Tuesday, 23 May 2017

Figuring it out

From: Inside edge

What are the dodgiest of the dodgy statistics being bandied around about housing benefit?

Are they campaigners’ estimates of the number of people who will be made homeless or forced to move as a result of the cuts? Or the number of councils block booking seaside bed and breakfasts? Or the Tory MP who discovered he’d been homeless as a child without realising it?

One of the most noticeable features of Wednesday’s Commons debate was the way that ministers sought to use attack as the best form of defence with repeated claims that their opponents were scaremongering and using ‘dog whistle’ tactics to alarm tenants who will not be affected. 

Or could they be ministers’ own claims of what’s happening to rents? One in particular has been trotted out by just about every Conservative and Lib Dem MP and minister who’s said anything about housing benefit in the last week.

‘Let me remind the House how distorted the private rental market is,’ MPs were told. ‘As I said, between November 2008 and February 2010 private rents fell by 5% and local housing allowance rates rose by 3%.’

That was work and pensions secretary Iain Duncan Smith on Wednesday but his ministers Steve Webb and Lord Freud have said pretty much the same thing word for word over the last week.

I was surprised when I heard that since as far as I am aware there are no reliable statistics on private rents. There are lots of different surveys and indices but it’s not clear whether any of them are truly comprehensive.

A dip in rents at the height of the credit crisis seems to make sense though and the RICS rental survey shows that more surveyors were reporting rents falling than rising in most of that period. However, a fall in the rents on new lettings is not the same as a fall in rents in general and most of the surveys are currently reporting strong tenant demand and rising rents.

I’ve asked the DWP what the source of the figures is and been sent a briefing headlined ‘inflated rents must end now’. It repeats the same claim but again with no source - and nobody else I’ve spoken to has found one either. 

However , as far as I can tell, even the LHA figure based on the DWP stats is questionable.

They show that the average LHA award actually increased by 5.4% between November 2008 and February 2010 from £107.08 to £112.85. 

On the face of that supports the DWP’s claim that the introduction of the LHA allowed landlords to inflate their rents more strongly than its own claim of 3% (perhaps that should have read 3% per year?).

Except that the rest of the housing benefit stats say something rather different. If the LHA was to blame why did the rate for private regulated tenants increase by 6.1% over the same 15-month period? Why did the rate for non-LHA deregulated private tenants increase by 5.2% - only just less than for LHA?

And why did the biggest increase in housing benefit actually go to housing association tenants at 7.1%?

Even when you include the far more modest 3.3% increase in the rate paid to local authority tenants, the increase in the social sector as a whole (5.6%) was actually more than for LHA tenants.

Landlords are hopping mad over the implication that they are ripping off the system. The British Property Federation published a detailed rebuttal last week that used the DWP’s own figures to show that almost 70% of the increase in the housing benefit bill is down to an increase in the number of claimants rather than rents. 

Of the rest, 17.7% is due to the increase in social sector rents (not just actual increases but the effect of stock transfer too) and only 13.2% is down to increased private rents. 

The BPF also accused the DWP of misrepresenting the results of an independent study it commissioned on Low Income Working Households in the Private Rented Sector

As for the other stats, I’m awaiting a response from the DWP. 

 

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