Ahmad: the cup's half empty

As they say in American tv shows: ohmigod. R(Ahmad) v LB Newham [2009] UKHL 14 is now available and the Lords have done a pretty good job at destroying the jurisprudence built up by the High Court and Court of Appeal in Part 6 cases. The headlines are: (a) Newham’s scheme was not irrational by failing to have a device which determines priorities between households in the s. 167(2) reasonable preference groups; and (b) it was not unlawful by allocating up to 5% pa of properties to existing tenants who apply for a transfer and might not have a reasonable preference. But it’s more than this, so much more, because comments are made about the extent of an irrationality challenge to allocation schemes. Local authorities are going to be seriously delighted with this decision, so, in an even-handed way, the cup is half full for them.

Newham’s Allocation Scheme

In outline, Newham adopted the banding approach advocated by the 2000 Green Paper at para 9.18 (more of which later). It’s scheme, rather than being the simple one advocated by that document, ran to 110 pages. It has two different methods: a CBL scheme which accounts for 75% of properties let, and a direct offer scheme for the rest. Direct offers take priority over CBL lettings. In the CBL element, there were three broad bands: priority homeseekers (those with a reasonable preference); Newham tenants wanting a transfer; and others who don’t fall into either of those categories. Only 5% of properties could be allocated to the second group; the rest are allocated to the priority group. Ranking within the priority group was done on the basis of waiting time alone.

Direct offers were made to those with additional preference, multiple needs, under-occupation transfers, decants and special schemes. The first two categories are tightly defined, “particularly acute cases” of additional priority ([33]). There was also provision for a discretionary override.

Housing Act 1996

I’m not going to repeat here the relevant sections of Part 6 but there are certain key provisions to bear in mind. The first is s 159(7) which provides that, subject to the rest of Part 6, local authorities are entitled to allocate accommodation “… in such manner as they consider appropriate“. Second, s. 167(6) which says that, subject to s. 167(1)-(5) and regulations made by the Secretary of State, “… the authority may decide on what principles the scheme is to be framed.”

S. 167(2) opens with the words, “As regards priorities, the scheme shall be framed so as to secure that reasonable preference is given to …” and then lists the five categories. That subsection ends with a power given to authorities to frame their scheme so as to give additional preference to certain households in those reasonable preference categories with urgent needs – but the key thing here is the opening words: “The scheme may also be framed …“.

S. 167(2A) says that the scheme may contain provision for determining priorities between the reasonable/additional preference households and lists certain factors.

It is relevant – indeed crucial – to the HL decision that s 167 was substantially recrafted by the Homelessness Act 2002 and, in particular, with the addition of ss (2A).

First Instance and CA
The CA judgment is discussed here. essentially, these followed the usual pattern in these cases by holding that the scheme did not allow for cumulative need to be taken into account and also was unlawful in allowing those with no reasonable preference to take priority over those with reasonable preference. All of that was pretty standard stuff – based on R(A) v Lambeth – but a pretty innovative argument was addressed to the CA that previous cases on this point did not take account of the changes introduced in the Homelessness Act 2002. This argument was unsuccessful in the CA but highly influential on the reasoning in the HL.

HL Decision

The argument presented by Jan Luba for Ahmad was essentially based on the approach taken by the High Court and CA: that Newham’s scheme was irrational in failing to determine priorities between the reasonable preference categories other than on waiting time (ie not according to need); and that the scheme failed to give reasonable preference to the priority groups in s 167(2) because of the 5% allocation to existing tenants. Lord Neuberger deals with the first argument, on which Baroness Hale makes some comments as does Lord Scott (who seemed a bit more troubled than the others).

