QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| THE QUEEN ON THE APPLICATION OF ANDREW PLANT
|- and -
|LAMBETH LONDON BOROUGH COUNCIL
James Goudie QC and Jon Holbrook (instructed by Lambeth LBC Legal) for the Defendant
Hearing dates: 15 – 17 November 2016
Crown Copyright ©
Mr Justice Holgate:
Events from October 2012 to November 2015
Option 1 – refurbish all of the 306 homes on the estate;
Option 2 – Demolish 19 homes and redevelop with 38 new homes. Refurbish all other houses on the estate.
Option 3 – Demolish 31 homes and redevelop with 51 new homes. Refurbish all other homes on the estate.
Option 4 – Demolish 120 homes and redevelop with 193 new homes. Refurbish all other homes on the estate.
Option 5 – Demolish all 306 homes on the estate and redevelop with 464 new homes (the full "regeneration" option).
It was pointed out by LLBC that the average cost per home of LHS refurbishment works was more than twice as much for the CGE compared to other estates in Lambeth.
(i) In late 2014 LLBC had embarked upon a "detailed and sophisticated programme of consultation" with residents. The effect of the decision on 9 March 2015 had been to renege on those arrangements and to prevent the Council from considering the representations from residents on three of the options (paragraph 79).
(ii) Assuming, without deciding, that a sufficiently significant change in circumstances could have entitled LLBC to alter the consultation process in that way, on the evidence presented to the Court no such change had occurred. Therefore, by removing options 1, 2 and 3 from the consultation exercise the authority had acted unlawfully (paragraphs 83 - 87);
(iii) With regard to section 31(2A) of the Senior Courts Act 1981, if LLBC had not altered the arrangements for consultation, the financial position on all of the options would have been before the Council "much more fully" and in those circumstances it was not "highly likely" that LLBC's decision would have been the same. Consequently, the Court was not required by section 31(2A) to refuse relief (paragraph 90);
(iv) If, contrary to (iii), the test in section 31(2A) for refusing relief had been met, on balance general public interest factors outweighed the need to hold LLBC to its consultation promises to the tenants of the CGE and so under section 31(2B) of the 1981 Act relief would have been refused. Those public interest factors included the Council's very difficult financial position, the balance to be struck between the interests of the residents of CGE and the Council's other tenants and those on the housing waiting list, the urgent need for works to be carried out to the CGE, and the need for residents to have certainty about the future of their estate (paragraph 91).
(v) Relief should not be refused on the grounds of delay (paragraphs 92-7).
Events leading to the present claim for judicial review
LLBC's consultation document issued on 19 January 2016
"The...HRA is a ring-fenced pot of money held by the Council to look after the homes it owns. All the money needed to manage, maintain and improve the Council's social housing comes from this account. Also there are strict rules set by Government, which control how the Council must manage the [HRA], for example it is not allowed to run a deficit."
Under the heading "Where does the HRA get its money from?":-
"Money comes into the HRA from Council tenant rent and service charges. In the last few years Council rents in Lambeth have been rising. However, in the summer 2015 budget, the Government announced that Council rent would be reduced by 4% over the next 4 years. This year on year 1% reduction, which starts in 2016, will mean £28.4 million less income by 2020. This reduction is not going to be replaced.
The HRA is also losing income because of measures such as the Government's "High Value Empty Homes Payment" and Right to Buy." (emphasis added)
The document informed residents that LLBC could only use money in the HRA to fund management of the Council's housing, maintaining repairing and improving the Council's housing stock, capital investment on that stock (e.g. major improvements or repairs), and interest and loan repayments relating to amounts borrowed to fund capital expenditure on HRA properties.
- The cost of delivering the Lambeth Housing Standard would be too expensive and would not be good value for money.
- Lambeth Housing Standard works would, in themselves, not address the fundamental condition of the homes nor address many of the wider social and economic problems faced by residents.
- The wider benefits from regeneration would justify the investment. This includes occasions where the existing estate is relatively low-density and where there is an opportunity to create additional much needed new homes.
"Any money spent on refurbishing homes to LHS standard on Cressingham Gardens will mean that there is less money to be spent improving other homes. This means that the Council has to make sure that any refurbishment work represents value for money. Unfortunately, the predicted cost of bringing homes on Cressingham Gardens up to LHS is disproportionately higher than the average – for every home refurbished to LHS on Cressingham, on average, 2 homes elsewhere in the Borough could be brought up to the same level."
"Given the limited funds available in the Council's Housing Revenue Account, the Council has to make difficult decisions regarding which estates to refurbish and which estates to redevelop."
