “None of the reports to the councils’ committees mention the HRA.  If there was any mistake it was attributable to the fault of the councils, who ought to have known about HRA requirements” ([56]).  As regards HB, the agreements were not predicated on the availability of HB and it was not sufficiently vital to avoid the contracts; indeed, even if an occupier was not eligible, Cornwall would have to find the rent from somewhere else in its budget.  These agreements were also commercial so reg 9(1) did not apply.

Public Law

On the public law grounds, the starting point (of course) is that burden is extremely high when a public authority is seeking to avoid a contract lawfully entered into on public law grounds.  The balance is between protecting commercial contracting and the policy that public bodies must act lawfully.  There were three grounds raised: capacity; fiduciary duties; and discretionary decision-making.  If you want the punch line now, then it’s that Penwith/Restormel were held to have breached their fiduciary duties.  But the rest of the judgment will be just as significant to LSVT local authorities concerned by the impact of this judgment (and there may well be quite a few of them).

Capacity

There were two points taken here: the first was about the HRA; the second was about the grants/loans.  On the first, the argument for Cornwall was that, although the councils clearly had the power to take the leases, the councils had to run the leases through their HRA – the argument was that rent cannot lawfully be paid if no HRA is kept, and an HRA is a prerequisite of the lawful exercise of powers to take leases over 10 years.  Cranston J’s position was that this argument was incorrect because the HRA does not operate at the level of individual transactions with a debit value as that value can be made good from elsewhere.  I’m not sure that I necessarily follow (ie agree with) that argument but the second point he made was that the leases were with CTE not individual tenants and entry into those leases did not require an HRA and the council’s subsequent use of the properties was not relevant to that exercise.  Thus, no HRA needed.  Again, I’m not convinced that one can unbundle the transaction in that way but a key point for future reference is as follows:

The fact that 25 year leases cannot be accounted for outside the HRA does not render performance of the contracts between CTE and Cornwall Council impossible, or different in quality to any degree.  It may simply mean that Cornwall Council must operate an HRA, and if necessary charge no more than local area reference rents. ([70], my emphasis)

As regards the grants and loans made to CTE, Penwith’s Homesafe loan to CTE of £350k was unlawful.  Not only had the proper procedures not been complied with but also CTE did not qualify for such a loan anyway.  Restormel was protected because the Cabinet Committee had authorised the grant.

Fiduciary duties

Cornwall had success here.  After a summary of the authorities (Bromley LBC v GLC [1983] 1 AC 768, the ‘fares fair’ case, and Hazell v Hammersmith and Fulham LBC [1992] 2 AC 1), Cranston J understood that local authorities have a fiduciary duty to their council tax payers which included a duty to deploy its financial resources to best advantage, not necessarily thriftlessly, but by balancing its duties to its taxpayers against its other duties.  There then followed a discussion of the open market value of these properties, an imponderable because (on CTE’s case) these were unlike “ordinary” private rentals, there were no comparables, and the level of HB personal subsidy was set at the standard rate which “should be treated as a carefully considered assessment of the amount which, in each area, it would reasonably be expected to cost to provide accommodation for this group” ([77]).

Cranston J disagreed, however, because “the crucial point is that the councils never had regard to what was the market rent for the various properties leased from CTE” (again !, [79]).  the rents had been fixed before the properties had been bought/developed and the figure arrived at was based on the maximum sum available to the councils through rent rebate subsidy: “the rent was formulaic, fixed even before the properties were identified and purchased.  The £120 figure was simply multiplied by the number of bed spaces to produce the weekly, and ultimately the yearly, rent for each property” ([79]).  In failing to have regard to the market rent, the councils had breached their fiduciary duties.

Discretionary decision-making

This ground concerned improper purposes, irrelevant considerations, failure to take into account relevant considerations, and irrationality.  Let me give a flavour of the claim on improper purposes because, in a way, it summarises the problems which the councils had unwittingly entered into (and also the irrelevant considerations):

The improper purposes were said to be to abuse of the housing benefit system by determining rents under the leases with CTE and under the agreements with residents by reference to housing benefit rates; to charge excessive rents to licensees; to pay excessive rents to CTE; to pay such rents to CTE notwithstanding the absence of any adjustment provision for housing benefit changes in the Penwith leases and a provision in the Restormel leases which is virtually worthless; and to pay such rents on the basis that they would contribute to financing move-on accommodation when there was no contractual obligation upon CTE to provide such accommodation and no provision for the repayment of rents if it were not provided. ([82])

It is important to note that these points were disposed of shortly by Cranston J as of no substance, although the provision of move-on accommodation was conceded by CTE: “Foolishly, neither Restormel nor Penwith made the provision of move on accommodation a contractual commitment on CTE’s part.  There was not even an incentive in the leases or funding agreements with CTE to live up to the aspiration it set itself.” ([84])  That absence of provision suggested that this was not a significant part of the bargain between the parties.  If you’ll forgive a summary of Cranston J’s view of this sub-ground, it is that the reports just about passed muster and all significant relevant matters had been taken into account.  Irrationality didn’t advance the case any further.

