Homelessness appeals and contracting out

The Court of Appeal recently decided that there was jurisdiction within a homelessness appeal to decide the lawfulness of contracting out, but that on the facts of the case, the homelessness review function had been lawfully contracted out by the local housing authority. Timothy Straker QC and Toby Vanhegan analyse the ruling.

In James v Hertsmere Borough Council [2020] EWCA Civ 489 the appellant applied in November 2017 to the authority for homelessness assistance. By a letter dated 24 August 2018, a homelessness review decision was made that he was not in priority need. The review was not carried out by the authority but by the Residential Management Group ("RMG"). The authority had contracted out their homelessness reviews to RMG by a contract signed on 23 August 2017 for one year until 11 April 2018. In about March 2018 the authority's authorised officer under the contract verbally agreed an extension for a further 12 months from 12 April 2018. 

The appellant appealed to the county court against the review decision. His grounds included a challenge to the lawfulness of the contracting out. In response, the authority's Leader and the Chief Executive purported to ratify the decision to contract out, and the contract extension, on 22 November 2018.

The appellant was not successful in the county court and appealed to the Court of Appeal. The authority filed a Respondent's Notice arguing, inter alia, that the county court had no jurisdiction to entertain contracting out issues on a section 204 appeal. 

The Court held that the correct interpretation of section 204 of the Housing Act 1996 is that a point of law arises from a decision if it concerns or relates to the lawfulness of the decision. It is not limited to points of law that might broadly but imprecisely be described as points of housing law, but extends to the full range of issues that would otherwise be the subject of a judicial review, including vires and therefore contracting out issues. If the issue is one of general public importance, the county court could transfer the appeal to the High Court.  

The Court also held that because RMG was instructed to carry out the review during the initial contract period, it was entitled under the terms of the contract, to complete that review even after the expiry of the initial term. In any event, there was a valid ratification by the Leader and the Chief Executive. They were not ratifying an ultra vires act, because the authority had the power to contract out the homelessness review function. 

Timothy Straker QC and Toby Vanhegan from 4-5 Gray’s Inn Square appeared for the appellant alongside Nick Bano (Garden Court Chambers). Counsel instructed by Andrew Perera from Arkrights Solicitors.