On the public highway

Registered housing providers are privately owned organisations and, therefore, fall within the private sector. However, they can also be regarded as hybrid public bodies, as, while they are not owned by the state, they undertake some public functions.

The case of McIntyre v Gentoo Group Ltd has moved registered providers another step closer to public body status by widening the ambit of what constitutes a public function after the High Court ruled that the case was governed by public law.

The case
Mr and Mrs McIntyre had an assured weekly tenancy following a stock transfer to Gentoo. They applied for a mutual exchange, but the landlord made their consent conditional on Mr McIntyre clearing rent arrears from another property.

This condition was held to be unlawful under private law.

The decision
The decision, made in January, ex-pands on an earlier case of Weaver v London & Quadrant Housing Trust which ruled that registered housing providers can be challenged under public law when carrying out a public function. After Weaver, it was thought that what constituted a ‘public function’ would be limited to matters where the registered provider was carrying out a statutory function on behalf of a local authority (such as housing the homeless). McIntyre v Gentoo Group makes it clear that this is not the case.

Any decision relating to the management of social housing by a registered provider is now at risk from judicial review under the Human Rights Act. It was explicitly stated that this included management, maintenance, letting and rent setting.

Implications
The ruling has two major implications for providers. First, is the fact that any social housing function they provide can be challenged on public law grounds, with claimants able to seek a judicial review or protection under the Human Rights Act. This could lead to an increase in litigation, making management more difficult and more expensive. However, McIntyre did specify that where a private law remedy (such as under the terms of a tenancy agreement) exists, the applicant should be required to pursue their remedy using private law and public law should not be used to gain a remedy unavailable under private law.

This creates an important safeguard for registered providers, but how will it be enforced in practice? For example, what if the applicant claims that the private law remedy is insufficient?

Second, this is a further development in a long line of decisions that seem to be changing the status of not-for-profit housing providers from being private sector bodies to public sector ones. At the end of that road is the risk that the billions of pounds borrowed by registered providers could be added to the public debt - with dire results. Clearly that is not what this or any government wants to see happen, but it wouldn’t be the first time that the ‘law of unintended consequences’ strikes with unfortunate effects.

hugo.stephens@cobbetts.com

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