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1. MR JUSTICE RICHARDS: These proceedings concern the lawfulness of the scheme operated by the London Borough of Islington for the allocation of housing accommodation to those on its register of applicants. Ms Reilly and Ms Mannix are secure tenants of the authority but occupy accommodation which is plainly unsuitable for their needs. They have both applied to the authority for suitable alternative accommodation but have been unable to obtain it to date because they have been too low down in the queue for accommodation. By their applications for judicial review they challenge the system for determining relative positions in the queue, as well as specific decisions by the authority dated 16 April 1998 and 26 June 1998 respectively. The hearing of Ms Reilly's case (for which leave had previously been given by Collins J) came on before me at the same time as an application for leave by Ms Mannix. With the agreement of all parties I granted leave to Ms Mannix and directed that the two cases be heard together, with the evidence filed by the authority in the case of Ms Reilly standing also as evidence in the case of Ms Mannix. The issues raised by the two cases are the same.

2. Prior to the coming into force of the Housing Act 1996 local housing authorities had a general discretion with regard to the allocation of housing, subject to a duty under section 22 of the Housing Act 1985 to secure that in their selection of tenants a reasonable preference was given to prescribed categories of persons. The 1996 Act repealed section 22 of the 1985 Act and introduced in Part VI a new regime governing the allocation of housing accommodation. Part VI opens with section 159, the material provisions of which are as follows:

3. Thus the position on the face of it is that an authority's allocation of alternative accommodation to those who are already secure tenants of the authority is not covered by the detailed provisions of Part VI but remains the subject of the general discretion conferred by section 159(7). It is necessary, however, to look at some of the further provisions of Part VI because it is the applicants' submission, considered later, that they do apply in the circumstances to the allocation of accommodation to secure tenants.

4. Section 161 provides that a local housing authority shall allocate housing accommodation only to persons ("qualifying persons") who are qualified to be allocated housing accommodation by that authority, and goes on to define who are qualifying persons. Section 162 contains provisions concerning the housing register:

5. Section 167 governs the allocation of accommodation to those on the register. Its material provisions are these:

6. The descriptions of people to whom preference is to be given as mentioned in subsection (2) include, by way of example, people occupying insanitary or overcrowded housing or otherwise living in unsatisfactory housing conditions, families with dependent children and households consisting of or including someone with a particular need for settled accommodation on medical or welfare grounds. The descriptions have been extended, pursuant to a power contained in subsection (3), by The Allocation of Housing Regulations 1997 to include, amongst others, homeless persons to whom a main housing duty is owed.

7. Section 169(1) of the 1996 Act makes provision for guidance to be given to authorities by the Secretary of State:

8. Extensive general guidance exists in the form of a Code of Guidance on Parts VI and VII of the Housing Act 1996 (Allocation of Housing Accommodation; Homelessness), which I have seen in a copy containing revisions last made on 8 August 1997 and to which it will be necessary to refer in due course.

9. Part VII of the 1996 Act, to which the title of the Code also refers, contains a new regime governing the duties owed by local housing authorities to those who are homeless. It is not necessary to set out in any detail the duties that may arise under that Part, but the interaction between Parts VI and VII may be noted. Those to whom a full housing duty is owed under section 193 are included amongst those to whom reasonable preference is to be given under section 167(2) (see above). The full housing duty is limited to a period of two years (with a power to continue to secure the availability of accommodation thereafter) and ceases before then if, inter alia, "the applicant, having been informed of the possible consequence of refusal, refuses an offer of accommodation under Part VI and ... the authority are satisfied that the accommodation was suitable for him and that it was reasonable for him to accept it and notify him accordingly within 21 days of the refusal" (section 193(7)).

10. The published Allocations Scheme adopted by the London Borough of Islington pursuant to Part VI of the 1996 Act starts with a reminder of the severe housing shortage faced by the authority and a statement that "The Council's allocations policies, therefore, represent an attempt to ration an inadequate resource" (paragraph 1.2).

11. Section 3 of the published scheme explains that the authority's housing supply is let only to those applicants entered on its Housing Register and eligible for consideration for offers of accommodation in line with the policies and priorities set out in the scheme. Within the Housing Register, the authority operates the following lists: (i) Transfers (authority tenants and housing association tenants requiring a move to alternative accommodation), (ii) Statutory Homeless (homeless applicants placed in temporary accommodation who are in priority need, not intentionally homeless and who have a local connection with Islington and towards whom the authority has accepted a statutory duty under section 193 of the Housing Act 1996), and (iii) Waiting List (all other applicants entered on the Housing Register).

