A return of sanity: Allocation and reasonable preference

Jakimaviciute, R (On the Application Of) v Hammersmith And Fulham London Borough Council [2014] EWCA Civ 1438

Eligibility for allocation list, reasonable preference and homelessness.

After a run of Court of Appeal housing decisions that might be mildly described as disappointing, it is good to see one that is definitely right, albeit apparently reluctantly given.

R (Jakimaviciute) v Hammersmith & Fulham (our note here) was a judicial review permission decision on a challenge to H&F’s allocation policy excluding the ‘homeless in long term secure temporary accommodation’ from being qualifying persons for the Part 6 housing list. The High Court found that, although such persons were indeed within the ‘reasonable preference’ definition, the requirement to give a ‘reasonable preference’ in an allocation scheme only took effect once the person was on the housing list. Thus H&F had not unlawfully failed to give J a reasonable preference, because she was excluded from the list, and reasonable preference didn’t come into play.

J appealed to the Court of Appeal.

A brief recap of relevant provisions.

Housing Act 1996

160ZA(6) Except as provided by subsection (1), a person may be allocated housing accommodation by a local housing authority in England (whether on his application or otherwise) if that person –
(a) is a qualifying person within the meaning of subsection (7), or
(b) is one of two or more persons who apply for accommodation jointly, and one or more of the other persons is a qualifying person within the meaning of subsection (7).
(7) Subject to subsections (2) and (4) and any regulations under subsection (8), a local housing authority may decide what classes of persons are, or are not, qualifying persons.
And
“166A(1) Every local housing authority in England must have a scheme (their ‘allocation scheme’) for determining priorities, and as to the procedure to be followed, in allocating housing accommodation.
For this purpose ‘procedure’ includes all aspects of the allocation process, including the persons or descriptions of persons by whom decisions are taken.

(3) As regards priorities, the scheme shall, subject to subsection (4), be framed so as to secure that reasonable preference is given to –
(a) people who are homeless (within the meaning of Part 7);
(b) people who are owed a duty by any local housing authority under section 190(2), 193(2) or 195(2) (or under section 65(2) or 68(2) of the Housing Act 1985) or who are occupying accommodation secured by any such authority under section 192(3);
(c) people occupying insanitary or overcrowded housing or otherwise living in unsatisfactory housing conditions;
(d) people who need to move on medical or welfare grounds (including any grounds relating to a disability); and
(e) people who need to move to a particular locality in the district of the authority, where failure to meet that need would cause hardship (to themselves or to others).
The scheme may also be framed so as to give additional preference to particular descriptions of people within one or more of paragraphs (a) to (e) (being descriptions of people with urgent housing needs).
The scheme must be framed so as to give additional preference to a person with urgent housing needs who falls within one or more of paragraphs (a) to (e) and who … [is a member of the regular forces, etc.]”

H&F had included in their allocation scheme, the following as a class of person who ‘does not normally qualify’ for registration (on the housing list):
Homeless applicants placed in long term suitable temporary accommodation under the main homelessness duty, unless the property does not meet the needs of the household or is about to be ended through no fault of the applicant. Long term temporary accommodation can include private sector homes let via the council or a housing association under a leasing arrangement, and non-secure tenancies on regeneration estates.”

On appeal, Ms J argued that ’reasonable preference applied to the scheme as a whole, not just priority within it.

Mr Martin Westgate QC, for the claimant, submits that on the proper construction of Part 6 of the 1996 Act, the duty under section 166A(3) to frame the allocation scheme so as to secure that reasonable preference is given to certain classes of people is a fundamental requirement which applies to the arrangements for allocation as a whole, including the setting of any qualification criteria under section 160ZA(7). He places reliance on the structure and wording of the statute, on the legislative history, on considerations of policy and on the content of the relevant statutory guidance.

Meanwhile H&F relied on the discretion in s.160ZA(7).

Mr Baker, for the Council, submits that the claimant’s approach sits ill with the terms of the discretion conferred by section 160ZA(7) and that Parliament would have framed the provisions differently if it had intended such a result. Further, as a matter of substance, deciding who is to qualify is very different from determining priorities between those who do qualify. The exercise of the discretion to set the qualification criteria could in principle be challenged on Padfield grounds (Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997) but no such case is or could be advanced here.

