Case No: B5/2014/2185
Neutral Citation Number: [2015] EWCA Civ 1051
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COUNTY COURT AT BIRMINGHAM
His Honour Judge Worster
Case No. BM 30213A
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 27/10/2015
Before :

LORD JUSTICE RICHARDS
LORD JUSTICE FLOYD
and
LORD JUSTICE SALES
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Between :

	Terryann Samuels	Appellant	
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	Birmingham City Council	Respondent	

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James Stark (instructed by Community Law Partnership) for the Appellant
Jonathan Manning and Emily Orme (instructed by Birmingham City Council Legal and Democratic Services) for the Respondent

Hearing date : 6 October 2015
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Judgment
Lord Justice Richards : 
1.	The appellant was formerly an assured shorthold tenant of 18 Dagger Lane, West Bromwich, Birmingham.  Her contractual rent was £700 a month, towards which she received housing benefit of £548.51 a month, leaving a shortfall of £151.49 payable by her.  She fell into rent arrears, as a result of which she was given notice by her landlord to leave the property in July 2011.  She subsequently made two applications to Birmingham City Council (“the council”) for assistance under the homelessness provisions of the Housing Act 1996 (“the 1996 Act”).  The first application was made in June 2012, the second in July 2013.  In each case the council decided that she was intentionally homeless, on the ground that the accommodation at Dagger Lane had been reasonable for her to continue to occupy and had, in particular, been affordable, and that the loss of the accommodation was the result of her deliberate act in failing to pay the rent.  The decision in respect of the first application is not directly in issue but the application is relevant for the information which came into the council’s possession in the course of it.  The decision in respect of the second application was the subject of an appeal to the County Court.  The appeal was dismissed by order of His Honour Judge Worster, sitting in the County Court at Birmingham.  A further appeal is now brought against the judge’s order, with permission granted by Patten LJ.
2.	The appeal to this court focuses on the finding in the review decision that the accommodation at Dagger Lane was affordable.  The grounds of appeal are, in summary, that (1) there was a failure to have regard to relevant considerations, (2) the judge was wrong to take into account an email from the decision-maker relating to one aspect of the reasoning in the decision, and (3) the decision was inadequately reasoned.
The legal framework
3.	It is not necessary to go into the homelessness provisions of the 1996 Act in any detail.  The full housing duty under section 193 arises in respect of a person where the local housing authority are satisfied that various conditions are met in relation to that person and “are not satisfied that he became homeless intentionally”.  By section 191(1), a person becomes homeless intentionally “if he deliberately does or fails to do anything in consequence of which he ceases to occupy accommodation which is available for his occupation and which it would have been reasonable for him to continue to occupy”.  
4.	Section 177(3) empowers the Secretary of State by order to specify matters to be taken into account or disregarded in determining whether it would be, or would have been, reasonable for a person to continue to occupy accommodation.  Article 2 of the Homelessness (Suitability of Accommodation) Order 1996 (“the 1996 Order”), made in the exercise of that power, provides in material part as follows:
“2. Matters to be taken into account
In determining whether it would be, or would have been, reasonable for a person to continue to occupy accommodation … there shall be taken into account whether or not the accommodation is affordable for that person and, in particular, the following matters –
(a) the financial resources available to that person, including, but not limited to –

(i) salary, fees and other remuneration;
(ii) social security benefits;
…
(b) the costs in respect of the accommodation, including, but not limited to –
(i) payments of, or by way of, rent;
…
(d) that person’s other reasonable living expenses.”
5.	Section 182(1) requires a local housing authority, in the exercise of its functions relating to homelessness, to have regard to such guidance as may from time to time be given by the Secretary of State.  The relevant guidance is contained in the Homelessness Code of Guidance for Local Authorities (“the Code Guidance”).  Paragraph 17.39 of the guidance sets out article 2 of the 1996 Order, with additional italicised comments.  It states inter alia that account must be taken of:
“(a) the financial resources available to him or her (i.e. all forms of income), including, but not limited to:
i)  salary, fees and other remuneration (from such sources as investments, grants, pensions, tax credits etc.);
ii) social security benefits (such as housing benefit, income support, income-based Jobseekers Allowances or Council Tax benefit etc.) ….”
6.	Paragraph 17.40 reads:
“In considering an applicant’s residual income after meeting the costs of the accommodation, the Secretary of State recommends that housing authorities regard accommodation as not being affordable if the applicant would be left with a residual income which would be less than the level of income support or income-based jobseekers allowance that is applicable in respect of the applicant, or would be applicable if he or she was entitled to claim such benefit.  This amount will vary from case to case, according to the circumstances and composition of the applicant’s household.  A current tariff of applicable amounts in respect of such benefits should be available within the authority’s housing benefit section.  Housing authorities will need to consider whether the applicant can afford the housing costs without being deprived of basic essentials such as food, clothing, heating, transport and other essentials ….”
7.	As to the statutory decision-making sequence, section 184 of the 1996 Act governs the housing authority’s initial decision, section 202 confers a right to request a review, and section 204 confers a right of appeal to the County Court against the review decision.
The facts
8.	The appellant was the tenant of 18 Dagger Lane between November 2010 and July 2011.  During that period her household consisted of herself and four children.  Two of the children were her own:  Jada (born on 19 January 2004) and Jade (born on 23 January 2006).  The other two were her niece and nephew, called Kyra and Kyron, who were her sister’s children.
9.	The landlord gave the appellant notice to leave 18 Dagger Lane  because she was in arrears of rent.  She left there in July 2011.  It is unnecessary to consider where she then moved to, or the circumstances that led her subsequently to apply to the council for assistance under the homelessness provisions of the 1996 Act, because it was found as a fact and is not in dispute that 18 Dagger Lane was her last settled accommodation, from which she was deemed to be homeless.