Outcome

The leases were of no effect and Cornwall had a restitutionary claim for repayment of the rents.  CTE defended that on the basis of the restitutionary defence of change of position (cue fond memories of being taught CoP by the late, great Peter Birks, who put up with my hangover state at his Thursday 9am classes; RIP).  CTE’s change of position defence was successful – they had acted in good faith and could not be taken to doubt the councils’ decision-making procedures which were of no interest to them; and it did not matter that CTE had changed its position before it received the monies.  The equitable outcome was this:

[S]since the councils have had the benefit they were supposed to under the terms of the leases it is proper that the level of rent payable in respect of Cornwall’s occupation should be the amount that was agreed.  As for the Penwith £350,000 loans, the equitable outcome is that CTE should repay them in due course in accordance with the terms and conditions of the relevant loan agreements. ([99])

Cranston J: An appreciation

Ross Cranston is a former academic and I would suggest to anybody with sufficient interest to read his magisterial tome, Legal Foundations of the Welfare State.  OK, he was involved with the Blair government as an MP and Solicitor General, but (in my view) he is one of the outstanding High Court Judges.  He certainly demonstrated that accolade in this case.  He weaves a comprehensible survey of basic legal principles with academic work (referring, for example, to the great Law and Administration by Carol Harlow and Rick Rawlings – one could say that’s the LSE connection, but I’m charitable), and deals with the almost impenetrable HRA provisions with aplomb (although I’m not totally convinced correctly).  The point about fiduciary duties is potentially far-reaching and may well cause a few LAs to be just a little concerned.

However, it is not as simple as merely asking a few questions. There is guidance from the government on the nature of the consultation and the courts have been clear (in R(Peat & Others) v Hyndburn BC) that a licensing consultation must follow that guidance. One of the key parts of the guidance states:

During consultation, LHAs must give a detailed explanation of the proposed designation, explaining the reasons for the designation, how it will tackle specific problems, the potential benefits etc. For example, in the case of selective licensing, LHAs must be able to demonstrate what the local factors are that mean an area is suffering from low demand and/or anti-social behaviour, how those factors are currently being tackled and how the selective licensing designation will improve matters. Affected persons should be given adequate time to give their views and these should all be considered and responded to.

This is where Newham has started to go wrong. Their consultation contains loaded questions with no explanation of the meaning. For example there is a question about whether poor property management is a problem. However, this cannot be asked without specifying that the question is confined to landlords in the private sector and giving some idea of what is meant by poor property management. Another question asks if landlords should be obligated to take steps within their powers to deal with anti-social behaviour by their tenants but without outlining what the scope of those powers are.

It gets worse. The consultation goes on to give outlines of the licensing scheme Newham proposes. It will come as no surprise to most readers that local authorities do not have a completely free hand to impose any licensing scheme they please and there are specific restrictions imposed by the Act. So Newham state that they intend to charge one fee for landlords who licence early and a “penalty” fee of nearly ten times that sum for those landlords who have been prosecuted for failure to have a licence. Quite apart from the concern over Newham creating it’s own penalty scheme outside the proper jurisdiction of the magistrates courts, the law requires that Newham can only levy charges that reflect the costs of running the scheme. Newham will state that they are loading the cost onto those who cause then the most problems but they will have to show that the balance is fair and is a genuine reflection of the different costs of licensing the two groups. This might be hard for them to do.

In addition, Newham have set out a list of standard conditions they propose to attach to licences under the scheme. Firstly, the RPT has ruled that standard conditions which are automatically applied to all properties are inappropriate and conditions must be applied on a case by case basis even though there will often be a strong similarity in conditions among properties in the same area. There are also legal restrictions on conditions which can be imposed. For example one of the conditions Newham intends to impose is one:

Requiring the licence holder to provide each occupier with a written statement of the terms of his occupation which must contain anti-social behaviour clauses.

But HA 2004, s90(7) states that no condition can be applied to a licence which requires or intends to secure a change in the terms of the terms of the tenancy or licence that the property is occupied under.

Newham has every right to impose selective licensing but if it is serious about doing so it must do so within the law. There is an urgent need to rethink the terms of the scheme and to amend the consultation to bring it into line with guidance.

Now, with that preface out of the way, let us turn to the Localism Bill.  There is so much going on in this bill that its title is misleading.  It’s not particularly or coherently about “localism”, but, at a much more fundamental level, the housing provisions are about changing the landscape of “the social” in social housing as well as tinkering around the edges (see my comments on the so-called “democratic filter” before a complaint can reach the ombudsman – it’s fair to say that I’m up in arms about that).  If it was about “localism” proper, then that would return us to a pre-1977 free-for-all, which (frankly) few people in power want. Then there are what can only be described as the meanderings of the Housing Minister, Grant Shapps (who, if my sources are right, is not the brightest smartie in the box).  Let me pick two such meanderings: he goes to Harrogate and announces that private rented properties will have to meet minimum standards before being used for homeless households, an announcement which pretty much unpicks the coalition’s policy to private renting and makes it seem, at best, incoherent; second, he says at one point that the minimum period for the flexible tenure should be five years, goes back on that, gets criticised for going back on that (not unreasonably), and then re-issues a draft direction (links to Inside Housing story) saying that they should be for five years and the minimum period of two years should only be used in exceptional circumstances.