But unlike the Admin Court, the Court of Appeal were distinctly unimpressed by H&F’s arguments.

‘The Scheme’ covered the entire process, from application to allocation of housing, including qualifying criteria. S.166A(3) – the requirement to give reasonable preference – was a requirement for the Scheme, not just allocation.

If there was any question about the purpose of the legislation contained in the Localism Act amendments to Housing Act 1996, the Government’s consultation should have dispelled them. From the consultation document:

4.10 We want to provide local authorities with the power to decide who should qualify to be considered for social housing, while retaining a role for government in determining which groups should have priority for social housing through the statutory reasonable preference requirements ….
4.11 … We believe that the statutory duty on local authorities to frame their allocation scheme to give ‘reasonable preference’ to certain groups, together with local authorities’ wider equalities duties, should serve to ensure that local authorities put in place allocation systems which are fair and that those who are vulnerable and in housing need are properly protected. However, to provide a safeguard, we intend to reserve a power to prescribe by way of regulations, that certain classes of people are (or are not) qualifying persons, if there is evidence that people in housing need are being excluded from social housing without good cause. […]
4.15 The government believes that social housing should continue to be prioritised for the most vulnerable and those who need it most. We think the best way to ensure a consistent approach to meeting housing need is to continue to set the priorities for social housing centrally. Consequently we do not propose to remove the reasonable preference requirements in the allocation legislation.”
This was confirmed in the response to the consultation.

And then there was the Govt Allocation of accommodation: guidance for local housing authorities in England, 2012.

3.20 In framing their qualification criteria, authorities will need to have regard to their duties under the equalities legislation, as well as the requirement in s.166A(3) to give overall priority for an allocation to people in the reasonable preference categories.
3.21 Housing authorities should avoid setting criteria which disqualify groups of people whose members are likely to be accorded reasonable preference for social housing, for example on medical or welfare grounds. However, authorities may wish to adopt criteria which would disqualify individuals who satisfy the reasonable preference requirements. This could be the case, for example if applicants are disqualified on a ground of anti-social behaviour. […]
4.1 Housing authorities are required by s.166A(1) to have an allocation scheme for determining priorities, and for defining the procedures to be followed in allocating housing accommodation; and they must allocate in accordance with that scheme (s.166A(14)). All aspects of the allocation process must be covered in the scheme, including the people by whom decisions are taken. In the Secretary of State’s view, qualification criteria form part of an allocation scheme.”

The legislative history and statutory guidance thus both made clear that ‘reasonable preference’ was intended to apply to the scheme as a whole and not just the specifics of allocation for those qualifying.

The Court then, extremely politely one might think, pauses to note the ‘ironic feature’ that H&F’s own policy states that

in framing the Scheme the Council intends to give effect to the reasonable preference duty under section 166A(3), yet in its defence to the claim the Council contends that the function of setting qualification criteria is entirely separate from the duty to frame the scheme so as to secure the giving of reasonable preference to the classes specified in section 166A(3)

So, was the exclusion from qualifying a breach of the reasonable preference obligations?

Unsurprisingly, the answer was yes.

The disqualification effected by paragraph 2.14(d) is fundamentally at odds with the requirement under section 166A(3)(b) to frame a scheme so as to secure that reasonable preference is given to people who are owed a housing duty under one of the provisions of Part 7. The great majority of people within that class, far from being given any preference, are excluded altogether from consideration for housing accommodation under the Scheme; and they are excluded for a reason that cannot sit with Parliament’s decision to define the section 166A(3)(b) class as it did. It does not assist the Council to point to the fact that the only people to whom housing accommodation may be allocated under the Scheme are people within the section 166A(3) classes. It is the exclusion of a large proportion of one of those classes that causes the problem. Nor do I accept that the power to effect such an exclusion is inherent in the flexibility allowed to an authority in securing that reasonable preference is given.

