Advisory committee launches housing benefit inquiry
The social security advisory committee has launched an inquiry into the government’s proposed changes to housing benefit.
The committee, which advises the Work and Pensions secretary on changes to secondary legislation, is inviting responses from organisations and individuals interested in the effects of the reforms.
In his first Budget speech as chancellor, George Osborne announced a package to cut housing benefit by £1.8 billion a year by 2014/15.
He plans to change the system he said was in ‘dire need of reform’. Local housing allowance will be limited to between £280 and £400 a week, depending on house size, and housing benefit will be reduced by 10 per cent if a claimant has claimed jobseeker’s allowance for 12 months. The proposals have provoked strong public reactions.
The SSAC’s consultation runs until 10 September, and it may then take findings and recommendations to the current secretary of state, Iain Duncan Smith.
A spokeswoman for the SSAC said housing benefit had always historically provoked the largest response from the public, and the committee was expecting a record number of submissions to the consultation.
Inside Housing launched its campaign What’s the Benefit last month to find a fairer way of getting the bill down.
The work and pensions select committee quickly backed one of the key demands by agreeing to hold an inquiry into the controversial reforms.
By the end of July, overwhelming support from landlords, tenants and charities had seen 655 people sign a petition voicing concern about the plans - smashing a second campaign target to secure 500 signatures.
Picture credit: Alamy
View results 10 per page | 20 per page
Have your say
You must sign in to make a comment
Readers' comments (16)
Melvin Bone | 11/08/2010 8:59 am
'By the end of July, overwhelming support from landlords, tenants and charities had seen 655 people sign a petition voicing concern about the plans - smashing a second campaign target to secure 500 signatures.'
But another petition raised four times as much support as you reported:
'The Stop UK enforced ethnic cleansing of Gypsies and Travellers already has more than 3,000 signatures'
So maybe this is the more important issue?
Unsuitable or offensive? Report this comment
michael barratt | 11/08/2010 9:28 am
“He plans to change the system he said was in ‘dire need of reform’. Local housing allowance will be limited to between £280 and £400 a week, depending on house size, and housing benefit will be reduced by 10 per cent if a claimant has claimed jobseeker’s allowance for 12 months.”
It is Government policy that the majority of those currently receiving incapacity benefits will migrate to a new system of benefits. Only a very small number of claimants will join the support group and be excused from an obligation to look for work, for example none with a visual impairment will qualify for membership of the support group and therefore are considered jobseekers. Whereas historically 70% of those with severe visual impairments are not in full time work and the present economic crisis is unlikely to enhance their employment opportunities. So the often severely disabled and economically disadvantaged in our community not only have their income benefits reduced they will also see their housing benefit entitlement cut and cut again after 12 months.
As a parent of a disabled woman I despise the way politicians and some of your readers treat the disabled with disrespect, frequently characterising them as spongers and malingerers. The disabled should be (if at all) the last not the first to shoulder the burden of financial losses made by predominately the most economically privileged in our society.
Unsuitable or offensive? Report this comment
Chris | 11/08/2010 10:30 am
Michael - do not take too personally the comments from the too many contributers on this website who's primary aim is to hit out at anyone who they see as 'not them' or 'getting something they don't get'. Be understanding that their lack of understanding and enlightenment restricts their ability to see past the propaganda and manipulation that they would rather believe than question. It takes a strong person to stand, and not every one can have that strength.
The advisory committee enquiry will hopefully highlight the erroroneous thinking and negative impact of the proposals, rather than be a whitewash sham of and excuse.
Unsuitable or offensive? Report this comment
Eric Blair | 11/08/2010 1:40 pm
If you have disabled or elderly people in your family (I do) then you either make a stand or turn your back on them. Most responsible people choose to defend them.
It follows that if you see their wellbeing threatened (verbally or otherwise) by a pack of dangerous ignoramuses on a mission to identify scapegoats, you can sometimes feel rather defensive and ill-tempered.
Housing benefit expenditure is tiny compared to the billions which go missing because of tax evasion. This 'tax gap' is roughly £40 billion, but may be far bigger. Strange that the coalition is completely silent about that. Perhaps vulnerable people make softer targets for political scaremongering and point-scoring?
Unsuitable or offensive? Report this comment
gordon thompson | 11/08/2010 1:48 pm
Eric - its not strange at all that the Tories are disinterested in tax evasion. They have always prioritised the needs of the haves over the have nots.
On the broader subject it seems clear that the system will be reformed. Can I just ask that if its reformed then its a big bng approach from day 1 with no transitional arrangements. The Housing benefit system in particular is riddled with protected schemes and transitional arrangements which just serve to confuse and lead to errors in administartion and confusion amongst claimants.