Thus it was made plain to consultees once again that a decision to refurbish dwellings on CGE would divert funds away from other Council homes in need of refurbishment. Moreover, because the average cost per home of refurbishment on CGE was so much greater, fewer homes would be refurbished in the Borough overall if a refurbishment option were to be chosen for CGE.
The People's Plan
Financial information provided by LLBC
Feedback Exhibition on 25 February 2016
"Viability: option achieves a positive Net Present Value (NPV)".
In addition to those four criteria, the presentation board referred to other criteria which would be applied, including the giving of greater weight to options which provided higher numbers of new homes and/or new homes for Council rent.
The Officers' Report to the meeting of LLBC's Cabinet on 21 March 2016
(i) There was a huge discrepancy in the level of engagement of residents on CGE, with some not participating at all while a few were very heavily engaged. Of nearly 200 questions included in the final Q&A document nearly half had been submitted by just 2 leaseholders and of 16 emails to LLBC raising questions around half had been sent by the same 2 individuals. The workshop sessions were dominated by repeat attendance from only a few individuals;
(ii) Out of those who had responded, the preference remained for the refurbishment only scheme (option 1). But the opinions of residents on the estate appeared to be quite polarised. There remained strong support for and against redevelopment, but there was little support for the intermediate options 3 and 4;
(iii) A sizeable proportion of the residents spoken to by Council officials at the events simply wished that a decision be made by LLBC one way or the other and to bring to an end the seemingly endless consideration of what the future of the estate should be.
Paragraph 1.38 added that the above conclusions aligned with the outcome of the Test of Opinion survey conducted before the Cabinet Decision in July 2015 (see paragraph 15 above) and also with the experience of officers working on the estate.
(i) The average cost per dwelling of refurbishment on CGE was twice the average cost for all dwellings in the LHS programme. Furthermore, LLBC's estimated cost of £9.4m for refurbishing all the properties on CGE was conservative and could be significantly more. Other potential costs, such as the replacement of windows, had not yet been included;
(ii) Structural problems had been identified on the estate, for example roofs and severe damp problems. In such cases refurbishment would be so disruptive that in the worse cases tenants would have to move out, potentially for many months to allow the properties to dry out;
(iii) There is the potential for new homes to be added if CGE were to be redeveloped;
(iv) A survey in 2015 revealed significant overcrowding on the estate which could not be resolved through refurbishment alone;
(v) The CGE performs poorly in terms of access for the disabled.
Paragraph 1.45 stated that for a refurbishment option on the CGE to be considered viable the:
"refurbishment component of the option must be considered to be value for money AND funding can be allocated from within the HRA"
The "value for money" issues were considered in section 2 of the report and funding was considered in section 3.
"While recognising preferences expressed by residents for refurbishment and taking on board all those elements of the estate that residents like, it would not be value for money to commit funds to refurbishing properties on the estate because:
- as stated to residents, it would cost significantly more to refurbish properties at Cressingham Gardens than elsewhere;
- it is highly unlikely that refurbishment would resolve all the problems with the properties (as evidenced through the Tall Report);
- there are inherent design problems with the estate, such as inability to cater for disabled residents; and,
- there is significant overcrowding in the properties on the estate.
All of the options that have been considered represent significant refurbishment and consequently none of them can be justified" (emphasis added)
"Because the Council is the freehold owner of most of the properties on the estate all income and expenditure for the estate falls within the Council-wide HRA. This means there are strict budgeting controls that prevent the Council from running a deficit in any one year. Moreover, the Council cannot borrow more than is currently planned because borrowing via the HRA is capped by Central Government either by means of a fixed 'headroom' limit or because the HRA simply cannot afford to borrow more (i.e. there is insufficient income to pay any higher interest payments). Furthermore, grants from Central Government, such as were previously available for the Decent Homes programme, are now severely limited, if not curtailed altogether. This means that money spent on the estate from within the HRA is money that is not available to be spent on other Council-wide properties. Hence the Council has to make some difficult decisions about how best to spend its scarce resources." (emphasis added)
At least two points are self-evident from this paragraph. First, one of the reasons given for the non-availability of HRA funding for refurbishment was the Council's inability to borrow more money on the HRA given the insufficiency of its income to service the interest payments on any additional borrowing (ie even if headroom below the borrowing cap was not a constraint). This was given as a free-standing reason. Second, it followed that any spending from the HRA on the refurbishment of properties within the CGE would depend upon resources being diverted from other Council estates within the Borough. This separate financial reason for rejecting refurbishment is therefore consistent with the "value for money" considerations which the report had already given as a freestanding ground for rejecting options 1 to 4 and, by the same token, the option put forward in the TPP.