10.	When the appellant left 18 Dagger Lane, Kyra and Kyron did not accompany her to her next accommodation but went to live with her mother.   Thereafter the appellant gave birth to two further children of her own:  Jayiah (born on 25 August 2011) and Jaden (born on 26 April 2013).  So the number of children in her household went down at first to two, then up to three and eventually back to four.
11.	In June 2012 the appellant made her first homelessness application to the council.  She has difficulty reading and writing but the application was made with the assistance of a support worker from a charitable organisation known as ANAWIM.  The application form referred directly only to the three children in her household at the time of the application. In addition to the application form, however, various documents and information were provided by her or on her behalf.  They included:
i)	An amended child tax credits award from HM Revenue & Customs, dated 28 March 2012, identifying four qualifying children (Jada, Jade, Kyra and Kyron) in the period 6 April 2011 to 20 July 2011, which covered the latter part of the appellant’s stay at 18 Dagger Lane.  
ii)	A completed income and expenditure form:  (a) Under income, the form listed “Tax credits £756”, “Income Support £268”, and “Child Benefit £240”.  The figures for tax credits and income support were in fact the weekly figures multiplied by four, not precise monthly figures.  The figure for child benefit was the monthly figure for four children.  (b) The first item under expenditure was rent £151.49, which was the balance of monthly rent at 18 Dagger Lane after receipt of housing benefit.  The other items were food/household items £150, electricity £40, gas £50, school meals £20, travel costs & maintenance £60, telephone £20, and daughter’s gymnastics £40.
In the course of a follow-up telephone enquiry by a council officer, the appellant confirmed that when she resided at 18 Dagger Lane she was in receipt of child tax credits of £189 a week (i.e. £819 a month), income support of £67 a week (i.e. £290.33 a month) and child benefit of £240 a month.  She also confirmed that the expenditure figures that had been provided were correct.  
12.	In the statement in support of her application the appellant said that she had been unable to meet the shortfall in rent.  In a section 184 decision dated 9 August 2012, however, the council concluded that her accommodation had been affordable and that she was intentionally homeless.  That decision was upheld on review, by letter dated 25 March 2013.  The review decision was not challenged.
13.	The appellant had been provided with temporary accommodation during consideration of her June 2012 application.  In July 2013, on eviction from that temporary accommodation, she made a further homelessness application.  The application form referred only to her current family of four children, not to her household at the time when she lived in 18 Dagger Lane.  It stated that she gave up 18 Dagger Lane because she could no longer afford the rent.  In the course of a telephone enquiry by a council officer, she confirmed that the income and expenditure form completed in relation to the previous application was correct.
14.	In a section 184 decision dated 20 August 2013 the council again concluded that the accommodation at 18 Dagger Lane had been affordable and that the appellant was intentionally homeless.  When dealing specifically with affordability, the decision said nothing about the size or composition of the appellant’s household, but in considering the suitability of the accommodation it referred in terms to her current household (“You have four dependent children; this is including your new born child”) rather than to her household at the time when she resided at 18 Dagger Lane.  But nothing turns directly on this, since the decision was superseded by a review decision and, as explained below, the language of the review decision was materially different.
15.	By letter of 30 August 2013, the appellant’s solicitors requested a review of the section 184 decision.  In further representations dated 17 October 2013, they contended that the figure of £150 per month for food/household items shown in the statement of income and expenditure previously submitted was “laughable” and would be more appropriate as a weekly amount rather than a monthly one.  
16.	On 25 October 2013 the officer with conduct of the review at that time sent a “minded to uphold” letter to the appellant’s solicitors, indicating that although there was an irregularity or deficiency in the section 184 decision, in that it did not adequately demonstrate that due consideration had been given to the relevant maters when arriving at the decision, she was minded to uphold the decision.  She invited further representations.  
17.	On 1 November 2013 the solicitors sent a revised income and expenditure form, stating:  “Whilst it is impossible for our client, who as you are aware, has learning difficulties, to remember precise details, we are confident that these figures are reasonably accurate”.  On the revised form, the income figures were unchanged.  As to expenditure, the figure for rent shortfall remained the same but some of the other figures were increased and additional items were included.  The full list was:  food/household items £750, electricity £80, gas £100, clothes £50, TV licence £43.33, school meals £43.33, travel costs & maintenance £108.33, telephone £20, daughter’s gymnastics £40.  
18.	The council’s review decision, dated 11 December 2013, again concluded that the appellant was intentionally homeless.  On the first page of the decision there was a list of material taken into consideration, including the Code of Guidance, information from the council’s records and the representations from the appellant’s solicitors.  The conclusion on intentional homelessness repeated that consideration had been given to the statutory guidance.
19.	The key passage in the decision is the discussion of affordability.  It referred first to the undisputed monthly rent shortfall of £151.49 after payment of housing benefit, and to the information previously provided about monthly income.  It continued:
“At this time, you gave information relating to your outgoings which suggested that your total monthly expenditure on all household items was in the region of £530, leaving a significant amount of disposable income from which to fund your shortfall.  You clarified on more than one occasion that this income and expenditure information was correct when questioned as part of your original homeless application and review.
