England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		11th May 2006

Mr Justice Hughes :

1. These are 2 linked applications for judicial review. Both challenge the scheme adopted by the Defendant Housing Authority for allocating its housing stock to applicants. The issue is whether that scheme complies with s 167 Housing Act 1996 by sufficiently according reasonable preference to those who, having been homeless, have been accommodated by the Council under what is usually called the full homelessness duty imposed by s 193 of the same Act.

The statutory framework

2. The statutory framework is comparatively well known. I need not set it out in great detail. In adjacent Parts (VI and VII) the Housing Act 1996 deals respectively with:

1. Part VI: the allocation of housing by a Housing Authority;

2. Part VII: the Authority's duties to those who are homeless.

3. Both Parts contain provisions which have existed in one form or another for many years. The first appearance of a form of what is now Part VI was in the Housing Act 1935. The duties to the homeless first appeared in the Housing (Homeless Persons) Act 1977. In both cases the rules have been subject to much change, sometimes very frequently. The 1996 Act was last significantly amended, in both Parts, by the Homelessness Act 2002.
4. Allocation under Part VI is of long term housing, chiefly by way of secure tenancy under the Housing Act 1985, in property from the Authority's own stock, but also by way of nomination by the Authority to secure or assured tenancies to be held of a Registered Social Landlord or another person. It covers also introductory tenancies, where those are operated by the Authority under s 124, but I am not concerned with those and they present no differences which affect the questions I have to resolve. By whichever route such housing is provided, the tenant will obtain what is in practice virtually indefinite security, provided that the terms of the tenancy are obeyed. They are accordingly highly desirable tenancies to obtain, and as is very well known, in most areas those who want to obtain them enormously outnumber the available stock.
5. The duties of the Authority to the homeless under Part VII vary according to circumstance. But where a person is homeless, not ineligible on grounds connected with immigration status or misbehaviour, possessed of a priority need as defined by the Act, and not intentionally homeless, section 193(2) imposes on the Authority a duty to "secure that accommodation is available for occupation by the applicant." Although as originally enacted this duty lasted for two years, it now endures indefinitely, unless discharged by specific events set out in s 193. That does not mean that s 193 imports a duty to allocate to the homeless person a secure tenancy to a council house under Part VI; that would only very exceptionally be possible in any event, particularly at the very short notice that there is likely to be when someone becomes homeless. It has been common ground before me that there is nothing in the Act which requires that accommodation provided under Part VII must incorporate any element of permanence or of security of tenure: see R v Wandsworth LBC ex p Mansoor [1996] 3 All ER 913. In practice, Housing Authorities discharge this duty in ways which no doubt vary according to local conditions. In cities, and certainly in London, it is very common for the homeless to be accommodated, at any rate initially, under bed and breakfast type arrangements. And some Authorities, including this one, go into the private market to obtain accommodation by various routes. These Defendants commonly enter into arrangements under which a Housing Association takes a long lease from a private property owner, and lets the homes on assured shorthold tenancies to those to whom the Authority has accepted a duty under Part VII. Plainly, accommodation provided in discharge of the Part VII duty is very often, if not normally, significantly less attractive to the occupant than a secure tenancy allocated under Part VI. It may be bed and breakfast type accommodation rather than a separate home of one's own. Even if not, it will not normally bring security of tenure. A holder of an assured shorthold tenancy, for example, will ordinarily be removable on a few weeks notice by the landlord. Such Part VII accommodation may also be more costly in rent, since often the cost of obtaining it from a private landlord has to be passed on to the tenant via the Housing Association. Housing Benefit may and often does meet such cost, but that may bring with it a situation in which the occupant has a disincentive to take a job, because he cannot afford to lose the eligibility to Housing Benefit. Those are just some, but by no means all, of the realities of a hard-pressed housing market, with which both those in need of housing and Housing Authorities have to cope. They are also just some of the reasons why many of those accommodated under Part VII as having been homeless can be expected to apply under Part VI to be allocated a secure tenancy.
6. The critical section of Part VI for present purposes is s 167.

""167 Allocation in accordance with allocation scheme

(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 to 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 of 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.

(2B) Nothing in subsection (2) requires the scheme to provide for any preference to be given to people the authority have decided are people to whom subsection (2C) applies.