The minutes of the Cabinet meeting on 21 March 2016
Overview and Scrutiny Committee
"The HRA business plan linked to in the report was over 30 years and showed the capacity to borrow was declining as Central Government brought in a 4 year rent reduction or a loss of £80m from the HRA budget, and this was reflected in the declining ability to borrow, with a £190m deficit forecast by the end of the HRA business plan. As highlighted by residents, if there were no changes made, this would go into deficit in four years' time."
"The debt cap in the HRA was constant as it was set by Government, however, the HRA business plan required a balance of reserves and this now meant that the debt cap was no longer the constraining factor on funding, but rather the affordability of the debt."
"…. The problem Lambeth had was that the HRA revenue income was reducing and, as shown by the latest HRA business plan, there was not sufficient money to borrow further monies from the HRA….."
Summary of grounds of challenge
LLBC acted unlawfully by choosing an option which failed to meet its own mandatory criterion, namely that the scheme should have a positive NPV. LLBC wrongly took into account its proposal to make a payment of £7.5m to fund initial costs of option 5. Alternatively, it failed to take into account in its appraisal of that option the future repayment of that sum by the SPV to LLBC. If neither error had been committed, the NPV of option 5 would have been assessed as negative.
(a) In its decision of 21 March 2016 LLBC's Cabinet failed to take into account, or were significantly misled as to, the up-to-date position regarding the 30 year business plan for the HRA; and/or
(b) the consultation with residents was unfair and unlawful by LLBC having failed to provide consultees with proper information on the 30 year business plan so that they could make representations thereon.
(a) The Cabinet's decision of 21 March 2016 involved a breach of Article 1 of the First Protocol ("A1P1") to the European Convention on Human Rights ("ECHR"), by interfering with the ability of secure tenants to rely upon a statutory right to buy; and/or
(b) the members of the Cabinet were misdirected in law as to the interference with that right to buy; and/or
(c) the consultation with residents was unfair and unlawful by LLBC having failed to provide adequate or proper information to consultees on the effect of option 5 on the right to buy.
The officers' report to the Cabinet significantly misled members by advising that the proposal in the TPP involved locating dwellings in a building with inadequate ceiling heights contrary to the London Housing Design Guide, and/or the report misinterpreted that Guide.
The officers' report to the Cabinet substantially misled members as to the treatment in the financial analysis of the cost of £430,000 for carrying out "weathertight" repairs to the properties on the CGE.
Appendix B to the officers' report to the Cabinet significantly misled members by stating that the main reason why the TPP presented a positive NPV for its proposed option (rather than a negative NPV as shown by LLBC's appraisal) was that it wrongly assumed that 80% of the income from rents and service charges would be available for funding refurbishment, whereas LLBC considered the available percentage of income to be only 33%.
LLBC failed to obtain sufficient information for inclusion in the officers' report to the Cabinet, alternatively the report significantly misled the members of the Cabinet, by overstating the costs per home of converting undercover car parking to housing in the TPP's proposed option.
(i) Statutory framework and general legal principles
(ii) Ground 2
(iii) Ground 4
(iv) Ground 7
(v) Ground 6
(vi) Ground 5
(vii) Ground 1
(viii) Ground 3
"… must not ... stray from its proper province of reviewing the propriety of the decision-making process into the forbidden territory of evaluating the substantial merits of the decision"
(R (Smith) v North Eastern Derbyshire PCT  1 WLR 3315 at paragraph 10). It is also worth bearing in mind what was said by Laws J (as he then was) in R v Somerset County Council ex parte Fewings  1 ALL ER 513, 515:-
"Although judicial review is an area of the law which is increasingly, and rightly, exposed to a good deal of media publicity, one of its most important characteristics is not, I think, generally very clearly understood. It is that, in most cases, the judicial review court is not concerned with the merits of the decision under review. The court does not ask itself the question, 'Is this decision right or wrong?' Far less does the judge ask himself whether he would himself have arrived at the decision in question. It is, however, of great importance that this should be understood, especially where the subject matter of the case excites fierce controversy, the clash of wholly irreconcilable but deeply held views, and acrimonious, but principled, debate. In such a case, it is essential that those who espouse either side of the argument should understand beyond any possibility of doubt that the task of the court, and the judgment at which it arrives, have nothing to do with the question, 'Which view is the better one?'. Otherwise, justice would not be seen to be done: those who support the losing party might believe that the judge has decided the case as he has because he agrees with their opponents. That would be very damaging to the imperative of public confidence in an impartial court. The only question for the judge is whether the decision taken by the body under review was one which it was legally permitted to take in the way that it did."
