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 …