Your representatives now seek to amend the figures that you gave for income and expenditure at this time.  It is now asserted that your monthly income from benefits was £1264, and that your monthly outgoings were £1386.48, leaving a deficit between your income and outgoings of around £140 per month, or £32 per week.  It is now asserted that contrary to the provided figure of £150 for housekeeping, the actual figure was £750 per month, or £173 per week.  This figure seems to me be excessive for a family of your size, given that this is purported to only account for food and household items, with utilities and travel expenses accounted for elsewhere.  I accept that a figure of £150 per month for food and household bills for a family of your size is equally likely to be inaccurate, but I consider that it is a matter of normal household budgeting that you would manage your household finances in such a way as to ensure that you were able to meet your rental obligation.  I cannot accept that there was not sufficient flexibility in your overall household income of in excess of £311 per week to meet a weekly shortfall in rent of £34.
I note that during your homeless application in June 2012 you confirmed that whilst you have learning difficulties, the extent of these difficulties is that you have difficulty managing big words and lengthy letters, but that you are able to manage by reading correspondence slowly.  You also confirmed that you are able to manage to pay your bills on time and manage your finances.  I consider that given that you have confirmed that this is the case, there is no reason to assume that you would have been unable to manage a household budget in such a way as to leave sufficient excess income to pay your rent shortfall.  Having given consideration to the facts available to me, I conclude that the accommodation at 18 Dagger Lane was affordable for you.”
In a later passage concerning the question whether the accommodation was reasonable for the appellant to continue to occupy, the decision stated:  “The property was of suitable size for your household”.  
20.	The appellant appealed to the County Court against that review decision.  The question whether the council had taken proper account of the appellant’s household at the relevant time was raised only at a very late stage in the appeal.  On the afternoon before the hearing, counsel for the appellant (Mr Stark) sent an email to counsel for the respondent (Miss Orme, who appeared by herself below but was led by Mr Manning on the appeal to this court) stating that the documents showed that the appellant “was in fact caring for 4 children and not 2 children before she left 18 Dagger Lane”.  This was said to be plain from the HM Revenue & Customs child tax credits document and from the amount of child benefit paid (see paragraph 11(i) and (ii) above).  The email asserted that the council did not make any enquiry as to who formed the appellant’s household at Dagger Lane, whereas the need for such an enquiry should have been obvious; and that the council “have assessed her household as including only 2 children when in fact it included 4 with the obvious consequences for expenditure”.  Mr Stark indicated that he would seek to amend his skeleton argument to raise these points.
21.	Mr Stark’s email and the tax credits document to which it referred were forwarded to the author of the review decision, Mr Grant Kennelly, with the comment:  “In the review letter it says ‘This figure seems to be excessive for a family of your size ….’  But I don’t know whether that is referring to 2 children or 4 children.”   Mr Kennelly replied:
“I was referring to a household of four children in my review letter.  At the time of the review, the household comprised the applicant and her own four children – the niece and nephew were no longer part of her household.  She has had two further children of her own since leaving Dagger Lane so her household remained one of four children.  I probably should have clarified this in the letter but I was referring to a household of four children at the time that she was residing at Dagger Lane.”
22.	At the hearing of the appeal, the judge allowed Mr Stark to amend his grounds of appeal and skeleton argument to take the points about the size of the household.  The judge also held that the email from Mr Kennelly should be admitted into evidence and taken into account.  He went on to give a clear and detailed judgment rejecting the appellant’s challenge to the review decision.  I will examine his reasoning as necessary when considering the submissions on the further appeal to this court.
The first ground of appeal:  relevant considerations
23.	The first ground of appeal raises a number of points under the general heading of failure to have regard to relevant considerations.
24.	Mr Stark’s primary submission is that when an applicant is reliant entirely on benefits to support herself and her family, regard should be had to the fact that such benefits are set at subsistence level and are not designed to give a level of income that allows flexibility to spend outside maintaining a very basic standard of living.  In particular, income support, child tax credits and child benefit are not intended to cover housing costs; it is the purpose of housing benefit to cover those costs.  Further, child tax credits and child benefit are specifically designed to address the costs and expenses of the upbringing of children and to support the welfare of the children, and that purpose is likely to be affected if sums are diverted to pay additional housing costs.  The starting point in such a case should therefore be that reasonable living expenses are matched by benefits income and that there is no flexibility within such income for the payment of additional housing costs.  Mr Stark accepted that the point might not hold good at the margins, such as in relation to the payment of a modest sum of arrears in order to avoid possession proceedings.  He also appeared to treat the starting point as a form of rebuttable presumption, accepting that if there were specific evidence that a person’s benefits income left room for payment of housing costs as well as other reasonable living expenses, that evidence would have to prevail.  He submitted, however, that the council failed to have regard to the starting point in making the review decision.
25.	I do not accept that a decision-maker is required to proceed by reference to such a starting point.  The 1996 Order and the Code of Guidance (paragraphs 4-6 above) make clear that in determining whether it would be, or would have been, reasonable for a person to continue to occupy accommodation, account should be taken of whether the accommodation is affordable and, in particular, of all forms of income (including social security benefits of all kinds) and of relevant expenses (including rent and other reasonable living expenses).  This suggests that a judgment has to be made on the basis of income and relevant expenses as a whole.  It does not suggest that benefits income is to have any special status or treatment in that exercise, let alone that one should adopt the starting point formulated by Mr Stark.  The Code of Guidance does recommend that authorities regard accommodation as not being affordable if the applicant would be left with a residual income less than the level of income support or income-based jobseekers allowance that is or would be applicable in respect of the applicant; but that is a different and more specific point, the application of which to the present case is considered below.