Statutory framework and general legal principles
LLBC's general power of management
"The general management, regulation and control of a local housing authority's houses is vested in and shall be exercised by the authority and the houses shall at all times be open to inspection by the authority"
"The ground upon which the courts will review the exercise of an administrative discretion is abuse of power – e.g. bad faith, a mistake in construing the limits of the power, a procedural irregularity, or unreasonableness in the Wednesbury sense – unreasonableness verging on an absurdity: see the speech of Lord Scarman in Reg. v. Secretary of State for the Environment, Ex parte Nottinghamshire County Council  AC 240, 247-248. Where the existence or non-existence of a fact is left to the judgment and discretion of a public body and that fact involves a broad spectrum ranging from the obvious to the debatable to the just conceivable, it is the duty of the court to leave the decision of that fact to the public body to whom Parliament has entrusted the decision-making power save in a case where it is obvious that the public body, consciously or unconsciously, are acting perversely."
"In a democratic country, decisions as to what the general interest requires are made by democratically elected bodies or persons accountable to them. Sometimes the subject matter is such that Parliament can itself lay down general rules for enforcement by the courts. … On the other hand, sometimes one cannot formulate general rules and the question of what the general interest requires has to be determined on a case by case basis. Town and country planning or road construction, in which every decision is in some respects different, are archetypal examples. In such cases Parliament may delegate the decision-making power to local democratically elected bodies or to ministers of the Crown responsible to Parliament. In that way the democratic principle is preserved."
"Democratically elected bodies go about their decision-making in a different way from courts. They have professional advisers who investigate and report to them. Those reports obviously have to be clear and full enough to enable them to understand the issues and make up their minds within the limits that the law allows them. But the courts should not impose too demanding a standard upon such reports, for otherwise their whole purpose will be defeated: the councillors either will not read them or will not have a clear enough grasp of the issues to make a decision for themselves. It is their job, and not the court's, to weigh the competing public and private interests involved."
"However, this nowadays does not readily capture the essential task confronting any judge. It is now to be treated as trite that the margin of appreciation which a decision maker has is heavily fact and context dependent: see for a summary of some of the leading case law on this per Lord Mance JCS in Kennedy v Charity Commission  2 WLR 808 at -. In the present case the following considerations apply. First, as with planning cases, it is important not to read officers' reports with an overly strict eye and it is necessary to consider them in the round setting aside drafting infelicities and errors unless they are material and likely to lead to unfairness. Secondly, in a case such as the present a wide margin of discretion must be accorded to the decision makers who are possessed of local, specialist, knowledge that the court does not have and which the court should hence be loathe to second-guess. Thirdly, this wide margin will extend to such (non exhaustive) matters as the modus operandi of the consultation exercise, the weighing of the pros and cons of the proposed scheme, and the extent to which they consider it necessary to investigate particular issues in greater or lesser depth and detail." (emphasis added)
Reviewing officers' reports to Committee
"The report by a planning officer to his committee is not and is not intended to provide a learned disquisition of relevant legal principles or to repeat each and every detail of the relevant facts to members of the committee who are responsible for the decision and who are entitled to use their local knowledge to reach it. The report is therefore not susceptible to textual analysis appropriate to the construction of a statue or the directions provided by a judge when summing a case up to the jury.
From time to time there will no doubt be cases when judicial review is granted on the basis of what is or is not contained in the planning officer's report. This reflects no more than the court's conclusion in the particular circumstances of the case before it. In my judgment an application for judicial review based on criticisms of the planning officer's report will not normally begin to merit consideration unless the overall effect of the report significantly misleads the committee about material matters which thereafter are left uncorrected at the meeting of the planning committee before the relevant decision is taken."
(i) In the absence of contrary evidence, it is a reasonable inference that members of the planning committee follow the reasoning of the report, particularly where a recommendation is adopted;
(ii) The purpose of the officers' report is not to decide the issue, but to inform the members of relevant considerations, allowing for the fact that the intended recipients, the Cabinet or committee, already have substantial local and background knowledge;
(iii) Part of the officers' expert function in reporting to a committee is to assess how much information needs to be included in a report, in order to avoid over-burdening busy members with material and undermining their ability to read and digest it effectively (see also paragraphs 67 above);
(iv) The Court should therefore focus upon the substance of the report, which should be read as a whole and in a common-sense manner, not legalistically.
"Consultation on matters of housing management
(1) A landlord authority shall maintain such arrangements as it considers appropriate to enable those of its secure tenants who are likely to be substantially affected by a matter of housing management to which this section applies-
(a) to be informed of the authority's proposals in respect of the matter, and
(b) to make their views known to the authority within a specified period;
and the authority shall, before making any decision on the matter, consider any representations made to it in accordance with those arrangements.
