Tuesday, 03 March 2015

April is the cruellest month

From: Inside edge

Every time you think you have got your head around the impact of the April 2013 welfare changes you realise you have forgotten something that makes it even worse.

I don’t need reminding that there are now just 147 days until the bedroom tax and overall benefit cap take affect. I know that increases in the local housing allowance will be restricted to CPI inflation from the same date. I realise that a range of other cuts in benefits and the localisation of council tax benefit and the social fund with reduced funding come in at the same time.

However, that is only the changes introduced by the Department for Work and Pensions. On top of that, I knew that local authorities had suffered deep cuts in their overall funding and I’ve been following closely the change in the Localism Act to allow them to discharge their homelessness duty into the private rented sector (which applies from this time next week). And I was aware that the Ministry of Justice was cutting legal aid to remove funding for most housing and welfare cases without quite realising that also applied from April (for obvious reasons).

The potential for all of those individual factors to interact with each other and the potential for unintended consequences is clear. However, until I read today’s report from the Child Poverty Action Group (CPAG), I had not fully thought through the extent to which this will create difficult and sometimes impossible dilemmas on the ground.

Even then, the focus of the report is mainly on London (because that is where the biggest impacts will be felt) and on the private rented sector (because that will have to cope – or not – with the fall-out). So it does not really cover concerns about the bedroom tax and the switch to universal credit.

The headlines generated by the report include warnings about the extent of out-of-area placements being planned by councils (with a Guardian survey finding widespread plans) and the potential for conflict with the troubled families programme (in Inside Housing). In the first case, the concern is that Newham was just ahead of the game when it contacted housing organisations throughout the Midlands and North about housing its homeless families. In the second, the worry is that councils face a choice between keeping ‘troubled families’ in their homes and potentially rewarding anti-social behaviour or allowing them to be evicted and to lose contact with the intensive programme of support that is meant to help them.

The most immediate priority, according to CPAG, is changing the regulations for the overall benefit cap so that it does not apply to temporary accommodation. Otherwise, with rising private rents making the procurement of affordable accommodation in London unsustainable, both families made homeless by the cap and those already in temporary accommodation could face double homelessness as they are evicted for rent arrears.

Little wonder then that the report found that London councils are looking to the North and Midlands for both private and temporary accommodation. Except that the whole thing could be open to legal challenge under strengthened guidance on ‘suitability’ proposed by Grant Shapps after the original furore about Newham.

The consequences for tenants are grim even with moves that are closer to home – as revealed in The Guardian’s story about a mother with two children from Waltham Forest. She was rehoused 37 miles away in Luton but the move split up her family so that her older daughter could stay in school.

However, the report reveals the pressures that will leave councils ‘between a rock and a hard place’. London Councils has already estimated that 133,000 workless households in London, including 63,000 with children, will be unable to afford their current rent as a result of the bedroom caps and overall benefit cap. Surveys also show a growing proportion of London landlords will either not extend existing tenancies or consider not renting at all to people on benefit.

Research so far into the impact of the 2011 changes (the bedroom caps and cut to 30th percentile) suggests that most tenants will look to make up rent shortfalls from elsewhere rather than move. The proportion moving out of the borough has been lower than expected so far, perhaps because transitional protection means the impact of the bedroom caps on existing claimants is only just being felt. However, staying put will become increasingly difficult as further cuts bite and larger families face the biggest shortfalls – and there is no transitional protection under the April 2013 cuts.

The officers interviewed for the report said that elected councillors had yet to realise the full implications of the changes. ‘While several officers had received a strong steer from elected members that they did not want to see families moved out of the borough, officers are struggling to see how they could achieve this,’ says the report. Officers were ‘unclear’ as to how claimants could avoid moving out of the borough without significantly increased overcrowding.

Come April 2013, families will have three options: look for cheaper accommodation near to home or elsewhere; look for work of over 24 hours a week to avoid the benefit cap; or present as homeless to their local authority. If they are vulnerable and not intentionally homeless, then the council has to find them a suitable home and provide temporary accommodation in the meantime. From next week the home can be private rented.