26.	In support of his approach, Mr Stark relied on a passage in the judgment of Henderson J in Burnip v Birmingham City Council & Another [2012] EWCA Civ 629, [2013] PTSR 117.  At the hearing of the appeal he did not take us to Burnip itself but referred us to a submission recorded at paragraph 24 of the judgment of Patten LJ in Farah v Hillingdon London Borough Council [2014] EWCA Civ 359, [2014] HLR 24.  That submission, relying on Burnip, was to similar effect as the submission made by Mr Stark in the present case; but since the court in Farah did not express any view on the point, Mr Stark’s way of dealing with Burnip was highly unsatisfactory.  After the hearing, without notice and without permission, and at a time when he had been notified that the court’s draft judgment was ready for distribution, he sent in further written submissions on Burnip and other matters, together with a copy of the judgment in Burnip and other materials.  This, too, was a highly unsatisfactory way of proceeding.  We decided, however, to invite written representations from the council in response and then to consider how to deal with the matter.  In the event, in relation to Burnip, I think it right for the court to consider the actual judgment and the submissions relating to it, rather than to confine attention to the way it was dealt with at the hearing.
27.	The claimant in Burnip was a severely disabled man who lived in a two bedroom flat in the private rented sector.  He required an overnight carer  who stayed in the second bedroom.  But his housing benefit was calculated by reference to the single bedroom rate which would have applied to able-bodied tenants.  The other claimants whose cases were before the court raised similar concerns.  The Court of Appeal held that the statutory criteria for calculating the housing benefit constituted prima facie discrimination against the severely disabled, within article 14 of the European Convention on Human Rights.  The next question was whether the Secretary of State had established an objective and reasonable justification for the discriminatory effect of the statutory criteria.  That question was addressed in the judgment of Henderson J, with whom the other members of the court agreed.  He said that in order to evaluate the Secretary of State’s case on justification, “it is first necessary to have a fuller understanding of the function, operation and interaction of the various social security benefits which were available to the claimants”, and that it would be wrong to view housing benefit in isolation (paragraph 29).  He set out a detailed analysis of the benefits paid to Mr Burnip (incapacity benefit, disability living allowance and housing benefit itself), in addition to student loan income.  He then raised the question whether “the wider benefits context” justified the discrimination.  He answered that question in the negative, for reasons that included the following:
“45.  First, I think it is necessary to draw a clear distinction between the benefits which Mr Burnip was entitled to claim for his subsistence, and those which he was entitled to claim in respect of his housing needs.  His incapacity benefit and disability living allowance were intended to meet (or help to meet) his ordinary living expenses as a severely disabled person.  They were not intended to help with his housing needs.  This is demonstrated, in my view, not only by the availability of HB [housing benefit] and discretionary housing payments as separate benefits with separate rules applicable to them, but also by the way in which HB is structured.  As I have explained, the amount of HB is fixed by reference to an applicable amount which represents what the claimant is taken to need to live on, and if a claimant’s reckonable income exceeds his applicable amount, the amount of HB is reduced by 65% of the excess.  Furthermore, Mr Burnip’s applicable amount included the three disability premiums which I have mentioned, while the whole of his disabled living allowance was disregarded in the calculation of his reckonable income.  Thus it was only if (in broad terms) his incapacity benefit and student loan together exceeded his applicable amount that any reduction would fall to be made in the amount of his HB; and to the extent that there was such an excess, the HB rules themselves prescribed how it was to be taken into account. It would therefore be wrong in principle, in my judgment, to regard Mr Burnip’s subsistence benefits as being notionally available to him to go towards meeting the shortfall between his housing-related benefits and the rent he had to pay.”
28.	Mr Stark submitted that Henderson J’s approach in that case to incapacity benefit and disability living allowance applies equally to the benefits received by the appellant in the present case (income support, child tax credits and child benefit):  they are subsistence benefits set at a level to meet reasonable living expenses, not to meet a shortfall between housing benefits and rent.  
29.	In my judgment, however, Henderson J’s reasoning provides little assistance to Mr Stark.  It was addressed to the different question whether the availability of the other benefits payable to Mr Burnip could justify the discriminatory effect of the statutory criteria relating to housing benefit; and the reasoning depended in part on the fact that that his disability living allowance was specifically disregarded in the rules relating to the calculation of housing benefit.  The judge’s statement that it would be wrong in principle to regard Mr Burnip’s subsistence benefits as being notionally available to go towards meeting the shortfall between housing benefits and rent was specific to the particular context.  It cannot be applied across to the very different context of the present case.  It does not affect the reasons I have already given for rejecting Mr Stark’s submission that the starting point for the affordability assessment should be that reasonable living expenses are matched by benefits income and that there is no flexibility within such income for the payment of additional housing costs.  It does not cast doubt on the proposition that in this context a decision-maker should take into account all forms of income and relevant expenses in making a judgment as to whether accommodation is or was affordable. 
30.	In his post-hearing written submissions, Mr Stark also drew attention to observations of Lord Carnwath in R (SG and Others)) v Secretary of State for Work and Pensions [2015] UKSC 16, [2015] 1 WLR 1449, at paragraph 125, that although child related benefits are paid to parents, they are designed to meet the needs of children considered as individuals and they attach to the child rather than the parent.  But even if one takes those observations at face value, they do not assist the appellant, since it does not follow that such benefits cannot go towards meeting the costs of housing the children concerned.   
31.	We have very little other material before us in relation to the legislative purpose of the various benefits in question.  On the face of it, however, there seems to me to be considerable force in the general point made by Mr Manning on behalf of the council, that although housing benefit is specifically related to the costs of accommodation, it does not follow that no other benefits are ever intended to be used for the purpose of assisting with housing costs; a point that gains force from the greater limits placed on housing benefit by such welfare reform policies as the local housing allowance size criteria, the introduction of universal credit, the so-called bedroom tax, and the benefit cap (as to the last of which, see the description of aims at paragraphs 30-35 of the judgment of Lord Dyson MR in R (SG and Others) v Secretary of State for Work and Pensions [2014] EWCA Civ 156, [2014] HLR 20).
