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Affordability and intentionality – adding it up


Samuels v Birmingham City Council [ 2015 ] EWCA Civ 1051

A second appeal from a s.204 County Court appeal that addressed the council’s decision-making on whether the property from which Ms Samuels had become homeless was affordable (and thus, whether she was intentionally homeless for failing to pay the full rent).

There was a shortfall of £151.49 after housing benefit on Ms S’s monthly rent of £700. It was not disputed that she was evicted because of rent arrears that had accrued. Ms S made two applications as homeless to Birmingham, in June 2012 then again in July 2013 (on the ending of temporary accommodation). The first application was only relevant to this case in terms of the information provided at that point to the Council. On both applications, Birmingham decided that she was intentionally homeless on both applications.

Ms S had been living at the property with 4 children.

On the first application, Ms S, who has learning difficulties, filled in a form with the assistance of a charity support worker that gave details as follows:

(a) Under income, the form listed “Tax credits £756”, “Income Support £268”, and “Child Benefit £240”. The figures for tax credits and income support were in fact the weekly figures multiplied by four, not precise monthly figures. The figure for child benefit was the monthly figure for four children. (b) The first item under expenditure was rent £151.49, which was the balance of monthly rent at 18 Dagger Lane after receipt of housing benefit. The other items were food/household items £150, electricity £40, gas £50, school meals £20, travel costs & maintenance £60, telephone £20, and daughter’s gymnastics £40.

In the course of a follow-up telephone enquiry by a council officer, the appellant confirmed that when she resided at 18 Dagger Lane she was in receipt of child tax credits of £189 a week (i.e. £819 a month), income support of £67 a week (i.e. £290.33 a month) and child benefit of £240 a month. She also confirmed that the expenditure figures that had been provided were correct.

On her second application, Ms S confirmed in a telephone interview that these figures were correct.

In submissions on a s.202 review on her second application, Ms S’ solicitors stated

that the figure of £150 per month for food/household items shown in the statement of income and expenditure previously submitted was “laughable” and would be more appropriate as a weekly amount rather than a monthly one.

And they then submitted:

Whilst it is impossible for our client, who as you are aware, has learning difficulties, to remember precise details, we are confident that these figures are reasonably accurate”. On the revised form, the income figures were unchanged. As to expenditure, the figure for rent shortfall remained the same but some of the other figures were increased and additional items were included. The full list was: food/household items £750, electricity £80, gas £100, clothes £50, TV licence £43.33, school meals £43.33, travel costs & maintenance £108.33, telephone £20, daughter’s gymnastics £40.

The review decision stated:

“At this time (of the first application), you gave information relating to your outgoings which suggested that your total monthly expenditure on all household items was in the region of £530, leaving a significant amount of disposable income from which to fund your shortfall. You clarified on more than one occasion that this income and expenditure information was correct when questioned as part of your original homeless application and review.

Your representatives now seek to amend the figures that you gave for income and expenditure at this time. It is now asserted that your monthly income from benefits was £1264, and that your monthly outgoings were £1386.48, leaving a deficit between your income and outgoings of around £140 per month, or £32 per week. It is now asserted that contrary to the provided figure of £150 for housekeeping, the actual figure was £750 per month, or £173 per week. This figure seems to me be excessive for a family of your size, given that this is purported to only account for food and household items, with utilities and travel expenses accounted for elsewhere. I accept that a figure of £150 per month for food and household bills for a family of your size is equally likely to be inaccurate, but I consider that it is a matter of normal household budgeting that you would manage your household finances in such a way as to ensure that you were able to meet your rental obligation. I cannot accept that there was not sufficient flexibility in your overall household income of in excess of £311 per week to meet a weekly shortfall in rent of £34.

At s.204 appeal, the original and review decision was upheld. Ms S appealed to the Court of Appeal.

As a reminder, Article 2 of the Homelessness (Suitability of Accommodation) Order 1996 provides

2. Matters to be taken into account
In determining whether it would be, or would have been, reasonable for a person to continue to occupy accommodation … there shall be taken into account whether or not the accommodation is affordable for that person and, in particular, the following matters –
(a) the financial resources available to that person, including, but not limited to –
(i) salary, fees and other remuneration;
(ii) social security benefits;

(b) the costs in respect of the accommodation, including, but not limited to –
(i) payments of, or by way of, rent;

(d) that person’s other reasonable living expenses.

