Local authority – Housing –Homelessness – Appellant appealing against decision of respondent local authority that she was intentionally homeless following application under homelessness provisions of Housing Act 1996 – Whether respondent adopting correct approach in determining whether accommodation was “affordable” for purposes of 1996 Act — Appeal allowed
The appellant was an assured shorthold tenant of 18 Dagger Lane, West Bromwich, Birmingham, where she lived with her four children. In July 2011, having fallen into rent arrears, she was given notice to leave. She later applied to the respondent local authority as homeless under Part VII of the Housing Act 1996. It was decided that she was intentionally homeless, on the ground that the accommodation at Dagger Lane was affordable and reasonable for her to continue to occupy, and that its loss was the result of her deliberate act in failing to pay the rent. The respondent considered that the shortfall in rent could have been met by greater flexibility in the household budgeting and confirmed its decision on review. The appellant’s appeal against that decision was dismissed by the county court and her further appeal was dismissed by the Court of Appeal: [2016] PTSR 558.
The appellant appealed to the Supreme Court. The central issue was whether the respondent adopted the correct approach in determining that the accommodation was “affordable” for purposes of the 1996 Act. Under article 2 of the Homelessness (Suitability of Accommodation) Order 1996, in determining whether it would be reasonable for a person to continue to occupy accommodation, the local authority had to take into account whether that accommodation was affordable. That included consideration of the financial resources available to that person, including “social security benefits”, and consideration of the person’s “other reasonable living expenses”.
The appellant contended that the respondent had been wrong in principle to treat her non-housing benefit as containing a surplus which could be treated as available to make up shortfalls in housing benefits and had failed to apply the 1996 Order correctly. Rather than add all income and subtract all reasonable expenditure, it had treated the appellant’s housing benefit as hypothecated for rent and asked whether the gap between housing benefit and rent could be bridged from other income. Further, the respondent had failed to pay regard to para 17.40 of the Homelessness Code of Guidance for Local Authorities (the Code), as correctly interpreted.
Held: The appeal was allowed.
(1) Paragraph 17.40 of the Code provided: “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”. The appellant argued that the reference to a residual income “less than the level of income support …” had to be taken as not limited to “income support” in the strict sense, but as including amounts available in respect of the children, by way of child benefit or child tax credit.
(2) On the one side, the 1996 Order required the respondent to take into account all sources of income, including all social security benefits. There was nothing in the Order which required or justified the exclusion of non-housing benefits of any kind. On the other side it required a comparison with the applicant’s “reasonable living expenses”. Assessment of what was reasonable required an objective assessment; it could not depend simply on the subjective view of the case officer. Furthermore, affordability had to be judged on the basis that the accommodation was to be available “indefinitely”: R (Aweys) v Birmingham City Council [2009] WLR 1506 considered.
(3) Guidance was provided by para 17.40, where the secretary of state recommended authorities to regard accommodation as unaffordable if the applicant’s residual income would be less than the level of income support. Even if that recommendation in respect of income support was not interpreted as extending to benefits for children, the lack of a specific reference did not make the level of those benefits irrelevant. As the authorities showed, benefit levels were not generally designed to provide a surplus above subsistence needs for the family. The duty under the Children Act 1989 to promote and safeguard the welfare of children, was also relevant. The guidance made clear that amounts would vary according to the circumstances and composition of the applicant’s household. Further, there was a reference to a “current tariff … in respect of such benefits” (plural), which suggested that the tariff might be looked at in respect of benefits other than income support, and was at least a good starting point for assessing reasonable living expenses.
(4) That was not how the review officer dealt with the appellant’s case. He asked whether there was sufficient “flexibility” to enable her to cope with the shortfall of £151.49 between her rent and her housing benefit. However, the question was not whether, faced with that shortfall, she could somehow manage her finances to bridge the gap; but what were her reasonable living expenses (other than rent), that being determined having regard to both her needs and those of the children, including the promotion of their welfare. The amount shown in the schedule provided by her solicitors (£1,234.99) was well within the amount regarded as appropriate by way of welfare benefits (£1,349.33). In the absence of any other source of objective guidance on that issue, it was difficult to see by what standard that level of expenses could be regarded as other than reasonable. Accordingly, the review decision had to be quashed. It was hard to see on what basis the finding of intentional homelessness could be properly upheld.
James Stark and Jonathan Manning (instructed by Community Law Partnership, of Birmingham) appeared for he appellant; Tom Royston and Brooke Lyne (instructed by Birmingham City Council Legal and Democratic Services) appeared for the respondent); Martin Westgate QC, Shu Shin Luh and Connor Johnston (instructed by Freshfields Bruckhaus Deringer LLP) appeared for the intervener’
Eileen O’Grady, barrister
Click here to read a transcript of Samuels v Birmingham City Council