32.	Accordingly, I am not persuaded that there is any merit in the primary way in which Mr Stark put his case on failure to have regard to relevant considerations.
33.	The next submission by Mr Stark is that the decision-maker failed to have regard to paragraph 17.40 of the Code of Guidance (quoted at paragraph 6 above).  There is a general reference to the guidance on the first page of the decision letter and in the paragraph setting out the conclusion on intentional homelessness but Mr Stark submitted that there is nothing to show that specific regard was had to the guidance when considering the issue of affordability.  The importance of the guidance, and the need for it to be clear from the decision that proper consideration has been given to the relevant matters required by the statute and the guidance, are emphasised in the decision of the Supreme Court in Nzolameso v Westminster City Council [2015] UKSC 22, [2015] HLR 22, in particular in the passage at paragraphs 31-35 setting out the concerns of the Secretary of State.
34.	I accept, of course, that the decision must make clear that the relevant matters have been considered.  But for that purpose it is not generally necessary to refer expressly to individual passages in the guidance concerning the matters considered.  As Kitchin LJ put the point in Balog v Birmingham City Council [2013] EWCA Civ 158, [2014] HLR 14, at paragraph 48:
“In my judgment review officers are not obliged to identify each and every paragraph of the guidance which bears upon the decision they have to make.  That would be to impose upon them a wholly unreasonable and unnecessary burden.  I do not therefore accept that the absence of any express reference to this paragraph [paragraph 17.40] indicates that the review officer failed to have regard to the guidance it contains.”
35.	Applying that to the present case, there was in my view no need for the review decision to refer expressly to paragraph 17.40 of the guidance in relation to the issue of affordability.  It was sufficient if the substantive consideration given to the issue showed that due regard had been had to the paragraph.  
36.	The first part of paragraph 17.40 recommends that housing authorities regard accommodation as not being affordable if the applicant would be left with a residual income which would be less than the level of income support or income-based jobseeker’s allowance that is or would be applicable in respect of the applicant.  It is true that the review decision did not address that point in terms.  It did, however, take into account the payment of income support, and on the face of it the appellant’s residual income after the cost of her accommodation (i.e. after deduction of the shortfall in her rent) was well in excess of the level of her income support.  At the hearing of the appeal Mr Stark did not suggest otherwise.  Nor did he suggest that the appellant’s residual income was less than the level of income-based jobseeker’s allowance that would have been applicable to her.  He did submit that the child tax credits should also be taken into account in this part of the exercise, but that is not what paragraph 17.40 says.  On the basis of matters as they stood at the end of the hearing, it seems to me that nothing turns in this case on the first part of paragraph 17.40 of the guidance and that it was unnecessary for the review decision to deal expressly with it.
37.	In his post-hearing written submissions, Mr Stark sought to introduce a further point on this part of the guidance, arguing that the reference to income support is to be explained, as regards households with children, by the fact that a limited class of persons who were receiving income support or jobseeker’s allowance which included amounts for eligible children before 2005 have never been transferred onto child tax credits.  He produced calculations purporting to show that on that basis the payment of the rent shortfall on 18 Dagger Lane would have taken the appellant below the applicable amount of income support.  I have found the argument difficult to understand.  It seems to involve attributing to the appellant an amount of income support different from that which she actually received, and/or to invite a strained and implausible construction of the guidance itself.  But I think that the simple answer to the point is that it is too late to raise it.  I accept the following submission in paragraph 14 of Mr Manning’s written response:
“In any event, it is simply too late for the Appellant to take this sort of new point on the Guidance.  She is seeking to impugn the Authority’s decision on the basis of a failure to follow Guidance, yet the substance of the argument is now that the Guidance has to be read in a highly obscure manner, by reference to comparative income figures which were never applicable to the Appellant, without that argument having ever been put to the Authority or to the court below or even to this court until after the hearing, and without the Secretary of State having been notified of the issue.”
It is unnecessary to consider Mr Manning’s additional objection (which Mr Stark has sought to address in a written reply) that the income figures relied on for the new point are themselves fresh evidence for which permission should be refused.
38.	The second part of paragraph 17.40 of the guidance states that housing authorities will need to consider whether the applicant can afford the housing costs without being deprived of basic essentials such as food, clothing, heating, transport and other essentials.  In my judgment, that was the very exercise undertaken in the passage of the review decision quoted at paragraph 19 above.  Mr Stark submitted that the passage failed to consider what would have been a reasonable amount to spend on food and other household items (it merely said that the figure of £750 per month or £173 per week was excessive) and did not consider whether the consequence of deducting the rent shortfall of £34 per week from available household resources would be to require excessive sacrifice.  To some extent this overlaps with Mr Stark’s argument as to inadequacy of reasons, which I consider under the third ground of appeal.  But in so far as it is relied on here as showing a failure to have regard to relevant matters, I reject it.  The decision-maker made a judgment that the appellant could have afforded to pay the rent shortfall without being deprived of basic essentials such as food or other basic essentials.  In making that judgment, he was doing just what the guidance said needed to be done.  It is therefore clear that due regard was had to this aspect of the guidance.
39.	It follows that in my judgment there is no substance to the argument that the Code of Guidance was not taken properly into account.  In addition to the general statements that the guidance had been taken into account, the review decision contained enough to show that due regard was had to paragraph 17.40 in relation to the issue of affordability.
