Clare Cullen considers the Court of Appeal case of Paley v Waltham Forest LBC concerning affordability assessments and suitability of homelessness accommodation.
The case demonstrates the need for local authorities to give applicants an opportunity to have an input into an affordability assessment and to ensure that proper allowances are made for essential items of expenditure.
Article 2, Homelessness (Suitability of Accommodation) Order 1996/3204 provides that affordability is a matter which must be considered when determining whether accommodation is suitable. An authority should consider, amongst other matters, the financial resources of the applicant, the costs of the accommodation and the person’s reasonable living costs.
Section 182(1), Housing Act 1996 requires an authority to have regard to the Homelessness Code of Guidance.
Chapter 17, Homelessness Code of Guidance states that
“housing costs should not be regarded as affordable if the applicant would be left with a residual income which is insufficient to meet essential needs”. Basic essentials include “food, clothing, heating, transport and other essentials specific to their circumstances.”
The guidance also provides that Universal Credit standard allowances may be used as a guide to assess the income an applicant will require to meet essential needs.
The statutory criteria require an authority to determine what is a reasonable level of expenditure (Patel v London Borough of Hackney  EWCA Civ 897).
Ms P, a single parent with 4 children, applied to the local authority as homeless. The local authority accepted a full homelessness duty to secure suitable accommodation under section 193(2), Housing Act 1996.
Ms P completed an accommodation needs form which set out her outgoings. This included £29.50 per week on buses and £8 per week on taxis. The authority offered Ms P private rented sector accommodation in Stoke to bring the full homelessness duty to an end.
Ms P requested a review and her housing file. Ms P said that the accommodation was not affordable as she would be required to meet the shortfall in rent of £48.10 from non-housing elements of her Universal Credit due to the benefit cap.
The housing file showed that the local authority had re-calculated her outgoings and removed the travels costs putting those within a £50 figure intended to cover clothes, transport, school requirements and servicing debts. This had been done without seeking further input from Ms P. Ms P did not directly comment on these amended figures during the review.
A 'minded to' letter was sent. Ms P again stated that the accommodation was unaffordable because she would be required to meet the £48.10 shortfall.
The review decision concluded that the accommodation was suitable and affordable. In reaching the decision, the review officer identified travel needs of Ms P including visiting family by taking the train which would cost £56.
Ms P appealed the decision. The appeal was dismissed in the county court.
In the Court of Appeal, Ms P argued, amongst other matters, that the affordability assessment was unlawful because it had been conducted without her input and was also irrational.
The Court of Appeal allowed the appeal. The assessment was irrational. The review officer had too narrow an approach to transport costs and had failed to allow for Ms P’s debts.
The review decision did not reflect that a local authority may be guided by the Universal Credit standard allowances and that Ms P would have to meet the shortfall in housing costs by using the non-housing element of her Universal Credit.
While the benefit cap had been found to be lawful by the Supreme Court that did not mean that a local authority could simply ignore its impact.
Whilst an authority could not be susceptible to challenge on the basis that there was no input from an applicant into an affordability assessment, an applicant must be given an opportunity to be involved at the various stages of the process. In this case, the authority had failed to give Ms P that opportunity. An enquiries ground of appeal relating to section 11, Children Act 2004 was dismissed.
Read the judgment in full on Bailii Paley v Waltham Forest LBC  EWCA Civ 112