Some councils are using discretionary housing payments to pay deposits or offer incentives to encourage landlords to take claimants – but this is only ever a short-term solution. Meanwhile, even outer London boroughs are finding they cannot match a supply of affordable accommodation to demand.

The report goes on: ‘Given the pressures on private rents, most authorities felt that it would not be possible to do this to any large scale within London, particularly for families whose benefits are capped at £500 a week. This led to discussions about procurement of private sector properties elsewhere – locations cited included Nottingham, Derby, the Midlands and Wales.’

Many councils believe that the government’s suitability consultation on the discharged duty, which says that ‘it is not acceptable for local authorities to make compulsory placements automatically hundreds of miles away’, leaves them in an impossible position.

The benefit cap will leave families in temporary accommodation with a shortfall against their rent that councils cannot ask them to make up if it would deprive them of other essentials. The report goes on: ‘Applying the benefit cap to families in temporary accommodation effectively means that families who are accepted as homeless, could be made homeless once more due to their inability to pay the costs of temporary accommodation.’

And what about people who local authorities persuade not to make a homelessness application and accept help through prevention and relief work? Do they accept stay put and find a way to make up the rent shortfall, move into sub-standard and overcrowded accommodation or move far away from their communities and children’s schools? None of the choices look good and the scope for choice is narrowing all the time.  

Readers' comments (23)

  • Chris

    You forgot to mention Jules that this is just round one of the purge upon the poor and the pogram against social housing and all who live in it. Round two is already in the pipeline spurred on by a whipped up electorate chomping at the bit to hear the next outrageous underserving poor group to be hit, oblivious of the other 99.9% also being effected.

    But all this you are listing, and the report which inspired it, has forgotten another major factor. The similar scale of attacks on the 'middle' (those hard working families who have been so softened up to believe that their losses have been caused by the undeserving poor) will reduce many of them to the level of those they believe are fraudsters and feckless. The demand on reduced services from new swathes of poor is the compounding factor so many pundits forget.

    Already white collar workers are included in the queue for food aid - the Red Cross having to fight starvation in the UK - and the full cuts are still yet to come.

    There is a part of me that truly hopes the members of the mob, who's representatives occupy these pages too, get to suffer the consequnce of their blind obeyance of Tory spin - but then that would be to reduce to their level. So rather I hope and pray that they will join the ranks of those calling for fairness and justice, and an end to the something for nothing culture that sees the wealthiest paying the least whilst the poorest starve.

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  • Rick Campbell

    It is not often that I disagree with Chris -- but I am at variance with something he has said in that he refers to in " blind obeyance to Tory spin" --- in that (inmho) it really is not just Tory spin -- it is the spin of all the major political parties

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  • Chris

    As ever Rick, you are 100% correct - if only you were not we might have something to defend ourselves with.

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  • The real crime is that people were ever allowed to claim more than 26k couple 18k in benefits in the first place. If this had always been capped, rents might be lower and families in London would not have been living in extremely expensive accomodation way above the means of the average wage in this country.

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  • No Mr P Righteousness, the real crime is that housing is so unaffordable as to require benefits at that level.

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  • Melvin Bone

    I agree Rick. Salvation is not with a different government but getting the current government to act differently.

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  • What should have been capped was private rent levels. HB in the private sector is a virtual subsidy for landlords. Rent capping would have saved a small fortune which could have been devoted to new Council house buiulding.

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  • Is this social cleansing?

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  • Rick Campbell

    If rents had been capped say, 10 years ago, by not introducing target rent, housing benefit and tax credit costs would have been less would they not?

    Perhaps the numbers of LSVTs would have been less too?

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  • Capping private rent levels leads to landlords exiting the market and/or refusing to maintain properties, leaving a growing market at the bottom end to be filled by the slumlords
    - just like in the good old days.

