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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Ahmad, R (on the application of) v London Borough of Newham [2008] EWCA Civ 140 (29 February 2008) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2008/140.html Cite as: [2008] EWCA Civ 140, [2008] ACD 193, [2008] BLGR 628

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE ADMINISTRATIVE COURT
Nicholas Blake QC
CO/8047/2006

		Royal Courts of Justice Strand, London, WC2A 2LL
		29/02/2008

Lord Justice Richards :

1. This case concerns the lawfulness of the allocation scheme adopted by the London Borough of Newham ("Newham") pursuant to s.167 of the Housing Act 1996 ("the 1996 Act") for determining priorities in allocating housing accommodation. Nicholas Blake QC (now Mr Justice Blake, but sitting at the time as a deputy High Court Judge) found that the scheme was unlawful in failing to take adequate account of the cumulative needs of the claimant's family. Newham appeals against that decision. The claimant supports the decision and, by a respondent's notice, advances additional grounds of challenge which were rejected by the deputy judge.

The facts

2. The claimant is married and has four children, namely Shaira (now aged 15) Amaan (aged 10), Riddah (aged 5) and Huzaif (the youngest). The family occupies a two-bedroom wheelchair-accessible ground floor property of which the landlord is a registered housing association. The claimant and his wife share a bedroom, in which Huzaif also sleeps. The three other children share the second bedroom. The accommodation is plainly overcrowded, but it is not statutorily overcrowded within the meaning of Part 10 of the Housing Act 1985.
3. In addition, two of the children have health problems. Shaira was disabled from birth and has a set of medical conditions for which she requires full-time care and various items of special equipment. She suffers from epileptic seizures, screaming fits, vomiting and irregular sleep. It is undisputed that her condition impacts upon her housing needs and those of her siblings and that she requires her own bedroom.
4. Of the siblings, Amaan is the most affected by sharing a bedroom with Shaira. His constant tiredness at school is attributed to the disturbed nights. He also suffers from allergies, general behaviour disorder and incontinence. The allergies require him to occupy a cool, well-ventilated and uncarpeted room. For those and other reasons it is contended that Amaan, too, requires his own bedroom.
5. The claimant himself is not in the best of health. He has been chronically depressed for some years and is in receipt of psychological therapy. His family's housing circumstances are said to exacerbate his condition.
6. The claimant has been the tenant of his present accommodation since 1994. In August 1999 he applied to Newham for a transfer to larger accommodation. Under the allocation scheme operated by Newham at that time, he was granted overriding medical priority on medical grounds. He received offers of accommodation but refused those offers on the ground that the accommodation was not suitable. He is eligible for a four-bedroom wheelchair-accessible property, but such properties are in extremely short supply in Newham and it is therefore very difficult for his requirements to be met.
7. In September 2002 Newham introduced a new allocation scheme. For a short transitional period the medical override under the old scheme was carried forward to a limited extent into the new scheme, but it still did not lead to the claimant obtaining what he regarded as suitable accommodation. It is the application of the new scheme to him since that transitional period ended which is the subject of these proceedings. He complains in particular that the scheme does not give him the priority that he should be given in the light of the needs of his household taken as a whole.
8. Before examining the issues in detail, it will be helpful to set out the statutory provisions, the effect of the relevant case-law, the Secretary of State's statutory guidance and related materials, and the principal features of the scheme itself.

The statutory provisions

9. Section 159(1) of the Housing Act 1996 requires a local housing authority to comply with Part 6 of the Act (ss.159-174) in allocating housing accommodation. The material provisions are contained in s.167, which in its current form provides:

"(1) Every local housing authority shall 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 to be taken.

(1A) The scheme shall include a statement of the authority's policy on offering people who are to be allocated housing accommodation –

(a) a choice of housing accommodation; or

(b) the opportunity to express preferences about the housing accommodation to be allocated to them.

(2) As regards priorities, the scheme shall 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 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 others).

The scheme may also be framed so as to give additional preference to particular descriptions of people within this subsection (being descriptions of people with urgent housing needs).

(2A) The scheme may contain provision for determining priorities in allocating housing accommodation to people within subsection (2); and the factors which the scheme may allow to be taken into account include –

(a) the financial resources available to a person to meet his housing costs;

(b) any behaviour of a person (or a member of his household) which affects his suitability to be a tenant;

(c) any local connection (within the meaning of section 199) which exists between a person and the authority's district.

…

(2E) Subject to subsection (2), the scheme may contain provision about the allocation of particular housing accommodation –

(a) to a person who makes a specific application for that accommodation;

(b) to persons of a particular description (whether or not they are within subsection (2)).

…

(6) Subject to the above provisions, and to any regulations made under them, the authority may decide on what principles the scheme is to be framed."

10. As originally enacted, s.167 was in a simpler form. Subss. (1A) and (2A)-(2E), among other provisions, were inserted by the Homelessness Act 2002 ("the 2002 Act"). The descriptions of people to whom reasonable preference is to be given under subs. (2) were amended at the same time, though those differences are not important for this case.

The relevant case-law

11. R v Islington London Borough Council, ex parte Reilly and Mannix (1998) 31 HLR 651 ("the Islington case"), a first instance case decided by me, concerned the application of an allocation scheme to secure tenants of the authority who applied for transfers to alternative accommodation. The situation was held not to be governed directly by Part 6 of the 1996 as then enacted; but it was relevant that the authority, in the exercise of a broad discretion, had decided to apply the same system for determining priorities to transfer applicants as to applicants to whom the provisions of Part 6 did apply. Under the scheme, priorities were determined on the basis of points awarded by reference to defined categories of housing need, with a residual power in the chief housing officer to award additional points so as to bring an applicant higher up, or to the top of, the priority list. The principal reason why the scheme was found to be unlawful was that the authority had decided to place very considerable weight on the respective needs of applicants but had adopted an unreasonable approach towards the assessment of need. As I put it (at p.666):

"There can be no doubt that, subject to the residual discretion, the method of calculating allocations points under the present scheme is incapable of producing a fair assessment of applicants' respective housing needs. That is because it makes only very limited allowance for multiple categories of need … and makes no allowance at all for the number of persons within the applicant's household who are affected by a particular category of need …. There is no possibility of a 'composite' assessment, to use the applicants' expression.

Nor do I think that the residual discretion can be viewed as a rational way of redressing the balance ….

The conclusion I reach is that the authority's present allocations scheme, in failing to make adequate provision for a composite assessment of housing need, is one that no reasonable authority would adopt and is unlawful for that reason ….

I stress that it is for the authority to decide on the particular categories of need to be included in an allocations scheme of this kind, and to decide into which categories individuals fall. The criticisms made in this judgment relate to a broad question of approach and are not intended to impose any particular template upon the authority …."