(2) For the purposes of this section, a matter is one of housing management if, in the opinion of the landlord authority, it relates to-
(a) the management, maintenance, improvement or demolition of dwelling-houses let by the authority under secure tenancies, or
(b) the provision of services or amenities in connection with such dwelling-houses;
but not so far as it relates to the rent payable under a secure tenancy or to charges for services or facilities provided by the authority.
(3) This section applies to matters of housing management which, in the opinion of the landlord authority, represent-
(a) a new programme of maintenance, improvement or demolition, or
(b) a change in the practice or policy of the authority,
and are likely substantially to affect either its secure tenants as a whole or a group of them who form a distinct social group or occupy dwelling-houses which constitute a distinct class (whether by reference to the kind of dwelling-house, or the housing estate or other larger area in which they are situated).
(5) A landlord authority shall publish details of the arrangements which it makes under this section, and a copy of the documents published under this subsection shall-
(a) be made available at the authority's principal office for inspection at all reasonable hours without charge, by members of the public, and
(b) be given, on payment of a reasonable fee, to any member of the public who asks for one."
(i) No public law issue had arisen as to whether the arrangements made by LLBC under section 105 were appropriate (paragraphs 72-73);
(ii) Although section 105 does not contain an explicit obligation to consult, its components reflect the elements of lawful consultation described in R v North and East Devon Health Authority ex parte Coughlan  QB 213 paragraph 112. There is no real difference between the requirements of section 105 and the requirements of Coughlan as regards consultation (paragraph 77);
(iii) The section 105 arrangements in this case comprised the detailed and sophisticated programme of consultation announced in LLBC's letters of 21 October and 6 November 2014 (paragraph 79)
I respectfully agree with Laing J. I also accept that those arrangements included viability and financial modelling. I heard no submission to the contrary.
(i) Statutory duties of consultation vary greatly depending on the particular provision, its context, the purpose for which the consultation is to be carried out, and the content of the obligation. A "mechanistic approach" to the requirements of consultation must therefore be avoided (paragraph 36)
(ii) The present case was not concerned with circumstances in which a common law duty to act fairly arose unless there was a promise or practice of consultation. Furthermore, the problem with the consultation was not that it had been unfair. Rather the local authority was discharging an important function in relation to local government finance, which affected its residents generally, and not just the 36,000 households (see paragraphs 35 and 37).
(iii) Such wide-ranging consultation in respect of a local authority's exercise of the general power in relation to finance, was far removed in context and scope from situations in which the common law had recognised a duty of procedural fairness. The purpose here was not to ensure procedural fairness in the treatment of persons whose legally protected interests might be adversely affected, but to ensure public participation in the local authority's decision-making process (paragraph 38).
(iv) Meaningful public participation in this particular process, in a context with which the general public would not be expected to be familiar, required that consultees be provided not only with information about the draft scheme, but also an outline of the realistic alternatives and an indication of the main reasons for the authority's preference for adopting the draft scheme. In this context that satisfied the requirement in Coughlan at paragraph 112 to let consultees know what the proposal is and why it is being considered positively, telling them enough (which may be a good deal) to enable them to make an intelligent response (paragraph 39);
(v) A requirement to provide information about the options does not mean that there necessarily has to be a detailed discussion of the alternatives or of the reasons for their rejection. The consultation required in the present context related to the authority's draft scheme, not the rejected alternatives. It is also important in the context of a public consultation exercise that the consultation documents should be clear and understandable, but not unduly complex or lengthy (paragraph 41).
(i) By reference to R (Osborn) v Parole Board  AC 1115 (at paragraphs 67 and 68) the first purpose of a fair consultation is that it "is liable to result in better decisions, by ensuring that the decision-maker receives all relevant information and that it is properly tested" and second that it avoids a sense of injustice on the part of the person who is the subject of the decision. In addition, a third purpose is to reflect the "democratic principle" in a case where the question is not whether a particular institution should be closed, but whether a particular taxation-related scheme applicable to all inhabitants should be made (paragraph 24);
(ii) The four "Sedley criteria" approved in Coughlan should also be approved by the Supreme Court (paragraph 25);
(iii) The demands of fairness are likely to be higher when an authority contemplates depriving someone of an existing benefit or advantage than where the claimant is a bare applicant for a future benefit. The degree of specificity required of the consultation material put forward by the authority will depend upon the identity of the consultees and the subject matter. Members of the public, particularly the economically disadvantaged, may well require more explanation of a proposal with technical content than say another public authority (paragraph 26).