What are we to make of all this? Not being in charitable mood this morning for various reasons, my view is that the coalition’s housing policy is pretty woefully thought-through; even that suggestion of thought may be too charitable.  But, at least, you would have thought that they would take account of local views as well as the views of experts.  As regards the former, we have previously commented on the frankly outrageous (told you I’m not in charitable mood) fact that the consultation period on the document, Local Decisions: A Fairer Future for Social Housing, ended on the day of the second reading of the Bill in Parliament (17.01.11) and the summary of the responses (leading, of course, to no change) was not published until 28.02.11 (see our respective discussions here and here).

As regards the latter, I’m not claiming for myself expertise in these matters, but the House of Lords contains too many experts on housing and draftspersonship to mention.  They are also a body which is responsible for the scrutiny of proposed legislation.  And they do it pretty well most of the time.  Yes, they can be a thorn in the side of government (as Thatcher would tell you) but they also moderate and make good some pretty frightful drafting (as I remember their approach to the then Housing Bill 1996).  Much of their best moderation (and, indeed, in the Commons) comes at Committee stage, when the house gets down to the nitty-gritty of the detail.

Now we come to the Localism Bill.  On 20.07.11, the HL committee stage of the Bill was completed.  In a matter of a few hours, debate was conducted on a range of fairly fundamental proposed amendments, from planning (including sites for Gypsies and Travellers) to the issues around social housing.  The debate was effectively guillotined, and amendments not discussed will be discussed at Report stage of the Bill (along with a raft of other amendments, no doubt, so that will be rushed as well); but the essential point is this: provisions and amendments which will have a huge effect on vulnerable and other households were dispatched in a matter of a few hours.  It’s pretty difficult to disagree with the Law Society press release that “It is impossible for the Lords to effectively carry out their function of scrutiny if they are forced to consider 40% of an enormous Bill in less than five hours.  This Bill includes some of the most radical social housing reforms in recent memory. The government has avoided scrutiny of them through regrettable haste.”  It all now depends on Report stage in the Lords and the amount of time the coalition will set aside from that, given the considerable amount of other business.

The government moved a huge number of amendments at this late stage during the parliamentary process to tidy up the Bill, including an interesting (well, to nerds like me) amendment to section 52, LPA 1925 excluding flexible tenancies from the requirement for a deed and from land registration requirements and changes to succession to shared ownership properties.  If they are doing this at such a late stage (I appreciate that it has been common practice for governments to do this, but look at the resulting quality of our legislation), it might be suspected not unreasonably that there will be some significant glitches (perhaps even worthy of the Prescription Act 1832).

Even Baroness Hanham, the DCLG spokesperson in the Lords, began her response to the grouped homelessness amendments by noting that “this is clearly a debate that needs a lot more time than we have got tonight” (col 1464).  Such was the speed with which the HL dealt with the amendments that the social housing ones were grouped together, so that the proposers spoke to most of the amendments before the government responded.  Reading the debate, the overwhelming feeling is that it was extremely high quality.  And they raised absolutely crucial issues – the length of the minimum fixed term, the scope of the review provisions, protections for vulnerable homeless persons provided with private rented accommodation, the ombudsman filter, etc.  I was particularly struck by a comment from Lord Newton about the “coherence” of the Localism Bill in the context of the coalition’s legislative programme:

I did on one occasion incur some possible unpopularity on my Benches by making the point that we have at least three-if not more-Bills on the go at the moment: the Welfare Reform Bill, the Legal Aid, Sentencing and Punishment of Offenders Bill, and this one, all of which impact on various disadvantaged groups, including disabled people. It is far from clear that there has been a joined-up approach to these bits of legislation. (col 1463)

Lord Newton (Tony Newton) is not one of my favourite politicians, but he has a point.  Let’s hope that the coalition sees some sense in the recess.  I doubt it, though.

I’ll give a somewhat lengthy report of this case, because it is one of the first to touch on the changing planning environment for Gypsies and travellers after the DCLG’s stated intention to remove the Regional Plans and after Cala in the Court of Appeal (our brief report here).

This was Broxbourne BC’s committal application, much adjourned, for breach of an injunction to cause, permit or occupy a caravan on a plot alongside the river Lea. Mr Breary was the second defendant. From 2009, Mr B owned the plot number 19, one of 73, 50 of which were owned by the Lea Valley Regional Park Authority. It was trying to acquire the rest.

Of the 73 plots along Wharf Road, by 2010 50 were owned by the Lea Valley Regional Park Authority, on 2 of which the Authority was allowing caravans to be stationed for the time being. Of the remaining 23 plots 13, including plot 19, were in the council’s view being used unlawfully for the stationing of caravans. Residential use is authorised for only one plot, and that is a result of long usage, not specific authorisation. The remaining plots are not used for caravans, although in some cases other development has taken place. It seems that it was from about the year 2000 the plots with residential caravans have been occupied by gypsies and travellers.