12. Section 4 states that housing applications are assessed in line with the authority's rehousing standards, which determine the number of bedrooms required by the applicant and her/his household. The standard is used to calculate the level of overcrowding for the purposes of the points schemes (see below) and the size of accommodation that will be offered to an eligible applicant.

13. Section 5 explains who makes the relevant decisions and then sets out the allocations system and priorities. Provision is first made for a percentage of available accommodation to be allocated to the statutory homeless:

14. There follows a series of paragraphs on allocations priorities for those on the Transfer List and Waiting List. Allocations of vacancies are decided on the basis of allocations points and subject to applicants' stated requirements regarding the location and type of property in which they wish to be housed. The basis of the points scheme is described as follows:

15. An applicant's points score for allocations priority is therefore the total of (i) the points for the highest category under which he or she is eligible (maximum 410 points), (ii) 100 additional points if eligible under more than one category, (iii) time points and (iv) discretionary points.

16. Determination of an applicant's eligibility to be included on the Transfer List in the first place is governed by a separate points scheme. It is unnecessary to consider the detail of that scheme, which is not itself under challenge, but I note that points are awarded for factors that include overcrowding, the extent of sharing of bedrooms by persons within the applicant's household (e.g. if two people of opposite sex both aged over 5 years and not living as a couple have to share a bedroom), whether the applicant's present accommodation involves the very young or elderly living on an upper floor without a lift, medical considerations and waiting time. The Chief Housing Officer has an overriding discretion to decide that an applicant is eligible for rehousing if there are exceptional circumstances. Eligibility for inclusion on the Waiting List is governed by its own points scheme.

17. In its affidavit evidence in the present proceedings, the authority has referred to the costly and time-consuming process of establishing a housing register and allocations scheme as required by the 1996 Act. The original scheme was expected to throw up problems which would become more apparent once it was in operation. The authority is aware that the scheme is not ideal and in particular that it is insufficiently flexible. In consequence, it is said, (i) a greater degree of discretion is operated in practice than is allowed for in the published scheme, and (ii) a review of the scheme has been under way since February 1998 and a revised allocations policy is currently being prepared and is due to be published soon.

18. As to the exercise of discretion, the authority's affidavit evidence is that, although the principle remains that transfer applicants should be dealt with in points order, cases may be dealt with out of order if the circumstances warrant. I have been told more specifically by counsel, on instructions, that the approach operated since November 1997 has been to apply paragraph 5.15 of the published Allocations Scheme, quoted above, as if the passages contained in square brackets were omitted, i.e. on the basis that the Chief Housing Officer may award additional allocations points in cases where there is an exceptionally serious threat to the health, safety or welfare of the applicant or a member of his/her household (but without the need for a potentially life-threatening risk). That is also said to be the form in which the discretion is expressed in the proposed revision to the published scheme. This specific information about the approach allegedly adopted in practice emerged in the course of the hearing. It is not set out in any of the documentary material before the court. Indeed, as explained below, it is contrary to the approach adopted by the authority in previous correspondence with the present applicants.

19. Ms Reilly resides with her two children, aged 4 and 8, in a one-bedroom flat on the top floor of a three storey block without a lift. Her application for a transfer was made in December 1992 and approved in March 1993. It is based on the following factors:

20. On the basis of the published Allocations Scheme, Ms Reilly's point score should be 410 for medical category A, 100 for eligibility under a further category (acute overcrowding or social need), and 5 for each month on the waiting list. Her entitlement under the authority's housing standards should be to a two-bedroom property.

21. On 8 July 1997 the authority notified Ms Reilly that she had 460 points and was number 1,935 in the queue for a two-bedroom property. That was plainly a mistake, in that her points score at the time should have been 765 (410 for medical category A, 100 for an additional category and 255 time points). By letter dated 15 December 1997 the authority notified her that she had 680 points and was 162nd in the queue. A further letter two days later referred to 695 points. In either case the points score was again plainly mistaken: allowing for the further time points since the previous notification, the correct total was 795 points.