Unsuitable or offensive? Report this comment
Sidney Webb | 11/08/2010 1:55 pm
To true Eric. I think the ancient and wrong belief that persons with disability were the cause of their condition (as a punishment for sin for instance) and therefore should be shunned by the righteous is still with us in today's society, if only as a media manipulators psycological tool to sucker in the less thinking. It taps in too easily to the rather them than me tendency, the sort that stood ideally by whilst the not-us others were slaughtered at various points through history.
We all have elderly in our families, just as we all grow old. Any of us could be disabled. I am. Everyone can care - why then do so few make the effort and why do so many jump on the discrimination bandwaggon?
Need is something that can affect any person at any time in their life. If you truly believe that your job, your home, your health is secure - is it? What if you lost your health, would you be able to do your job, would you keep your home? What if it was you needing the benefit, the social home, the support, would you look back and wish you had supported those in need rather than scapegoated them?
I can well imagine the scapegoating posters falling on hard times and being first in the queue for the help they would deny others.
Unsuitable or offensive? Report this comment
David Lawrenson | 11/08/2010 4:37 pm
The Advisory Committe is needed becasue the detail of how the change to Local Housing Allowance / Housing Benefit rates will be managed in practice will be interesting and the government will need to tread very carefully and will have to make sure they look after the needs of the old, the sick and the HB claimants with young families in all this or they could be facing a PR disaster. Visions of vulnerable people being forcibly moved from expensive central London boroughs to cheaper neighbouring boroughs are very worrying.
As someone who works entirely advising organisations on the private rented sector, I’m interested to read here on IH, the various views that readers have on private landlords. It’s certainly another “take” on things with private landlords sometimes cast as the villains of the housing piece. Is this fair?
Well, some of them sure aren’t angels. But post Thatcher and the sale of swathes of council stock, we don’t see anyone else (including the city institutions, still hungry for tax breaks to induce them to enter the PRS) providing much accommodation just now, so I guess local authorities will just have to learn to live with their private landlords.
Certainly, many private landlords targeted areas where they knew the LHA rates were (up to now) pretty generous relative to the capital values of properties. They invested in these areas for the sometimes very good yields knowing that the level of local LHA dependency was sufficiently high and that the government (by setting LHA based on median local rents) was actually bidding up and in effect, setting overall rent levels in some areas of high benefit dependency. And since landlords and tenants knew what was payable (because the figures were published by the Valuation Office), many rather unsurprisingly tended to set rents at the maximum payable by the state under LHA.
Now, following the last budget and the caps on LHA levels, these landlords will have to think again – which goes to show the risk to them of developing an investment and lettings business based on what the government does. Some may sell but we think that outside the more expensive inner London borough, private landlords will come to realise that in reality in many cases they cannot get any more than the new 30th percentile rates from non-LHA-dependent tenants. For these landlords the LHA gravy train doth end here! And so it should despite the protestations from some landlord groups and associations. Basically, many private landlords in some areas have had it too good for too long and cutting LHA rates will, I’m sure, actually lead to reduced rents overall in many areas. And so, from the point of view of the taxpayer the proposed changes could be a good thing.
However, as I said at the top of this comment, what’s proposed by the government is a sharp and blunt tool and they absolutely must ensure the vulnerable are protected -so some serious tweaking to LHA proposals must be put in order.
Turning to more expensive areas like Westminster and K and C, where the effect of the cuts are much greater, how many of their private landlords will stop taking LHA dependent tenants and / or sell their properties or just accept that they are not going to get as much in future is a big question but with a bit of quick but targeted research this is a question that can be answered within weeks. And those involved in housing at local authorities must surely start finding out the answers to these questions pretty quickly because the result of the changes to LHA rates could be that a lot more people will be seeking housing in the less expensive boroughs of London. These neighbouring boroughs will need plans to manage the possibly fairly large numbers seeking housing and they will need them fast.
Certainly, we think, local authorities will now also need to get a whole lot smarter with their private rented sector access schemes. And if they have not already done so, the local authorities, especially in the more expensive London boroughs will need to team up seamlessly with other outer boroughs to find housing solutions for those who will find themselves priced out of some areas. As part of this and as a minimum, LHA processing systems must be made faster, especially at making payments direct to private landlords if their Local Housing Allowance dependent tenants don’t pay their rent. If there is a failure to deliver this, private landlords could really start to desert the business of letting to LHA dependent tenants (starting with the more up market boroughs first.) Another way forward to local authorities is the PRS access schemes, where they will need to be sharper at finding good landlords cheaply. One way to do this would be to use the internet much more effectively and review the cost effectiveness of localised letting schemes and local advertising campaigns to attract landlords.
On this topic, many studies have shown that private landlords aren’t too bothered about being incentivised to let to benefit dependent tenants. It’s our opinion that landlord incentives like bond guarantees used by many local authorities are not the most efficient way of incentivising private landlords. All landlords really want is their rent to be paid on time, every time and with the minimum of hassle.
