Benefit burden

True, many of the measures announced by chancellor George Osborne will cause extreme pain, but will they lead to as bleak a scenario as Mr Robb paints?

On the positive side, Mr Osborne did not announce a widely expected freeze to the £17 billion annual housing benefit bill, nor did he attempt to reduce this bill by altering the formula by which social rents are set as had been feared. However, housing benefit featured prominently in the chancellor’s speech and his assertion that the system is in ‘dire need of reform’ will have set teeth on edge ahead of expected proposals from work and pensions secretary Iain Duncan Smith.

The news that ‘unprotected’ government departments, including Communities and Local Government, will face budget cuts of at least a quarter in the spending review this autumn is also ominous.

So what now for social landlords? As Mr Robb claims, it seems certain that the number of people in housing need will rise as a result of Mr Osborne’s actions. The government may be able to claim that more pain is being felt by the rich than the poor, but this will not make it any easier on the people facing eviction as their local housing allowance is capped or the people scrabbling to pay their rent after their benefit is docked as they are deemed to be under-occupying their homes. Social landlords will be the ones who have to pick up the pieces.

In the case of the move to cut housing benefit by a tenth for the long-term unemployed, this could have real implications for social landlords’ incomes. Much of the talk at this week’s Chartered Institute of Housing conference in Harrogate was of how landlords already run significant ‘welfare-to-work’ schemes, yet they will have to ramp these up if they are to avoid, in some cases, a fall in rental income of around £10 million.

For landlords already having to absorb a rise in VAT, this added burden could have been better timed. In this light, the decision to scrap the future jobs fund looks even more short-sighted.