In May 2008, the Council obtained a without  notice injunction under section 187B of the Town and Country Planning Act 1990 for plot 19 in the above terms. A copy was posted on the fence and remained attached to the fence into 2009 on the Council’s evidence. Through 2008 there were a couple of apparently abandoned caravans on the site.

In October 2009 Mr B purchased plot 19 from the first defendant in the case. He and his family moved on the plot in about July 2010. It was accepted he did not know of the injunction. The Council wrote to Mr B with a copy of the injunction in November 2010, giving him 14 days to comply. By this point, Mr B’s children were attending the local school.

Mr B explained his situation to the Council. The Council officer visited twice in mid December 2010, noting Mr B needed advice, but it was occupation on these dates that formed the basis for the committal application. The Council’s planning authority had approved enforcement action against all the sites in the river side area in September 2010.  On 20 December 2010, the Council applied for committal.

In January 2011, Mr B applied for a change of planning use for plot 19 to a caravan site with two caravans for residential occupation. This was refused in March, with the given reasons being inappropriate development within the green belt; the location of the site in a high risk flood area; the location of the site within the designated boundary of the Lea Valley Regional Park; the applicant’s failure to provide sufficient information regarding the suitability of existing water, sewage and electricity infrastructure; and the interests of highway safety, since its occupation would result in an intensification of use of an un-manned level crossing on the London to Stansted railway line. Mr B appealed that decision. The appeal is not due to be heard until 27 July 2011 with a decision following, possibly quite some time later.

Mr B applied to adjourn the hearing until the determination of his planning appeal. The Court gave that short shrift

In my judgment it was not appropriate to adjourn the hearing. Given the history of the false starts of the application the Overriding Objective pointed in my view in a diametrically opposite direction to that perceived by Mr Willers. Secondly, the ramifications of the adjournment proposed would be to deprive the injunction of any force, whatever the outcome of the appeal. As indicated the appeal hearing will take place on 27 July although it may not be for some time until after that before the inspector publishes his or her decision. So for a very substantial period Mr Beary would have been in occupation of plot 19, in breach of the injunction. An adjournment would mean that the court would continue the injunction in force knowing that it will be breached. That to my mind was a situation better avoided; the more desirable course was to address the committal and variation applications head-on.

On the planning application, the Court noted that the national planning policy under C1/2006 had required local authorities to consider temporary planning permission where there is an un-met need but no available alternative gypsy and traveller site provision in an area, if there is a reasonable expectation that new sites are likely to become available in the area at the end of the period to meet the need. Paragraph 46 of Circular 1/06 states that in such circumstances local planning authorities are expected to give substantial weight to the unmet need in considering whether temporary planning permission is justified.

However, the DCLG had announced that the regional plans, which had required local authorities to identify sites, was to be scrapped. The Court noted the High Court decision in R (Cala Homes (South) Ltd) v Secretary of State for Communities and Local Government [2010] EWHC 2866 (Admin) that revocation of the plan by excecutive action was unlawful and also the Court of Appeal decision in R (Cala Homes (South) Ltd) v Secretary of State for Communities and Local Government [2011] EWCA Civ 639 that the intended revocation of the regional plan was a material factor that planning authorities could take into consideration. It was also noted that the government has also published a draft planning policy statement “Planning for traveller sites” following its announcement that it intended to withdraw C1/2006 and replace it with “light touch” guidance.

The Council’s own development plan, dating from December 2010, aimed for the limited expansion of existing private sites and one public sites for travellers. The Lea Valley area was not part of the plan, being instead part of a flood risk area and to be developed for the regional park and to lessen flood risk. Caravan sites were not permitted (being ‘highly vulnerable’) in area of flood risk zone 3a areas. The Environment Agency classified the Lea River Valley area, including the plot, as zone 3a. The level of risk to the spot where the caravans were situated was disputed by Mr B.

There as a further planning consideration which was the aspiration for the area to become a regional park. The Lea Valley Regional Park Authority contended that planning permission for the site would be against green belt and regional park objectives.

Turning to the committal application

Mr B argued that a) the Council had delayed in enforcement, and during that period Mr B and his family settled in the site and the children began school. When the Palnning Committe endorsed enforcement they were unaware who was living on the site or their circumstances. There had been no referall back to the committee before beginning enforcement in December 2010.

b) the Council had failed to have regard to the Race Relations Act 1976 and Article 8 implications of taking committal action, and the impact of such action on the children. Section 71 of the Race Relations Act 1976 imposes an obligation on bodies like the council to have due regard to the need to promote equality of opportunity and good relations between persons of different racial groups. The attendant code of practice directs decision makers to consider whether a policy aim can be achieved without causing an adverse impact on a racial group or whether the adverse impact could be reduced by taking particular measures. A delay of three months in enforcing an injunction in similar circumstances on these grounds was ordered in South Cambridgeshire District Council v O’Brien [2008] EWCA Civ 1159.

The Court took the view that although O’Brien was a case about an application for an injunction, that would not prevent the same principles applying on a committal application, particularly as the Court’s order on a committal application can be tailored to the circumstances, even more so than on an injunction application.

