“The effect of the scheme is that a person may be entitled to housing benefit if he or she is liable to make payments in respect of a dwelling in Great Britain which he or she occupies as a home. If the applicant has no income, or if the applicant’s income does not exceed a certain level, then there will be an entitlement to an amount up to a maximum of housing benefit in that particular case. The housing benefit may arise in any one week to 100 per cent. of the recipient’s eligible rent as defined, calculated on a weekly basis, less deductions. In general terms, a person’s eligible rent is what the applicant is liable to pay.”
“It is evident that the scheme is directed to two possible abuses. The first is that a recipient of housing benefit may live in an unnecessarily luxurious and therefore expensive dwelling house. The second is that a landlord may charge more than the market rate to a recipient of housing benefit, both those abuses stemming from the fact that the prudence which activates the ordinary citizen may cease to do so if there is a belief that public funds will pay whatever the recipient of housing benefit may choose to require. It is with those possible abuses in mind that the relevant regulations with which this appeal is concerned have to be read … .”
“… First, it is directed to the humane objective of assisting those of modest means to provide themselves with a roof over their heads. This is, after all, one of the most basic of human needs, and it is not surprisingly accepted as a proper object of public expenditure. But, secondly, such expenditure must be directed to meeting real needs. Thus expenditure may be restricted if a claimant is housed more expensively than necessary, whether because his accommodation is unnecessarily large, or because he is paying more than the market rate for the area in which he lives, or because he could be housed adequately but more economically in similar accommodation in an accessible but less expensive quarter. Special consideration is, however, given to those who are elderly, or unable to work, or who are responsible for a child or young person living with them.”
“13. Restrictions on unreasonable payments … … (3) The relevant authority shall consider – (a) whether by reference to a determination or re-determination made by a rent officer in exercise of a function conferred on him by an order undersection 122 of the Housing Act 1996 or otherwise, whether a claimant occupies a dwelling larger than is reasonably required by him and others who also occupy that dwelling (including any non-dependants of his and any person paying rent to him) having regard in particular to suitable alternative accommodation occupied by a household of the same size; or (b) whether by reference to a determination or re-determination made by a rent officer in exercise of a function conferred on him by an order undersection 122 of the Housing Act 1996 or otherwise, whether the rent payable for his dwelling is unreasonably high by comparison with the rent payable in respect of suitable alternative accommodation elsewhere, and, where it appears to the authority that the dwelling is larger than is reasonably required or that the rent is unreasonably high, the authority shall, subject to paragraphs (4) and (7), treat the claimant’s eligible rent, as reduced by such amount as it considers appropriate having regard in particular to the cost of suitable alternative accommodation elsewhere and the claimant’s maximum housing benefit shall be calculated by reference to the eligible rents as so reduced. (4) If any person to whom paragraph (10) applies – … (d) is a member of the same household as a child or young person for whom he or his partner is responsible, no deduction shall be made under paragraph (3) unless suitable cheaper alternative accommodation is available and the authority considers that, taking into account the relevant factors, it is reasonable to expect the claimant to move from his present accommodation. … (9) For the purposes of this regulation – (a) in deciding what is suitable alternative accommodation, the relevant authority shall take account of the nature of the alternative accommodation and the facilities provided having regard to the age and state of health of all the persons to whom paragraph (10) applies and, in particular, where a claimant’s present dwelling is occupied with security of tenure, accommodation shall not be treated as suitable alternative accommodation unless that accommodation will be occupied on terms which afford security of tenure reasonably equivalent to that presently enjoyed by the claimant; and (b) the relevant factors in paragraph (4) are the effects of a move to alternative accommodation on – (i) the claimant’s prospects of retaining his employment; and (ii) the education of any child or young person referred to in paragraph (4)(d) if such a move were to result in a change of school. (10) This paragraph applies to the following persons – (a) the claimant; (b) any member of his family; … … .”
“It is, as I have already suggested, plain that the procedure is designed to protect the public purse. But it is fair, I think, to infer that the procedure is not designed to produce homelessness, which would be the result if a beneficiary’s rent were restricted, so that he could not afford to stay where he was but was unable to find any other accommodation to which he could be expected to move at the level of rent payable. The effect of the regulations, therefore, under regulation 11(2)(c) is to confer a discretion as to whether the rent should be restricted but, in a case which falls within 11(3), to deny the local authority or the Review Board a discretion to restrict the rent, unless it is in effect satisfied that there is alternative accommodation suitable for the reasonable needs of the beneficiary and his family which is available on the market at the level of the rent allowed. Regulation 11(3) is clearly designed to make special provision for families which include elderly persons of the advanced age of 60, disabled persons and children and young persons. It is, I think, implicit that the restriction of the rent is recognised as being possibly such as to oblige a recipient of housing benefit to move, but certainly in an 11(3) case such a recipient is not to be obliged to do so unless it appears that there is somewhere that he and his family can move at the rent allowed.”