22. Following further representations on behalf of Ms Reilly, the authority wrote to her in the following terms on 16 April 1998, the decision letter that she challenges:

23. That passage calls for a number of observations. First, the calculation of 805 points was still an error. The correct figure, as later acknowledged, was 815 points. The error was subsequently attributed to a failure to correct the computer system to reflect the fact that the number of allocation points for medical category A was 410, not the original figure of 400 when the scheme was introduced. That explanation, however, is not borne out by the material before the court, which shows a figure of 410 in the original scheme. The second observation is that the reference to three-bedroom properties is a mistake. It was later confirmed that she qualified for a two-bedroom property. Thirdly, what is said in the letter about the availability of discretionary points (a statement which was confirmed by the authority as late as August 1998) accords with the published scheme but flatly contradicts what I have been told about a wider discretion having been operated in practice since November 1997.

24. By the beginning of September 1998, immediately before the hearing of the judicial review proceedings, the authority's position had changed. By that time Ms Reilly had been awarded 1,724 points, putting her 2nd in the queue for a two-bedroom property. The points were made up as follows: 410 for medical category A, 100 for an additional category, 325 time points and 989 discretionary points. Those discretionary points are said to have been awarded by the Chief Housing Officer for the express purpose of bringing Ms Reilly up to second position in the queue, in recognition of the problems that she faces without heating or hot water as the autumn and winter approach.

25. Neither the resulting position nor the decision that led to it is one about which Ms Reilly complains. She is understandably content with second position in the queue. She is still aggrieved, however, at the way in which the authority has approached the question of allocation over the years.

26. Ms Mannix resides with her baby and two other children, aged 3 and 6, in a one-bedroom flat on the ground floor. Her application for a transfer was made in December 1994 and approved in January 1995. It is based on the following factors:

27. On the basis of the published Allocations Scheme, Ms Mannix's point score should be 300 for overcrowding, 100 for eligibility under a further category (the children's medical condition or social need), and 5 for each month on the waiting list. (It was submitted initially on her behalf that she qualified for 410 points under medical category A, with overcrowding qualifying for 100 points as an additional category. I am told, however, that the medical condition does not fall within medical category A but qualifies for eligibility only under a lesser, residual category attracting 100 points; so that overcrowding is her primary category, attracting 300 points.) Her entitlement under the authority's housing standards should be to a three-bedroom property.

28. On 11 September 1997 the authority notified her that she qualified for a transfer by reason of overcrowding and had 355 points. It appears that a further 30 points were awarded thereafter on an appeal. But in any event the points score was plainly wrong. There should have been a total of 560 points (300 for overcrowding, 100 for an additional category and 160 time points). On 11 February 1998 she was notified that she had 485 points: a puzzling print-out sent with the letter refers to 200 "start points", 185 monthly points and 100 extra points awarded to applicants with three children in one-bedroom units. At that time the correct points score should have been 585 (300 plus 100 plus 185 time points).

29. On 26 June 1998, in the decision letter under challenge, the authority informed Ms Mannix that she qualified for 605 points, namely 300 for overcrowding, 100 for an additional category (medical) and 205 for waiting time. No discretionary points were awarded.

30. In Ms Mannix's case, too, the authority's position had changed by the beginning of September 1998, immediately before the hearing of the judicial review proceedings. By that time she had been awarded 1,414 points, putting her 4th in the queue for a three-bedroom property. It appears that the points consisted of 300 for overcrowding, 100 for an additional category (medical), 215 for waiting time and 799 discretionary points awarded by the Chief Housing Officer for the express purpose of bringing her up to fourth place in the queue.

31. Like Ms Reilly, Ms Mannix is content with the position finally reached but is aggrieved at the authority's approach to allocation over the years.

32. In the event both applicants had achieved by the outset of the hearing at least the major part of what they were seeking in terms of allocations priority to reflect their perceived housing needs. Nevertheless it remained appropriate for the proceedings to continue. That is in part because the position of the applicants themselves is potentially affected by the outcome of one of the issues raised on their behalf (concerning the allocation of a percentage of properties to the statutory homeless, leaving only a limited pool available for others). More importantly, it is because the history of the applicants' cases raises concerns about the authority's scheme which have implications for other applicants: there exists a wider public interest in determining the lawfulness of the scheme.