Issue 1
Newham’s scheme was not irrational in failing to dig down, so to speak, into an assessment of the relative priorities of the reasonable preference applicants. Lord Neuberger gives five reasons:
(1) the opening words of s 167(2) do not suggest that such an assessment is required. To read it as requiring such an assessment “… 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” ([39]).
(2) the frame that authorities may give additional preference “… 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.” ([40]) In answer to Jan Luba’s argument that this only refers to urgent housing needs, Lord Neuberger in part refers to the wording of the additional preference power, ie “may” ([41]).
(3) s 167(2A) and the use of the word “may” again “… 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” ([42]).
(4) Reference was made to the Green Paper and the suggestion there that banding would be appropriate ([44])(the first time I’ve seen a consultation document being held up as an interpretation of statutory provisions but there we go) .
(5) This is the really damning point and is certain (a la Puhlhofer) to be regularly cited by local authorities. It needs to be quoted in full:

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”.

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.

Baroness Hale makes similar points at para 15 and then goes on to make the following observation concerning an irrationality challenge against an allocation scheme:

One can, of course, imagine policies that would be irrational. It is dangerous to give examples which have not been tested by argument. But one possibility might be a policy which ensured that small families had priority over large ones, or that people coming from outside the borough had priority over those living within it, or that people who had been waiting the shortest time had preference over those waiting the longest. But it is not irrational to have a policy which gives priority to some tightly defined groups in really urgent need and ranks the rest of the “reasonable preference” groups by how long they have been waiting. These definitions are of course open to criticism, and no doubt when the council come to rewrite their policy they will give careful thought to the points which have been made in these proceedings, but it is not for the courts to pick detailed holes in the definitions which the council have chosen. Section 167(6) makes it clear that, subject to the express provisions, it is for the council to decide on what principles the scheme is to be framed.

Later she says: “Castigating a scheme as irrational is of little help to anyone unless a rational alternative can be suggested. Sometimes it may be possible to do this. But where the question is one of overall policy, as opposed to individual entitlement, it is very unlikely that judges will have the tools available to make the choices which Parliament has required a housing authority to make.”

Having made these general observations, the next question was whether Newham’s scheme was, in fact, irrational. Given the high bar set, it was hardly surprising that it was found not to be so. On their interpretation of Part 6, the scheme “plainly” [50] satisfied the statutory requirements and accorded with the Green Paper policy. Waiting time, it was said, is an important factor which a housing authority could regard as “very significant” ([52]). Yes, it is “rough and ready” but such a scheme has advantages over a more nuanced scheme because “… it is very clear, relatively simple to administer, and highly transparent” ([51]). Any alternative would be more expensive, time-consuming, based on value judgment, open to argument and more opaque ([51]). Lord Scott was persuaded by these drawbacks of the alternatives. As he put it: “To allow the choice to depend upon the judgment of a Council official, or a committee of officials, no matter how experienced and well trained he, she or they might be, would lack transparency and be likely to lead to a plethora of costly litigation based on allegations of favouritism or discrimination” (5]). Waiting time is at least certain and avoids subjective evaluation. Baroness Hale at [15] also makes similar points about points based schemes and their vulnerability to attack.

Furthermore, the scheme does allow for additional preference and multiple needs to be taken into account, albeit their criteria are “very stringent” ([54]). Given Newham’s housing difficulties in terms of supply and demand for social housing, there was nothing inherently absurd or arbitrary about that.

Then there are some sideswipes at the High Court and CA decisions. First it was said that previous cases were decided before the amendments under the Homelessness Act 2002 and, therefore, the earlier cases on cumulative preference “can no longer be relied on” ([58]). Second, it was said that (although this may be an “unfair suspicion”) the courts had been swayed by the desperate circumstances of Mr Ahmad and his family. But, and again this is worth quoting, “… save in the most exceptional circumstances, it would be wrong in principle to have any regard to the housing circumstances and requirements of an individual applicant when considering the validity of a housing allocation scheme under Part 6 of the 1996 Act” ([60]). In parenthesis, it might be noted that, whilst the earlier courts may have been swayed by the Ahmads situation, the HL was evidently swayed by the council’s predicament (see eg [7], Lord Scott, [25] & [61]-[62], Lord Neuberger). Third, there was nothing inconsistent with the code in what had been said on this point and Lord Neuberger noted that, following the 2002 Act, the code has in any event become less prescriptive ([64]).