“… First of all, [counsel for the Secretary of State] … has emphasised the Secretary of State’s anxiety that the scheme should be efficaciously operated so as to ensure that public funds are not wastefully dissipated. The court recognises that as an entirely proper interest and recognises that, in any decision that it may give, it must be very careful not to interpret this subordinate legislation in a way which would frustrate the intentions of the legislature or the Secretary of State’s intention to which I have referred. Secondly, it has repeatedly said that it is not part of the local authority’s function and no part of the Review Board’s function to identify specific property available for a recipient’s occupation. Speaking for myself, I unreservedly accept that. … It is, in my judgment, quite sufficient if an active market is shown to exist in houses of the appropriate type in an appropriate place at the level of rent to which rent is restricted. There must, however, be evidence at least of that in a case falling within paragraph 11(3); otherwise the recipient, if he had to move, would have nowhere to go. … .”
“In my judgment on the proper construction of Regulation 11 as amended an authority when making the necessary comparison with suitable alternative accommodation must indeed satisfy itself that there is a relevant active market in property of the relevant description, type or class, but in making this judgment for the purposes of Regulation 11(2)(c) it need not concern itself with any financial considerations (other than the question of rent) which may make parts of that market wholly or relatively inaccessible to applicants like these. If satisfied that there is, on this basis, an ascertainable market rent and an active market, then as Evans L.J. said … [in ex parte Gibson] the authority is entitled to leave the applicants to take their chance of finding accommodation in that market.”
“[In] order to compare the level of rent, it seems to me that [the Housing Benefit Review Board]have to bear in mind that they are concerned with whether the rent being paid by someone in the private sector is an unreasonably high rent. It is no part of the scheme to try to compel private sector tenants to move to council accommodation. … If, in deciding whether a rent is unreasonably high for a tenant in the private sector it is appropriate for the Council to have regard to the levels of public sector rent, then there is a potential unfairness to the private sector tenants because the usual result of taking account of what I call public sector tenancies is to produce a lower figure than is appropriate for private sector lettings. … [The] element of subsidy does mean that, on the whole, such rents are at a lower level. It seems to me that if [counsel for the Housing Benefit Review Board] is correct, it would be open to a Board to have regard only to public sector accommodation, because if they were satisfied that there was public sector accommodation which was … suitable alternative accommodation, then why should they not regard the rent being paid in the private sector as unreasonably high in comparison with that? [Counsel] says they would not do that. That would not be a correct way of going about it. But it seems to me that the difficulty with her submission is that there is nothing in the language of the regulation, if she be right, to prevent them doing that. Quite apart from that, it seems to me that even taking the public sector accommodation into account has the tendency to depress the amounts in question. I think that [counsel for the applicant] is right when he says that the purpose of this is to compare like with like, and to answer the question whether this landlord was charging an unreasonable rent for this tenant. That is what has to be considered. It seems to me that that is also consistent with the reference to the determination by a rent officer. It will be remembered that [regulation] 11(2)(c) says: “Whether by reference to a determination by a rent officer or otherwise the rent payable is unreasonably high”.” “Whether by reference to a determination by a rent officer or otherwise the rent payable is unreasonably high”.”
“29. Collins J was not, however, considering the position where there is no relevant unsubsidised accommodation with which a comparison can be made. Further, his comments about subsidy appear to me to be equally appropriate where the subsidy is a private charitable one just as where it is a public subsidy. An unsubsidised private landlord and his tenant are not to be penalised just because there happens to be a charity with a large endowment offering sub-market rents to a limited number of tenants.”
“30. On the other hand, it does not appear to me that “suitable alternative accommodation” can never include subsidised accommodation. That would have two results that would at least be highly unfortunate. Firstly, it would mean that in such a case there would be no statutory control over the rent which a private landlord might charge because there would be nothing relevant for the purpose of regulation 13(3)(b) compared to which the rent in question would be unreasonably high. 31. Secondly, if all the private suitable accommodation was fully occupied, and the council determined that the rent being charged was unreasonably high in comparison with that private accommodation, then where, for example, the tenant is, as here, a member of the same household as a child or young person, regulation 13(4) provides that the council may only make a deduction if cheaper suitable alternative accommodation is available. [Leading counsel for the claimants] accepted that “suitable alternative accommodation” must have the same meaning in regulation 13(3) and 13(4). Yet his contentions as to the effect of [ex parte Morgan]would mean that even if the rent in issue was unreasonably high in comparison with the rent payable for other private accommodation, but only subsidised accommodation was available at the relevant time – in the present case in the form of an equally satisfactory refuge which had not lost its public funding – this could not be taken into account in determining whether cheaper alternative accommodation was available.”