And the Code of Guidance states at 17.40:

“In considering an applicant’s residual income after meeting the costs of the accommodation, the Secretary of State recommends that housing authorities regard accommodation as not being affordable if the applicant would be left with a residual income which would be less than the level of income support or income-based jobseekers allowance that is applicable in respect of the applicant, or would be applicable if he or she was entitled to claim such benefit. This amount will vary from case to case, according to the circumstances and composition of the applicant’s household. A current tariff of applicable amounts in respect of such benefits should be available within the authority’s housing benefit section. Housing authorities will need to consider whether the applicant can afford the housing costs without being deprived of basic essentials such as food, clothing, heating, transport and other essentials ….”

Ms S argued, firstly:

that when an applicant is reliant entirely on benefits to support herself and her family, regard should be had to the fact that such benefits are set at subsistence level and are not designed to give a level of income that allows flexibility to spend outside maintaining a very basic standard of living. In particular, income support, child tax credits and child benefit are not intended to cover housing costs; it is the purpose of housing benefit to cover those costs. Further, child tax credits and child benefit are specifically designed to address the costs and expenses of the upbringing of children and to support the welfare of the children, and that purpose is likely to be affected if sums are diverted to pay additional housing costs. The starting point in such a case should therefore be that reasonable living expenses are matched by benefits income and that there is no flexibility within such income for the payment of additional housing costs.

The Court was not impressed by this. The Code of Guidance suggested that income and expenditure as a whole was to be considered, and made no special allowance for benefits. Burnip v Birmingham City Council & Another  [ 2012 ] EWCA Civ 629 could be distinguished as “it was addressed to the different question whether the availability of the other benefits payable to Mr Burnip could justify the discriminatory effect of the statutory criteria relating to housing benefit; and the reasoning depended in part on the fact that that his disability living allowance was specifically disregarded in the rules relating to the calculation of housing benefit”. The reasoning in Burnip could not simply be applied to the different context of Child Benefit and Tax Credits.

Further, while child related benefits might be ‘designed to meet the needs of the child’ (R (SG and Others)) v Secretary of State for Work and Pensions [ 2015 ] UKSC 16 ), this could include the child’s housing costs.

Secondly, Ms S argued that the decision maker had failed to have regard to 17.40 of the Code of Guidance, quoted above.

There is a general reference to the guidance on the first page of the decision letter and in the paragraph setting out the conclusion on intentional homelessness but Mr Stark submitted that there is nothing to show that specific regard was had to the guidance when considering the issue of affordability. The importance of the guidance, and the need for it to be clear from the decision that proper consideration has been given to the relevant matters required by the statute and the guidance, are emphasised in the decision of the Supreme Court in Nzolameso v Westminster City Council  [ 2015 ] UKSC 22, in particular in the passage at paragraphs 31-35 setting out the concerns of the Secretary of State.

The Court was not persuaded, finding that it was not necessary for specific reference to be made to the Code of Guidance providing that the substantive regard provided for in the Guidance had taken place and was evidenced in the decision letter (Balog v Birmingham City Council [ 2013 ] EWCA Civ 158. Our note ).

It is true that the review decision did not address that point in terms. It did, however, take into account the payment of income support, and on the face of it the appellant’s residual income after the cost of her accommodation (i.e. after deduction of the shortfall in her rent) was well in excess of the level of her income support.

Ms S argued that the decision letter “failed to consider what would have been a reasonable amount to spend on food and other household items (it merely said that the figure of £750 per month or £173 per week was excessive)”, but the decision maker had found that Ms S could have paid the shortfall without being deprived of basic essentials. That was sufficient.

There was a second ground of appeal concerning an email from the review officer to the Council’s counsel just before the s.204 hearing, but that is highly specific (and failed) so we’ll pass by that.

The third ground of appeal was on inadequacy of reasons. Referring to Farah v Hillingdon London Borough Council [ 2014 ] EWCA Civ 359 (our report), Ms S argued that there was a tension between Farah and Balog and that Farah required a more detailed approach to reasoning.