(i) The first of Lord Wilson's purposes, which included "the proper testing" of all relevant information (paragraph 24 of Moseley), referred back to paragraph 67 of Osborn where the central issue was whether, and if so in what circumstances, a prisoner was entitled to an oral hearing before the Parole Board. Neither Moseley nor the present case concern a right to an oral hearing;
(ii) The present case is concerned with a proposal which would result in persons losing valuable benefits, their homes, for example, through the termination of a secure tenancy;
(iii) The present case is more analogous to cases concerned with a proposal for the closure of a public institution such as a care home or school. LLBC has chosen option 5, the demolition and redevelopment of the entire estate. It has rejected the refurbishment options for CGE which, given its view on the lack of funding, would require monies for refurbishing other Council estates to be diverted to CGE. The Claimant has not suggested in these proceedings that any of the challenges raised are concerned with LLBC's assessment of the "value for money" factors nor with any argument that funds should be diverted in this way. No evidence has been shown to me that consultees responded by making any such suggestions;
(iv) Thus, the consultation exercise carried out by LLBC was correctly directed towards the residents of CGE. It was not required to be a wider consultation exercise affecting all residents of the Borough, or all residents of the Authority's housing estates or any group of them. The consultation was not concerned with public-participation in the Council's decision-making process on a subject as broad as local taxation, or a scheme for relief from local taxation. The context here is somewhat removed from Moseley and the satisfaction of the broader democratic principle engaged in that case (per Lord Wilson) or the approach taken by Lord Reed;
(v) LLBC was entitled to put option 5 forward in the consultation exercise as its preferred option. There was no requirement for LLBC's discussion of the options it had rejected to be so detailed.
"A breach of procedure, whether called a failure of natural justice, or an essential administrative fault, cannot give him a remedy in the courts, unless behind it there is something of substance which has been lost by the failure."
Likewise, in George v Secretary of State (1979) 77 P&CR 609, 617 Lord Denning MR said that "there is no such thing as a technical breach of natural justice" "One should not find a breach of natural justice unless there has been substantial prejudice to the applicant as the result of the mistake or error that has been made." More recently, in Hopkins Developments Limited v Secretary of State for Communities and Local Government  PTSR 1145 the Court of Appeal held that the issue is whether "there has been a procedural unfairness which materially prejudiced the applicant" (paragraphs 45 and 62). Thus, by way of example, in R (Midcounties Co-operative Limited) v Wyre Forest District Council  EWHC 964 (Admin) Ouseley J refused to grant any relief in relation to a failure to comply with a statutory requirement for consultation on a draft document where there was no evidence that the claimant would have said anything of substance on that material (paragraphs 104 to 106).
The Housing Revenue Account
The Claimant's submissions
"…which will be finalised and a summary of which will be published in the near future."
Nevertheless, it is important to note a point accepted in paragraph 55(6) of the Claimant's skeleton, namely that the Q&A document made it plain that the HRA debt level of £160m was far below the cap of £408m. On 8 March 2016 LLBC sent an email stating that the authority was still working on publishing its business plan, but that this had been subject to "pressures" created by (inter alia) the increasing numbers of cases in which the RTB was being exercised and the 1% a year reduction in rents imposed by Central Government. On 16 April 2016 (i.e. after the Cabinet's decision on 21 March 2016) LLBC published a summary "dashboard" of its latest 30 year HRA business plan showing a capital borrowing headroom in that account of £67.738m in 2016/17 and similar, if not larger, levels of headroom in most of the following years covered by the plan. Mr. Wolfe QC makes the point that this stood in stark contrast to LLBC's dashboard summary dated 30 December 2013, which was the only HRA analysis that consultees had previously seen. That had estimated that in 2016/17 the headroom would be only £5.125m and in 2017/18 only £13.184m.
The Defendant's submissions
"refurbishment component of the option must be considered to be value for money AND funding can be allocated from within the HRA"
The Claimant has not suggested that section 2 of the officers' report was significantly misleading, or revealed any error of law, in relation to the "value for money" assessment. That in itself was a sufficient reason for the refurbishment options to be rejected, as the report makes clear. But in any event, the report was not significantly misleading in telling members that no more funding was available from the HRA. The reason given that LLBC could not afford to pay for any more debt was perfectly sufficient. The additional reference to "headroom" was gratuitous. In view of the information previously given to members, the report in March 2016 cannot be treated as "significantly misleading" when it is read in context, or as vitiating LLBC's decision. The "dashboard" which LLBC published on about 16 April 2016 (paragraph 16 of first witness statement of Ms. Gniewosz) made it plain that the HRA would fall below the minimum balance of £10m from 2017-8 onwards.