40.	The final part of the first ground of appeal is a contention that the council failed to consider whether the appellant’s actual income was lower than the income she believed she was receiving by way of child tax credits.  This contention is based on the document from HM Revenue & Customs detailing the appellant’s amended tax credits award for the period 6 April 2011 to 5 April 2012.  The document stated that there had been a total overpayment to her of about £6,000, that a sum in excess of £1,000 had already been collected back from her and that the balance would be collected from future awards by reducing payments under them.  It is submitted that since this information had been provided to the council, it should have put the council on enquiry.  I do not accept the submission.  In support of her first homelessness application, the appellant had given the council a figure for the amount she was receiving by way of child tax credits at the time when she resided at 18 Dagger Lane.  That figure had been confirmed by her at the time of her first application and then by her solicitors at the time of her second application.  It had never been revised.  The council was entitled to rely upon it.  Nor did the HM Revenue & Customs document provide any reason for doubting the figure, let alone for going behind it.  Whilst it referred to past and future deductions, it contained nothing to show that the amount the appellant had actually been receiving at the relevant time was less than the figure she had given the council and had subsequently confirmed.
The second ground of appeal:  the status of the late email
41.	The second ground of appeal is that the judge erred in law in taking into account the reviewing officer’s email to the effect that the reference to “a family of your size” in the affordability section of the review decision had been a reference to the appellant’s household of four children at the time she was residing at 18 Dagger Lane:  see paragraphs 20-21 above for the text of the email and the circumstances in which it came to be sent.
42.	The appellant’s case on this ground is based on the principles set out in the judgment of Hutchison LJ in R v City of Westminster, ex p. Ermakov (1995) 28 HLR 819, in particular at page 833:
“(2) The court can and, in appropriate cases, should admit evidence to elucidate or, exceptionally, correct or add to the reasons; but should, consistently with Steyn LJ’s observations in ex p. Graham [R v London Borough of Croydon, ex p. Graham (1993) 26 HLR 286], be very cautious about doing so.  I have in mind cases where, for example, an error has been made in transcription or expression, or a word or words inadvertently omitted, or where the language used may be in some way lacking in clarity.  These examples are not intended to be exhaustive, but rather to reflect my view that the function of such evidence should generally be elucidation not fundamental alteration, confirmation not contradiction.  Certainly there seems to me to be no warrant for receiving and relying on as validating the decision evidence – as in this case – which indicates that the real reasons were wholly different from the stated reasons.  It is not in my view permissible to say, merely because the applicant does not feel able to challenge the bona fides of the decision-maker’s explanation as to the real reasons that the applicant is therefore not prejudiced and the evidence as to the real reasons can be relied upon.  This is because, first, I do not accept that it is necessarily the case that in that situation he is not prejudiced; and, secondly, because, in this class of case, I do not consider that it is necessary for the applicant to show prejudice before he can obtain relief.  Section 64 [now section 203 of the 1996 Act] requires a decision and at the same time reasons; and if no reasons (which is the reality of a case such as the present) or wholly deficient reasons are given, he is prima facie entitled to have the decision quashed as unlawful.
(3) There are, I consider, good policy reasons why this should be so.  The cases emphasise that the purpose of reasons is to inform the parties why they have won or lost and enable them to assess whether they have any ground for challenging an adverse decision.  To permit wholesale amendment or reversal of the stated reasons is inimical to this purpose.  Moreover, not only does it encourage a sloppy approach by the decision-maker, but it gives rise to potential practical difficulties.  In the present case it was not, but in many cases it might be, suggested that the alleged true reasons were in fact second thoughts designed to remedy an otherwise fatal error exposed by the judicial review proceedings.  That would lead to applications to cross-examine and possibly for further discovery, both of which are, while permissible in judicial review proceedings, generally regarded as inappropriate.  Hearings would be longer and more expensive.
…
(5) Nothing I have said is intended to call in question the propriety of the kind of exchanges, sometimes leading to further exposition of the authority’s reasons or even to an agreement on their part to reconsider the application, which frequently follow the initial notification of rejection.  These are in no way to be discouraged, occurring, as they do, before, not after, the commencement of proceedings.  They will often make proceedings unnecessary.  They are in my judgment very different from what happened in this case.”
43.	In the present case, Judge Worster directed himself by reference to that passage, considered the rival arguments of counsel and concluded as follows:
“49. There is obvious force in both arguments.  It is a rare case when a party puts in material which goes to the way a Court is to read a decision letter, let alone a case where a Court takes it into account.  But I have concluded that this material falls on the permissible side of the line.  It does not change the reason for the decision.  There is (now it is pointed out) a lack of clarity in the language adopted by the decision maker which is simply remedied.  There is no need for further exploration.   The point is a discrete one, and does not give rise to the concerns identified by Hutchison LJ in Ermakov.
50.  What has caused me to pause, is that my impression of the written material was that the Appellant was putting forward expenditure on the basis of a household of herself and her children, and not Kyra and Kyron – so 3 children, not 2 children or 4 children.  Even the expenditure form as amended by her solicitors refers to 3.  But having considered that point, it seems to me to go nowhere.  The reviewing officer has proceeded on the basis that there were 4 children, as indeed there were.  That is an answer to the point about a failure to inquire as to the size of this Appellant’s household ….”
44.	Mr Stark submits that the size and composition of the household at the time the appellant was living at 18 Dagger Lane was fundamental to the question whether there was sufficient excess income to pay the rent shortfall.  The original decision-maker appeared to have directed his attention to the appellant’s present family, not to her household at 18 Dagger Lane.  The “minded to” letter in the review process referred in general terms to an irregularity or deficiency in that decision but did not identify the error in the assessment of the size of the household (see paragraph 16 above).  There was nothing in the review decision itself to show that the reviewing officer was looking at a different family make-up from that considered in the original decision.  The reference to “a family of your size” was not sufficient to show that the focus was on the size and composition of the appellant’s family at the time she was residing at 18 Dagger Lane.  Thus, there was a material gap in the reasoning, making it impossible for the appellant to tell whether the correct test had been applied.  This was the gap that the email attempted to plug.  It was contrary to the principles in ex p. Ermakov to allow the gap to be plugged in that way.   