12. R v Westminster City Council, ex parte Al-Khorsan (1999) 33 HLR 77 ("the Westminster case") concerned a scheme under Part 6 of the 1996 Act. The applicant had a certain level of priority under the scheme by virtue of being homeless, but he complained about the failure of the scheme to take into account additional medical and welfare considerations which would or should place him higher up the list. Latham J referred to a passage in the Code of Guidance (see below) to the effect that authorities should take a long term view of applicants' circumstances, to ensure that housing went to those households with the greatest underlying needs. He continued (at para 11):

"That seems to me to be the philosophy which underlies the provisions of section 167. The various categories of need identified in section 167, and in the 1997 Regulations [which added a category to s.167(2) as originally enacted], are not to be treated, it seems to me, as separate watertight compartments. They identify needs which are capable of being cumulative. And it is only in that way that a proper judgment can be made of the respective needs of persons on the list. This was recognised by Richards J in R v Islington LBC, ex p. Reilly and Mannix …. In so far, therefore, as the respondent's scheme precludes consideration of any of the other categories to which reasonable preference and additional preference ought to be give under section 167(2) it is unlawful, in that it excludes from consideration matters which Parliament has required the respondent to take into consideration. The extent to which priority should be given within the homeless category to those who may fall within the other categories is a matter for the respondent. But those who have needs which are capable of falling into any of the other categories are entitled to have those needs taken into consideration."

13. The scheme in R (A) v Lambeth London Borough Council; R (Lindsay) v Lambeth London Borough Council [2002] EWCA Civ 1084, [2002] HLR 57 ("the Lambeth case"), was relatively complex. Allocations were made through seven groups, at least one of which (group D) included applicants who were not entitled to reasonable preference under s.167. This gave rise to the first ground of objection, namely that those who were not entitled to preference under s.167 (accounting for some 4 per cent of the total) had an equal opportunity of obtaining accommodation as those entitled to such preference. The Court of Appeal found in the claimants' favour on the issue. Collins J, giving the main judgment, said this:

"15. Section 167 does not require more than that a reasonable preference be given. Each authority's scheme will inevitably be linked to its particular situation and will reflect its particular problems. The Code of Guidance recognises that other factors than those in section 167(2) can be taken into account and given weight provided that they do not dominate the scheme at the expense of those in s.167(2). Equally, the authority will decide what weight to attach to each of the factors ….

16. The scheme must be framed so as to secure [original emphasis] that reasonable preference is given. The Council's scheme is based on date order and includes (potentially in each group but in reality largely in Group D) those who are not entitled to any preference. Mr Lowe QC [counsel for the authority] attempted to suggest that 4 per cent was de minimis. In terms of numbers, that suggestion is insupportable, but the exact percentage is irrelevant. Unless it is clear that no applicants who are not entitled to preference are able to compete on equal terms with those who are, the scheme cannot secure that the necessary head start is given ….

17. The scheme is not directly linked to the various categories in section 167(2). That is not in itself a reason to regard it as unlawful provided that it does in fact secure the necessary preference for those categories …. But the fact remains that the scheme cannot secure that the necessary preferences are accorded because of the presence of those who are not within s.167(2) in the Group and who have the same opportunity to achieve preference."

14. The second ground of objection in the Lambeth case was that, even if a group comprised only those entitled to preference, the scheme would still be unlawful because it failed to provide a means of giving priority to those who fell within more than one category (composite need) or those entitled to additional preference. Lambeth, on the other hand, placed great emphasis on the opportunity given by the scheme for applicants to make choices by judging their own needs (in that they could be housed more quickly if they were willing to accept accommodation which was smaller or otherwise less suitable than their identified need). On this issue, too, the court found in the claimants' favour. Collins J, having referred to the Islington case and quoted the passage from Latham J's judgment in the Westminster case set out above, continued:

"18. … This can be encapsulated in the requirement that the scheme in question has a mechanism for identifying those with the greatest need and ensuring that so far as possible and subject to reasonable countervailing factors (for example, past failure to pay rent et cetera) they are given priority. No doubt normally those in greater need will be those who qualify under more than category, but it will not necessarily be the case that X who is within more categories than Y automatically must be regarded as being in greater need than Y. All will depend on the circumstances, one of which may include the length of time Y has spent waiting.

19. In the Islington case, Richards J decided that the scheme could not achieve what it should in this respect and so failed because it was irrational. That in my view is the correct approach. So we have to decide whether the method which Lambeth has devised in its Allocations Policy to identify and so give priority to those in greatest need can reasonably be said to achieve its object. Any scheme which is aimed at an assessment of comparative need will be imperfect. Whether done by means of quotas or points with an injection of discretion or howsoever, it will inevitably involve elements of subjective judgment and individuals will feel that their needs are greater than those of others who have been given priority over them.

20. As it seems to me, the question is whether self-assessment can be said to be a rational means of solving the problem. Lambeth asserts that it works and that an individual's assessment of his or her own needs is as reliable as that made by a third person. The difficulty with that submission is that the individual is inevitably concerned only with his or her own situation and may not on any reasonably objective view have greater need. While I have recognised the inevitable [im]perfections of any scheme, this seems to me to be altogether too haphazard ….

21. Accordingly in my view the system which Lambeth has devised and the manner in which preferences are to be accorded by means of self-assessment or, as Lambeth calls it, choice do not meet the statutory requirements …."

15. Pill LJ gave a concurring judgment in which he said this:

"37. I agree with Collins J … that the Council's allocation scheme is unlawful by reason of its failure to give preference to the 96 per cent of applicants who are entitled to the statutory preference over the 4 per cent who are not. The 4 per cent cannot for present purposes be dismissed as too small to matter.

38. I also agree that the provision of choice does not render the allocation scheme lawful. Conferring a choice on applicants is of course admirable and accords with government policy …. However, the sustained submissions of Mr Lowe have not persuaded me that giving the choice of accepting something less than the applicant may be allowed, if available, discharges the specific duty in section 167(2) to give a preference. I fail to see how permitting an applicant to assess his need so highly that he accepts inferior accommodation amounts to conferring a preference on him. The two concepts are different and the right to choose does not amount to a preference within the meaning of the section. This conclusion is not dependent on the fact that the choice is available to all applicants, and not only to those entitled to the statutory preference, but is consistent with it.

…

40. I also agree with Collins J, and the judgments cited, that the allocation scheme must provide fuller guidance in identifying needs, including a recognition that the factors in section 167(2) may operate cumulatively …."

16. The scheme under consideration in R (Cali, Abdi and Hassan) v Waltham Forest London Borough Council [2006] EWHC 302, [2007] HLR 1 ("the Waltham Forest case"), had only three bands: additional preference, reasonable preference and no preference. It operated a bidding system for available properties, under which only those in the first two bands were allowed to bid; those in the first band had priority over the second; within the first band, priority was given by reference to the date on which the household was awarded additional preference; and within the second band, priority was given by reference to the original registration date. Lloyd Jones J applied the case-law referred to above in holding that the scheme was unlawful. He said:

"31. I accept the submission of the Claimants that the Defendant's published scheme does not allow for cumulative grounds for the grant of preference to be recognised and reflected in an assessment of housing need. There is no mechanism in the published scheme whereby a household qualifying a number of times over for a reasonable preference can, on the basis of its cumulative need, qualify for additional preference …. A large number of needs of widely varying severity are banded together and thereafter priority is determined solely on the basis of waiting time."