However, the Court was not satisfied there was any flaw in the Council’s decision making. ‘Due regard’ under s.71 Race Relations Act meant appropriate in the circumstances ( Baker v Secretary of State for Communities and Local Government [2008] EWCA Civ 141), including the countervailing factors. Although the Council had made no specific reference to the duty in its papers, it was clear that in substance the Council had had due regard to the special position of the gypsies and travellers in the Wharf Road area. IN the broader enforcement action a distinction had been made between those who had been there for some time and more recent arrivals, with the former left until alterantive sites were available. In addition, Mr B faced a high hurdle on his planning appeal in the context noted above.

There were also concerns about how far the court could countenance flouting of its orders.

On Mr B’s aplication for a stay until determination of his planning appeal, this did not stand a realistic prospect of success Against the argued precedents of South Buckinghamshire District Council v Smith [2006] EWHC 281 QB, South Cambridgeshire DC v Price [2008] EWHC 1234 (Admin) and Brentwood Borough Council v Ball [2009] EWHC 2433 (QB), where injunctions had been refused pending planning appeals, there was the fact that these all concerned injunction applications. Following Mid Bedfordshire District Council v Brown [2004] EWCA Civ 1709, South Cambridgeshire District Council v Gammell [2005] EWCA Civ 1429 and Wychavon District Council v Rafferty [2006] EWCA Civ 628, however, on committal applications and applications to vary injunctions which were being breached, “maintaining the authority of court orders is an overarching consideration”.

There had been no application “forthwith” when Mr B realised he was breaching the injunction and an application to vary was only made once a committal application had been made. While there may well be delays in being able to obtain legal advice, the clear tenor of Gammell was that action should be immediate.However:

it is appropriate that the principles in South Bucks District Council v Porter have some purchase in a case like the present since at the time the injunction was issued, indeed at the time that the application to commit was authorised, there was no knowledge of Mr Beary and no consideration of his personal circumstances. Thus in considering the application to vary it is necessary for me to consider (1) planning issues, such as the planning merits, the planning history, including the length of unlawful occupation of the site, and the availability of suitable alternative sites; (2) the personal circumstances of the family, including the implications of Article 8 of the European Convention of Human Rights, and the consequences were the injunction to remain in its current form; and (3) the overarching public interest in ensuring that court orders are respected and obeyed.

On the planning issues the court was not persuaded that Mr B had real prospects of success in his appeal. Mr B had to surmout the hurdles of the green belt and the ‘very special circumstances’ for the grant of permission. Even if C1/2006 was still in force at the time of the appeal, the direction of travel of the DCLG was clear and, could, post Cala, be taken into account. This was even before the disputed issues about flooding were taken into account.

On article 8 proportionality, Z H (Tanzania) v Secretary of State for the Home Department [2011] UKSC 4 was cited to the effect that under the UN Convention on the rights of the child, their best interests must be a primary consideration in public policy making.

However, in Chapman v United Kingdom (2001) 33 EHRR 18 a refusal of planning permission was an interference with a gypsy’s art 8 rights, but was held to be proportionate.

The court did not accept the argument that because there is an unmet need for gypsy and traveller sites, the decision not to allow the applicant gypsy family to occupy land where they wished constituted a violation of Article 8. That would be tantamount to imposing on contracting states an obligation to make available an adequate number of suitably equipped sites. Article 8 did not give a right to be provided with a home.

So, while the position of the children was of great importance, and “Mr Beary’s conscious defiance of the law since he knew of the injunction cannot be visited on his children nonetheless, as Z H (Tanzania) made clear, their interest as a primary consideration does not mean that it cannot be outweighed by other factors in the balance so that interference with their Article 8 rights is proportionate. ”

In addition and as the decisive factor for the application to stay:

The fact is that there is properly in place an injunction prohibiting residential occupation of the site. To vary the injunction so as to permit the very action that it is designed to prevent would fail to acknowledge the force of the injunction. In Mid Bedfordshire District Council v Brown, South Cambridgeshire District Council v Gammell and Wychavon District Council v Rafferty the Court of Appeal has made clear that, where there is a continuing breach of an existing injunction, and the application is to vary it for the future, so as to allow a person to continue to do the very act which the injunction prohibits, the need to uphold the authority of the court is of overarching importance in the exercise of the court’s discretion.

The breach of the injunction was admitted and Mr B had apologised to the court for it. Mr B asked that the Court make no order, or adjourn sentence pending the planning appeal or impose a limited fine.

Guilford Borough Council v Smith The Times, 18 May 1993, endorsed on appeal by the Court of Appeal: [1994] JPL 734, was authority only for “the rather obvious and limited point that a judge in considering committal must scrutinise carefully the particular circumstances of the instant case” and could exercise a discretion accordingly.

R v Newland [1987] JPL 851: (1987) 54 PCR 222 was a successful appeal of a first instance committal order where the Judge had cursorily dismissed the prospects of success of a planning appeal, but that case specifically did not include the careful canvassing of the prospects of success of the planning appeal that had taken place in this case. It was not therefore authority for adjourning sentence pending the appeal, as argued by Mr B.