45.	I find those submissions unpersuasive.  In my judgment, the judge was plainly correct to hold that the email fell on the permissible side of the dividing line and to take it into account.  This was a simple case of clarification or elucidation of the reasons given in the review decision, not a case of fundamental alteration or contradiction of those reasons or the plugging of a gap in the reasons.  The statement that expenditure of £750 per month on food and household items was excessive for “a family of your size”, and the later statement that the property was “of suitable size for your household”, showed that the decision-maker had a particular size of household in mind although he did not spell out what that was.  There was nothing to suggest that it was a household with only two children or that it was the appellant’s current household, rather than her household at the time when she resided at 18 Dagger Lane.  There was no repetition of the language in the original decision that suggested a focus on the appellant’s current household.  There was simply a lack of specificity about the household being referred to.  If, immediately after receipt of the review decision, the appellant had sought clarification of the point and had received the answer given in the email, there could have been no legitimate complaint about this aspect of the reasoning.  That is the kind of exchange that Hutchison LJ was contemplating at sub-paragraph (5) of the passage in ex p. Ermakov quoted above.  The appellant’s complaint gains no force from the fact that the query was raised just before the hearing of the appeal and was answered promptly by the email.
46.	Nor do I accept Mr Stark’s further submission that the answer given in the email was itself ambiguous.  Not only did it contain an unequivocal statement that the assessment was made on the basis of a household of four children at the time the appellant was residing at 18 Dagger Lane (rather than two children, as contended in counsel’s email to which the officer’s email was giving his response); but in my view it also made clear that the four children in question were the appellant’s own two children and her niece and nephew. 
The third ground of appeal:  adequacy of reasons  
47.	The third ground of appeal is a reasons challenge which has a substantial linkage with matters considered under the previous two grounds.  It is submitted that the review decision was inadequately reasoned, having regard to (a) its failure to set out the composition of the household taken into account when assessing whether the property at 18 Dagger Lane was affordable, (b) its failure to specify what elements of the appellant’s expenditure on food and household items were excessive, (c) its failure to explain how a family of the relevant size living on subsistence level benefits could be expected to find £34 a week towards the rent shortfall, and (d) its failure to address the correct income figure when the information before the council demonstrated that overpaid child tax credits were being deducted from the benefits paid to the appellant.
48.	My conclusion on the second ground of appeal means that point (a) falls away.  The reviewing officer’s email as to the composition of the household that he took into account when assessing affordability provided ample clarification of that aspect of the reasoning. 
49.	I have dealt with the substance of point (d) under the first ground of appeal, at paragraph 40 above.  There was nothing in the HM Revenue & Customs child tax credits document that required the council to go behind the income figures provided by the appellant.  
50.	Points (b) and (c) have been covered in part when considering the other arguments under the first ground of appeal, at paragraphs 24-39 above, including the application of paragraph 17.40 of the Code of Guidance.  But it is necessary to say a little more about them in the specific context of the reasons challenge.  We were referred to two decisions of the Court of Appeal bearing on the issue:  Balog v Birmingham City Council and Farah v Hillingdon London Borough Council (both cited above).  
51.	Balog was a case where the issue of affordability was not raised by the applicant but was identified by the reviewing officer as an issue that needed to be considered.  It involved a similar question to that in the present case, as to whether the applicant could afford to pay a sum towards his rent, and the finding was expressed in similar terms (see paragraph 13 of the judgment):
“… I note that you have attributed £693 per month to housekeeping.  Whilst I acknowledge you would have had essential housekeeping outgoings such as food shopping, I am satisfied £693 is a large amount for your family size and could have been reasonably reduced by more cost [effective] shopping.  I am satisfied that you could have reduced your outgoings by the stated £26.18 deficit and by a further £41.72 to ensure your rent was paid. I do not consider you would have had to sacrifice essential amenities to do so, and I am satisfied that you could have reasonably performed this task in your household.  Accordingly, having considered your monthly outgoings, I am satisfied that the rent was affordable and it was reasonable for you to remain for this reason.”
52.	In the course of his exposition of the legal framework, Kitchin LJ summarised the principles governing adequacy of reasons:
“22.  More generally, a decision by a housing authority must, of course, be adequately reasoned so that a person adversely affected by that decision can understand how and why it has been reached and so form a view as to whether to challenge it on a point of law.
23.  The reasons for a decision may, however, be stated relatively briefly, depending, of course, upon the particular issues under consideration.  Moreover, the reasons do not need to detail every aspect of the decision making process ….
24.  The need to adopt a realistic and practical approach to any consideration of a review decision was emphasised by Lord Neuberger in Holmes-Moorhouse v Richmond-upon-Thames LBC [2009] UKHL 7, [2009] 1 WLR 413 at 428 ….”
53.	At paragraphs 46-52, Kitchin LJ explained his conclusion that the reviewing officer, in the passage I have quoted, had had adequate regard to the Code of Guidance, specifically to paragraph 17.40.  He then dealt succinctly with the reasons issue:
“53. …  I have explained the reasoning of the review officer and, for the reasons I have given, I believe it was as detailed as it needed to be. It explained the matters he had taken into account, the circumstances in which a rental shortfall would arise and why he considered that it would be reasonable for Mr Balog to pay it.  This was sufficient to enable Mr Balog and those advising him to understand how and why the review officer arrived at his conclusion.”