33. On behalf of the applicants Mr Latham mounts a general challenge to the lawfulness of the Allocations Scheme itself, contending that (i) it is rigid and inflexible and precludes the authority from making a composite assessment of the applicants' housing needs and taking into account relevant matters, and (ii) it gives undue priority to the statutory homeless. Specific complaint is also made about the way in which the scheme was implemented in the case of the applicants and in particular about the decision letters that prompted the proceedings for judicial review.

34. The applicants' first contention focuses on the absence of any satisfactory provision in the Allocations Scheme for a composite assessment of housing needs. However many categories an applicant may fall under, the points score will be based solely on the score for the highest category and an additional 100 points for eligibility under one or more additional categories, together with time points and discretionary points. This results in a patently inadequate assessment of housing needs: there is a failure to take into account all relevant considerations and/or the approach is Wednesbury unreasonable. The problems are illustrated by the position of the present applicants. Leaving aside the recent addition of discretionary points, Ms Reilly's priority in the queue depended upon her disability (medical category A) and an additional 100 points for eligibility under other categories. No adequate account was taken of the fact that she suffered from severe overcrowding, or of the medical condition of either of her children, or of the absence of heating and hot water. Ms Mannix's priority depended on overcrowding and an additional 100 points for eligibility under other categories. No adequate account was taken of the ill health suffered by her and her three children, or of her damp and mouldy living conditions. As to the discretion to award additional points, (i) the discretion set out in the published scheme is excessively restrictive and amounts to an unlawful fetter of discretion, whilst (ii) the wider discretion which has now been applied so as to give both applicants high priority is contrary to the published scheme, is arbitrary and uncertain and does not compensate for the lack of satisfactory provision for the assessment of composite need in the main scoring system established by the scheme. Any discretion should be a residual discretion and should not be so wide as to account, as here, for a high proportion of the points ultimately awarded.

35. In support of those submissions reliance is placed on passages in the Code of Guidance, in particular those relating to the concept of "reasonable preference". For example, paragraph 5.7 states:

36. Paragraph 5.8 states that the flexibility inherent in the provisions of s.167 means that an authority should not operate on a purely formulaic basis. Authorities must behave rationally, taking into account all considerations relevant to housing and social needs, and ignoring irrelevant factors.

37. Reliance is also placed on R v. Lambeth London Borough Council, ex p. Ashley (1996) 29 HLR 385, a decision of Tucker J. That case concerned the compatibility of aspects of an allocation scheme with the "reasonable preference" provisions of section 22 of the Housing Act 1985. One provision was to the effect that a maximum of 20 points per household would be awarded where a person over three years old had to share a bedroom with a person or persons of the opposite sex over eight years old. That provision was found to be unlawful, for these reasons:

38. In the present case, it is submitted, the authority's Allocations Scheme suffers from a more general rigidity and inflexibility, in that it gives no adequate consideration to (i) the existence of distinct needs on the part of an applicant (e.g. a medical condition and overcrowding) or (ii) the existence of more than one individual affected by relevant needs in the applicant's household (e.g. several children affected by overcrowding).

39. On behalf of the authority, Miss Giovanetti takes issue first with the reliance placed by Mr Latham on Part VI of the 1996 Act, including the "reasonable preference" provisions of section 167 and the Code of Guidance. She submits that neither Part VI nor the Code governs the situation with which the present case is concerned, namely the allocation of alternative accommodation to existing secure tenants of the authority (transfer applicants). In my judgment that submission is well founded. I have already explained that the allocation of alternative accommodation is subject on the face of it to the general discretion conferred by section 159(7), not to the detailed provisions of Part VI. Although Mr Latham has put forward various arguments in an attempt to avoid the apparent position, I do not find them persuasive. Thus, the fact that an authority chooses to have a common register for Part VI applicants and transfer applicants (as permitted by section 162) does not render the transfer applicants subject to Part VI. Nor does the fact that an authority chooses to apply the same system of allocations to other applicants as it does to certain Part VI applicants (namely, in the present case, the Waiting List applicants). Similarly, the provisions of section 167 concerning reasonable preference do not govern the assessment of priorities as between Part VI applicants and transfer applicants; nor does the guidance given in the Code with regard to the discharge of an authority's duties under section 167. Moreover section 169, in requiring authorities "in the exercise of their functions under this Part" to have regard to the Secretary of State's guidance, is concerned in my view with guidance as to the exercise of their functions in cases to which the provisions of Part VI do apply, not with guidance concerning the exercise of the general discretion conferred by section 159(7) in cases where the provisions of Part VI do not apply. In conclusion, it may seem somewhat surprising that those who are already secure tenants but whose accommodation is unsuitable should be denied the benefit of Part VI, but in my view that is the clear effect of the statutory provisions.