17. The central ground of challenge in R (Lin) v Barnet London Borough Council [2007] EWCA Civ 132, [2007] HLR 30 ("the Barnet case"), was that the authority's points-based scheme accorded so few points to the homeless for their homelessness relative to the points given to other preference groups and non-preference groups that they were incapable of bidding successfully for accommodation under the scheme. The Court of Appeal rejected that ground. Dyson LJ, with whom the other members of the court agreed, stated:

"25. The test is not … whether the homeless are 'excluded from allocation'. It is whether they are given 'reasonable preference' relative to persons who do not come within s.167(2). The duty to give a reasonable preference merely requires the giving of what Judge LJ referred to in the corresponding previous legislation … as a 'reasonable head start': see R v Wolverhampton MBC, ex part Watters (1997) 29 HLR 931, 938. Preference should not be confused with prospects of success. Prospects of success depend on many factors, of which the most material is the fact that the demand for accommodation greatly exceeds the supply. It is quite possible for a lawful scheme to give reasonable preference to a person within s.167(2) and for that person never to be allocated Part 6 housing. Such a person is entitled to no more than a reasonable preference.

26. Section 167(2A) expressly permits the local housing authority to determine priorities as between groups within s.167(2). The fact that homeless persons are accorded fewer points than other persons within s.167(2) cannot be a ground for challenge to an allocation scheme.

…

28. As to whether the preference is 'reasonable', it seems to me that this is a matter for the discretion of the council …."

18. A further ground of challenge was that in certain circumstances the scheme awarded fewer points to an applicant who fell within s.167(2) than to someone who did not. That, too, was held not to make the scheme unlawful. Having referred to s.167(2A) and to the Code of Guidance, Dyson LJ said (at para 36):

"It is clear, therefore that a scheme may give reasonable preference to applicants who do not fall within s.167(2) provided that such non-statutory preferences do not dominate the scheme at the expense of the statutory preference categories."

Distinguishing what was said in the Lambeth case as to the position where the 4 per cent of applicants who fell outside s.167(2) were accorded preference in exactly the same way as the 96 per cent who fell within the subsection, Dyson LJ said that in the case before him homeless applicants were not competing on equal terms with applicants who fell outside the subsection: the former were entitled on the grounds of their homelessness to their own special award of points which the latter did not receive (para 41).

The statutory guidance and related materials

19. The Secretary of State has issued a Code of Guidance for local housing authorities on the allocation of accommodation. By s.169(1) of the 1996 Act, authorities are required to have regard to such guidance. The current version of the Code is dated November 2002.
20. Chapter 5 of the Code relates to allocation schemes. Under the heading "Choice and preference options", it states:

"5.2 The requirement under s.167(1A) of the 1996 Act for a statement to be contained in the scheme as to the housing authority's policy on offering a choice of accommodation, or giving the applicant an opportunity to express preferences in relation to accommodation, means that the housing authority must address the matter and take a policy decision on it.

5.3 The Secretary of State believes that allocation policies for social housing should provide choice for applicants wherever possible, while continuing to meet housing need ….

5.4 The allocation scheme may contain provision under s.167(2E) for the allocation of particular accommodation to a person who makes a specific application for that accommodation. This is intended to facilitate choice by providing for the adoption of 'advertising schemes' whereby applicants can apply for particular properties, which have been advertised as vacant by the housing authority.

5.5 It is for housing authorities and their partner RSLs to decide in the light of local circumstances, and drawing on the experience of the choice based lettings pilot scheme, the ways in which they can amend or develop existing arrangements so as to offer more choice to applicants.

5.6 Housing authorities which do not offer a choice of accommodation, should consider giving the applicant an opportunity to express preferences in relation to accommodation …."

21. Under the heading "Reasonable preference", the Code refers to the duty to ensure that reasonable preference is given to the categories of people set out in s.167(2), and continues:

"5.9 It is important that the priority for housing accommodation goes to those with greater housing need. In framing their allocation scheme to give effect to s.167(2), housing authorities must have regard to the following considerations:

a) the scheme must include mechanisms for

i) ensuring that the authority assess an applicant's housing need, and for

ii) identifying applicants in the greatest need;

b) the scheme must be framed so as to give reasonable preference to applicants who fall within the categories set out in s.167(2), over those who do not;

c) the reasonable preference categories must not be treated in isolation from one another. Since the categories can be cumulative, schemes must provide a clear mechanism for identifying applicants who qualify under more than one category, and for taking this into account in assessing their housing need;

d) there is no requirement to give equal weight to each of the reasonable preference categories. However, housing authorities will need to be able to demonstrate that overall, reasonable preference for allocations has been given to applicants in all the reasonable preference categories ….

e) a scheme may provide for other factors than those set out in s.167(2) to be taken into account in determining which applicants are to be given preference under a scheme, provided they do not dominate the scheme at the expense of those in s.167(2). (See para 5.25 below.)

Otherwise, it is for housing authorities to decide how they give effect to the provisions of s.167(2) of the 1996 Act in their allocation scheme."

22. In a subsection headed "Reconciling choice and need", the Code states:

"5.10 The Secretary of State is of the opinion that there is sufficient flexibility within the statutory framework to enable housing authorities to offer applicants a choice of accommodation while continuing to give reasonable preference to those with the most urgent housing need.

5.11 When considering how to reconcile choice and housing need, housing authorities should consider adopting a simplified system of applicant prioritisation in place of a complex points-based approach. An appropriate approach might include systems that:

(a) 'band' applicants into a number of groups reflecting different levels of housing need, with prioritisation of applicants within these groups being determined by waiting time, and/or

(b) give people in the most urgent housing need priority over other applicants (often by using a time-limited 'priority card')."

23. Under the heading "Determining priorities" it is stated:

"5.23 Section 167(2A) allows allocation schemes to make provision for determining priorities in relation to applicants who fall within the reasonable preference and any additional preference categories. The factors which the scheme may allow to be taken into account include … [the Code then refers to the instances set out in s.167(2A) itself].

5.24 There should be arrangements for determining allocation priorities between two households with similar levels of need. It would be legitimate to employ some indicator that reflects the time spent waiting at a particular level of need …."

24. The final passage that it is helpful to quote, which appears under the heading "Allocation scheme flexibility", is this:

"5.25 While housing authorities will need to ensure that, overall, reasonable preference for allocations is given to applicants in the relevant categories in s.167(2), these should not be regarded as exclusive. A scheme should be flexible enough to incorporate other considerations. For example, housing authorities may wish to give sympathetic consideration to the housing needs of extended families. However, housing authorities must not allow their own secondary criteria to dominate schemes at the expense of the statutory reasonable preference categories. The latter must be reflected on the face of schemes and be evident when schemes are evaluated over a longer period."