54.	Farah was factually a more complex case, as appears from the details set out in Patten LJ’s judgment.  In the original decision, it was said that the income and expenditure form “reflects items we would not consider to be necessities such as payment to credit card and swimming which amounts to £35.00 according to your estimate”, and that the figure given for weekly income was understated (see paragraph 7 of the judgment).  It was also said that “some items in your weekly expenditure are exaggerated for a family of 4 with 3 children being under the age of 11”; and the conclusion reached was that the property was affordable and that “you failed to give adequate priority to the payment of your monthly rent” (paragraph 9 of the judgment).  Following the request for a review, the authority’s position evolved in the course of exchanges concerning the refusal of accommodation pending review.  For example, “the items of expenditure which the writer seems to be suggesting should have been reduced or eliminated in order to meet the rent include not only the credit card payments but also the sums spent on taxis and clothing” (paragraph 14 of the judgment).  This was followed by a review decision which (in a passage set out at paragraph 15 of the judgment) dealt with affordability in these terms:
“An affordability assessment carried out for the period during which Ms Farah was resident at the property shows that the rent shortfall would have been affordable to her had she prioritised those payments over non-essential and secondary financial liabilities.”
55.	The court held that the review decision had to be set aside for failure properly to review the original decision or to give any reasons for reaching the same conclusion.  Patten LJ said this:
“29. … The reviewing officer correctly set out her task as being to ascertain whether the s.184 decision was a correct legal decision, that the conclusions were fair and reasonable and that the facts could have led to no other outcome.  But the decision as recorded in the letter of 3 December does not in my view carry out this exercise.  The passage quoted earlier at [14] is a verbatim repletion of what Ms Brickwood said in her earlier letter of 10 October when refusing the appellant’s request for accommodation pending review.  It makes no reference to the Guide; to the appellant’s own explanation for her expenditure and the consequent arrears of rent; to the housing officer’s judgment as to what items of expenditure were non-essential, or the issue of whether other items of expenditure were excessive.  Nor does ir review any of the conclusions in the s.184 decision.  Instead, it merely states that the affordability assessment that was carried out shows that the rent would have been affordable had the appellant prioritised her expenditure.  No reasons are given for accepting the correctness of that assessment.
30.  For these reasons alone, the s.202 decision must, in my judgment, be set aside.  There has been no proper review of the earlier decision nor any reasons given for reaching the same conclusion.”
56.	Patten LJ went on to say that if it was necessary to look beyond the review to the section 184 decision itself, then there were still problems.  He referred to Balog as showing that it is not necessary to refer to each and every paragraph of the guidance taken into account or to provide an over-detailed set of reasons.  He continued:
“31. … But, as in all cases, the level of detail necessary will usually depend upon the issue to be decided and the facts of the particular case.  In some cases it will be enough to say that the housing authority concluded that the amount spent on a particular form of expenditure was excessive or unnecessary without going into further detail or qualification.  In other cases, where the tenant has produced and relied on a justification for the expenditure under review, a more detailed explanation of the reasons for rejecting those arguments may be required.
32.  The present case falls, in my view, into the latter category.  The housing officer had already in his s.184 decision letter made specific deductions in expenditure by removing the credit card and swimming payments.  But he had not explained which of the remaining items was in his view excessive or why.  Given that one of these items was the £50 spent on taxis (which was arguably essential) and the other items were money spent on food and clothing, it was, I think, incumbent on the reviewing officer to revisit this part of the assessment and to explain why she had reached the same conclusion ….
33. The decision in the present case was on any view a marginal one which called for a reasonable explanation of the key points on which the appellant failed.  Mr Lane says that it would have been obvious to the appellant why she had failed but I disagree. She was never told what other expenditure she should have postponed and the sums she spent on food, clothing and taxis were not so large or obviously excessive as to require no explanation for being treated as excessive ….”
57.	I see no tension between Balog and Farah as regards the applicable principles.  The different outcomes in the two cases resulted from the differences in their particular facts.  But I think it unhelpful to engage in a detailed comparison between the facts of the present case and the facts in Balog and Farah respectively.  The essential question is whether the review decision in this case contained sufficient by way of reasoning to enable the appellant to understand how and why the decision on affordability had been reached.
58.	It is important to note that the only information the appellant had provided about her expenditure at the material time consisted of the figures set out on her original income and expenditure form (paragraph 11(ii) above) and the amended figures supplied by her solicitors for the purposes of the review on her second application (paragraph 17 above).  Moreover, in supplying the amended figures, the solicitors had stated that it was impossible for her to remember precise details.  There was no attempt to explain or justify individual figures.  In those circumstances, as it seems to me, the decision-maker was entitled to approach the matter in the way he did, forming a broad judgment as to whether the amended figure of £750 per month for food and household items was excessive for a family consisting of the appellant herself and the four children, and whether there was sufficient flexibility in the overall household income to pay the rent shortfall.  Enough was said to enable the appellant to understand how and why the decision on affordability had been reached.  It was not necessary to go into further detail as to why the amended figure of £750 per month was considered excessive or what could have been sacrificed in order to pay the rent shortfall, for example by identifying specific items of food or other household items that could have been dispensed with.  The information provided by the appellant did not call for a more elaborate analysis.  
59.	The judge below held that the decision letter provided “a more than adequate expression of the reasons for the decision” (paragraph 54 of his judgment).  I agree.  I do not think that the judge fell into error in any of the respects advanced under the third ground of appeal. 
Conclusion
60.	For the reasons given, I would dismiss the appeal.
Lord Justice Floyd :
61.	I agree.
Lord Justice Sales :
62.	I also agree.