“32. I can see no reason why “suitable alternative accommodation” cannot include both subsidised and unsubsidised accommodation. No distinction is drawn in the use of the words to prevent the words from having their normal meaning. The effect of the decision in [ex parte Morgan]is that comparison must be like with like so far as reasonably possible, which means that in the normal case, involving private unsubsidised lettings, comparison should be within the unsubsidised private sector. 33. Where such a comparison is not possible because of the absence of such comparators, it is permissible and necessary to look at the rent charged by subsidised landlords. However, for an unsubsidised rent to be unreasonably high in comparison with that charged by the subsidised landlords, it would normally have to be shown that the size of the rent exceeded what the other rent could be expected to have been but for any element of discount. I do not totally rule out any other possibility, for example where a subsidy has been lost because of some wrongdoing by the landlord, particularly where there is no shortage of suitable subsidised accommodation. However, the present case concerns refuges for women against whom violence has been perpetrated. The number of places needed in hostels for such women and their children may well exceed the number of places for which public funding is available, particularly at a time such as the present when public funding is being substantially reduced across the board. Many if not most of those availing themselves of such accommodation would need to obtain housing benefit to pay the rent. Without housing benefit, and without being subsidised by public or private funding, a charity could not operate a hostel that was needed to cater for those who could not get into a funded hostel because it could not recoup its reasonable operating costs. This would leave victims of violence either homeless or at risk at the homes they wished to leave.”
“35. It is apparent from Roshni’s accounts that the loss of public funding meant that it could not operate once it lost its public funding without substantially increasing rents. It also appears, so far as I can presently tell, that the loss of public funding was the result of cut backs and not of any failings on its part, and that the new rental level was set to enable it to survive. I also note from the accounts for the year ending31 March 2011 that it was 98% full during that year, indicating considerable demand for its facilities. The five comparables between them accommodate up to 83 women who have been victims of violence, although not all are in bedsitters and only two of them, with a maximum capacity for 17 women appear to concentrate on those from South Asia. Roshni’s 9 places therefore appears to represent a 50% increase on what would otherwise be available in that respect and an 11% increase on total availability. …”
“The Secretary of State has sought in further submissions to question whether this test is the correct one. He says that it is a highly subjective test as it would require a local authority to assess the extent to which the landlord has set the rent to compensate for a lack of subsidy, and that it would be difficult for a local authority to do this on the ground, as it may require it to make potentially complex theoretical judgments about what level of rent might have been charged by a comparator landlord had it not been in receipt of subsidy. It is also said that it would probably also require a wider consideration of the relevant organisation’s business model and projections to establish the level of rental income which a particular landlord required in order to remain operational, and thus … the level which they would … theoretically have been obliged to push rents up to had they not been in receipt of subsidy.”
“8. … [The] test contemplated by me in [paragraph 33 of the interim decision] is very unlikely to involve the sort of complexity that is envisaged by the Secretary of State or the detailed analysis of the landlord’s accounts to which the council has subjected Roshni’s accounts in these cases. In the normal case, there will be a simple question as to the size of the subsidies in the comparables and their effect on the rental level. If without the subsidies the comparable rental levels would equal or exceed, or be very close to, the rents charged by the landlord, then it would normally follow that the rent charged by the landlord would not be unreasonably high by comparison with the comparators. The excess would simply compensate for the absence of subsidy and that excess would not be unreasonable. It would only be where the excess was more than minimally greater than the subsidised element of the comparable rents that the landlord might be expected to justify the difference and the local authority would have to consider the explanation. While there may be possible justifications for the extra rent that would mean that it was not unreasonably high by comparison, they are unlikely to depend on a detailed analysis of the landlord’s accounts, any more than the reasonableness of any other rent is determined, for example, by a rent officer by reference to such accounts. What may be relevant could include the reasonable provision of additional services or the omission of reasonable provisions by a comparator, leading to an unduly low rental. For example, the comparator may be letting rooms in a building due for demolition within a short period, so that there is no need to allow for the cost of major repairs in calculating the rent. … 10. In the present case, the closest comparator in terms of size and other factors is comparator 3, on which the council has relied in its latest submissions. Its accounts … show that it received£173,501 from Supporting People and£79,772 from accommodation charges. In other words only 31.5 per cent of its accommodation costs came from rental charges and the remaining 68.5 per cent came from relevant subsidies. It is plain that if the subsidy had been lost and it had been necessary for it to recoup all of its accommodation costs from rent, the rent would have needed to be in the