(2C) This subsection applies to a person if the authority are satisfied that—

(a) he, or a member of his household, has been guilty of unacceptable behaviour serious enough to make him unsuitable to be a tenant of the authority; and

(b) in the circumstances at the time his case is considered, he deserves by reason of that behaviour not to be treated as a member of a group of people who are to be given preference by virtue of subsection (2).

(2D) Subsection (8) of section 160A applies for the purposes of subsection (2C)(a) above as it applies for the purposes of subsection (7)(a) of that section.

(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)).

(3) The Secretary of State may by regulations—

(a) specify further descriptions of people to whom preference is to be given as mentioned in subsection (2), or

(b) amend or repeal any part of subsection (2).

(4) The Secretary of State may by regulations specify factors which a local housing authority shall not take into account in allocating housing accommodation.

(4A) The scheme shall be framed so as to secure that an applicant for an allocation of housing accommodation—

(a) has the right to request such general information as will enable him to assess—

(i) how his application is likely to be treated under the scheme (including in particular whether he is likely to be regarded as a member of a group of people who are to be given preference by virtue of subsection (2)); and

(ii) whether housing accommodation appropriate to his needs is likely to be made available to him and, if so, how long it is likely to be before such accommodation becomes available for allocation to him;

(b) is notified in writing of any decision that he is a person to whom subsection (2C) applies and the grounds for it;

(c) has the right to request the authority to inform him of any decision about the facts of his case which is likely to be, or has been, taken into account in considering whether to allocate housing accommodation to him; and

(d) has the right to request a review of a decision mentioned in paragraph (b) or (c), or in section 160A(9), and to be informed of the decision on the review and the grounds for it.

(5) As regards the procedure to be followed, the scheme shall be framed in accordance with such principles as the Secretary of State may prescribe by regulations.

(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.

(7) Before adopting an allocation scheme, or making an alteration to their scheme reflecting a major change of policy, a local housing authority shall—

(a) send a copy of the draft scheme, or proposed alteration, to every registered social landlord with which they have nomination arrangements (see section 159(4)), and

(b) afford those persons a reasonable opportunity to comment on the proposals."

7. I should mention also s 159(7), which provides:

"(7) Subject to the provisions of this Part, a local housing authority may allocate housing accommodation in such manner as they consider appropriate."

Barnet's allocation scheme

8. The Defendants operate a Part VI allocation scheme based upon the award of points. Points are geared to different categories or considerations. In accordance with new published Government policy to provide an element of choice in allocation, the officers of the Defendants do not simply allot a vacant property to an applicant of their determining. Instead each vacancy is advertised. Subject to the rule that an applicant will not be allocated a home which is too large for him and his family by the standards of rules which are laid down in the scheme, all applicants on the list may bid for the vacant property. A short list is prepared of bidders with the most points, those on it have the opportunity to view, and the property is then allocated to the holder of the highest number of points who wishes to take it up. There are, in fact, not only far too many applicants for the homes available, but the evidence shows that there are a good many more applicants who fall within s 167(2) and are thus entitled to reasonable preference, than there are homes in which to put them. Plainly, the criteria for the award of points are crucial to applicants.
9. The points system is comparatively detailed and occupies nearly three pages. I need not set it out in its entirety. Points are awarded for considerations such as inadequacy of present number of bedrooms, shared facilities, insanitary conditions, medical factors, the need for children to share bedrooms with those of the opposite sex, domestic violence needs, present insecurity of tenure, and on a number of other bases. It is necessary in the present case to draw attention to the following:

(a) those with children who are homeless (s 167(2)(a)) or owed relevant Part VII duties having previously been homeless (s 167(2)(b)) and who need family sized accommodation receive for that factor alone 10 points;

(b) those without children who are within either s 167(2)(a) or s 167(2)(b) and need one bedroom or studio accommodation receive for that factor 75 points;

(c) Part VII duty cases in emergency accommodation (such as bed and breakfast) receive 75 points for that factor, reduced to 10 if intentionally homeless;

(d) Part VII duty cases living in leased accommodation on assured shorthold tenancies or similar receive an additional 300 points if they are about to lose the tenancy;