In this case, a fine would not accord observance of the injunction the importance it deserved. Following South Cambridgeshire District Council v Gammell, the committal application was granted and a sentence of 28 days given, “that sentence not to take effect if he removes the caravans within 4 weeks from today. That period should give him time to remove the mobile home and caravan from the site and will enable the children to finish the school year at the local primary school.”

(a) the government announced it would abolish Regional Strategies;

(b) it then purported to do so, under the Local Democracy, Economic Development and Construction Act 2009;

(c) in Cala Homes No.1 the High Ct decided that this couldn’t be done – the power in the 2009 Act was to modify, not abolish entirely;

(d) the Secretary of State then announced he’d abolish them via primary legislation in the Localism Bill and a letter to this effect was sent to local planning officers;

(e) in Cala Homes No 2, an attempt to have (d) declared unlawful was rejected; in essence, developments in planning policy are plainly matters that the Secretary of State is entitled to tell people about and the possible abolition of Regional Strategies was a matter for local authorities to have regard to as they saw fit.

Cala Homes appealed to the Court of Appeal, where their appeal was dismissed. The weight to be given to Regional Strategies (pending their anticipated abolition) was a matter for individual authorities to consider, but it could not be said to be a wholly immaterial factor which should be left out of account.

J has previously alluded to this case involving an application for permission for Judicial Review of a local authority decision to make a selective licensing designation. However, we now have a full transcript.

Selective licensing is found under Part 3 of the Housing Act 2004. It allows local authorities to designate all landlords in a specified area as requiring a licence to let their property. This is only permitted if the local authority reasonably considers that the area is or is likely to become an area of low housing demand (section 80(3)(a)) which will be improved by making the designation or that the area is one of anti-social behaviour which is being exacerbated by the actions (or failings) of private sector landlords (section 80(6)) and the making of the designation will alleviate the problem. As with all such designations the local authority must conduct a consultation of those persons likely to be affected by the making of the designation and consider representations made (section 80(9)).

In 2006 the DCLG issued guidance on the carrying out of consultations and the making of designations which was revised in April 2010 (the, snappily named, “Approval steps for Additional and Selective Licensing Designation in England“). One of the key passages, regarding consultations, stated:

LHAs will be required to conduct a full consultation. This should include consultation of local residents, including tenants, landlords and where appropriate their managing agents and other members of the community who live or operate businesses or provide services within the proposed designation. It should also include local residents and those who operate businesses or provide services in the surrounding area outside of the proposed designation who will be affected. LHAs should ensure that the consultation is widely publicised using various channels of communication.
During consultation, LHAs must give a detailed explanation of the proposed designation, explaining the reasons for the designation, how it will tackle specific problems, the potential benefits etc. For example, in the case of selective licensing, LHAs must be able to demonstrate what the local factors are that mean an area is suffering from low demand and/or anti-social behaviour, how those factors are currently being tackled, and how the selective licensing designation will improve matters. Affected persons should be given adequate time to give their views, and these should all be considered and responded too.

Hyndburn made a selective licensing designation on 3 March 2010 which was confirmed by the Secretary of State on 31 March 2010 (just a day before he removed the need for confirmation altogether). The consultation relied on to make the designation was, however, conducted a little in advance of this, in August 2008.

The claimants (who are a small group of professional landlords acting with the support of another 341 of their peers) now seek to quash the designation on the basis that Hyndburn misled the Secretary of State as to the nature of their consultation and also that the consultation they carried out was inadequate.

The main ground relied on by Hyndburn at the permission stage was that the claimants had delayed excessively in the making of their application. It was submitted for H that they were first notified of the review by a letter from solicitors at the beginning of September 2010 at which stage they immediately pointed out that the attempt to review the decision was out of time.

The Court (in the person of Mr Justice Owen) disagreed, pointing out that a lettings agent (acting on behalf of the claimants) had written to H questioning the scheme in early April 2010. H were hampered here by the fact that they did not actually respond to this communication until near the end of May 2010 and only then with a holding email. In August 2010 H held a landlord’s forum after which the same agent emailed H stating that the scheme was ‘seriously flawed’. H then responded to this email on 3 September stating that they had complied with their statutory requirements while responding to the claim letter offering to amend some of the licence conditions. There was a degree of to-ing and fro-ing in an effort to work something out but the delays that attended these negotiations were attributed by the Court primarily to H.

H was ultimately scuppered by the simple but elegant argument that the negotiation process itself should not have been required if H had conducted a proper consultation in the first place.

Permission to apply for review granted.

The moral here is for Council’s to make sure they really consult properly and think very carefully about what they are trying to do with a licensing designation and why. Hyndburn is not the first Council to have found itself becoming caught up in threats of messy and expensive litigation for want of carrying out a proper consultation. The normal response of councillors to blame the lawyers is not sufficient. It should not be necessary for lawyers to become involved in the first place and it probably would not be if a more sensible and robust consultation was carried out. Councils seem to forget that the object of a good consultation is to build a consensus on the best course of action so that most people are then satisfied about the final proposed plan. Actually, they may not be the only ones to have forgotten that….