And so a “ declaration that paragraph 2.14(d) of the Scheme is unlawful” was granted. Though H&F was invited to consider “If those falling within paragraph 2.14(d) have a lesser need for social housing than other people within the reasonable preference classes, the Council may wish to consider whether it is possible to reflect that factor in an appropriate banding structure under the Scheme in place of the impermissible exclusion effected by paragraph 2.14(d).”

Comment

Thank heavens for that! The Admin Court decision was not only, in my less than humble opinion, clearly wrong but provided councils with the means to bypass the statutory reasonable preference groups entirely. It would have made a mockery of the purpose of the statutory requirements, and ignored the statutory guidance entirely.

The broader point, beyond those in ‘long term secure temporary accommodation’ is that allocation schemes cannot in any way exclude from qualifying those in the statutory reasonable preference groups. The post Aweys latitude on allocation policies can only go so far.

The H&F previous Tory administration’s parting gift was a Court of Appeal defeat on allocation policy (I did warn the incoming Labour leader back in May that the policy was a liability…).

Now, H&F are far from alone in maintaining such a policy of excluding those with reasonable preference. Indeed H&F’s policy borrowed inspiration and detail from Barnet’s policy. I had a detailed critique of the apparent unlawfulness of Barnet’s policy from July 2013, which is now, thankfully, valid again, at least at that date (the notes can be downloaded here).

If Barnet had any legal officers left, I would imagine there would be some considering of this judgment going on. But they don’t. So we will have to see what happens.

As a footnote on ‘long term secure temporary accommodation’, Ms J had been in a PRS tenancy. But in Dec 2013, after the Admin Court decision, she was put back in the allocation scheme “because the owners of her current temporary accommodation defaulted on the mortgage and the property came under the control of receivers. The receivers indicated that they intended to seek possession and as such the council has concluded that it would not be reasonable to regard the accommodation as available to [the claimant] on a long term basis”. She had not got permanent housing by the date of the Court of Appeal hearing. H&F said this showed the flexibility of their scheme, but equally it shows the oxymoronic nature of ‘long term secure temporary accommodation’.

As a further footnote, the effect of the allocation scheme is worth noting. It introduced a 5 year residence requirement as well as restricting qualification to only (some of) the reasonable preference groups.

On 29 March 2013 there were 11,077 households on the register, of which some 49% had no identified housing need. By contrast, the Council would normally have access to about 500–600 units of social rented accommodation per annum. The new Scheme is a radical alteration of approach and is based on the following general principles: the focus is on applicants with the severest housing needs; applicants must satisfy a residence condition irrespective of housing need; and extra priority is available for qualifying applicants who satisfy the community contribution criteria. The introduction of the Scheme has resulted in a radical reduction in the numbers of qualifying applicants. By 9 April 2013 the size of the housing register had reduced to 1,359 households, and by 27 April 2014 there had been a further reduction to 831. Of those removed from the register following the introduction of the Scheme, only 519 were removed because they fell within paragraph 2.14(d); 3,701 did not satisfy the residence condition; and 5,551 had no qualifying need.

It strikes me as a little odd that they decided to regulate demand rather than address supply, given that this was a laissez faire Tory council administration, keen on market principles.

About Giles Peaker

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts, and still is Nearly Legal on Google +.
Posted in Allocation, Homeless, Housing law - All and tagged , , .

27 Comments

  1. Thanks for this.

    Just one point of possible confusion; the “PRS tenancy” that Ms J was in was not a tenancy arising on acceptance of a “private rented sector offer” within s193(7AC). Had she been, she’d not have been entitled to a reasonable preference, since she’d have been neither homeless nor owed the s193(2) duty. She had been put in TA in accommodation provided by a private landlord.

  2. You might be surprised at how widespread is the belief that the 2 year PRS re-application duty is actually a 2 year 193(2) duty…

    • The s193(2) duty that arises under s195A on re-application within 2 years of the applicant’s acceptance of a PRS offer, where the applicant is found unintentionally homeless (irrespective of priority need).

    • But that is the s.195A duty that goes with private sector discharge. This is about temporary accommodation (which is also s.193(2)), but not an offer of PRS accommodation in discharge of duty (so not a s.193(7AA) offer). No two year ‘re-application duty’ involved at all – just continuing duty.

