R (Ahmad) v London Borough of Newham

The House of Lords allowed the appeal and held that the London Borough of Newham's allocation scheme for social housing complied with Part VI of the Housing Act 1996 as amended. The court decided that section 167(2) does not require authorities to determine priorities between all applicants who attract the "reasonable preference" in accordance with a detailed assessment of the relative gravity of each applicant's needs; subsections 167(2) and 167(2A) use permissive language ("may") which leaves authorities with a discretion to adopt broad-band approaches. A choice based lettings scheme that places all applicants meeting section 167(2) criteria in a single band and then selects within that band by waiting time is not irrational as a matter of public law provided the scheme otherwise complies with the statutory requirements and is rationally justified. The court also held that permitting up to 5% of advertised properties to be allocated to existing tenants seeking transfers did not breach the requirement to give reasonable preference to the groups in section 167(2).

This judicial review challenged Newham's housing allocation scheme. The claimant sought a declaration that the scheme was unlawful, quashing of the refusal to rehouse him and an order for reconsideration. The claimant's case was that the scheme unlawfully grouped all applicants who satisfied one or more of the criteria in section 167(2) of the Housing Act 1996 together and resolved competing claims within that band by reference to time on the waiting list rather than by assessing and ranking their relative needs; he also challenged the allocation of up to 5% of choice-based lettings to existing tenants seeking like-for-like transfers.

Procedural history: the Deputy Judge in the Administrative Court held the scheme unlawful and ordered reconsideration ([2007] EWHC 2332 (Admin)); the Court of Appeal upheld that decision ([2008] EWCA Civ 140). The London Borough of Newham appealed to the House of Lords.

The issues framed were (i) whether section 167 requires authorities to determine priorities between applicants who attract the statutory "reasonable preference" by assessing the relative gravity of their needs, and if so to what extent, and (ii) whether allocating up to 5% of properties to existing tenants seeking transfers unlawfully undermines the reasonable preference given to the section 167(2) groups.

The court's reasoning: the House of Lords interpreted section 167(2) and 167(2A) and emphasised the use of permissive language permitting authorities to adopt broad-band policies. The court relied on the legislative scheme, the relevant statutory context including section 159 and section 169, and policy material (the Green Paper) to conclude Parliament contemplated discretion in designing allocation schemes. The rationality threshold applies to schemes; the burden is to show a scheme is irrational in the Wednesbury sense. The court concluded Newham's scheme met the statutory minimum, provided specific narrow higher-priority bands for the most urgent cases, and that choosing waiting time as the tie-break between those in the same band is a transparent, objective, administrable and rational criterion. On the second issue the court held that a modest allocation to transfers did not deprive the reasonable preference groups of a reasonable preference. The House of Lords therefore allowed the appeal and set aside the declaration that the scheme was unlawful.

Appeal allowed. The House of Lords held that the allocation scheme lawfully gave reasonable preference to the groups listed in section 167(2) without being required to rank all such applicants by the relative gravity of their needs; the scheme’s use of waiting time as the determinant within a broad band was not irrational and the limited allowance for transfers did not negate reasonable preference. The Deputy Judge’s declaration that the scheme was unlawful was set aside.

First instance: Administrative Court (Deputy Judge Nicholas Blake QC) held the scheme unlawful and ordered reconsideration ([2007] EWHC 2332 (Admin)). Court of Appeal: decision of the Administrative Court upheld ([2008] EWCA Civ 140). House of Lords: appeal allowed and the declaration set aside ([2009] UKHL 14).