Posted by: Isabel Hardman29/07/2010
So far in the What’s the Benefit? campaign, we have focused a great deal of attention on the direct impact that the government’s reforms to housing benefit will have on tenants themselves.
Those immediate drops in income from housing benefit are obviously the most pressing concern for private tenants who are terrified that as of April next year, they may have to leave their homes and communities because they can no longer afford their rent.
But there is another aspect to these reforms that housing organisations are concerned about: some of the plans may threaten social landlords’ viability. The National Housing Federation and Chartered Institute of Housing have warned that plans to dock housing benefit by 10 per cent for claimants who have been on jobseekers’ allowance for more than 12 months will cause a rise in arrears.
This will come into effect from April 2013, along with links between the amount of housing benefit paid and family size for social tenants.
Around 65 per cent of housing associations’ income is from housing benefit, and any drop in that income and subsequent rise in arrears could mean they have to cut back on key aspects of their work. Many have started conducting sensitivity testing, and have told Inside Housing that they may have to cut back on their development programme or on work on improving neighbourhoods. That’s not good news when one of the reasons the bill for housing benefit in the private sector is so high is a lack of available affordable housing.
More worrying still, the Tenant Services Authority warned back in February that attempts to cut the housing benefit bill could increase the risk of bad debt and undermine housing associations’ stability.
Talking about business plans isn’t as immediately emotive as families facing eviction within months, but if social landlords suffer as a result of these reforms, then their tenants will be the ultimate victims.
Housing minister Grant Shapps told Inside Housing shortly after the emergency budget that there was little chance of damage to housing associations. He insisted that because the changes would not come online until April 2013, the economy will have recovered by then and housing associations will not be in such a tight situation.
That remains to be seen, and it would be nice to be able to say so confidently that the economy will definitely be fighting fit in three years’ time. But anything that threatens the way landlords carry out their work for vulnerable tenants is a very serious business indeed.
Don’t forget to sign our petition expressing concern about the government’s plans for housing benefit, and to email your suggestions for other ways of reforming the benefit to firstname.lastname@example.org
From What's the benefit?
The blog for our What’s the Benefit? campaign, which is calling on the government to find a fairer way to reduce the £21 billion housing benefit bill than its current proposals.