(e) all applicants whose income is such that they cannot meet their own housing needs receive 100 points for that factor ("income points");

(f) applicants who have lived in the borough by choice for 2 years, with exceptions which do not apply here, receive 200 points for that factor ("residency points");

(g) all applicants receive waiting time points at the rate of 10 per year on the Register up to a maximum of 50 ("waiting points");

h) there is a list of those regarded as having exceptional housing needs; for the most part they receive 500 points;

(i) existing secure tenants in Part VI accommodation who wish to transfer receive points for that factor; where they apply for a property smaller than their present one they receive either 250 or 200 points, according to size; where this does not apply, transfer applicants receive 100 points for the transfer factor alone ("transfer points").

The applicants

10. Both applicants are Part VII duty cases, having been provided with accommodation by the Defendants under the full duty imposed by s 193(2).
11. Ms Lin lives with her 13 year old son. She has been a Part VI applicant since about February 2002. Following loss of other housing, she has been accommodated under Part VII since about March of that year. Since August 2003 she has been provided, under Part VII, with a two bedroomed flat above a shop on a weekly assured shorthold tenancy from a Housing Association which rents the property from a private landlord. For various reasons, she contends that the accommodation is some way less than satisfactory. She has 340 points made up as follows:

Part VII duty points 10

Residency points 200

Income points 100

Waiting points 30.

For the kind of two bedroomed property which she needs, the current going rate for bidders is around 440 points or perhaps more. If she completes her five years of waiting, her point count will rise to 360, but is unlikely, unless she qualifies for other points, to reach the bidding threshold.

12. Ms Hassan is in her late sixties and not in good health. She lives in a family unit consisting of herself and three adult daughters. She has been a Part VII duty case since 1996. She has been in several different properties, including under an assured shorthold tenancy. Currently she is in temporary accommodation consisting of a self contained flat forming part of a hotel annexe with breakfast provided at the nearby hotel. She has a licence but no tenancy. She has 435 points made up as follows:

Part VII duty points 10

Emergency/temporary accommodation points 75

Residency points 200

Income points 100

Waiting points 50

For the kind of 3 bedroom property which she needs, the current going rate for bidders is not less than around 500 points; often it is quite a lot more. Unless she qualifies for other points, for example on a re-assessment of medical considerations, she too is unlikely to reach the bidding threshold.

The law.

13. The circumstances of both applicants are such as properly to arouse some sympathy, albeit it has been no part of this hearing to investigate fully their personal situations or histories. The resolution of their applications for judicial review, however, does not depend on any assessment by me of those circumstances, but upon whether Barnet's scheme is unlawful. Moreover, it goes without saying that any Housing Authority will have a large number of distressing cases upon its books. It is not and cannot be the function of this court to attempt to solve the shortage of housing, nor to impose its own views of which of competing hard cases is the stronger.
14. The question for me is whether the Barnet scheme lawfully meets the requirements of Part VI, and in particular whether it accords to the applicants a reasonable preference as required by s 167(2)(b). It does not, however, follow that it is for me to substitute my own view of how much preference it is reasonable to give to any of the myriad groups who fall within s 167(2). On the contrary, s 167(2A) specifically leaves it to the Authority to determine priorities amongst those within s 167(2). Moreover, so long as a reasonable preference is given to those within s 167(2), the factors there mentioned are not exclusive as to the giving of weight. S 167(2E) plainly provides for the scheme to recognise priorities outside s 167(2). And even before that section was inserted by the 2002 Act, it is accepted that it was open to an Authority to give weight to other factors providing that they do not dominate the scheme at the expense of those within s 167(2). The Code of Guidance issued by the Secretary of State, to which the Authority is obliged by s 169 to have regard, recognised that before the 2002 Act and still does. The legality of that approach was recognised by the Court of Appeal in R(A) v Lambeth LBC [2002] EWCA Civ 1084; [2002] HLR 57 at paragraph 15. As did Collins J in that case, I gratefully adopt the formulation of Judge LJ in R v Wolverhampton MBC ex p Watters (1997) 29 HLR 931: the obligation under the Act is to provide those within s 167(2) with a reasonable head start; it is not to guarantee allocation. And subject to reasonable preference being given, and to other specific provisions of Part VI, it is for the Housing Authority to allocate its housing in such manner as it considers appropriate: s 159(7). The way in which it is done may vary with local conditions. Even without varying local conditions, the policies adopted by different Housing Authorities may lawfully differ. It is only if a scheme departs from the Act or is unreasonable in Wednesbury terms, which in the present context means in effect in perverse or irrational, that it becomes unlawful.