UPDATE: Since writing this I have noticed that another selective licensing scheme is being threatened with review. Local Government Lawyer has a brief report here. Anyone have more information?

There is, however, an equally serious point here about the growth of housing associations and their agglommeration into major, well, corporations with paid board members, executives with fat-cat salaries (if you’ll forgive the  gutter-press speak), group structures, takeovers and all the other accoutrements of businesses.  McDermont’s book is a salutary read because it reminds us of the amazing power and influence that these institutions have on the social housing world, a far cry from the rationale for their use as social housing vehicles in the 1980s.  L&Q is a member of what used to be called (and probably still is) the G15 of housing associations – large, although not necessarily the largest, ones which, should they decide to do so en bloc, could have sensational regulatory powers; could make or break social housing policy; but seem by repute to be a bit of a dining club.  It could be a force for good but I suspect their “good” and mine won’t necessarily correlate.  L&Q’s approach to the redevelopment may be an example of that, although I don’t know any of the details beyond the report (so, forgive me for (a) treating Inside Housing as gospel, and (b) if I’m wrong, and (c) not knowing more).

Have a lovely shiny weekend.

* note the apostrophe, Pauline – none of those new-fangled “ipads” here

The Upper Tribunal (Lands Chamber) has recently ruled on the proper use of improvement notices under the HHSRS. When I say recent I should actually say a little while ago. You can blame the recent spate of good weather and a short spell of leave for the slightly reduced speed of posting on this.

Anyway, dragging my gaze back from sunny blue skies to the hard grey world of statistics, the situation concerns the use and scoring of the excess cold hazard. In this case Bristol CC had inspected a property which was heated entirely by convector heaters. Most EHOs have a strong dislike of these heating systems and a powerful preference for gas central heating which they see as more energy efficient, environmentally friendly, effective and controllable. There is good cause for this belief in many cases but it is not a universal truth.

Here the EHO considered that the convector heating was wholly inadequate for the task and revised the likelihood of an incident under the excess cold profile upwards from the national average of 1 in 340 to 1 in 180. This generated a score in excess of 3000. She then issued an improvement notice based on the high score thus obtained requiring the fitting of a gas central heating system or electric night storage heating. After, the fitting of loft insulation there was a reinspection at which the score was lowered to 1819. Both scores disclosed category 1 hazards requiring the Council to take action.

The landlord, the interestingly-named Aldford Two LLP, appealed to the RPT. The RPT inspected the property and heard evidence from both sides. It made an order that the scoring should stand but that the Council should not enforce the improvement notice issued. The Council appealed on the basis that the RPT could not require it not to act where a category 1 hazard existed. It also complained that the RPTs reasoning was incorrect and that the RPT had substituted its own decisions, based on their inspection for that of the Council. In particular the Council complained of three items that the ROT had advanced as being the reasons for preferring its own views:

1. The fact that the tenants appeared happy with the system;
2. The perception by the RPT members on inspection that the property was warm inside while it was cold outside;
3. The belief by the Tribunal members that, based on their own experience, electric heaters were adequate for a property of this type.

The LC started with a consideration of the underlying HHSRS system and the inspection by the Council. It noted, with some surprise, that the EHO had produced a score which meant that there was a 1 in 570 chance of a death occurring from cold in the property in the next 12 months which it clearly found to be unlikely.

Before the RPT the landlord had contested the finding by the EHO that the heating system was ‘seriously defective’. It had produced a heat loss calculation which showed that the heating system was adequate for the property and this had been accepted by the EHO in her witness statement. The EHO had however continued to state that the heating was below the norm for this type of property and, based on an EPC she had produced, cost an excessive amount to heat the property as compared to the alternatives the Council was seeking. The landlord contended that the cost of heating the property was not a relevant consideration for the purposes of the HHSRS and that the figures produced by the Council were, in any event, incorrect.

The LC heard submissions on the above issues and also invited further written submissions on whether it should (or could) quash the improvement notice and substitute a hazard awareness notice. The submissions on this issue were diametrically opposed with the two sides taking the positions one would expect.

The LC began its conclusions by finding that the reasons the RPT had given for quashing the improvement notice were inadequate. Given that the RPT appeared to accept a category 1 hazard existed it could not simply quash the enforcement notice without substituting an alternative means of enforcement. This was held by the Council to be all that was necessary as granting their appeal would restore the original improvement notice. The LC did not agree with that and ruled that there were two matters for it to consider:

1. Whether the RPT were right to accept that a category 1 hazard existed; and
2. Whether the improvement notice was the most appropriate form of enforcement action and whether a hazard awareness notice would not have been more appropriate.