order of£568 instead of£179 . Even the smaller percentage subsidy of 58 per cent to which I came by a different calculation in my previous decisionwould mean a rental increase from£179 to£426 . I find it impossible to see how Roshni’s unsubsidised rent of£242.17 can be regarded as unreasonably high in those circumstances. I note that it is suggested that other subsidies obtained in the course of the year by Roshni from other sources should be taken into account. However, they can only be taken into account if they can be used by Roshni to subsidise rents. Roshni’s evidence, which has not been seriously challenged and which I accept, is that most of those funds, which in any event fall far short of the lost grant from Supporting People, could only be used for other charitable purposes relating to children projects. … 12. As I have already indicated, it does not appear to me to be necessary or appropriate to engage on a detailed examination of Roshni’s and the comparators’ accounts. The council in this case has sought to do so, pointing out, for example, that Roshni’s support costs in their accounts are£21,815 more expensive than those of comparator 3. That is correct but it fails to differentiate between costs related to accommodation and those related to children projects. I note that comparator 3’s accounts show that it had a grant from the council of£16,972 for such projects, while Roshni’s accounts show not only a similar grant from the council but also two further grants totalling nearly£50,000 , suggesting that Roshni will have spent far more on such projects than the comparator. The excess in relation to children projects could easily account for the£20,815 difference in support costs. Other criticisms could also be levelled at the council’s analysis of the accounts but for the reasons I have given they are not relevant to the outcome of this appeal. 13. Given the demand for Roshni’s accommodation (it was 98 per cent full in the year in question), that it filled an important need beyond that provided by the funded charities, and that its loss of funding was the result of cutbacks and not of any failings on its part, I am satisfied that there is nothing remotely unreasonably high in the rents charged by it by comparison with the rent payable in respect of suitable alternative accommodation. 14. I therefore find that the claimants’ eligible rents are the full amounts claimed by them.”
“It was agreed that in a case to which paragraph (2) applied the local authority was not required to determine the claimant’s eligible rent by simply reducing his excess rent to his alternative rent. The paragraph could with the utmost simplicity have been drafted so as to have that effect, but such was not the course adopted. The obligation on the local authority was to “treat the claimant’s eligible rent … as reduced by such amount as it considers appropriate having regard in particular to the cost of suitable alternative accommodation elsewhere”
“(1) The substitution of “shall” for “may” did not deprive the review board of a discretion as to the amount of a reduction in the eligible rent. The amount of the reduction is not automatic or mandatory: it is by such amount “as it considers appropriate”
“Criticism was made of the expression “reasonably relevant” but it is obvious that Mummery [L.J.] meant “reasonably (or properly) regarded as relevant” and that is the correct test. In the absence of clear language I would be very reluctant to conclude that the local authority or the review board were precluded from considering matters which could affect the mind of a reasonable and fair-minded person when deciding on the level to which a claimant’s eligible rent should be treated as reduced, and the very general language of paragraph (2) gives no ground for inferring that such a constraint was intended.”
“I would also attach importance to the fact that the risk of hardship due to homelessness is inherent in the nature of the exercise which the authority is required by regulation 11(2) to carry out. In order to avoid unreasonable demands on the public purse, the authority is required to make a reduction from the eligible rent if the dwelling which the claimant occupies is larger than is reasonably required or the rent is unreasonably high by comparison with that payable for suitable accommodation elsewhere. The claimant who is subject to this reduction is then faced with a choice. Either he must move to suitable accommodation which is available elsewhere for letting at a rent which will be covered by the amount of his housing benefit, or he must accept the fact that the housing benefit which he receives will fall short of what he needs to pay the rent. Some claimants will be able to make this choice. Others may not. For them, this may be a choice that cannot be made at all. Suitable alternative accommodation elsewhere may not be available in their area. A move to suitable accommodation in another area may bring with it loss of employment or other forms of very real hardship. And the margin between the rent that has to be paid and the housing benefit may be such that claimants will find themselves at risk of being evicted because they are genuinely unable to pay the rent when it falls due.” (and in paragraph 27, on p.549E-F): “The authority has a statutory duty to rehouse claimants who become homeless. There are likely to be cases where all that is needed to prevent homelessness is a reduction in the gap between the eligible rent and the alternative rent fixed by the housing benefit officer. Reducing the gap may be enough to enable claimants to meet their obligations and remain in the accommodation which they occupy. An interpretation of regulation 11(2) which would disable an authority from reducing the gap between the eligible rent and the housing benefit in cases where to do this would prevent homelessness would seem to be contrary to good sense. It would also, I think, be contrary to the overall purpose of the Regulations. I would hold that there is nothing in the wording of regulation 11(2) which drives one to the conclusion that the authority is so restricted in the discretion which it can exercise.”