Delay

15. Ms Lin's claim form was lodged on 7 April 2005. Barnet's scheme had not changed in the preceding three months. Arguably, a decision had been made by the Defendants on 22 December 2004 when by reasoned letter they declined to alter either the scheme or its application to the Claimant. Ms Hassan's claim was lodged on 9 September 2005. Neither her situation nor the scheme had altered for many months before that.
16. Applications for judicial review must be made promptly and in any event within three months of grounds arising: CPR 54.5. There is power to extend time under CPR 3.1(2)(a).
17. It seems to me that these claims could have been brought more speedily, and probably without rather extensive correspondence. But this is a case in which the policy adopted by the Defendants is a continuing one. It is in everyone's interests that it should be established whether it is lawful or unlawful. Permission has been granted in both cases. The parties were fully prepared to argue the point. On behalf of the claimants, Mr Manning limits himself to a claim for a declaration, so that there is no question of belatedly attempting to undo a long past decision. Like Roch J, as he then was, in R v Rochdale MBC ex p Schemet [1994] ELR 89 at 100, I follow and apply the reasoning of Nicholls LJ, as he then was, in R v Westminster City Council ex p Hilditch (unrep; 14.6.90):

"If the policy is unlawful, prima facie it should be discontinued. The mere fact that the policy has been in place for nearly three years is not a sufficient reason for the court countenancing its continuing implementation for the indefinite future. There is here good reason for extending time for the making of an application for judicial review, at any rate so far as the relief sought is directed at restraining the further implementation of the allegedly unlawful policy."

18. Although CPR Pt 54.5 has been amended to remove a separately stated power to extend time, and to make clear that the parties cannot extend it by agreement amongst themselves, I see no reason not to apply that reasoning to the present case, in the exercise of the power contained in CPR 3.1. I extend time as necessary to enable these applications to be heard.

The lawfulness of Barnet's scheme

19. Mr Manning's principal challenge to the scheme is that it defeats what he submits is the purpose of the Act. He contends that the Act is so designed as to contemplate that the accommodation of the homeless under Part VII will be temporary, pending allocation of more secure Part VI housing. And he submits that Barnet's scheme is, contrary to that purpose, so designed as to consign Part VII duty cases to long term relative insec

urity in assured shorthold accommodation which is, moreover, likely to be high cost. He seeks a declaration in these terms:

"the Defendants' scheme unlawfully frustrates the policy of the Act that long term accommodation for the homeless is to be allocated under Part VI rather than secured under Part VII."