40. Accordingly, as regards its applications to these applicants, the authority's Allocations Scheme falls to be assessed not on the basis of the statutory provisions or related ministerial guidance, but in accordance with general principles of public law. That is not to say that the court will close its eyes to the statute or the ministerial guidance. Although they do not govern the present situation, their substantive content may have a bearing on the lawfulness of the position at common law. Further, the very fact that the authority has chosen to apply the same scheme to certain Part VI applicants as to transfer applicants may help to illuminate the underlying objective and assist in determining whether the scheme provides a rational way of meeting that objective.

41. Looking at the matter in terms of general principles of public law, Miss Giovanetti accepts that the scheme as originally published was unduly rigid and inflexible because the ability to award discretionary points was unduly limited. She submits, however, that the scheme as now operated, i.e. on the basis of the wider discretion referred to above, avoids that problem and is lawful. A broad approach is necessary. Applicants' needs are not the only consideration. Management needs must also be taken into account (e.g. decants for renovation work, or the release of under-occupied properties). There has to be a broad balancing of unequal factors in order to determine where competing applicants should come in the list. Even if one limits attention to the issue of need, neither Part VI nor the relevant parts of the Code lay down any requirement that applicants be housed in order of need. Part VI simply requires a preference to be given to certain qualifying persons, and the Code emphasises the discretion enjoyed by authorities, referring to approaches that they may wish to adopt as regards priorities. A fortiori there is no requirement in relation to secure tenants to establish relative priorities in terms of precise needs. What the authority has done is to define certain factors which are commonly present and in respect of which degrees of preference will be given. There is nothing unreasonable about that approach. In particular, it is not unreasonable to fail to reflect the number of people affected by each factor, or to fail to reflect more fully the number of factors by which an individual applicant is affected. Further, the kind of detailed exercise that the applicants' case would require would be too difficult and burdensome in practice. In any event, the existence of the residual discretion means that in exceptional circumstances the authority can take into account the number of factors affecting an individual applicant and the number of people affected by a particular factor. The present cases involve exceptional circumstances, in that the families (or at least one of them) is facing another winter without heating or hot water, and are precisely the kinds of case with which the enlarged discretion is apt to deal.

42. Miss Giovanetti further submits that ex p. Ashley is distinguishable. It was decided on the basis that the relevant scheme excluded certain matters from consideration and therefore prevented reasonable preference being given as required by section 22 of the 1985 Act. In the present case one is not concerned with a statutory requirement to give reasonable preference and the existence of a discretion operates to ensure that matters are not excluded from consideration.

43. In reaching my conclusions on this issue, I have taken careful account of the fact that the court is concerned with a broad discretionary power and must be careful not to impose upon the authority, under the guise of judicial review, judgments that are properly those of the authority or obligations that Parliament has refrained from imposing upon the authority (e.g. by requiring it to determine priorities by reference solely to housing need or to give reasonable preference to transfer applicants falling within defined categories of need). The principles of public law nevertheless have an important role to play in determining whether the authority has exercised its discretion lawfully.

44. That is illustrated by a point now conceded on behalf of the authority, namely that the scheme in its published form is unduly rigid and inflexible, in that it provides for the assessment of individual cases by reference to the points system already described and circumscribes the residual discretion so that additional points can be added (otherwise than for management reasons) only where there is a life-threatening risk to health, safety or welfare. It meant that the cases of the present applicants could not be given a priority which the authority has now recognised to be appropriate. To that extent the published scheme is rightly conceded to be unlawful in accordance with established principles (and it matters not whether the matter is analysed in terms of a fetter on discretion or on the basis that the provision precludes relevant considerations from being taken into account).

45. I doubt whether the problem of rigidity is solved by permitting a wider discretion in the terms which are said now to apply in practice and which are included in the proposed revisions to the published scheme. That discretion can still be exercised only in cases where there is "an exceptionally serious" threat to the health, safety or welfare of the applicant. It is a high threshold. The present applicants got over it, but as an exhaustive statement of the circumstances (other than management factors) in which a residual discretion may be exercised so as to alter an applicant's position in the queue it strikes me as remaining unduly restrictive.