25. We were referred to various other materials that cast light on the policy behind the amendments made to the 1996 Act by the 2002 Act and reflected in the Code of Guidance. A Green Paper in April 2000, "Quality and Choice: a Decent Home for All", emphasised the desirability of increasing choice in the provision of social housing and of moving away from points-based allocation schemes. It stated:

"9.18 We do not believe points-based assessment systems are an ideal way of ensuring that social housing lettings meet need in a sustainable way. Assessments take little account of people's own 'felt needs'. For this reason, some authorities are now moving away from points-based systems to more broad-brush 'banding' systems. The needs of everyone in each band are considered to be of broadly similar urgency. We believe there is scope for extending this idea. The banding could be as simple as:

people with an urgent need for social housing;

those in non-urgent need of social housing; and

those with no particular need for it.

…

9.20 In order to decide between competing claims within these broader bands, there needs to be some determining criterion. In the case of first-time applications, this could be the time that the person has been waiting in that particular band. For existing tenants, it could be the time spent at their current address.

9.21 The advantage of this approach is that it would enable people to balance their own 'felt' need, as measured by the time they felt able to wait, against the availability of the properties they might be able to secure. In effect, waiting time would become the 'currency' that those in the social sector could use to optimise their own decisions about where to live, taking into account all their needs and aspirations.

9.22 Since those in the highest needs band would have priority over those with lesser needs, there would be no question of the poorest or most vulnerable people having the worse choices. Of those with broadly similar needs, people who had put up with their situation the longest would have the best chance of securing a home which met their requirements.

9.23 We recognise that in areas of high demand the number of households within the urgent category will be significant. Authorities in such areas may decide to introduce additional bands to differentiate between demand priorities. However, the principle of giving priority according to the time spent in housing need remains valid."

26. A follow-up Green Paper in December 2000 said that the government remained firmly of the view "that greater choice for tenants should be incorporated wherever possible into lettings policies for social housing, while continuing to meet housing need" (para 6.4), but it did not want to be prescriptive about the approach adopted.
27. More recently, in a Five Year Plan, "Sustainable Communities: Homes for All", dated January 2005, the government has stated that it wants all local authorities to operate choice-based systems by 2010 (para 5.19).

Newham's allocation scheme

28. Newham describes the introduction of its new allocation scheme in September 2002 as a move from a needs based points system to a choice based scheme which increases applicant choice in line with the view expressed in the Secretary of State's guidance.
29. Applicants for housing are first placed into one of three groups: (1) "Priority Homeseeker", consisting of those who fulfil one or more of the reasonable preference criteria in s.167(2) of the 1996 Act; (2) "Homeseeker", consisting of those who do not fulfil any of the reasonable preference criteria and are not Newham tenants applying for a transfer; and (3) "Tenant Seeking a Transfer", consisting of Newham tenants who are applying for a transfer and do not fulfil any of the reasonable preference criteria.
30. Properties are then allocated in two different ways: on the basis of "choice based lettings" and by "direct offers". Approximately three-quarters of properties are allocated through the choice based lettings process and the remainder by direct offers.
31. The choice based lettings process works as follows. Properties are advertised in a weekly cycle on the website and in a magazine distributed to local service centres and libraries. The details given include the number of bedrooms, location, landlord and rent, and in most cases there is a photograph. The properties are open to bids from applicants within the Priority Homeseeker and Tenant Seeking a Transfer groups. They are not generally open to bids from those in the Homeseeker group, except in the case of sheltered accommodation and occasionally where properties are proving difficult to let. Eligible applicants who are interested in a property can "bid" for it during the week after it has been advertised. Bids are ranked according to the length of time those bidding (or their households) have been registered on the housing list. The properties are then offered in ranking order.
32. A significant feature of the process is that bids can be made by ordinary tenants seeking a transfer as well as by applicants fulfilling the reasonable preference criteria. However, the total number of such tenants rehoused in any one financial year is limited to 5 per cent of the total number of applicants rehoused through the process; and we were told that the number has in practice been under 2.5 per cent of the total, though the precise figure was not agreed. We were also told that ordinary transfer applicants amount to just 5.5 per cent of those on the housing register, reflecting the fact that the vast majority of applicants have needs meeting the reasonable preference criteria.
33. Direct offers are made to applicants falling within defined groups, namely "Additional Preference" (to which the description of "emergency rehousing" is also applied), "Multiple Needs", "Underoccupation Transfers", and "Decants", and applicants qualifying under certain "Special Schemes". A property identified for a direct offer may also be advertised through the choice based lettings process but, if accepted by the applicant to whom it is offered directly, will go to him rather than to whoever might otherwise have been the successful bidder for it. Thus it provides an accelerated route to housing.
34. The Additional Preference group contains applicants who need to move urgently on grounds of harassment, medical grounds or social/welfare grounds. The criteria are, however, very rigorous. Thus, the medical criterion is that applicants must be assessed as having a medical condition that is so severe that it is impossible for them to live in their current homes; and the social/welfare criteria include such matters as likelihood of admission of a family member to residential care if rehousing is not made, or the need for a child experiencing abuse to be moved away from the perpetrator, or that the applicant or a member of the household is at risk of serious harm to themselves or to others in their present accommodation.
35. We were told that the Multiple Needs group was introduced into the scheme following a judicial review challenge in 2003, in which Newham submitted to a consent order and undertook to amend its existing scheme so as to permit a composite assessment of need. The resulting Multiple Needs group is stated in the scheme to comprise applicants whose households are entitled to reasonable preference on more than one of the grounds in s.167. In fact, however, that is a misstatement, since the criteria applied are narrower than under s.167. The detailed assessment requires completion of a form under which an applicant has to score two or more points in order to come within the Multiple Needs group. One point is scored if the household is homeless or is owed a duty under the homelessness legislation and no suitable temporary accommodation is available from the Homeless Persons Unit: that is a partial reflection of s.167(2)(a)-(b). One point is scored if the current accommodation is statutorily overcrowded or subject to environmental health abatement action: that is a substantially narrower test than that of "people occupying insanitary or overcrowded housing or otherwise living in unsatisfactory housing conditions" in s.167(2)(c), and has been adopted as a deliberate matter of policy because overcrowding is endemic in Newham. If more than one member of the household has a "reasonable preference to move on medical grounds" (a reference to s.167(2)(d)), one point is scored for each additional member of the household with such preference, but no points are scored for the first member of the household with such preference. Finally, and corresponding to s.167(2)(e), one point is scored if the household has a need to move to another part of the borough to avoid hardship.
36. The Underoccupation Transfers group comprises council tenants who are occupying accommodation larger than their needs and are willing to move to smaller accommodation. The Decants group includes households that have to be rehoused as a result of council action, such as major repairs or improvement works. There are various Special Schemes, including for example a Fostering and Adoption Scheme under which assistance is given to the Social Services Department by providing a small quota of three bedroom units to enable families to foster children on a short-term basis.
37. Applicants in the direct offer groups may be offered any property type unless there are medical requirements as assessed by the Medical Assessment Officer before an offer is made. Applicants in the Underoccupation Transfers group, however, can choose the type of property they are willing to accept. There is a degree of choice as to the areas within the borough in which direct offers will be made.
38. The scheme empowers senior officers to agree to rehousing of persons outside the normal policy in exceptional circumstances.
39. The section of the scheme dealing with medical assessments (section 11) states that every medical application is assessed on its merits by the Medical Assessment Officer. Assessments are not primarily concerned with determining the severity of the applicant's medical condition, but reflect their difficulty in coping with their existing housing. Priority is awarded on the basis of how their medical condition is affected by their current housing and how a move could help. For example, someone with a serious heart condition who is already living on the ground floor may not receive any medical priority. However, if the property is in such bad condition that the risk of a chest infection through cold or damp would endanger life, priority can be awarded if heating/dampness problems cannot be rectified. The levels of medical priority that may be awarded are (i) emergency rehousing status (i.e. within the Additional Preference group) or (ii) "reasonable preference where an applicant's current home is unsuitable and the applicant needs settled accommodation on medical grounds" (i.e. qualifying for the Priority Homeseeker group and of potential relevance to the Multiple Needs group). One of the additional matters mentioned is that a separate bedroom entitlement may be awarded where the applicant needs their own bedroom for medical reasons or personal development, needs a carer or personal assistant, or some special bulky medical equipment. A further point made is that medical priority and welfare priority often overlap owing to complex problems experienced by some applicants, and that other agencies may be involved in decisions on status.
40. I should mention finally that there is a right to request a review of certain decisions and there is a formal complaints procedure in relation to decisions that do not attract a right of review.