20. That challenge fails. To say that Part VII duty applicants have, under s 167(2)(b) a reasonable preference in subsequent Part VI allocations is a far cry from saying that the purpose of the Act is to effect a transition for all of them into secure tenancies. The duty under Part VII is to meet homelessness. When it comes to a subsequent Part VI application, the issue for the Authority is different. Whilst it is to be expected that many Part VII duty cases will become Part VI applicants, and whilst, when they do, they are entitled by s 167(2)(b) to a reasonable preference, such applicants constitute only one group among many who must be accorded a s 167(2) reasonable preference. When it comes to determining how the competing groups within s 167(2) are to be ordered the Housing Authority must make up its own mind. Those within the subsection are not all likely to be regarded as of equal priority. Just one example may illustrate the point. In requiring by s 167(2)(a) that reasonable preference be given to the homeless, the Act makes no distinction between the intentionally homeless and those homeless through no fault of their own, but it would be unsurprising if a Housing Authority were to distinguish between them, and it is entitled to do so. The Authority is entitled to consider all relevant factors for all applicants, and it may often happen that others, such as those with medical or welfare considerations, will in the end trump the claims of Part VII duty cases. I refuse the declaration sought.
21. Mr Manning further submits that the effect of the Barnet scheme is to give in reality no useful preference at all to Part VII duty applicants. It is true that the cases of these two applicants appear to demonstrate that unless they qualify for other points, for example on medical or welfare grounds, Part VII duty cases may never reach the bidding threshold, at least in the current state of the market. But that is the unfortunate result of the chronic shortage of housing, and of the fact that the s 167(2) categories are so widely stated that unless priorities are set amongst them, it may happen that, in the language of WS Gilbert, everybody is somebody, and thus nobody can be anybody. I decline to make a general declaration that the Barnet scheme is not so framed as to secure that any or any reasonable preference is given to Part VII duty applicants.
22. The real question in this case is whether the Barnet scheme departs from the Act in the specific ways in which it awards points. Mr Manning says that the structure of the points system is such as to remove reasonable preference from Part VII duty cases such as the applicants. If that challenge can be made out, then the scheme is indeed to that extent unlawful.
23. It is necessary first to consider the income, residency and waiting points. It is suggested that these permit those with no statutory preference under s 167(2) to compete with Part VII duty cases on equal, or indeed preferential, terms. It is true that it may happen that an applicant who is outside s 167(2) may be entitled to a total of 350 income, residency and waiting points, and that a Part VII duty applicant may have only 10 points for his status as such. But that does not mean that no reasonable preference has been accorded to the latter. 10 points is a small number, but these are nevertheless points which a non-Part VII duty applicant, for example a person in a similar assured shorthold tenancy not provided by the Authority under Part VII but privately entered into, will not have. Income, residency and waiting points are available to all applicants, whether they are within s 167(2) or not. Their availability does not affect such preference as is accorded to Part VII duty applicants. That is enough to resolve that issue. Additionally, income and residence points are clearly specifically authorised by s 167(2A), whilst it is elementary fairness that as between otherwise similar applicants, a degree of priority should be given to those who have waited longest.
24. Next, Mr Manning focussed on the exceptional needs points, which stand mostly at 500. They thus do indeed mean that those who are entitled to them advance well up the queue, and will almost certainly outbid any Part VII duty applicant who is not also entitled to similar exceptional needs points or at least to large numbers of other points. The exceptional needs categories include, first, these:

Young people leaving care, when put forward by Social Services;

People with learning disabilities, also when put forward by Social Services;

Those recovering from drug/alcohol abuse, if put forward by The Crossing;

Those needing larger homes to foster or adopt children for the Council;

Formerly homeless people specially counselled by the Safestart Foundation;

Those accepted under the Witness Protection Scheme.

All these are clearly people with pressing welfare needs and thus within s 167(2)(d). The Safestart applicants may also be homeless within s 167(2)(a) or be Part VII duty cases within s 167(2)(b). Young people leaving care are likely also to be persons whom the Council has a duty to accommodate under s 23B(8) Children Act 1989, although that duty does not import a requirement to provide Part VI housing. It is for the Authority to determine priorities amongst those falling within s 167(2). It is not unlawful for it to give priority to these categories of applicants.