46. In my judgment, however, the problem about the scheme goes deeper than that. In determining priorities for the allocation of available housing accommodation to transfer applicants, the authority has decided to place very considerable weight on the respective housing needs of applicants. That is evident from the wording of the Allocations Scheme, from the authority's evidence relating to the scheme and indeed from the authority's eventual decision in relation to the present applicants. It is also evident from the fact that the authority has decided to apply the same system for determining priorities to transfer applicants as to waiting list applicants to whom the "reasonable preference" provisions of Part VI of the 1996 Act and the related paragraphs of the Code of Guidance apply. Thus far the approach is entirely understandable and reasonable. Of course, housing need is not the only factor taken into account. Waiting time is another; management considerations (decants etc.) are relevant and may be overriding in appropriate cases. Housing need is, however, a very important factor. The question then arises, however, whether the authority's approach to the assessment of housing need is a rational approach. That is where the deeper problem seems to me to lie.

47. There can be no doubt that, subject to the residual discretion, the method of calculating allocations points under the present scheme is incapable of producing a fair assessment of applicants' respective housing needs. That is because it makes only very limited allowance for multiple categories of need (the grant of 100 additional points for eligibility under further categories) and makes no allowance at all for the number of persons within the applicant's household who are affected by a particular category of need (e.g. the number of children affected by overcrowding or suffering from a medical condition). There is no possibility of a "composite" assessment, to use the applicants' expression.

48. Nor do I think that the residual discretion can be viewed as a rational way of redressing the balance. Even leaving aside my concerns about the restrictive nature of the discretion available in practice under the scheme as presently operated, the residual discretion is not a satisfactory way of bridging the gap between the outcome of the category-based points calculation and the true assessment of need. It is too vague and uncertain and results in a disproportionately large element of need being subject to assessment on an undefined and unguided discretionary basis. That is underlined by the facts of the present cases. The discretionary points ultimately awarded to Ms Reilly and Ms Mannix (almost 1,000 and almost 800 respectively) were far greater than their category-based points; and the discretionary judgment was not to the effect that a particular need justified, say, an extra 300 points, but was simply a judgment that these applicants ought to be given enough additional points to bring them near the top of the queue. It is unsurprising that the applicants, though not complaining about their resulting positions in the queue, complain about the potential inconsistency and arbitrariness to which such a system lends itself.

49. The conclusion I reach is that the authority's present allocations scheme, in failing to make adequate provision for a composite assessment of housing need, is one that no reasonable authority would adopt and is unlawful for that reason. The present case does not fall within the ratio of R v. Lambeth Borough Council, ex p. Ashley (supra), since the existence of a residual discretion (subject to my concerns about the restrictive nature of that discretion) means that account can be taken of the number of persons affected as well as of the number of categories of need. But there is in this case an echo of the point made by Tucker J in ex p. Ashley about the illogicality of limiting the number of points for a particular category in a way that fails to reflect what might be gross differences between different households. For the reasons I have given, the category-based element of Islington's scheme suffers from an analogous failing; and the existence of the residual discretion is not sufficient to render the overall result rational.

50. I stress that it is for the authority to decide on the particular categories of need to be included in an allocations scheme of this kind, and to decide into which categories individual applicants fall. The criticisms made in this judgment relate to a broad question of approach and are not intended to impose any particular template upon the authority. Nor do I believe that it would place a serious additional burden upon the authority to operate a scheme that made adequate provision for a composite assessment of need. The kinds of judgment to be made would be no different from those that have to be made now, albeit that there would be greater reliance on specific categories and less on the residual discretion (though a residual discretion would still be required).

51. The applicants' submission is that the Allocations Scheme gives undue priority to the statutory homeless by reason of the provision in paragraph 5.6 that 50 per cent of all vacancies are to be allocated to that group. That is said to be directly contrary to the legislative purpose of the 1996 Act, namely to provide a single route into social housing and to remove what was perceived to be an automatic priority for the statutory homeless. It also gives an absolute priority to the statutory homeless, whereas section 167 of the 1996 Act (as extended by the 1997 Regulations) permits no more than a reasonable preference to be given to them. In any event the applicants themselves are also in groups to whom a reasonable preference is to be given under section 167. The point is also made that Ms Reilly has elected not to apply under the homelessness provisions but should not thereby be prejudiced in terms of waiting time: one of the purposes of the 1996 Act is to ensure that there is a single route to social housing and that the statutory homeless should not have an automatic priority. By allocating a percentage of properties to the statutory homeless, the pool available for allocation to others is reduced.