The claimant's challenge to the allocation scheme

41. The claimant is accepted to fall within the Priority Homeseeker group and can therefore bid for properties through the choice based lettings process. At the date of his witness statement in the judicial review proceedings, he had bid for 23 properties, but without success. He came third in the queue on one occasion and sixth on another, but was generally ranked very much lower. This comes back to the problem that large properties are in very short supply and average waiting times are therefore very long: although the claimant has been registered on the housing list for many years, that is not long enough to take him high up the rankings.
42. The claimant has been held by Newham not to qualify for a direct offer. I have explained that, although the existing property is accepted to be unsuitable owing to overcrowding, it does not fall within the definition of statutory overcrowding. Further, whilst Shaira has been assessed as meeting the criterion for reasonable preference on medical grounds, Amaan and the claimant himself have been assessed as not meeting that criterion. This means that, as compared with the two points needed to come within the Multiple Needs group, the household has a zero score. The Additional Preference group does not apply because, despite Shaira's medical condition, it is not impossible for the household to continue to live in the existing property. None of the other direct offer groups is applicable.
43. The claimant considers that both he and Amaan, as well as Shaira, should qualify for reasonable preference on medical grounds, which would give the household the two points required to bring them within the Multiple Needs group and thus entitle them to receive a direct offer. Part of his challenge in these proceedings was to the most recent medical assessment decisions refusing reasonable preference in respect of himself and Amaan. Newham did not seek to defend those decisions before the deputy judge, who quashed them as being insufficiently reasoned. Pursuant to an undertaking given to the deputy judge, fresh assessments were made by Newham before the hearing of the appeal before us. They resulted, however, in the same decisions, notified to the claimant in a letter dated 22 November 2007. A request was then made for the fresh decisions to be reviewed. Those decisions are not in issue before us before us and we need say nothing further about them. But the matter proceeds on the basis that the claimant does not qualify for a direct offer.
44. The remaining, and more important, part of the claimant's challenge is to the scheme itself. The scheme is said to be unlawful on three main grounds: (1) it does not take proper account of the household's cumulative or composite need, (2) it does not reconcile need and choice in a rational manner, and (3) the criteria applied are insufficiently precise.
45. The deputy judge found in the claimant's favour on the first of those grounds but rejected the challenge on the other two. Newham appeals against his decision on the first ground; and, by a respondent's notice, the claimant contends that he should also have found the scheme to be unlawful on the other two grounds.
46. I shall consider the deputy judge's reasons and the parties' submissions on all three issues before coming to my own discussion and conclusions in relation to them.

The first issue: cumulative need

47. The deputy judge's reasons for finding Newham's allocation scheme unlawful were as follows. First, under the scheme the same priority is afforded to those within the Priority Homeseeker group as to the Tenant Seeking a Transfer group, although the former are entitled to reasonable preference under s.167(2) and the latter are not. Transfer cases may be limited to 5 per cent of the annual allocation, but in the Lambeth case giving priority to a similar percentage of non-priority cases was held to distort the policy.
48. Secondly, cases of multiple claims to priority on the basis of both overcrowding and medical or social need, or overcrowding and medical or social need of more than one person in the household, have to be capable of being considered a greater case of need than a single factor applying to a single person. As the deputy judge read the policy, that is not generally permitted. True it is that there is a Multiple Needs group which enables persons with multiple claims for reasonable preference to be considered for direct offers under a form of additional preference. That does not, however, cure the defects, for a number of reasons. One reason is that, to qualify for the Multiple Needs group, it is necessary to be assessed as having three points for medical or social needs. The second is that accommodation will be considered unsatisfactory only if it is statutorily overcrowded or subject to abatement action, whereas s.167(2)(c) includes those who live in unsatisfactory housing conditions without necessarily being statutorily overcrowded. The third is that the position is not cured by the Additional Preference group: in particular, a most rigorous test of medical assessment is needed to qualify for emergency re-housing on this ground, which would exclude other cases of genuine medical or welfare need.
49. For Newham, Mr Baker submitted that the deputy judge was wrong to hold as he did. Mr Baker placed emphasis on the extent of the authority's discretion as to the manner in which reasonable preference is to be accorded to those within s.167(2). He cited a passage from para 20 of the judgment of Lloyd Jones J in the Waltham Forest case, which referred in turn to something I said in the Islington case, about the "broad discretionary power" conferred on the authority by Parliament (as to which I would note that the existence of a discretion is not in dispute, but the discretion in the Islington case was a particularly broad one since the situation fell outside Part 6 of the 1996 Act). Mr Baker submitted that in the present case Newham acted within the ambit of its discretion, making legitimate policy choices with which the court should be very slow to interfere. In his skeleton argument he contended that the deputy judge's application of the earlier case-law to the scheme was too onerous and interfered impermissibly with Newham's discretion to decide how to accord preference. There is no requirement for all instances of multiple need as manifested in the categories in s.167(2) to be reflected in some additional priority. In exercising its discretion in framing the scheme, Newham is entitled to decide how such cases of multiple need are to be dealt with and to determine where to drawn the lines.
50. It was submitted further that the previous cases, properly analysed, do not go as far as the reliance placed on them by the deputy judge in support of his conclusion:

i) The Islington case related to transfers which at that time were wholly excluded from Part 6 of the 1996 Act. The decision may be supportable on its particular facts but does not assist in relation to the operation of the complex statutory scheme now in place under Part 6.