Issue 2
This issue was the one about the mixing of non-preference tenants seeking a transfer and preference households. The argument on this point, as Baroness Hale put it (and she dealt with this point), “… the people in [the reasonable preference] groups must be given preference in relation to every property which is let under the scheme” ([17]). She had earlier effectively said that Part 6 involves something less than a target duty because “… there is not even a duty to provide [social housing], although there is a duty to have and to operate a lawful allocation policy” ([13]). So it’s no surprise that her view of this issue is robust. As she puts it, at [17], the requirement is only “reasonable preference” (and she like the others do not define this criterion and do not approve the Watters definition):

It does not require that they should be given absolute priority over everyone else. Still less does it require that an individual household in one of those groups should be given absolute priority over an individual household which wishes to transfer. The decision in R (A) v Lambeth London Borough Council [2002] HLR 998, 16–17, 37, appears, in part at least, to have been based on this mistaken premise. The scheme is about the overall policy for allocating the available housing stock between groups.

Having said that transfers due to under-occupation and like-for-like transfers are “good housing management. … Happy tenants are more likely to be good tenants” ([20]), she makes the really central point. It’s only 5% on Newham’s scheme that are allocated to transfers and although transfers are not necessarily neutral in terms of allocation schemes and reasoanble preference:

Once it is accepted that reasonable preference does not mean absolute priority, and that it is reasonable for a housing authority to take wider housing management considerations into account, it is difficult to say that Newham were not entitled to strike the balance which they have struck.

Sorry for the length of this post. I’ve got to say that I’m blown away and am off to have lunch with my lovely friend, Ruth, who will, no doubt, commiserate with me. No doubt my NL colleagues will be more even-handed than myself …

Posted in Allocation, Housing law - All, secure-tenancy and tagged , , , , .

14 Comments

  1. Pingback: Head of Legal

  2. The problem is that this sort of approach will simply lead to more homelessness applications on the basis that it is not reasonable to continue to occupy by those in high need but waiting behind those in lesser need.

  3. Don’t you think that’s already the case in reality JS?

    Allocations has seemed so wooly for so many years it has led to it being impossible to accurately advise a client *practically*

    I think it’s commonly been the case that people make homeless applications on the ‘not reasonable to occupy’ basis because without the reasonable preference that homelessness grants, they had no chance of getting rehoused.

    It appears to me that (whatever the rights and wrongs of this decision)applicants in housing need (but not homeless) will now be able to see a chance of being rehoused based on being ‘in need’ once they clock up enough waiting time.

    Hm.

    Cait

  4. If it does give primacy to ‘clocked-up’ time, then this is a very welcome decision in terms of fostering and strengthening sustainable communities.

    But it’s doubtful that the cup has yet run dry for queue-jumpers.

    • Clocked up time in regard to those who have a reasonable preference, with no distinguishing between levels of need above a single ‘reasonable preference’ qualification. Not sure how this fosters a sustainable community, as those who couldn’t get a shot at housing through no reasonable preference before, still can’t. It just means increased desperation for the most desperate – in Newham at least.

      The judgment makes no difference to the existing allocations policies of other LAs. If the allocation policy addresses cumulative need, like most of those in south London, for instance, the LA has to abide by its allocation policy, or face JR if it fails to do so.

      The headline result is that an allocation policy/CBL scheme that fails to deal with cumulative need above awarding ‘reasonable preference’ is now nearly, although not wholly, impossible to challenge as unlawful per se.