The Court disagreed. “I think it unhelpful to engage in a detailed comparison between the facts of the present case and the facts in Balog and Farah respectively. The essential question is whether the review decision in this case contained sufficient by way of reasoning to enable the appellant to understand how and why the decision on affordability had been reached.”

The decision letter provided adequate reasoning, because:

It is important to note that the only information the appellant had provided about her expenditure at the material time consisted of the figures set out on her original income and expenditure form (paragraph 11(ii) above) and the amended figures supplied by her solicitors for the purposes of the review on her second application (paragraph 17 above). Moreover, in supplying the amended figures, the solicitors had stated that it was impossible for her to remember precise details. There was no attempt to explain or justify individual figures. In those circumstances, as it seems to me, the decision-maker was entitled to approach the matter in the way he did, forming a broad judgment as to whether the amended figure of £750 per month for food and household items was excessive for a family consisting of the appellant herself and the four children, and whether there was sufficient flexibility in the overall household income to pay the rent shortfall. Enough was said to enable the appellant to understand how and why the decision on affordability had been reached. It was not necessary to go into further detail as to why the amended figure of £750 per month was considered excessive or what could have been sacrificed in order to pay the rent shortfall, for example by identifying specific items of food or other household items that could have been dispensed with. The information provided by the appellant did not call for a more elaborate analysis.

Appeal dismissed.


This is, I think, a bit of a harsh decision, particularly in the closing emphasis on the appellant’s failure to provide detailed information. This was a person with difficulty reading and writing and with learning difficulties. Expecting detailed accounts would surely be a step too far. While her initial figure of £150 per month for food for herself and four children was clearly far too low (and accepted as such by the Council on review), it is surely for the LA to either accept the revised figure of £750 per month, or to explain, as per Farah, why that figure was too high and what it considered to be a realistic amount. Instead, a vague assertion that there ‘must’ be sufficient flexibility in the budget to meet the rent shortfall here gets approval from the Court of Appeal.

The court in Farah did state

the level of detail necessary will usually depend upon the issue to be decided and the facts of the particular case. In some cases it will be enough to say that the housing authority concluded that the amount spent on a particular form of expenditure was excessive or unnecessary without going into further detail or qualification. In other cases, where the tenant has produced and relied on a justification for the expenditure under review, a more detailed explanation of the reasons for rejecting those arguments may be required.

and Ms S’ figures were not precise (though hardly unusual in that), but here it was one specific element of expenditure that was at issue, and no real reasons provided for rejecting her revised figure of £750 per month.

The lesson, at least for the solicitors of homeless applicants, is to ensure that the submissions on income and expenditure are as fully detailed and specified as possible. Not easy when, as here, the relevant time was over two years ago…

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.


  1. Ian

    She had a TV, (and TV licence) yet did not pay all of the rent! Clearly she could have sold the TV, stop the TV licence and paid more of the rent…. Likewise with the daughter’s gymnastics.

    Yet I don’t like the lottery that a person in social housing gets an easier life with all their rent paid, but someone in private sector does not. This is made even worse as being in social housing is often an reward for someone refusing to take reasonability for their life! (Also the person that makes the most effect to reduce other spending so they can remain in the private sector, is the least likely to be rewarded with social housing.)

    • Giles Peaker

      Oh Ian, where to start? How about the fact that this was not social housing? It was a PRS tenancy.

      And unlike your version of poverty, where people should have to sell off their every belonging, pawn their children and live in abject misery in order to meet housing costs, the accepted measure of poverty includes access to television as a necessity.

      And then, of course, your assertion that “being in social housing is often an reward for someone refusing to take reasonability for their life!” is completely wrong, as demonstrated by this very case.

      And then people in social housing ‘having all their rent paid’ as a matter of course is also wrong. Some do, many don’t.

      Most Housing Benefit, by value, goes to PRS landlords and more people claiming LHA are employed than unemployed. So lower social sector rents actually save tax payers money…

  2. Ian

    Higher social sector rents with the money invested in building more homes, may save the tax payer a lot more money.

  3. ‘Glen at AP lawyers’.

    Higher rents will push more and more people into debt, then eviction, B & B’s and ultimately homelessness. Is this really what we want for our most vulnerable?


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