ii) The Westminster case did concern housing allocation under Part 6 but was prior to the amendments made by the 2002 Act, in particular the introduction of subs.(2A). Moreover the authority's scheme was held to be unlawful because, in relation to homeless persons, it merely provided for a certain quota of properties to be allocated in date order of application and therefore failed to have regard to the relevant consideration of needs under other categories. Latham J expressly recognised, however, that the extent of any priority remained a matter for the authority's discretion. In the present case, Newham's scheme has clearly considered how multiple needs should be taken into account, so that the failing identified in the Westminster case is not present.

iii) The Lambeth case also predated the coming into force of the amendments made by the 2002 Act. It does not appear from the judgments that the legal principles were in dispute. The scheme in that case was in any event very different from Newham's, relying heavily on the use of self-assessment by applicants, and Collins J concluded that it was "too haphazard". That criticism cannot be advanced in the present case: Newham's scheme is deliberate, making clear provision for identifying, and giving preference in respect of, multiple needs.

iv) The Waltham Forest case post-dated the amendments made by the 2002 Act, but the judgment made no reference to the new subs.(2A) and is accordingly not a reliable guide to the subtlety of the statutory scheme. The scheme was different from Newham's, especially because there was no multiple needs group. The judge found the scheme unlawful because there was "no mechanism" whereby a household could qualify for additional preference on the basis of its cumulative need. The decision therefore took the point no further than the Lambeth case and is in any event distinguishable from the present case.

51. Mr Baker's point about s.167(2A), as introduced by the 2002 Act, is that the subsection specifically addresses the question of determining priorities as between people falling with the s.167(2) categories, giving each authority very broad discretion whether or how that is to be done under their scheme, consistent with an increased flexibility in moving away from complex points-based schemes towards much broader bandings of applicants as encouraged by the current guidance. In oral submissions he went so far as to submit that subs.(2A) entitles the authority not to distinguish at all in priority within or between the s.167(2) categories.
52. According to Mr Baker submissions, Newham's scheme is not unlawful in its treatment of transfer applicants because, first, the existence of a 5 per cent cap involves a relevant difference in treatment, and, secondly, the authority is entitled to allocate property to them even though they are not within s.167(2), provided that aspect does not dominate the scheme. As regards multiple needs, he relied first on his submission that s.167(2A) entitles the authority not to distinguish in priority within or between the s.167(2) categories; and secondly on the submission that the matter is sufficiently addressed by the direct offers element of the scheme: it is lawful for the authority to draw a line equivalent to the adoption of the bandings encouraged in the guidance.
53. For the claimant, Mr Latham submitted that the authorities are consistent and correctly decided and have not been affected by the introduction of subs.(2A) by the 2002 Act. The guidance has also been consistent. The legislative objective remains as stated by Collins J in the Lambeth case at para 18. Subs. (2A) does no more than make clear that countervailing factors can be taken into account in determining priorities in the allocation of housing to those having reasonable preference within subs.(2). The second half of subs.(2A) indicates what kinds of factors may be taken into account: financial resources, behaviour and local connection. There is nothing in the guidance or other materials to show that the subsection was intended to effect the major change that Newham's interpretation would give it.
54. As to the application of the established law to the facts of the case, Mr Latham supported the deputy judge's reasons for finding the scheme unlawful. He submitted that the scheme does not contain a rational means of identifying and giving priority to those in greatest need. In substance it has only two bands: the generality of those with reasonable preference (the Priority Homeseeker group under the choice based lettings element of the scheme), and those qualifying for direct offers. The real concern is not so much the inclusion of transfer applicants in the choice based lettings element as the fact that such a small proportion of those with reasonable preference qualify for direct offers; and the criteria for direct offers, in particular for Multiple Needs, do not provide a rational means of identifying greatest need. Whilst accepting that it is for the discretion of the authority where to draw the line or lines, Mr Latham submitted that something more is required in order to take proper account of composite need, and that this is consistent with the giving of increased choice. There could be a points-based system plus choice or a more sophisticated banding system.

Second issue: reconciling choice and need

55. The claimant contends that the scheme does not rationally reconcile the two legislative objectives identified in s.167, namely need and choice. It is said that one relates to the assessment process (identifying and giving priority to those in greatest housing need), the other to the allocation process (affording applicants choice of accommodation). There is no necessary inconsistency between them, and the Code of Guidance gives guidance on how to reconcile them. It is accepted that there is no duty to offer choice at all; but Newham has chosen to do so and it must therefore act rationally in reconciling choice with need.
56. It is submitted that the allocation scheme does not achieve a rational reconciliation between the two objectives. Choice is offered only under the choice based lettings element of the scheme and not in the direct offers element. It is therefore offered to those in lesser need (including transfer applicants who are not in need) and denied to those in greatest need. Mr Latham suggested that it would be possible to allow an applicant to bid with enhanced priority for other properties which might be more suitable for him. A comparison is made with the position of those in the Decants group, who are specified in the scheme as persons to whom direct offers will made but who are sometimes permitted in practice to bid for properties with priority over other bidders. There is no rational reason, it is submitted, why this could not also apply to applicants in the Multiple Needs and Additional Preference groups.
57. The deputy judge was not satisfied that this argument provided an independent ground for striking down the scheme. At paras 70-71 of his judgment he referred to the fact that s.167(1A) does not mandate a choice-based lettings scheme at all or in every case. He described the claimant's submission as being that "if you are to have [choice based lettings] for some, you should have it for all", but held that that was a matter of the merits of the scheme for authorities to decide. It might well be rational for an authority to conclude that the benefit of direct offers in the hand outweighed the opportunity to bid for the home which you might very well not succeed in obtaining, as the claimant's own recent history showed. Nevertheless, he expressed the view that Newham might want to re-evaluate the position in the light of what he had said as to the need for greater ability to take into account cumulative need. Whether that should be done by amendment of the Multiple Needs direct offer approach or by making some ability to rank reasonable preference needs in the choice based lettings element of the scheme was a matter for Newham.
58. Mr Latham renewed his submissions on this issue, stressing that the claimant does not contend that an authority must afford choice in all circumstances but submitting that the manner in which Newham has sought to reconcile the twin objectives of choice and need in the scheme is irrational.
59. Mr Baker, on the other hand, relied on the reasons given by the judge, putting weight on the fact that s.167(1A) only requires a statement of the authority's policy, which the scheme contains, and submitting that in any event a choice is offered under the scheme on a rational basis.