25. There are also in this group of exceptional points allocation some who would, by moving, free up scarce housing for others. That is so in the case of would-be discretionary successors where the property is larger than needed, and those able to leave supported housing. The award to such people of sufficient points to enable them to move to smaller or unsupported housing does not, I am satisfied, remove reasonable preference from s 167(2) applicants, nor did Mr Manning contend that it did. It pursues a legitimate aim which is likely to benefit all applicants, including those who have reasonable preference under s 167(2), and amongst all applicants it does not disturb such preference as those entitled to it severally have. Lastly there is a discretionary power to award special points in exceptional circumstances to Council leaseholders disturbed due to imminent demolition and who have extreme financial, social or medical hardship. They are also likely to be within s 167(2) on welfare grounds, their re-accommodation pursues a legitimate management aim, and they are in any event a sufficiently small group not to disturb the reasonable preference accorded to those within s 167(2), including Part VII duty cases.
26. It follows that the exceptional needs cases do not render the Barnet scheme unlawful by reason of failure to accord reasonable preference to Part VII duty applicants within s 167(2)(b).
27. Next, Mr Manning complains that the Barnet scheme fails to provide sufficient assessment of composite needs, and thus fails for the same reason as the scheme considered by Richards J, as he then was, in R v Islington LBC ex p Reilly and Mannix (1998) 31 HLR 651. This is a very different case to that one. Here the points system admits of cumulative points for different needs, provides for the size of the family to be given weight by allocating points for each extra bedroom required, and gives points for children sharing rooms, as well as containing a power to award additional points on the advice of the Council`s Childrens Panel.
28. As originally formulated in the Claimants' grounds and skeleton argument, the complaint related to the fact that childless Part VII duty applicants qualify for 75 points whereas families with children who are Part VII duty applicants receive only 10 – thus it was suggested that what was taking place was the reverse of giving weight to the number of people in the household. That apparently curious feature of the points system is however explained by the evidence that the Authority discovered that Part VII duty applicants who were bidding for one bedroom or studio properties did not enjoy any realistic advantage without such points when compared with non-part VII duty applicants seeking the same accommodation. As a result a change was made to introduce the 75 points precisely in order to give effect to reasonable preference for applicants within s 167(2)(b). No such adjustment was found necessary in the different market of bids for family accommodation. This is precisely the kind of market-sensitive policy decision which is properly left to individual authorities. In any event, the difference between the 10 and the 75 points awarded to differently constituted families of Part VII duty applicants arises between different applicants all within s 167(2) and the prioritisation amongst such people is a matter left by the Statute to the Authority.
29. At a late stage in the argument, the Claimants advanced the different proposition that the Barnet scheme fails to provide sufficiently for composite needs on the grounds that the emergency accommodation points are 75 irrespective of the size of the family. Because this argument came late, the Defendants did not have the opportunity to file evidence explaining why the rule is so. On instructions given to Mr Dilworth it appears possible that it may be connected to avoiding an incentive to the 'homeless at home' to make themselves statutorily homeless and seek Part VII housing rather than remaining at home and claiming the points for which they separately qualify there. I do not consider that this detailed comparison of very limited particular cases amongst the many different situations for which a points scheme must try to provide demonstrates that this scheme fails sufficiently to provide for composite needs, and in any event I would refuse declaratory relief on the grounds that the argument was developed late and without opportunity for evidence to be filed on the point.
30. Transfer points, as it seems to me, give rise to a different conclusion. There are, first, provisions for those whom the Council needs to move for repair or demolition. No point arises on those. Many will be outside the allocation scheme altogether, because it is only transfers which are sought by the tenant which count as allocations: s 159(5). In any event, these are rules serving legitimate estate management aims, in a manner similar to the comparable exceptional needs categories mentioned above. Further, no complaint is made by Mr Manning about the downsizing transfer points, 250 or 200 as the case may be. He accepts that those serve a legitimate aim of freeing up relatively more scarce properties, which is likely to benefit those entitled to s 167(2) preference, and thus serves the statutory aim of that subsection. I have reached a similar conclusion above in relation to the exceptional needs downsizing points. That leaves the 100 points routinely awarded to all existing tenants who wish to move, whether they seek a property the same size as their existing or a larger one.
31. Mutual exchange arranged by tenants amongst themselves does not count as allocation and is not therefore subject to the Part VI scheme, nor to s 167; that is specifically provided by s 160(2)(c). Transfer applications, which are made by an existing tenant for a vacant property, are different. These too were kept outside the allocation scheme, and thus outside the application of s 167, by s 159(5) the 1996 Act as originally enacted. But that subsection was amended by the Homelessness Act 2002 and now provides:

"(5) The provisions of this part do not apply to an allocation of housing accommodation to a person who is already a secure or introductory tenant unless the allocation involves a transfer of housing accommodation for that person and is made on his application."