    • Yes, I agree, NL. There is still scope for challenge, indeed an irrationality challenge, on the actual operation of the scheme. This becomes crucial, I think, when one deals with the interaction between Parts 6 & 7. So @ Cait and JS, there is scope for considering whether a Part 6 applicant should also be considered by the LA as a Part 7 applicant without the necessity of a formal Part 7 application where they “have reason to believe” that an applicant is homeless. That case law, not discussed in Alam v LBTH but the point was developed there to an extent, raises some important issues about the interaction between the two Parts. I would anticipate such issues (and others) to continue to be chipped away at. As I suggested, the cup’s only half empty.

  5. Pingback: Here’s £10,000, take a year off, law firms tell graduate recruits « Insitelaw magazine

  6. The HL decision in Ahmad represents a policy decision and a close to the challenge of allocation schemes, but scope for those who have not been allocated the priority that the allocation scheme would technically give them if applied properly. Housing waiting lists are so long that growing families inevitably face overcrowded conditions for a long time, unless they decide to rent privately, with the help of Local Housing Allowance which will pay the average market value for an appropriate sized place. With this LHA no-one really need be homeless or living in poor conditions unless they choose to suffer it out for a long time because ultimately they want a secure tenancy, which is like gold dust. Camden, our local council, encourages private renting and will help overcrowded families in hostels to get a bigger bedroom property and pay their deposit plus, if they are on benefits, the rent, even if market rate. But often the prospective council tenants refuse this offer as they want to retain homeless priority to get a secure tenancy. So, although the decision may take something away from desperate families, it was perhaps a necessary solution to a very difficult and highly complex social problem, giving local authorities a bit more power as opposed to undermining their efforts to provide a fair system of allocation within their boroughs.

  7. LP. I do not have your sunny optimism concerning the LHA. The issues over what counts as a locality, for instance, have been rehearsed in the case reports on this blog. I also don’t share your optimism that suitable ‘appropriately sized’ places are readily available via the private sector in areas like Camden at LHA rent levels. I doubt that many people are prepared to stick out overcrowded accommodation for a long itme in persuit of a secure tenancy, but you do seem to be confusing homeless applications (Part VII) with applications to the main housing list (Part VI), which is what is at issue here. Unless you mean the reasonable preference for homelessness, which won’t be affected by this decision in any event. So I don’t see how your conclusion follows from this case.

    You will in any event have to say more to explain to me how the decision supports LA’s ‘efforts to provide a fair system of allocation’. It may do, but I can’t see what idea of fairness you are basing this on.

  8. NL I appreciate your criticism- I am referring to both people who are homeless in temporary accomodation and those who occupy an overcrowded council home. There have been cases where a homelessness application has been made while living as a tenant in council accomodation because the accommodation was extremely overcrowded and/or insanitary- just to clarify- most people don’t stand a chance of getting a concil flat unless they fall into a few reasonable preference categories (in London anyway).
    I just point out that there are other options for both those in a hostel or an unsatisfactory council homes that the tax payer is footing the bill for (rent deposit scheme, LHA – two cases I have worked on have been offered these schemes and to stay on the list to get out of their overcrowded conditions). Refusal by the teanat/hostel resident is due to the giving up of a reasonable preference strand which puts them lower down the list. LHA in WC1 pays out £520/week for a 2 bedroom- what do these people want- a mansion with a garden?) Is it FAIR that social housing for a small minority of people in a reasonable preference group manage to get it, and other people on low incomes have to endure private renting for the in any event? Some people in social housing should take responsibility for their decisions, such as having children they expect state welfare and larger housing to look after and take care of overcrowding, while a lot of people can not even afford to and would not start a family knowing that they have no means to do so unil they are able to earn a sufficient living. The only way housing authorities can divy up the small amount of housing is by having an HAS, and that represents what they perceive as fair within their borough. You may not see HAS by the LA as fair, but I’m sure a lot of other countries from where people flee to the UK see it as a luxury- life may not be fair in the UK- but what regime would you pick? Congo? Somalia? I’d rather not.