Third issue: sufficiency of criteria

60. The claimant contends that an allocation scheme must specify the criteria to be applied in assessing whether an applicant comes within one or more of the reasonable preference categories. It is said in particular that an applicant is entitled to know what threshold he has to meet in order to be awarded reasonable preference on medical or welfare grounds. Section 167(1) requires that the scheme shall include the procedure to be followed, stating that "procedure" for this purpose includes all aspects of the allocation process. A failure to define the criteria for awarding reasonable preference was one reason why the scheme in the Waltham Forest case was found to be unlawful: Lloyd Jones J held that the scheme "does not explain what criteria apply or indicate that they will be applied" (para 46). One of the complaints upheld in the Barnet case concerned the absence, from a points-based scheme, of information as to when and for how long certain points were available. Such information was held to be central to the operation of the relevant part of the scheme: it was an important "aspect of the allocation process" which s.167(1) required to be included in the scheme, and because it was not so included the scheme was to that limited extent invalid (para 48).
61. Mr Latham accepted that the criterion for inclusion in the Additional Preference group on medical grounds, namely that applicants be assessed as having a medical condition so severe that it is impossible for them to live in their current homes, is clear; but he submitted that the criterion for inclusion in the Priority Homeseeker group (reasonable preference) on medical grounds is inadequate, since (i) the scheme does not use the wording of the existing s.167(2)(d) but the somewhat different statutory wording that existed prior to the amendments made by the 2002 Act, and (ii) it is in any event too vague and uncertain simply to refer to the statutory criteria. It is submitted further that the scheme is silent on the criteria and threshold for awarding reasonable preference on welfare grounds, and as to the procedure whereby any assessment on welfare grounds is made.
62. The deputy judge rejected those submissions for the following reasons:

"68. … [I]t seems to me, in the light of the statute, the Code and the previous learning, that no precise criteria of medical or social need needs to be fully spelt out in the policy. These matters can be addressed carefully and thoroughly by the relevant officers performing the function under the policy and giving a sufficiently reasoned decision in the end. By these means the claimants will know why they failed to be afforded priority under the schemes that reflect the duty in the statute. Thorough and complete as the policies for assessments have to be, the duty does not, in my judgment, require every single factor relied upon to be spelt out in advance. This remains a field of judgment rather than science, and a realistic, cumulative assessment could be undermined by over-prescription of circumstances in the policy. Clearly the claimant must know who is to make the judgment and how. That is likely to be apparent from the forms used to make the assessment and the information the claimant puts into the process by following them."

63. On this point, too, Mr Latham renewed the submissions made to the deputy judge, whereas Mr Baker supported the deputy judge's decision, largely for the reasons he gave. Mr Baker submitted that the scheme contains all the necessary detail, satisfies the requirement of according a reasonable preference to those who need to move on medical or welfare grounds under s.167(2)(d), and is not required to state any alternative test or alternative or additional criteria to be applied: indeed, to do so would run the risk of introducing an unlawful secondary test. He referred to R (Wahid) v Tower Hamlets London Borough Council [2002] EWCA Civ 287, [2003] HLR 2, a case on community care services, in which Hale LJ stated at para 33 that "[n]eed is a relative concept which trained and experienced social workers are much better equipped to assess than are lawyers and courts".