32. It follows that the clear purpose of the amendment was that thenceforth transfer applicants should be treated in the same way as new applicants. Therefore in considering transfer applications alongside applications from the waiting list, the Authority is now required to afford reasonable preference to those within s 167(2). Barnet's scheme, in awarding 100 points to all transfer applicants simply for holding that status, plainly affords them a significant advantage when competing for scarce properties with any applicant who is not an existing tenant, including those who are entitled to reasonable preference under s 167(2). The available statistics are of limited scope and value. They do, however, indicate in a general way that a significant proportion of all allocations are made to transfer applicants – over the years since the 2002 Act came into force, something of the order of a quarter to a third, conservatively estimated, and if anything the trend is upwards.
33. I have considered whether this advantage given to transfer applicants can be lawful on the grounds that transfers are stock neutral overall. Each transfer application which succeeds will, it is true, result in a vacated property as well as in a new one being taken up. But that does not mean that the s 167(2) applicants who are not existing tenants are still enjoying their reasonable preference. On the contrary, they are postponed to any transfer applicant who otherwise shares their characteristics, in competition for any particular property. Whilst in the case of a downsizing transfer, there can properly be said to be a countervailing advantage which serves the interests of those entitled to statutory preference under s 167(2), in the case of the ordinary transfer applicant's 100 points, there is none. The 100 points awarded to every existing tenant who seeks allocation mean that he is promoted above any s 167(2) applicant who is not himself an existing tenant. In particular, those qualifying for statutory preference under s 167(2)(a) (the homeless) or s 167(2)(b) (the Part VII duty cases) cannot be existing tenants, and can only receive 10 points for those factors alone. More generally, the 100 points available to transfer applicants must to an extent inflate the bidding threshold. To this extent the scheme fails to give reasonable preference to those entitled to it under s 167(2). Whilst it is true that the scheme prevents any applicant, transferring or otherwise, from being allocated a property larger than is appropriate to his family according to rules laid down, that does not prevent the 100 points from giving the would-be transferor a considerable advantage over a s 167(2) applicant who is not an existing tenant, in any competition for any particular property.
34. I conclude therefore that the award of 100 transfer points is unlawful in that it fails to preserve the reasonable preference for s 167(2) applicants. I will hear Counsel on the form of the appropriate declaration, but take the provisional view that it should be framed in approximately those simple terms. I confine myself to that finding. What if any adjustment is required to the scheme, whether in relation to transfer points or consequently elsewhere, must remain a matter for the Authority.
35. A further challenge to the scheme is mounted on the basis that it insufficiently explains its process and/or is too dependent upon discretion, and thus fails to comply with s 167(1). There is said to be insufficient precision in the rule that 300 lease-end points will be awarded to Part VII duty cases whose properties are "about to be returned to the landlord". I see no difficulty in any tenant understanding this rule; at the very least, once notice has been given by the landlord the property is plainly about to be returned. Nor do I consider that unlawful uncertainty is created by any flexibility there may be in the time during which the 300 points may be deployed. The rule clearly means that whilst under notice, or in equivalent position, the tenant may bid for another property employing an extra 300 points. No doubt if he is unsuccessful, he will have to be provided again with accommodation under Part VII. There is nothing unlawfully uncertain about that. Nor is this a scheme in which there is irrational discretion; there is power to exercise residual discretion but the evidence shows that it is extremely rarely employed. Overall the scheme perfectly adequately explains for potential applicants how they should go about making their applications, and how points are awarded to them and to others.
36. Lastly Mr Manning submits that both the transfer points and the residence points are indirectly racially discriminatory. In the light of my decision that the 100 ordinary transfer points are unlawful, it is strictly not necessary to decide whether they also offend s 1(1)(b) or 1(1A) of the Race Relations Act 1976. I have however reached clear conclusions. There are somewhat fewer black or ethnic minority tenants than there are white, but the figures do not justify the contention that transfer points are ones for which a considerably smaller proportion of black or ethnic minority applicants than of white applicants would qualify (s 1(1)(b)), nor the contention that persons of black or ethnic minority origin are put by them at a particular disadvantage when compared with white people (s 1(1A)). In any event, but for the failure to respect the reasonable preference required by s 167(2), I am satisfied that transfer points are justifiable irrespective of colour race or creed and are a proportionate means of achieving a legitimate aim, because, s 167(2) apart, it is legitimate to encourage freedom of movement in tenants, and to discourage ossification of the housing stock. As to residence points, they are earned after only two years. There is no evidence beyond mere surmise that persons of black or ethnic minority origins are at any significant disadvantage when compared with persons of white origin in earning these points, and it seems to me most unlikely that they are.
37. For these reasons, the claims for judicial review succeed on the limited basis of the 100 ordinary transfer points, but not otherwise.