52. That submission is dependent upon the applicability of Part VI to the present case. For reasons already given, I do not think that the applicants are able to rely on Part VI in that way. In any event I would reject the submission as being wrong in substance. As Miss Giovanetti points out, the 50 per cent quota for the statutory homeless is not set in stone and can be varied by the Director of Neighbourhood Services: I refer to the provisions of paragraphs 5.6-5.9 quoted above, which confer a broad discretion upon him. Further, the existence of a quota is not inherently inconsistent with the giving of "reasonable preference" but can be a lawful and rational way of giving such a preference. In the present case, on the material before the court, I do not think that there is anything unreasonable in adopting a quota for the statutory homeless or about the particular figure adopted. I observe finally that it is irrelevant that Ms Reilly might qualify under the provisions governing statutory homelessness. She has not applied under those provisions (and, for reasons it is unnecessary to consider, might not have found it to her advantage to do so). Her position has to be judged on the basis that she is a secure tenant seeking a transfer.

53. In addition to their challenge to the lawfulness of the scheme itself, the applicants complain of the seemingly arbitrary way in which their cases have been approached by the authority. Several assessments were notified to them, all of them wrongly calculated, prior to the decisions immediately before the hearing of the judicial review proceedings, and there can be no confidence that applicants given a higher priority have been assessed accurately. In the case of Ms Reilly, the letter of 16 April 1998 miscalculated the number of points under the scheme (for which an erroneous explanation was subsequently given), referred erroneously to a three-bedroom property rather than a two-bedroom property, and denied her the possibility of any discretionary points (referring only to the restrictive discretion set out in the published scheme). In the case of Ms Mannix, the letter may have accurately calculated the points under the scheme (the submissions advanced on the premise that she qualified for 410 points under medical category A appear to have been based on a false premise, to which I have already referred) but made no mention of the possibility of additional discretionary points. Mr Latham submits that in all the circumstances both decisions were plainly unlawful and should be quashed notwithstanding that they have now been superseded by further decisions.

54. The authority, through Miss Giovanetti, recognises and apologises for the problems caused to these applicants by the handling of their cases over time. The importance of accuracy and certainty is acknowledged. It is submitted, however, that no sensible purpose could now be served by the quashing of the previous decisions. I accept that submission. The way in which these applicants' cases have been approached by the authority over time has caused me considerable concern and it is common ground that the original decisions were unlawful. But matters have moved on. It would not be an appropriate exercise of the court's discretion to quash decisions that have been superseded. Any point that the applicants wish to make elsewhere about the unsatisfactory and unlawful way in which the authority has dealt with them can be made by reference to the body of this judgment.

55. This application succeeds in so far as it challenges the lawfulness of the authority's general approach to the assessment of housing need. I will hear counsel on the form of declaratory relief that may be appropriate to give effect to my judgment on that issue.

56. MR LATHAM: My Lord, I do not know whether you have seen a proposed order?

57. MR JUSTICE RICHARDS: I have not. We do not have an associate.

58. MR LATHAM: There is a copy on the bench below you.

59. MR LATHAM: My Lord, it seems that the formulation of the declaration that my Lord has given would stand in place of one.

60. MR JUSTICE RICHARDS: Yes. It seemed to me -- again subject to anything either of you wish to say -- that it was better to express a declaration in fairly general form, the content of the unlawfulness being apparent from the terms of the judgment, rather than to try to place a straitjacket upon the matter by the kind of terminology that is here used.

61. MR LATHAM: My Lord, your phrase takes into account the two factors we specified and I think both of us are happy with my Lord's formulation.