Discussion and conclusion

64. I propose to deal first with the issue of cumulative need. The relevant legal principles are laid down in a consistent line of authority. They were first articulated in the Islington case, the reasoning in which is applicable to a case under Part 6 of the 1996 Act even though it was not itself a Part 6 case. The reasoning was applied in the Part 6 context in the Westminster case and approved by the Court of Appeal in the Lambeth case, which was applied in turn in the Waltham Forest case.
65. The essential point is that, although s.167(2) provides in terms only that an allocation scheme shall be framed so as to secure that reasonable preference is given to the descriptions of people within the subsection (with the possibility of giving additional preference to particular descriptions of people within the subsection with urgent housing needs), the factors identified in the subsection are capable of operating cumulatively: among those who fall within s.167(2), some will have greater needs than others. A local authority must take this into account and reflect it rationally in the determination of priorities under its scheme. As it was expressed in paras 18-19 of the Lambeth case (quoted at para 14 above), there is a requirement that the scheme has "a mechanism for identifying those with the greatest need and ensuring that so far as possible and subject to reasonable countervailing factors … they are given priority", and if a scheme cannot achieve what it should in this respect it fails on the ground of irrationality.
66. I would reject the submission that the established line of authority has been affected by the amendments made by the 2002 Act and in particular by the insertion of subs.(2A) into s.167. Subs.(2A) is concerned with additional factors that may be taken into account in determining priorities, and the particular examples given in paragraphs (a) to (c) of the subsection would appear to be examples of factors that might weigh against the priority a person would otherwise enjoy by reason of his needs. There is nothing in the wording of the subsection to suggest that an authority may frame its scheme so that no account is taken of the relative needs of persons falling within s.167(2). Nor is there anything in the background materials to suggest that such a significant change of approach was intended. Indeed, the statutory Code of Guidance issued following the 2002 amendments proceeds very clearly on the basis that cumulative need must be catered for in the manner laid down in the Lambeth case: see para 5.9 (quoted at para 21 above); and see also the absence of any suggestion in para 5.23 (quoted at para 23 above) that subs.(2A) has the effect contended for by Mr Baker. I am therefore not surprised that the judgment in the Waltham Forest case, which post-dated the coming into force of subs.(2A), made no mention of that subsection: the new provision had no impact on the issue of cumulative need on which the decision in the case turned.
67. Equally, as it seems to me, the move towards giving tenants greater choice does not affect the requirement for allocation schemes to reflect cumulative need. The statute itself contains only limited provision on the point, by requiring in subs.(1A) that the scheme shall include a statement of the authority's policy on offering choice of housing accommodation or the opportunity to express preferences about housing accommodation to be allocated to them. The government's encouragement of choice-based schemes as a matter of policy appears from the Code of Guidance and the background materials to which I have referred at paras 25-27 above. It is evidently, and in my view rightly, considered to be consistent with the requirement to reflect cumulative need. For example, para 5.11 of the Code of Guidance suggests the adoption of a simplified banding system in place of complex points-based systems, indicating that an appropriate approach might include the banding of applicants "into a number of groups reflecting different levels of housing need", with prioritisation of applicants within these groups being determined by waiting times, and/or giving people in the most urgent housing need priority over other applicants.
68. Accordingly, there is no reason to depart from the established line of authority on cumulative need; and the Lambeth case, as a decision of this court, remains binding upon us.
69. Applying the relevant principles to Newham's scheme, the first and obvious point is that the choice based lettings element of the scheme places all those who qualify for reasonable preference under s.167(2) in a single group, that of Priority Homeseeker, and that their relative priority in bidding for available accommodation is determined not by relative need but by the length of time they have been registered on the housing list. Taken by itself, that is plainly an insufficient mechanism for identifying those in greatest need and giving them priority.
70. The crucial question, in my judgment, is whether the direct offers element of the scheme makes good the deficiency of the choice based lettings element. As to that, the availability of direct offers provides an enhanced priority to those in particularly urgent need of accommodation, notably the Additional Preference group and the Multiple Needs group. The categories are, however, highly restrictive. The Additional Preference group is aptly subtitled "emergency housing"; the rigour of its criteria is illustrated by the fact that, where a medical condition is relied on, it must be assessed as so severe that it is impossible for the person to live in his or her current home. The Multiple Needs group, apparently added by Newham at a later stage to meet the very concern that cumulative need was not otherwise taken sufficiently into account under the scheme, caters in fact only for certain cases of multiple need. Most pertinently, it takes no account of overcrowding unless the situation is an extreme one of statutory overcrowding; and it takes no account of the first person in any household who qualifies for reasonable preference on medical grounds.
71. The reality is, as Mr Latham submitted, that this is a scheme with two relevant bands, one consisting of applicants at the top of the spectrum of need and the other consisting of all those qualifying for reasonable preference. In that respect it has certain similarities with the scheme in the Waltham Forest case which had an additional preference band and a reasonable preference band and was found to be unlawful for failure adequately to reflect cumulative need (see para 16 above). Each scheme must of course be assessed on its own particular facts, and I recognise that the direct offers element of Newham's scheme provide in its details a material point of distinction. I also acknowledge that, if points-based schemes are to be superseded by banding systems, it is not for the court to prescribe the number of bands. Nonetheless, the conclusion I have reached is that Newham's scheme does not have a sufficient mechanism within it to cater for composite need. As Lloyd Jones J said in relation to the Waltham Forest scheme, so it can be said here as a ground of objection to Newham's scheme that "[a] large number of needs of widely varying severity are banded together and thereafter priority is determined solely on the basis of waiting time".
72. The claimant's own circumstances illustrate the point. Despite the overcrowding of his household and the admitted medical needs of his daughter Shaira, he gets nowhere near meeting the criteria for the Multiple Needs group. He would not meet those criteria even if, contrary to the decisions to date, his son Amaan were also assessed as qualifying on medical grounds for reasonable preference under s.167(2). He is simply banded with everyone else qualifying under s.167(2), in the all-encompassing Priority Homeseeker group, where his priority in the bidding process (accounting for roughly three-quarters of all properties allocated) is determined solely by length of time on the housing list.
73. In my view para 5.11 of the Code of Guidance contemplates a more nuanced approach than this when it refers to banding applicants into "a number of groups reflecting different levels of housing need".
74. My conclusion goes no further than any of the previous cases in the limit it places upon the local authority's discretion. There must be a rational means of reflecting cumulative need; but subject to that, the way in which it is done and where the lines are drawn are matters for the local authority.
75. For those reasons, and substantially in agreement with the reasons given by the deputy judge (paras 47-48 above), I would uphold his decision on the issue of cumulative need.
76. One of the deputy judge's reasons, however, seems to me to raise a different point. It relates to the fact that, under the choice based lettings element of the scheme, those in the Priority Homeseeker group bid on equal terms with those in the Tenant Seeking a Transfer group, their relative priority being determined solely by length of time on the housing list. The ground of objection to that, albeit not placed at the forefront of Mr Latham's submissions, is the same as the first ground on which the local authority's scheme was found to be unlawful in the Lambeth case. Because those who are not entitled to reasonable preference under s.167(2) compete on equal terms with those who are, the scheme cannot secure that the necessary head start is given to those entitled to reasonable preference: see paras 16-17 of the judgment in the Lambeth case (quoted at para 13 above). This is a separate point from the failure to reflect cumulative need and was treated as such in the Lambeth case.
77. The existence of a 5 per cent annual cap on allocations to transfer tenants does not amount to a difference in treatment capable in itself of removing the problem. It remains the position that unless and until the 5 per cent cap is reached (which has not been the case in practice) there is competition on equal terms rather than the enjoyment of a head start by those entitled to reasonable preference.
78. The proportion of allocations made in practice to transfer tenants under the choice based lettings element of the scheme is under 2.5 per cent, lower than the 4 per cent figure in the Lambeth case. It appears, however, that a de minimis argument was rejected in the Lambeth case not just on the factual ground that the number of properties in question was substantial, but also as a matter of principle ("the exact percentage is irrelevant" – para 16). In reaching its conclusion, the court also took into account what is said in the Code of Guidance, upon which Mr Baker relied before us, to the effect that other criteria may be taken into account provided they do not dominate a scheme at the expense of those entitled to reasonable preference.
79. I cannot therefore see a relevant point of distinction between the present case and the Lambeth case; and applying the court's approach in the Lambeth case, I take the view that Newham's scheme is unlawful for the further reason that the choice based lettings element of the scheme gives those in the Priority Homeseeker group (i.e. those entitled to reasonable preference under s.167(2)) no preference at all over those in the Tenant Seeking a Transfer group but applies length of time on the housing list as the sole criterion for determining priority between them. In reality, however, because transfer applicants account for such a small proportion of the total, the removal of this objectionable feature of the scheme will not have a substantial effect on those entitled to reasonable preference. In the circumstances I regard this as very much a subsidiary aspect of the case before us.
80. The question whether Newham has acted rationally in reconciling choice and need under the scheme seems to me to overlap to a significant extent with the matters already covered. The particular way in which Newham has sought to reconcile choice and need is unlawful for the reasons I have given: in summary, the choice based lettings element of the scheme confers choice but fails to take sufficient account of need (in that it does not reflect cumulative need at all and it does not give the requisite head start to those whose needs entitle them to a reasonable preference); and the direct offers element of the scheme does not remedy the deficiency as regards cumulative need.
81. But I would reject the further contention advanced by Mr Latham, under the second issue, that it is irrational to offer choice to those in lesser need and to deny it to those in greater need. There is no legal requirement, either under the statute or as a matter of rationality, for Newham to give a choice to those to whom it currently allocates accommodation by way of direct offers. Government policy favours it, but that is a different matter. To accept Mr Latham's submission would be to place an undue limitation upon the discretion enjoyed by local authorities. I therefore agree with the conclusion reached by the deputy judge on the second issue (para 57 above).
82. I also agree with the deputy judge's conclusion on the third issue, concerning the sufficiency of the criteria specified in the scheme (para 62 above). The scheme is already very long and detailed, catering as it must for a wide range of circumstances. In my view it is unnecessary to gloss or expand upon the statutory criterion as to reasonable preference on medical or welfare grounds. There are many factors of potential relevance: Annex 3 to the Code of Guidance lists a number of "indicators" for illustrative purposes, whilst stressing that the list is by no means comprehensive or exhaustive. I do not think that this level of detail needs to be included in the scheme. It is sufficient that the factors taken into account in reaching a decision on an individual assessment are spelled out in the decision. It is unfortunate that this scheme recites the wording of the statutory provision prior to its amendment by the 2002 Act, but that is not a material error and will no doubt be corrected in the next version of the scheme if it has not already been done.
83. For all the reasons given, I agree with the deputy judge's decision and would dismiss the appeal.

Lord Justice May :

84. I agree that this appeal should be dismissed for the reasons given by Richards LJ.

Sir Anthony Clarke MR :

85. I also agree.