"Insufficient floor to ceiling heights mean that new residential accommodation would not be able to meet the requirements of the London housing design guide (LHDG) without expensive and potentially significant excavation works."
Mr. Wolfe QC criticised that passage as being significantly misleading. He submitted that it involved a misinterpretation of the Design Guide.
"The minimum floor to ceiling height in habitable rooms is 2.5m between finished floor level and finished ceiling level. A minimum floor to ceiling height of 2.6m in habitable rooms is considered desirable and taller ceiling heights are encouraged in ground floor dwellings."
The accompanying explanatory text reiterates that ceiling heights are expected to be at least 2.5m, with a preference for 2.6m or more and adds:-
"For projects creating new dwellings in existing buildings and developments in sensitive historic contexts, including infill developments within conservation areas, lower ceiling heights may be permitted by the local borough."
- the NPV of the TPP option was significantly negative (as with the other refurbishment options)
- LLBC lacked the financial resources to service debt for funding refurbishment options
- therefore, the refurbishment of properties on CGE would require funds to be diverted from other estates
- there was no adequate justification for taking that course having regard to LLBC's "value for money assessment" of refurbishment on CGE, and
- there were technical design flaws in the TPP proposal, some of which were "quite probably irresolvable."
Thus, LLBC's decision cannot be vitiated on the grounds that the officers' report was significantly misleading in relation to the TPP proposal.
A summary of the complaint
The issue now before the Court and the evidence in the witness statements
"When Homes for Lambeth has been established and when it takes over development of a project, then this sum of money would be repaid to the Council. Within the appraisal model, it is repaid to the Council during the construction period."
"If the Council pursues building new houses through a Special Purpose Vehicle these homes will be rented at Council rent levels, but with a lifetime assured tenancy, rather than a secure tenancy. A key difference between the two forms of tenancy is that the Right to Buy is not available with a lifetime assured tenancy" (emphasis added).
"The Council is proposing to provide assured tenancies with protected rights, but not any preserved right to buy. The Council will consult with tenants on the proposed assured tenancy in due course."
It is not clear whether the expression "any preserved right to buy" is referring to a statutory or contractual right to buy. But given that this passage only refers to a proposal, on either view it is consistent with the decisions taken thus far by the authority on the future of the CGE. The only decision by LLBC to adopt option 5 was that taken by the Cabinet on 21 March 2016 and the resolutions passed on that date did not involve any decision by the authority as to whether a contractual right to buy should be included in the new assured tenancies. The authority has not formally considered that issue. LLBC has not suggested otherwise to the court. I also note that the OSC was not asked to consider the issue of a contractual right to buy at its meeting on 9 May 2016. Instead, the Cabinet having already said that there would be further consultation on the terms of the assured tenancies, that promise was repeated in the officer's report to the OSC.
Article 1 of the First Protocol to the ECHR
"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interested and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest to secure the payment of taxes or other contributions or penalties."
"… Article I of the First Protocol has a similar character [to Article 6(1)]. It does not confer a right of property as such nor does it guarantee the content of any rights in property. What it does instead is to guarantee the peaceful enjoyment of the possessions that a person already owns, of which a person cannot be deprived except in the public interest and subject to the conditions provided for by law: Marckx v Belgium (1979) 2 EHRR 330, 350 para 50. Here too it is a matter for domestic law to define the nature and extent of any rights which a party acquires from time to time as a result of the transactions which he or she enters into. One must, of course, distinguish carefully between cases where the effect of the relevant law is to deprive a person of something that he already owns and those where its effect is to subject his right from the outset to the reservation or qualification which is now being enforced against him. The making of a compulsory order or of an order for the division of property on divorce are examples of the former category. In those cases it is the making of the order, not the existence of the law under which the order is made, that interrupts the peaceful enjoyment by the owner of his property. The fact that the relevant law was already in force when the right of property was acquired is immaterial, if it did not have the effect of qualifying the right from the moment when it was acquired."
(See also Stretch v United Kingdom  38 EHRR 12 at paragraph 32).
Whether the Cabinet was misled or misdirected as to the options open to it
"However, it is not acceptable for local authorities to establish new wholly owned or controlled housing companies deliberately to avoid the government's reinvigorated Right to Buy Policy … Specifically, the government will not support the establishment of such companies where they are developing or acquiring and retaining new social or affordable units for rental purposes…"
This was the policy upon which the TPP relied in its critique of option 5 (see paragraph 2.2) and which was not addressed in the officers' report.