  3. So where does this sit other RP cases?

    Westminster exclude intentional h/less for five years….. would this now give rise to challenge?

    • I think any simple ban on the intentionally homeless would indeed fall foul – Reasonable Preference extends to ALL homeless under the meaning of Part VII Housing Act 1996 – which includes IH.

      How homeless would interact with a residency requirement of 2, 5 or 10 years, on the other hand, would be an interesting question, and one that would need careful attention to each allocation policy.

  4. So would for example as proposed by BRENT COUNCIL
    Rejecting as non qualifying persons from part 6 oh Housing list,Homeless accepted cases from bidding on CBL due to 5 year residency requirement be Unlawful as well???

    • Need to see how it was done. But there is clearly a tension. Residency requirement may be lawful in itself (not been tested yet) but if it operates to exclude people who are required to be given RP, then arguably questionable. (Brent’s policy currently excepts those owed full homeless duty from residency requirement. But only those owed full duty).

  5. Would that then apply to any other group that might be in RP?

    e.g, If applicant fits a Scheme criteria for RP under welfare grounds the applicant can then not be excluded for not meeting residency criteria?

    • Richards LJ deals with this at paragraph 45:

      ” It is permissible to adopt a rule excluding individual applicants by reference to factors of general application, such as lack of local connection or being in rent arrears, but it is not permissible to cut down the statutory class in the way that subparagraph 2.14(d) attempts to do.”

      So a LHA can exclude someone who is homeless because they’re in rent arrears; but not because s/he is homeless.

    • Yes. And that is the counter argument on a residency test – it affects all equally, so homeless still afforded an RP in relation to population as a whole. But a lot depends on how the actual scheme is set out.

      And there is still a clear potential argument that residency test operates with unfair impact on say, those fleeing DV, or homeless placed in temporray accommodation out of borough (depending on the scheme), where the lack of residency period is directly related to the reason for needing housing. Here is the statutory guidance, for example:

      3.22 When deciding what classes of people do not qualify for an allocation, authorities should consider the implications of excluding all members of such groups. For instance, when framing residency criteria, authorities may wish to consider the position of people who are moving into the district to take up work or to escape violence, or homeless applicants or children in care who are placed out of borough.

      So, things are not clear cut on a blanket residency test.

    • Agreed. I imagine we will see the Courts adopting an analysis on this similar to an equalities analysis, with RP categories replacing protected categories; if and insofar as a criterion of apparently general application impacts heavily on a given RP category with no mitigation, it will be looked at critically. The fact though that a criterion will exclude some otherwise entitled to RP won’t IMHO be determinative.

  6. How will this judgement effect the number of applicants on H&F Housing register ?

    Paragraph 22 gives the figures of how H&F housing register has changed in the last 18 Months from 11077 applicants to 831 in April 2014.
    I suppose all RP applicants disqualified under paragraph 2.14d will be reinstated,this only makes up 519 Applicants.
    What about great bulk 3701 RP applicants disqualified under the residency criteria ?

  7. Hi all

    My first time posting on here so apologies for any mistakes in posting this.

    Having briefly read the summary of Jakimaviciute (above), I wonder if it would apply to a case I have as I feel the reasonable preference element has been ignored and is not even addressed in the allocation policy.

    My client currently disabled, staying on her mothers sofa (in a sheltered accommodation 1 bedroom flat) when possible. An application for homelessness and housing have both been refused. Both have been challenged. Accommodation pending review been refused too.

    Homelessness – awaiting medical evidence from GP
    Housing – refused on locality (not lived in region for necessary length of time in accordance with allocations policy)

    In Housing matter – firstly we pursued exceptional circumstances (as allocations criteria not satisfied)- this was refused. We then requested consideration of the ‘reasonable preference’ as this appears to be entirely omitted from the allocations policy.

    We have just received an ambiguous response which essentially repeats the earlier decision and says our client doesn’t qualify for social housing.

    As client is causing a burden on her disabled mother, causing an overcrowding situation I am feeling that Paragraphs (c)(d) and (e) of Section 166(A)(3) may apply.

    It would appear the next course would be pre-action JR letter against the entire allocation policy? or am I barking up the wrong tree??

    Any feedback will be gratefully received.