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  • Melvin Bone

    'Capping private rent levels leads to landlords exiting the market and/or refusing to maintain properties'

    The positive being that all those ramshackle properties out there can be rented out for a pittance...

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  • Melvin
    What are you saying, that it is ok for private landlords to let ramshackle properties out to the poorest and most needy section of our community?

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  • "The positive being that all those ramshackle properties out there can be rented out for a pittance..."

    As I said :-

    "leaving a growing market at the bottom end to be filled by the slumlords
    - just like in the good old days."

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  • Patrick Mc Crossan

    I live in Social Housing in central London. I can see Big Ben from my window.

    There is a lot of housing all around central London that is social housing.

    Those of you wearing blinkers ignore a fundamental reason why housing is in such short supply regardless of new building slowing because of the recession.

    Immigration the word that rarely get used on this site.

    If the numbers flowing in keep rising, and we do not stop it Immigration itself will prevent any ability to resolve our countries problems with housing.

    The cost of each immigrant ( dependants never counted) is so vast with legal aid appeals and non stop appeals that we will never get on top of any social issue because the numbers arriving keep growing.

    The public want something done about immigration as all polls show, but no political party are responding.

    Labour opened the floodgates and created the massive increase since 1997.

    Liberal Democrats have no concerns about it at all so they provide no resolution.

    The conservatives want to take harsh decisions but cannot because they are in a coalition and their hands are tied.

    Unless we curb immigration to a trickle we will never cure the problems in housing we face.

    Not racist I refuse to accept that label, by the do-gooders,, but rather reality supported by the majority of public opinion in this country.

    We can not cope with housing or other problems when the numbers of immigrants are greater each year that the amount of new housing built.

    We can't build just for immigrants because we would be ignoring our own people already here.

    Immigration at current and recent levels are the clear problem that unless resolved will create for a generation difficulties and resentment for many years to come.

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  • Chris

    What is being missed here in the rent capping debate is that when rents were capped, and before social housing was terminated, the slums were removed not increased. So those arguing that rent capping will cause slum conditions are ignoring historical fact, or assuming that the current creation of welfare housing is irreversible.

    @Patrick - I think it has been long established now that social housing is not crammed full of immigrants, however much you may prefer it to be otherwise - however, the 2 Million homes sold off under RTB (including those you probably still think of as social) are open to the highest bidder, so if you are looking for cause and effect perhaps you are looking in the wrong place.

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  • Sorry Chris, bad choice of words. I wasn't refering to the slum clearances.

    Instead of slumlords, I should have said evil, pre meditated, criminal, b****d, scumlords.

    As opposed to 'accidental', 'ignorant' or even that quaint cheeky chappy the 'rogue'.

    Rent caps (controls) create the feeding grounds for these scumlords to prey on the bottom end. They are not the solution.

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  • Chris

    I think you are confused Boris, it is the benefit cap which will cause that which you wrongly attach to rent caps.

    Benefit caps will force those with least means out of decent housing - 'the market' will meet this demand as it used to before the welfare state was set up by renting subdivided and shared rooms in slum tenements just as the slumlords did befor rent regulation drove them out of business and social housing provided a decent alternative.

    You are identifying the right policy consequence, just mistaken in the policy that causes it.

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  • Patrick Mc Crossan. Well done for having the courage to speak up. Don't worry about being ignored by the 'do-gooders'. It's not often that folk have the courage to expose the 'elephant in the room' on such sites and wider. Thank you for your views. I would love to see iniside housing host a debate on your opinionis/conclusions but the crys of Racist, Nazi and Xenophobe from the 'do-gooders' would be unpaletable for this nice forum. Immigration is a massive factor in the housing crisis and not just in London either. Maybe the welfare reforms might have an impact. Maybe it will be less desirable for benefit tourists to come to the UK moving forward?

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  • Chris, I was responding specifically to earlier comments for rent caps.

    I agree that benefit caps will have the same effect.

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  • Chris

    I don't think you are quite getting it yet Boris - Rent Caps will not cause slum landlords.

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