Whether the consultation was unlawful
Conclusions on ground 3
(i) The judgments made by LLBC to reject all of the refurbishment options are legally unimpeachable;
(ii) LLBC's decision on 21 March 2016 followed extensive consultation with residents of the CGE over a number of years. At this stage of the proceedings the only arguable criticism of the consultation process was the absence of any reference to the possibility of contractual rights to buy being granted;
(iii) According to LLBC, funding to pay for refurbishment of properties on CGE is not available. No one has suggested that funding should be diverted from the refurbishment of any of LLBC's other estates in order to meet the costs of refurbishment on the CGE. LLBC has decided that that would not be justifiable, partly because the greater cost of refurbishment on CGE would represent poor value for money and also because the CGE would continue to suffer from inherent design faults and overcrowding;
(iv) No one has suggested that doing nothing to the CGE would be acceptable, or that there is some other alternative to option 5;
(v) LLBC position is that it is facing a severe housing crisis, not only because of the number of substandard council homes, but also the large number of homeless persons in the Borough and persons on the housing waiting list. LLBC has decided to secure the building of 1000 additional "council rent" homes by 2018-19;
(vi) LLBC has decided that the density of the existing development on the CGE is low and there is the opportunity to substantially increase the number of homes provided there in order to help address the need for more housing in the Borough;
(vii) In reaching its decisions on 21 March 2016 the Cabinet took into account the loss of a statutory right to buy for secure tenants who wish to move into new homes built on the CGE. That loss did not deter them from deciding to reject the refurbishment options and to adopt option 5. If the Cabinet had been aware of the possibility of providing a contractual right to buy in assured tenancies granted under option 5, that could not logically have altered their rejection of all of the refurbishment options. That would still have been the case if the Cabinet had been told about that possibility but had gone on to reject it. The refurbishment options would still not have provided value for money or been fundable. Given the circumstances, there is no basis for thinking that the Cabinet might have taken a different view about the one remaining option, namely to demolish and rebuild the estate. On the conclusions reached by LLBC the possibility of including a contractual right to buy could only affect the manner in which option 5 is implemented and not the decision whether to adopt option 5 as the way forward. The Claimant did not suggest otherwise;
(viii) No decision has been taken formally by LLBC on whether or not to include a contractual right to buy in the assured tenancies to be granted under option 5. The decision taken on 21 March 2016 does not preclude a future decision by LLBC to include such rights. LLBC has promised consultation on the terms of the assured tenancy, which is to include the contractual right to buy issue. It has created a legitimate expectation to that effect. No doubt it will have to deal with that issue and, on the basis of the materials presently before the court, no step should be taken by LLBC in the meantime which might impede or frustrate (a) the lawful carrying out of that consultation and a subsequent decision by LLBC on that issue or (b) the implementation of a decision to provide for a contractual right to buy if that should be the outcome. In that exercise LLBC will take into account not only the views of consultees but also any relevant central government or other policy.
(i) There was no legal requirement for the Cabinet to have regard to the contractual right to buy issue when reaching its decision on 21 March 2016. It was not an "obviously material" consideration for the purposes of that particular decision;
(ii) The officers' report to the meeting on 21 March 2016 is not to be treated as "significantly misleading" in relation to the right to buy issue;
(iii) Any failure to have regard to the Written Ministerial Statement was not a material legal error;
(iv) There was no requirement for the consultation which has since been promised on the contractual right to buy issue to take place before the Cabinet's decision on 21 March 2016;
(v) The consultation process carried out prior to the decision on 21 March 2016 did not cause any substantial prejudice to residents of the CGE, it was not unfair or unlawful, the overall process did not go "clearly or radically wrong", and there was no breach of any statutory obligation to enable secure tenants to participate in the decision-making process on 21 March 2016.
(vi) Alternatively, if I am wrong in any of the above respects, I am satisfied that any such legal error on the part of LLBC could not possibly have affected the decision of its Cabinet on 21 March 2016 which the Claimant seeks to impugn. It is inevitable that the Cabinet would have reached the same decision to reject the refurbishment options and adopt option 5 (applying Simplex GE (Holdings) Ltd v Secretary of State for the Environment (1988) 57 P&CR 306; R (Smith) v North Eastern Derbyshire PCT  1 WLR 3315). Alternatively, it is highly likely that that outcome would have been the same, or at least "not substantially different" (applying section 31(2A) of the Senior Courts Act 1981). There are no reasons of exceptional public interest to justify taking a different course under section 31(2B) (see also paragraph 12(iv) above).
The Claimant's application for permission to appeal
The Claimant's application for a continuing injunction