    • LP, the Ahmad judgment doesn’t change the reasonable preference requirement. The categories of need that are to be given a reasonable preference are set out in statute.

    • I know that!! I am a lawyer- but you misunderstand my points entirely and so I will blog with more intelligible creatures…..

    • LP – I can only hope the intelligibility rubs off, because I couldn’t make head nor tail of what you were saying, a couple of cheap caricatures aside. I think you seem to be saying that it isn’t fair that people with a reasonable preference have a shot at social housing when people, also on low income and in poor conditions don’t. You will hear no argument from me that the restricted availability of social housing doesn’t make for unfairness, perceived and actual, of all sorts.

      When I pointed out that Ahmad doesn’t change reasonable preference, you then appeared to be saying that it is selfish people hanging on in hostels and overcrowded housing because they want secure tenancies, when there is perfectly OK private accommodation and the LHA available (let alone all those people breeding irresponsibly), who are preventing all the no preference people from getting social housing. I think this is what you’re saying, but it is hard to tell. When at the end you resorted to a version of the why don’t you go and live in X argument, it all went too, too Daily Mail to really merit much consideration.

      Because I took this to be what you were saying, I did you the favour of not addressing it (actually, I did respond, then replaced it, because I couldn’t be sure that you were actually saying something quite that daft.)

      But you complain I haven’t responded to your points, so here goes…

      1. Ahmad doesn’t change reasonable preference, so whatever it is you appear to be saying is by the by.
      2. Do you know the numbers in Camden’s preference band and no preference band? I don’t, but if they are anything like the inner London LAs I do know, then the nons will outnumber the prefs by a factor of 4 or 5 to 1. Plus, if you abolished reasonable preference, those people would still remain part of the housing list. So no practical difference for the vast majority of the nons in terms of a chance at social housing.
      3. You give the LHA for a two bed. As you no doubt well know, the real pressure is for 3 bed and upwards (that overcrowding you mentioned). For your private sector alternative to be even remotely a viable runner, you will have to give figures on a) the LHA for 3 plus bed properties; b) the market rent for 3 plus bed properties; c) the availability of 3 bed plus private rentals for those on the LHA. Again, I don’t know Camden’s figures in this respect,but the boroughs I do know have a completely catastrophic shortfall of affordable (LHA rent level) private 3 bed plus properties. I would be surprised if Camden was any different.
      4. If there are all these wonderful private sector properties available on the LHA, why are you worried about those with no preference? Surely they can also move into these places, always assuming they don’t expect a mansion. In fact, given the availability of the LHA and private sector accommodation, on your argument, why is there any need for the large majority of social housing? (I am assuming you are excepting sheltered accommodation, emergency accommodation and existing tenants. Possibly a wrong assumption. What of people seeking a transfer? – you have given your answer on overcrowding).

      In short, I hadn’t replied because what I thought you were saying, as far as I could make it out, was, putting it kindly: utterly lacking support in fact or figures; internally contradictory; and based on, at best, a kneejerk anecdotal moral judgment rather than considered practical or economic sense. I felt encouraged in this conclusion because you completely failed to respond to my question as to what would constitute fairness in an allocation system dealing with scarce resources absent reasonable preference.

      If I am wrong about what it is that you thought you were saying, please let me know. But in the meantime may I just say that if you are a housing related lawyer, I look forward to going up against you.

  9. None of the comments so far have addressed the theme that the HL picked up about the right of LAs to take local decisions. In formulating an allocations policy it is not ALL about the reasonable preference categories.

    The decision recognised that giving existing tenants with lower priority some (very small) prospect of a transfer was a reasonable thing to do. Council Members represent the whole community and are entitled to decide on a policy which suits their whole community whilst complying with their statutory obligations. They at least are democratically accountable – not something council officers, lawyers or judges can say – and if the community doesn’t agree with with policy can vote them out.

    The Ahmad decision recognises their right to strike a balance and that this can be a reasonable thing to do even on the LAs with greatest demand.

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