62. My Lord, if I move to the additional orders, it may well be that the orders for certiorari are now otiose. I would ask for the general orders of mandamus that secure suitable alternative accommodation for the occupation of the applicants according to law for this reason. Without that there would be no liberty to apply and even though we know that the applicants are towards the top of the list -- second and fourth respectively -- there is always the risk that they could never be at the front. It is perhaps in an excess of caution that I would seek this order and I understand that an offer has been made to Miss Reilly already. It has not been accepted, so I do not anticipate problems but there is always a possibility.

63. MR JUSTICE RICHARDS: Not only is it an excess of caution, but you have the difficulty that you expressed yourself as being content with their position in the list as established immediately prior to the hearings and in those circumstances is it appropriate for any mandatory relief to be issued by the court?

64. MR LATHAM: My Lord, in my submission, in expressing contentment with the current assessments I am not seeking any order quashing those assessments, but it is accepted by the respondent that as a consequence of those assessments they should be offered accommodation within the immediate future.

65. MR JUSTICE RICHARDS: And that being accepted, do you need more?

66. MR LATHAM: My Lord, I might, but I do not push.

67. MR JUSTICE RICHARDS: I see. What do you say about that, Miss Giovanetti?

68. MISS GIOVANETTI: My Lord, firstly, we are happy with the declaration as formulated by your Lordship.

69. MR JUSTICE RICHARDS: We now have an associate. Let me make sure that we get this declaration down.

70. MISS GIOVANETTI: My Lord, the declaration reads: "A declaration that the respondent's policy for assessing the respective housing need of transfer applicants is unlawful insofar as it fails to make adequate provision for a composite assessment of the housing needs of transfer applicants."

71. Your Lordship may remember that the revised policy was due to be published. It has not been published. Those instructing me have a copy of your Lordship's judgment and it will be taken into account.

72. MR JUSTICE RICHARDS: I am grateful. As to the order of mandamus that is sought?

73. MISS GIOVANETTI: My Lord, we say it is completely unnecessary. The applicants have indicated that they are satisfied with the assessment. One offer has already been made. Our understanding has been communicated to Mrs Mannix. We do not have final confirmation of that, so I make that clear. But they are currently open to offer.

74. MR JUSTICE RICHARDS: Yes. There will be no order of mandamus. I see that the draft order has the respondent paying the costs. You cannot resist that?

75. MISS GIOVANETTI: No. My Lord, the only other thing is that we would ask for leave to appeal in this matter. As your Lordship heard, it is both to my learned friend's knowledge and mine the first full hearing of challenge to the Part VI policy or transfer allocation schemes.

76. MR JUSTICE RICHARDS: Though it has the oddity that, on the basis of reasoning adopted in my judgment, it is not within Part VI, albeit it is the same policy applied to Part VI cases as to non Part VI cases.

77. MISS GIOVANETTI: My Lord, it may be that if your Lordship gives leave to appeal, my learned friend might have a respondent's notice in mind. It is a point he is interested in. My Lord, but it is not just from this authority's point of view but from the point of view of a number of authorities. As your Lordship has heard, it is not uncommon to have so broad a category, plus a provision of discretion. It is a common approach. This is a matter of great interest and concern to other authorities. We would submit that it is an appropriate case for the Court of Appeal to consider. It would speed up the process and we would ask you for leave.

78. MR JUSTICE RICHARDS: I hear what you say, but the issue of construction as to the applicability of the Part VI provisions was decided in the respondent's favour.

79. MR JUSTICE RICHARDS: The decision as to rationality was ultimately a decision on the particular facts of the respondent's scheme as published and as operated in practice. In my judgment that is the kind of matter where it is appropriate to leave the parties to seek the leave of the Court of Appeal if they wish to take it further.

80. MISS GIOVANETTI: My Lord, I hear what your Lordship says. It is common ground that this is an absolutely standard formulation of policy. Categories of this sort are in use by a number of housing associations in London --

81. MR JUSTICE RICHARDS: I hear what you say. Whatever might be said on behalf of the applicants in relation to the matter I do not think this is an appropriate case for me to grant leave to appeal.

82. MR LATHAM: My Lord, may I add: there are potential problems about an appeal in that as soon as these applicants are rehoused, as far as the Legal Aid Board are concerned they may not have sufficient locus to support any appeal, but perhaps that is a matter for the Court of Appeal if the matter goes further.

83. MR LATHAM: My Lord, the only other matter is that I would ask for legal aid taxation.

84. MR JUSTICE RICHARDS: I will grant legal aid taxation. Thank you both very much.