The polarised positions of the 1979-97 Conservative Government and pressure groups over the Housing (Homeless Persons) Act 1977 impeded rigorous analysis of its merits. To assess the value of the homelessness legislation, this paper broadens the debate to review the moral basis underlying all council house allocations. A utility maximising frameworkis adopted to clarify the principle of allocation according to need, and it is argued that this is best described as a (revised) principle of allocation by long-term deprivation. The Conservative Government's case for amending the homelessness legislation is tested against this revised principle and it was found that it was not supported by the available evidence. This utilitarian framework proves capable of explaining the rival principle of allocation by desert, and also reveals the relevance of the collective impacts of allocations policies. The analysis suggests that neither a return to the 1977 Act nor the system established under the 1996 amendments are satisfactory. Instead, arguments are put forward for a new legal framework for allocations to be established. This would oblige local authorities to assess all households on the basis of long-term housing deprivation. However, it is also suggested that this system should seek to reduce over-concentrations of homeless households on undesirable estates. (Authors)