People working in local authorities may not like having to depend on private landlords so much. I can understand this and as a landlord myself I agree with most of them that selling off council homes was a huge policy mistake. But that’s what happened and is now history. And so, going forward local authorities and others in the business of the housing will have to accept that they will have to continue to depend on private landlords to house people. Their challenge is to make sure they properly engage with landlords.
Unsuitable or offensive? Report this comment
Sidney Webb | 11/08/2010 4:50 pm
David - an interesting and needed contribution.
From your experience and role, what would a local authority / government need to offer private sector landlords to gain a more affordable rental solution from them?
I leave this as wide as possible to promote response rather than argument, but would exclude the recognised (shall we say differently motivated) landlord who by default would not be encouraged by other than more cash.
Unsuitable or offensive? Report this comment
David Lawrenson | 11/08/2010 5:35 pm
Our view is that those landlords who understand LHA, feel comfortable with the form filling, have developed a good relationship with the bodies that actually pay the LHA and are in an LA where the admin and payment of LHA is fast and efficient are in “good place.” These landlords also know full well that tenants on benefits tend to stay longer - so less void periods.
Plus they know that if there are arrears over 2 months, they can be paid direct -which compares favourably to letting to a private tenant who does not qualify for LHA.
Given all this, most of the local authorities (we will discount the very expensive to live in areas here like K&C and Westminster) who run private rented sector access schemes should have a good story to tell and should be able to attract landlords to their schemes. But it all depends on the efficiency of the LHA system.
Get that right and you are halfway there. Beyond that, I’d suggest that they take a good look at local schemes to attract landlords. I’m of the view that using overarching global letting portals (not expensive-to-set-up "local letting agencies") to drive in landlords is a cleverer and cheaper way could be a better solution. (By the way at LettingFocus we don’t sell this overarching solution, we just think it is worth looking at.)
I’d also question the need for running landlord accreditation schemes. All good stuff, yes, but potentially costly to administer. Why not just team up with a professional landlord bodies for this kind of thing. (I’m a member of the NLA though I’m no apologist for them and don’t agree with their position on LHA changes as you can see from my earlier post.)
We would also say the government should review the value of bond guarantee, rent guarantee insurance schemes and all the other private landlord incentives. As I said in the first part, most landlords just want to be paid on time each time. Nothing more.
And we question why local authorities paying for rent guarantee schemes if the solution is simply for them / the government to sort out the system of LHA payments? There is more on this over at my own blog.
We think there is so much to be done here. But we think a lack of understanding of the PRS as a market, a failure by many to u/stand what landlords want combined perhaps with a lack of appreciation of the power of the net are the factors holding back creative thinking and better solutions here.
Of course, some may say that as a consultant in this area I would say that, but I'm a taxpayer too and I do think better solutions can be employed. Hope this did not come across as too polemical.
I do enjoy the debates here.
Unsuitable or offensive? Report this comment
David Lawrenson | 11/08/2010 5:35 pm
Our view is that those landlords who understand LHA, feel comfortable with the form filling, have developed a good relationship with the bodies that actually pay the LHA and are in an LA where the admin and payment of LHA is fast and efficient are in “good place.” These landlords also know full well that tenants on benefits tend to stay longer - so less void periods.
Plus they know that if there are arrears over 2 months, they can be paid direct -which compares favourably to letting to a private tenant who does not qualify for LHA.
Given all this, most of the local authorities (we will discount the very expensive to live in areas here like K&C and Westminster) who run private rented sector access schemes should have a good story to tell and should be able to attract landlords to their schemes. But it all depends on the efficiency of the LHA system.
Get that right and you are halfway there. Beyond that, I’d suggest that they take a good look at local schemes to attract landlords. I’m of the view that using overarching global letting portals (not expensive-to-set-up "local letting agencies") to drive in landlords is a cleverer and cheaper way could be a better solution. (By the way at LettingFocus we don’t sell this overarching solution, we just think it is worth looking at.)
I’d also question the need for running landlord accreditation schemes. All good stuff, yes, but potentially costly to administer. Why not just team up with a professional landlord bodies for this kind of thing. (I’m a member of the NLA though I’m no apologist for them and don’t agree with their position on LHA changes as you can see from my earlier post.)
We would also say the government should review the value of bond guarantee, rent guarantee insurance schemes and all the other private landlord incentives. As I said in the first part, most landlords just want to be paid on time each time. Nothing more.
And we question why local authorities paying for rent guarantee schemes if the solution is simply for them / the government to sort out the system of LHA payments? There is more on this over at my own blog.
We think there is so much to be done here. But we think a lack of understanding of the PRS as a market, a failure by many to u/stand what landlords want combined perhaps with a lack of appreciation of the power of the net are the factors holding back creative thinking and better solutions here.
Of course, some may say that as a consultant in this area I would say that, but I'm a taxpayer too and I do think better solutions can be employed. Hope this did not come across as too polemical.
I do enjoy the debates here.
Unsuitable or offensive? Report this comment