    We have now received a response

    • Frankly couldn’t say without seeing the allocation policy at issue. Nobody could. (And I’m not going to advise on it, as I haven’t got any time at all, not even a few minutes, so don’t send it!). If you are unsure, one for counsel?

  8. Good Afternoon,

    Im not sure if it possible, but I am after some really clear cut advise as the responses I have previously recieve from different forums/advisory agencies have not led me in any clear direction…

    Question is, should reasonable preference outweigh residential criteria unless that person is disqualifed from register due to specific reasons…

    A specific example is a household living outside of area in suitable accommodation applied to join housing register in another area in order to return to their place of origin and receive support. Should the household be refused because they do not meet the council’s set residential criteria or should they be exempt from this as they have been able to prove ‘they need to move to a particular locaility in the district of authority, where failure to meet that would cause hardship (to themselves or to others).

    • My feeling would be that Qualifying Criteria applies in that case. Assuming that the criteria is around length of continuous residence. You aren’t excluding all that want to move on hardship grounds, just those that are out of the area. There are very few cases where hardship couldn’t be mitigated by Social Care or other services, if not your bar for defining hardship might be set too low (I’m really only talking about cases who want to move back to family, not those fleeing DV/Other violence). May want to consider an overriding discretion for exceptional cases, although you will need to consider if each case has any exceptional circs (found out the hard way via LGO).

  9. The need to move, as a reasonable preference criteria, is a need to move from current housing on medical or welfare grounds, not so much a need to move to a specific authority’s area.

    But MB, I disagree on mitigation of hardship – as the housing need is based on current accommodation, availability of social care will not by and large be a mitigation. Eg, expressly includes ‘grounds related to a disability’ (HA 2004), so, for example, stairs for access for someone now using a wheelchair. The occasional availability of someone to help them up or down the stairs cannot be a mitigation of the need.

    And there has to be a discretion built in, because there can be – otherwise, fettering of discretion, classic public law challenge.

    There is a lot to come on the interaction of reasonable preference and residence requirements, I think, as the position is not at all clear. But the nature of the challenge will depend on how each individual allocation policy is structured.

  10. Interestingly, I’ve just been and looked at Barnet’s policy, and it has been recently updated (Feb 2015). Presumably in the wake of this case. I’ve only had a brief look, but it appears…

    The exclusion for being in long term temporary accommodation has gone, and the 5 year local connection requirement has been qualified do that the exclusion does not apply to people in a reasonable preference category.

    There are now 4 bands, and you need to be in a reasonable preference category to be in any of them. And band 4 (‘Reduced priority’) is now where you go if you either don’t have a 5 year local connection, or are in long term temporary accommodation under a homelessness duty. Band 4 states: “Customers in this band have reduced preference and are extremely unlikely to be offered social housing but may be
    helped to find a home in the private rented sector”. A letter provided to a client states “If you are placed in our priority bands (1,2 or 3), we will try to find you a suitable home from all of the properties made available to us”.There is an indication in the policy that people in Band 4 may be encouraged to accept an offer of private rented accommodation – although I have seen one case where the homelessness duty arose before 09/11/2012 and so a PRS offer cannot be made in discharge of that (though the client may eventually decide that moving into a PRS property anyway is preferable to remaining in temporary accommodation indefinitely), and there will no doubt be many others in the same position.

    A client who doesn’t meet the local connection criteria can eventually progress up the bands after gaining 5 years residence. A client in long term temporary application who is owed a full homelessness duty however appears to be stuck there forever (unless the tenancy is terminated by the landlord, or they decide to move into PRS accommodation). In reality, anyone who pursues accommodation duties under homeless legislation is still being penalized for it, and is unlikely ever to be made an offer. But is there scope for any further challenge, given that everybody has to have reasonable preference to be banded at all, so in theory band 4 applicants still have ‘reasonable preference’ over people who are not on the register at all?

  11. I work in an area where there is a high level of overcrowding. The Local Authority has set a residency criteria of 3 years, with many exceptions that include those fleeing DA and also those with an accepted homeless duty. Would meeting the reasonable preference category for overcrowding mean that the qualification criteria does not apply to those households?

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