Before answering these questions the LC first considered the three arguments advanced by the Council for setting aside the decision of the RPT based on the three reasons given above. The LC, while accepting that the RPT decision did not give sufficient reasons, was not prepared to hold that the three issue the Council complained of were correct. It was perfectly in order for the RPT to take into account the expressed views of the occupants who were, after all, in the best position to know if the property was adequately heated or not. While the RPT could not use this as the sole point of determination it was certainly one of the areas they could take into account. Equally, it was open to the RPT to consider whether a property was warm or cold during their inspection. This is something that an EHO would form a view on and the RPT had no less a right to form such a view. The final, and most contentious area was the application of the knowledge and experience of the tribunal. Tribunal members have been cautioned many times against applying their own knowledge and experience in a manner which outweighs the evidence presented to them. Decisions must be based on the presented evidence and not on evidence gathered or created by the tribunal itself. However, the RPT had not done that here. The Council had presented evidence that the heating system was inadequate and the landlord had presented evidence that it was. The Tribunal was perfectly entitled to prefer the landlord’s evidence and was entitled to use it’s experience and knowledge to justify that preference.

Having disposed of the Council’s criticisms of the reasons given in the RPT decision the LC returned to the two main questions it had set itself. It criticised the RPT for not considering whether the Council had correctly scored the property. While not going so far as to score the property itself the LC made clear that it considered the scoring to be excessive and expressed doubt as to the 1 in 500 chance of death figure. It held that the RPT would probably have reduced the score had it turned it’s mind to this question and based on that the installation of a new heating system was an unreasonable demand. Accordingly, the LC held that the improvement notice should be quashed and that a hazard awareness notice should be substituted for it.

Comment
This is the second occasion on which the LC has commented on the relatively uncertain quality of the statistics which underlie the HHSRS. It has also again brought to the fore the problems that many EHOs (and to be fair most of the population) have with statistics. In this case the EHO had made a huge adjustment to the likelihood of an incident under the cold hazard occurring. Due to the high chance of a serious outcome under that profile this had created the unlikely scenario that the property had a 1 in 570 chance of causing death (or an equivalent extreme harm) in the next 12 months due to cold. This is a statistical likelihood that, if accurate, would be (you will have to excuse the pun) chilling. If an event becomes more likely then it is not normally true to say that the outcome of that event becomes more serious. However, it is common for EHOs to increase both the likelihood of an event and also to shift the percentage outcomes of an accident towards the most serious outcomes simultaneously or at least to leave them unchanged. It is also common for changes to be made in national averages which are very large with little consideration as to how those averages were determined in the first place and where the property falls in the spectrum of properties nationally. It is this mindset, which probably has more basis in feeling that actuality, which produces the very badly skewed scoring found in this case.
I have been a, admittedly somewhat outspoken, critic of the tendency of many EHOs to enter a property and “see” what needs doing and then batter the HHSRS scores into making it fit their preconception. While this is entirely natural and is a partly an effect of having too little time it goes against everything the HHSRS was designed to do. EHOs really need to think carefully about the statistical underpinning of the HHSRS and what they are doing when they adjust the numbers the system is based on. Changes in likelihood and outcome are often made too readily and are too big to be sustainable under close scrutiny. EHOs must try to put aside their notions and accurately process the statistics first to produce an accurate score which will stand up to scrutiny and then consider their enforcement options rather than starting from the other end.
Before anyone lambasts me I should state clearly that I am a great supporter of EHOs and the HHSRS in general and agree that a substantial number of properties in the Private Rental Sector are below the necessary standard (often far below). However, not using the HHSRS system properly and accurately is ultimately counter-productive and is a serious waste of local authority time and resources.

We have previously posted on the saga of the rise and fall of planning permission for HMO property. The story now has a new chapter.

A number of local authorities were distinctly unhappy about the relaxation of the system of HMO planning by the amendment of the General Permitted Development Order to allow change of use from the C3 to the new C4 HMO planning class without seeking permission. They were even less happy that the ability of planning authorities to give notice to withdraw the permission granted by the amended GPDO was subject to the common requirement for them to give not less than 12 months notice or face the prospect of paying compensation to those affected by the withdrawal of the permission. Therefore Milton Keynes Council (apparently supported by others) sought judicial review of the changes and specifically review of the compensation requirement.

The substance of MKs complaint was that the Labour government had held a consultation on the best way to deal with the situation. The most popular option was to introduce a new HMO planning class while the least popular was one which allowed landlords to simply change use from a single dwelling to an HMO. On a change of government the Coalition was desirous of removing this restriction on the basis that it would deter landlords from. Entering the Market but a cording to MK were conscious that resiling from the C4 use class would be unpopular. Therefore MK contended that the government intentionally held a limited informal consultation with a number of stakeholders (but not MK) and ignored the comments of three of them that a full consultation should be held. This was contended to be an inadequate level of consultation for such a substantial change especially when it left planning authorities with a limited ability to control HMOs and one which left the open to potential compensation claims.

The Court disagreed. Accepting the argument of the Secretary of State that he had a very wide margin of discretion in these matters. A recent consultation had already been held and the second consultation actually asked much the same series of questions. There had been adequate opportunity for MK and others to have their views heard and considered and MK were one of a large number of parties who might choose to complain that the second consultation had not included them. In short, the consultation was not so unfair, given the wide margin of discretion afforded the SoS, as to render it unfair.

Application for review refused.